Egypt could add $18 billion to GDP if it curbs population growth

New report on potential ‘demographic dividend’ says country must reduce fertility rate

Egyptians crowd at a market selling food at discounted prices in Cairo. Controlling overpopulation has become a national priority. Reuters
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Egypt must intensify its efforts to reduce its fertility rate to reap significant economic benefits, the World Bank said in a new report.

The report published on Monday said Egypt can take measures to achieve a “demographic dividend”, an opportunity for greater prosperity and improved living standards when the share of the working-age population is larger than the dependent population.

It estimates that reducing the fertility rate from 2.9 births per woman to 2.1 would result in a cumulative gain in gross domestic product between 2020 and 2030 of around 569 billion Egyptian pounds ($18.8 billion) and savings in the health, housing and education sectors of 26 billion pounds ($867 million).

There’s no doubt the population issue is now presenting itself as one of the important priorities of Egypt
Minister of Health and Population Khaled Abdel Ghaffar

The country of 104 million people, now growing at a rate of one million every 10 months, has struggled with overpopulation for decades.

But it has become a national priority in recent months, as population growth continues to put a strain on nearly all government sectors amid an economic crisis.

“There’s no doubt the population issue is now presenting itself as one of the important priorities of Egypt,” said Minister of Health and Population Khaled Abdel Ghaffar at the launch event of the report on Monday in Cairo.

The World Bank suggests six priorities to lower Egypt’s fertility rate, including reducing school dropouts, increasing female labour force participation, delaying early marriage, leveraging social protection programmes and improving governance of the population programme.

In parallel, the government must implement policies that ensure socioeconomic development, such as creating productive jobs, investing in human capital, enhancing financial inclusion and entrepreneurship — particularly for women — and sustaining macroeconomic stability.

Egyptian and World Bank officials including Minister of Health and Population Khaled Abdel Ghaffar at the launch of the report. Nada El Sawy / The National

Population progress 'stalled'

Egypt showed a strong track record of managing population growth in the two decades to 2008, but progress has since stalled, the report said.

Investments in family planning, reproductive health and women’s empowerment contributed to a decline in the country’s total fertility rate from 4.5 to 3 births per woman between 1988 and 2008.

But, between 2008 and 2014, the fertility rate began climbing and reached 3.5 births in an “alarming” reversal.

Key population challenges following the January 2011 uprising included a decline in public resources for family planning, a drop in family planning social marketing and media campaigns, an increase in poverty and a rise in conservative influence.

By 2014, 33.2 per cent of the population was under the age of 14, resulting in a “youth boom”.

The working-age share of the population, those aged 15 to 64, increased between 1990 and 2010. It then declined because of higher fertility and population momentum, from nearly 63 per cent in 2010 to 61 per cent in 2020.

The shift also led to an increase in the dependency ratio, the ratio of those younger than 50 or older than 64 to the working-age population.

“Right now we have two Egyptians in the working-age population supporting three of the dependent population. What we would like to have is only one supporting one and this is doable,” said Sameh El Saharty, lead health specialist at the World Bank and an author of the study.

The UN estimates Egypt’s current fertility rate at 2.9 and projects it will be 2.7 in 2030, if all other factors remain the same.

Egypt’s population is set to grow to 120.8 million in 2030 and nearly 160 million by 2050.

However, if the fertility rate declines to the fertility replacement level of 2.1, the population could be controlled to grow to only 117.3 million by 2030.

Whole-of-society approach

The report said two presidential initiatives, Haya Karima (Decent Life) launched in January 2019 and the National Project for the Development of the Egyptian Family launched in February 2022, can be used as platforms to implement many of the proposed policies.

“We feel that Egypt has a lot of potential and capacity to achieve its demographic dividend. And we’re very encouraged by some of the continuing initiatives,” said Marina Wes, the World Bank’s country director for Egypt, Yemen and Djibouti.

She said the bank is currently finalising its five-year partnership framework with Egypt, which “really puts people at the very core”.

Minister of Education Reda Hegazy said the ministry is responsible for 750,000 new children joining schools every year. Under Haya Karima, 21,000 classes were built.

“The level of education is closely linked to population growth” and students who drop out are mostly female and in rural areas, Mr Hegazy said.

It is important to increase the participation of women in the workforce, which is now around 15 per cent, “among the lowest, even in the region”, said Ahmed Kamali, deputy minister of planning and economic development.

He also emphasised the importance of changing the cultural mindset.

“[Those in rural areas] think about kids as an asset, so we need to change this culture set-up. And we need to raise the opportunity cost of getting more kids,” Mr Kamali said.

Mamta Murthi, vice president of human development for the World Bank, said there are two dimensions to the demographic dividend.

The macro dimension is that reducing fertility rates will lead to higher rates of savings and investments and therefore higher growth rates. The micro dimension is that reducing fertility rates will result in investments in human capital, which is also a source of growth.

“Taking a whole-of-society approach, supporting strong social service delivery and family planning programmes, and supporting the empowerment of women sounds like a tall order, but actually it isn’t. Egypt is a country that has done this before,” Ms Murthi said.

“It’s time to turbocharge those earlier efforts and make progress.”

Updated: February 07, 2023, 5:41 PM