Why Kenya should start planning for ageing population

An ageing population is a looming economic and social burden for Kenya in the coming years, recent data have predicted.

Kenya’s population is shifting toward an older age structure as the share of older adults aged 65+ increases and as the total fertility rate declines.

According to the recently released 2018 World Population Data Sheet from the Population Reference Bureau (PRB), by mid-century, the share of the population aged 65 or older will reach seven per cent up from three per cent currently. This, while children's (ages 0 to 14) share will have fallen, from 41 per cent today, to 29 per cent in 2050.

FISCAL RESOURCES

The themes explored in the 2018 Data Sheet’s analytical features, released on Wednesday, show Kenya is gradually moving towards a high old-age dependency quotient.

“The changing age structures — the share of the total population in each age group — will influence the country’s economic trajectories and how it allocates resources to ensure that all generations can thrive,” says the report.

“What the new data means is the allocation of scarce fiscal resources to pay for the pensions and healthcare of the elderly — could increasingly prove a defining issue in Kenya’s economy in the near future,” the report says.

95.5 MILLION

In total, the population of Kenya will reach 95.5 million in 2050, up 44.5 million from an estimated 51 million at present, according to the projections by the PRB. The world population will reach 9.9 billion by 2050, up 2.3 billion or 29 per cent from an estimated 7.6 billion people now.

As smaller birth cohorts replace larger ones and larger birth cohorts age into adulthood, the share of children in the population begins to decline while the share of working-age adults grows. Those above age 65 are a dependent age group, as are those under the age of 15.

The population has more than doubled over the last 25 years, and rapid population growth is set to continue.

EDUCATED WOMEN

Kenya’s high population growth is explained over two different periods, by the increasing numbers of children up until about 2000. But that has changed with the number of children per family having fallen sharply, from 8.1 children in 1978 to 4.6 children in 2008, to 3.9 births per woman in 2016, and is projected to possibly reach 2.4 children by 2050.

The combination of a shortened period for child bearing along with the ability to limit family size, whether by delay or contraception, as women pursue advanced education, have together lowered the birth rate — all of which lead to smaller family sizes. Additionally, educated women are more likely to plan for smaller families or decide to never give birth.

Why does Kenya’s population continue to rise rapidly, while family size declines?

SMALLER FAMILIES

Based on these trends, the total number of children aged 0 to 14 is expected to increase by only 40 per cent by 2050, from 17.5 million to 24.5 million. But the total population will nonetheless more than double, due to several-fold increases of adult population groups.

PRB pins the rapid population growth to high fertility in previous decades, which has resulted in many more families in Kenya today. Meaning even though families are smaller, the total number of children continues to grow.

Additionally, Kenyans are living longer. The shift is due to more recent improvements in healthcare that are bringing down death rates at older ages. Life expectancy is projected to increase from 54 years today to 68 years by 2050. As a result, the fastest growing population group in Kenya is 15 to 64 years.

DEMOGRAPHIC DIVIDEND

Thus, Kenya is at the start of a demographic transformation.

As fertility declines and Kenyans live longer, a dramatic improvement in the “dependency ratio” or the proportion of the working-age population is expected to grow much faster than the young and elderly population groups that depend on them.

This implies Kenya is in a position to benefit from a “demographic dividend”, especially by 2020, when this gap starts to widen. And the good news is that this is the population group that works. From only 22 million working-age people today, Kenya by 2050 will have about 56 million of these.

Separate UN forecasts predict that Kenya's population will grow by around a million people per year. That is 3,000 people every day, over the next 32 years.

WORKING AGE

By 2050, Kenya will begin to experience moderate child dependency ratio (29-45) and high old-age dependency ratio.

Meanwhile, the population balance between the continents is shifting: In 1970, there were two Europeans for every African, but by 2030, there will be two Africans for every European.

The PRB report says Sub-Saharan Africa remains in a period of rapidly growing youth cohorts, meaning that the region’s working-age population will continue to grow rapidly. Even so, youth unemployment remains a critical challenge. According to economist David Lam, “Sub-Saharan Africa needs to generate about a million new jobs per month to keep employment rates stable and will need to generate almost two million jobs per month by 2030.”

ECONOMIC ADVANTAGES

While rapid population growth remains a challenge in many poor countries, the debate has changed in recent years. The World Bank’s World Development Report for 2009, Reshaping Economic Geography, found a strong correlation between population density and economic development. It says rich countries are urban countries. “No country has ever reached high income levels with low urbanisation,” the report says.

Population growth increases density and, together with rural-urban migration, creates higher urban agglomeration. And this is critical for achieving sustained growth because large urban centres have two distinct economic advantages.

First, as more people interact, there is more scope for innovation.

“Young people need jobs, but they also create jobs. Kenya has an educated workforce and a dynamic service industry, which typically has lower barriers of entry than agriculture or manufacturing, and provides opportunities for young entrepreneurs.”

PRIVATE SECTOR

In light of these facts, Kenya’s future pattern of population growth can be a force of good. The World Population Prospects — The 2017 revision by UNDP, says a large urbanising and well-educated population is likely to generate a strong middle class and as well as a vibrant private sector.

But UNDP warns that because over the last few decades Kenya did not make sufficient progress in upgrading its infrastructure and improving its governance, the constraints made it difficult for new industries to take root, especially in manufacturing, and opportunities to create jobs on a large scale were lost.

“To ensure Kenya does not miss future opportunities, and takes full advantage of the demographic dividend that may come to it, better infrastructure and better governance are key,” says the UN agency.