DEMOGRAPHIC DIVIDEND IN SENEGAL Latif Dramani Fahd Ndiaye Ouarmé Alaya Research Center of Economic and Finance University of Thies SENEGAL
CONTENT CONTEXT STYLISED FACT : Senegal is experiencing a demographic transition STYLISED FACT : NTA results for Senegal OPPORTUNITY WINDOW: Senegal DD opportunity window CHALLENGE: Is Senegal LCD system funding is sustainable? CONCLUSIONS
CONTEXT(1/2) ‐ Incidence of poverty remains high (52.2% in 2005 and 46.7% in 2011 ESPS 1 & 2) ‐ Achieving all the MDGs remains problematic ‐ Inadequate economic programs with the social demand
4
CONTEXT(2/2)
•
Even in 2030 the structure of the population of Senegal still has a very large compared to the base Tunisia
STYLIZED FACT : Senegal is experiencing a demographic transition
THE TOTAL FERTILITY RATE WENT FROM 6.6 CHILDREN PER WOMAN IN 1986 TO 5.0 IN 2011. (SOURCE: DHS
SURVEYS, UN)
STYLIZED FACT : Senegal is experiencing a demographic transition
THE POPULATION GROWTH RATE DECREASED FROM 3.1 IN 1986 TO 2.3 IN 2011
(SOURCE: UN POPULATION PROJECTIONS)
STYLIZED FACT : Senegal is experiencing a demographic transition MORTALITY DROPPED SIGNIFICANTLY IN THE SAME PERIOD. • THE INFANT MORTALITY RATE (FROM 86.4 TO 47 PER THOUSAND BIRTHS) • THE MATERNAL MORTALITY Ratio (FROM 769/100.000 births in 1990 to 392 in 2011)
(SOURCE: DHS
SURVEYS )
STYLIZED FACT : Senegal is experiencing a demographic transition CHANGE IN THE AGE STRUCTURE
AGE GROUP
YEAR 0-19
20-64
65+
1986
55,0%
41,3%
3,6%
2011
51,3%
44,4%
4,3%
2030
41,9%
53,0%
4,9%
STYLIZED FACT : Senegal is experiencing a demographic transition THE DEPENDENCY RATIO* DECREASED FROM 1.33 IN 1986 TO 1.15 IN 2011 THIS IS THE SIGN OF A VERY SLOW TRANSITION NOTE: This ratio is over estimated as it excludes the 2 million migrants (25% of the labor force) of the diaspora
(* SOURCE: DHS SURVEYS )
STYLIZED FACT : Senegal is experiencing a demographic transition CONSTRAINTS AND LIMITATIONS 9 MATERNAL AND INFANT MORTALITY, WHILE DECLINING, ARE STILL HIGH (SENEGAL WILL NOT ACHIEVE THE MDGS FOR THESE INDICATORS) 9 USE OF FAMILY PLANNING IS STILL VERY LOW (12% OF WOMAN IN 2010) 9 CULTURAL RESISTANCE STILL PRESENT
STYLIZED FACT : NTA results for Senegal 120,000
Aggregate
Million West African CFA francs
100,000
Consumption Labor income
80,000
60,000
40,000
20,000
0 0
10
20
30
40
50
60
70
Age Aggregate labor income and consumption in Senegal, 2005. Source: NTA data.
80
90+
STYLIZED FACT : NTA Results for Senegal A new generation of FP is needed (Planning Policies)
Annual rate of growth (percent)
0.7 0.6 0.5 0.4 0.3 0.2
Low fertility Medium fertility High fertility
0.1 6E-16 -0.1
2000
2010
2020
2030
2040
2050
Year Estimation of annual growth rate of support ratio in Senegal based on low, middle and high fertility for the period 2000 to 2050 Source: calculate on NTA data ; Estimation of population and projection provide by UN population 2012.
OPPORTUNITY WINDOW GDP per capita
Quality of employement strategies
First dividend
1- job-creation strategy 2- Population strategy (FP)
Second dividend Adapted from Mason and Lee
OPPORTUNITY WINDOW GDP per capita growth rate and DD in Senegal 5.00% Croissance du Pib per capita 2nd Dividende
4.2%
A big challenge !!
1er Dividende
4.00%
3.2%
3.00% 2.4%
2.00% 1.4% 1.5% 1.2%
0.9%
0.4%
0.00%
0.5%
First and second demographic dividend in Senegal Estimation of potential GDP growth , Source: ANSD Sénégal
2041‐2050
2031‐2040
2021‐2030
2011‐2020
0.0%
2001‐2010
1991‐2000
‐1.00%
1980‐1990
‐0.4%
0.7% 0.8%
0.5%
0.2%
0.02%
1.0%
0.7%
0.2%
1.1%
0.7%
1.00%
CHALLENGE: Is Senegal’s system of financing LCD sustainable?
• The life cycle deficit represent 47% of GDP and is funded from two sources : ‐ Reallocation of capital income ‐ Net transfers • Private transfers from diaspora are the primary source of funding, accounted for 94% of net transfers, while public transfers represent only 6%
Origin of transfers in Senegal
67% of transfers received originate from Europe and 25% from Africa
Source: Enquête sur les transferts de fonds des émigrés 2012, DMC, Ministère de l’Economie et des Finances
Transfers by emigrants’ education level in Senegal 32.9%
19.8% 20.7%
54% of transfers received are made by emigrants with at most primary level education
10.1% 4.0%
Autres (spécifier)
2.8% Troisième cycle
supérieur technique/professi onnel
1.6% Supérieur/Universi té
secondaire général
primaire
Alphabétisation
Aucune éducation formelle
2.3%
secondaire technique/professi onnelle
3.4%
Source: Enquête sur les transferts de fonds des émigrés 2012, DMC, Ministère de l’Economie et des Finances, Sénégal
Sustainability of Nets Transfers in Senegal • The sustainability of long‐term transfer was studied on the basis of three scenarios: 1‐ The first scenario is based on an assumption that net transfers will continue to grow at the average annual rate of 6.7% calculated for the period 2007‐2010. 2‐ The second scenario is based on an assumption that net transfers will grow at an average annual rate of 7.5%. 3‐ The third scenario is based on an assumption that net transfers will grow at an average annual rate of 9%.
Sustainability of Nets Transfers in Senegal Années
Transfers needed to finance the life cycle deficit (Billions of CFA)
scenario 1
scenario 2
scenario 3
Assumption
Assumption
Assumption
Average annual Growth rate: 1,067
Average annual Growth rate : 1,075
Average annual Growth rate : 1,09
2010
3553
565
565
565
2020
6213
1080
1164
1338
2030
9650
2064
2400
3166
2040
13088
3946
4946
7496
2050
16525
7545
10194
17746
Sustainability of Nets Transfers in Senegal • It will take an average annual growth rate of 9%, much higher than the current rate of 6.7%, for net transfers to finance the lifecycle deficit in 2050 • These results show that transfers cannot sustainably finance the lifecycle deficit in the long term • Indeed, the growth rate of transfers needed to cover the deficit is not consistent with the difficulties of the current international context: ‐ Insecurity among emigrants ( small jobs, difficult economic situation in Europe ) reduces their chance to send money back to Senegal
Conclusion
• For Senegal to benefit from the first demographic dividend, from 2000 to 2040, requires a set of measures such as: • Conduct a massive and sustained investment in education and health • Promote of family planning and the fight against malnutrition • Create jobs
Recommandations
• Is Senegal benefiting now from DD? • Demographic and economic projections show us a very complex probable future ... • Extend the estimation of NTA in other African countries in general and in Franciphone Africa in particular • Initiate a program or an international fund for DD research in Africa.
THANKS
