Wednesday August 6 2014

Economic transformation is best population control contraceptive

By Augustus Nuwagaba

There has been a lot of debate about population growth in Uganda. The bone of contention is whether Uganda’s current population is good or bad for the country. In this regard, an international conference - “Benefiting from Ugandan’s Demographic Dividend was recently held in Kampala. A demographic dividend means the benefit a country can realise from having a given population. For example, Malaysia is one of the countries that have the highest demographic dividend, which largely arises out of the earnings from their people, especially the capital inflows from export of labour.
It should be noted that the greatest resource any country can boast of is its people. No country has transformed its economy without investing in its people. Investing in people is, therefore, the most robust approach to quick economic development. The relationship between population and socio-economic transformation is based on two major factors:
Low child survival. Because mothers are not sure of the survival of their children, they will have many children as insurance. This used to be the major hindrance to family planning efforts in many sub-Saharan countries, including Uganda.
Poverty and inter-generational wealth flow: Another reason why people continue to have a large number of children is poverty. Because of lack of household incomes, parents think the only salvation will be from the probability that at least some children will access economic opportunities, hence improve the welfare of their families.
This issue is further buttressed by the absence of a welfare State. In the circumstance that in old age people have to depend on their children for survival, it is logical that parents will cast their nets wide by having many children. This is what is referred to as inter-generational wealth flow. It also means older children will look after their younger siblings.
Hence, it is rational to have a sizable number of children. That is why all countries that have transformed their economies started by investing in the population. They all focused on enhancing the human skills and capabilities of individuals aimed at increasing earning capacity.
It also means because of high earning capacity of each individual, you will have enhanced purchasing power. At individual level, if each person is sufficiently endowed with purchasing power, such a person does not depend on any other person for survival. At national level, if each person has skills, earns money and purchases commodities and services, then we have enhanced aggregate demand, which will greatly increase production. Why? Because factories will be attracted to such countries since people who will buy the commodities to be produced are available in great numbers. This explains the fact that it is good but not enough to invest in infrastructure such as electricity, roads, and railways without equal investment in people (skills, health, human capital and capabilities). We need to focus on a holistic approach to achieve economic transformation. Once you invest in people, and generate high skills, capabilities, productivity and independence in earning and survival, it will generate two results:
People will be too busy to have many children and will also have no time to look after many children.
Once we have sufficient earning capacity, we do not have to look at children as a source of insurance. The insurance will be the financial power and economic assets people have generated, which will guarantee the parents’ future. Children will, therefore, not be perceived as a future source of survival.
We, therefore, need to invest in people as the best contraceptive pill. Once this is realised, African governments will have the last laugh.

Mr Nuwagaba is an consultant on growth and economic transformation.