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Monday, October 24, 2016

Why Africa's Growth Does Not Add Up to Global Growth

High fertility rates and population growth in Africa is nearly solely offsetting the contracting populations of young across the remainder of the world.  The chart below highlights global fertility rates for 2016....where the global population growth is coming from.  In two words, Central Africa.

Those highlighted in yellow, orange, red, and magenta (indicating nations that, on average, have 3 to 6+ children per female) are almost entirely located in Africa.   Uganda, Somalia, Burundi all have birthrates near 6 children per female and the most populous African nation, Nigeria (approaching 200 million citizens), has a birthrate of 5.1.  Contrast this with the other extreme represented by Singapore, Taiwan, S. Korea all hugging the 1 child per female line.  Officially, 2.1 children per female is zero growth and the global fertility rate has fallen over 50% from it's 1964 peak of 5.1 to 2.4 as of 2016...and all indications point to further declines.


Some countries of note with collapsing 2016 birthrates:
    • Singapore 0.8
    • Taiwan, Hong Kong, S. Korea 1.2
    • Japan 1.4
    • Thailand 1.5
    • China 1.6
    • EU 1.6
    • Russia 1.6
    • Vietnam 1.8
    • Brazil 1.8
    • US 1.9
    • Indonesia 2.1
    • Bangladesh 2.2
    • Mexico 2.2
    • India 2.5
    • Pakistan 2.7
In 2016, the majority of the worlds nations have negative birthrates and nearly all wealthy nations and many developing nations are facing contracting populations of young.  Outside of Africa, the distribution of the population is forming an inverted pyramid with significantly smaller young populations "supporting" a one time surge in 65+yr/old populations.  The only question is whether this ongoing erosion at the base (young) and growing "cornice" of elderly will collapse slowly or suddenly?


Japan's inverting pyramid (below) is quite clear...but Japan is not alone or even unique in this matter.  Japan is just patient zero in a global epidemic where a system erroneously premised on infinite growth turns fatal due to the finite realities of earth.




Below, GDP per capita or purchasing power parity (PPP).  Countries with low PPP in red (Central Africa), moderate in green, high in blue, and very high in magenta.  Most global commodities and exports cost the same worldwide...so those with high PPP's (and particularly those with relatively easy access to credit) can consume far more than those with low PPP's.  The bulk of nations highlighted in red (particularly in Africa) have PPP's below $2000 a year...(and as low as $400/yr).  Nations with PPP's of $2000 year are generally in-line with the GDP per capita of Haiti and a third the PPP of Cuba...and about 4% of US GDP per capita.
Purchasing Power Parity (PPP). Countries with a low purchasing power parity are marked in red, moderate is in green, high values in blue and very high in magenta.How the worlds population is distributed, by global regions (chart below).  Africa represents about 15% of the worlds population but at least 80% & perhaps more than 90% of the population growth.
Below, net 2016 fertility rates as per those regions.  Shortly, all regions will be net negative except Africa.

The above data points are helpful in furthering some of my recent articles, "The Greatest Bubble Ever...& The Federal Reserve Can't See It?!?" HERE, "Why Exporters Are in Double Trouble" HERE, &"The Ingredients for Economic Growth No Longer Exist...New Normal Goal s/b Minimal Contraction, Not Growth" HERE.




1 comment:

  1. Chris, this is great stuff. Would love to connect with you and share some of my writings on this topic from a professional investor standpoint.

    Google "Ice Farm Capital", mgreen@icefarmcapital.com

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