Demographic change and economic policy in Ghana

Demographic change deals with the transition of the population structure. The most markedly transition is the change from higher births and deaths to lower births and lower deaths. This transition actually refers to a set of interrelated transitions.

Ghana's population growth shows signs of this state of demographic transition. This has generated a series of changes in our population structure. There is a corresponding mortality transition, fertility transition, age transition (with higher populations in rural areas), leading to migration transition (the redistribution of the population); this further creates the urban transition and eventually family and household transition.

That Ghana is also going through this series of transitions, presupposes that the population is being redistributed. This means the emphasis of economic policy would have to change. In this regard the needs of the aged and school-going children are particularly called into question.

From the 2000 Ghana Population and Housing Census, the dependency ratio of the population is high. Using the Volta Region as a case in point, the dependent population, those below 15 and those above 65 years, constitutes 47.65% of the total VR population. There is a dramatic change in the age structure of the population. This is the most visible effect of the demographic transition. This transition has particularly set in motion the migration transition in the Volta Region, from where the active population migrate to other regions. Of the total population of the VR only 27% live in the urban areas. Those in the rural areas form the highest of our population.

The US Census Bureau International database projects Ghana's population at 24.3 million in 2010 and 26.6million in 2015 and 30.9million in 2025. This comes with a corresponding growth rate of 1.9 and 1.7 and 1.4. Life Expectancy at birth may increase from 63years in 2015 to 67 years in 2025. Net migration is in the negative. This means, natural population change is the main driving force behind our population growth. Death rates may decrease from 10 per 1000 persons in 2005 to 8 in 2015 and 7 in 2025. Total Fertility rates may decrease from 4.1 in 2005 to 3.1 in 2015 and 2.5 in 2025.

For economic policy makers it means satisfying the needs of the aged population as well as for persons below 15 years. Our life expectancy is increasing. So, insurance institutions may have to take note. Presently, most people would not live even to enjoy their pension. The tendency is to lower the retiring age so that many more people can have their pension and possibly increase the life expectancy. This causes a shift in the labour participation rate. This could reduce unemployment. We have a young population so a pay-as-you-go system of pension should be a blessing here.

Policy makers would have to consider policies that take care of the needs of those below 15. The most basic need here is the provision of schools. This is investment in the future labour force. The problem of an ageing population is not immediately in sight here and we have no worry about migrants. The high dependency rate of our population makes the state the single welfare institution. Signs of the welfare state system are a welcome policy. Health insurance is available to all and the state supports many parents in feeding school-going children. The boarding school system is a relief for parents as the state pays part of the costs incurred.

Associated with a young population is the tendency to migrate. The desire to make it in life and build a family is at the heart of any decision by young people. Migrating from one region to another or from Ghana to another country offers much hope to young people to fulfil their dreams. At this stage it is more difficult to save. The best young people could do is to have a mortgage towards acquiring a house. A possible policy that offers young people soft loans towards acquiring property could ease the burden on young families. Economic planners may have to consider these needs of young people in policy formation.

Perhaps the most urgent policy is a cost-free university education. Already university students bear much of the cost of university education. There are several amounts involved in petty expenditure on university campuses. Incidentally these young graduates would contribute to our economic growth. Education ought to be a right for both rich and poor and not a privilege for the rich alone. Our population is young therefore we should be able to reap the benefits of this population structure.

Credit: Paul A. Agbodza
(Atikpui via Ho).
(Email: [email protected])