... "A key factor limiting the ability of Liberia to increase its wealth per capita and thus raise standards of living is persistent high fertility that culminates into rapid population growth," the World Banks said in one of its latest reports on Liberia
The World Bank (PDF) has named high population growth rate as one of the key factors that are limiting the ability of Liberia to increase its wealth per capita as a means of raising standards of living.
Liberia’s population, according to the Bank, is still growing at 2.5 to 3 percent annually, with on average 4.3 births per woman, almost twice the global average resulting in high population growth, which makes it harder for Liberia to increase its wealth per capita.
The adolescent fertility rate is 136 births per 1,000 women aged 15 to 49, substantially above the average for Sub-Saharan Africa (101 births), however, strong evidence that increasing education for adolescent girls can reduce fertility rates and improve health outcomes, which in turn might further foster the demographic dividend, the bank said in a report — Liberia Economic Update — “Investing in Human Capital for Inclusive and Sustainable Growth.
“High population growth makes it harder for Liberia to increase its wealth per capita. A key factor limiting the ability of Liberia to increase its wealth per capita and thus raise standards of living is persistent high fertility that culminates into rapid population growth. Liberia’s population is still growing at 2.5 to 3 percent annually, with on average 4.3 births per woman, almost twice the global average,” the Bank said in the report, which was authored by Gweh Gaye Tarwo, its Country Economist for Liberia.
“When marriage and sexual activity begin at young ages, childbearing often begins at early ages and is therefore linked to patterns of fertility. Delaying marriage and childbearing could reduce fertility rates and population growth," Tarwo said in the report. “In Liberia, the median age at first marriage is 22.6 years for women ages 25 to 29. 21.2 years for women ages 25 to 49, and 19.8 years for women ages 45 to 49. This indicates that the median age has risen by almost one year every five years. The median age at first marriage has increased from 18.4 years in 2007 to 21.2 years in 2020 for women.”
The Bank noted that while the country’s high population growth affects its wealth per capita, the country still stands a better chance if other intervention measures are taken would increase human capital wealth in Liberia. They range from ensuring overall macroeconomic stability for faster growth to significantly improving the overall business environment, including regulations affecting business creation; ongoing business operations and competition; and factor markets such as labor, finance, and land,” the Bank said.
The Bank’s position comes as Liberia's human capital wealth was estimated at US$24 billion in 2018, which represents 42.0 percent of the country’s total wealth. This human capital per capita was worth US$5,000, which is low compared to the world average of US$101,000 — and capital per head was also well below the level in countries such as Nigeria, Ghana, Benin, Côte d’Ivoire, Togo, and Senegal, the Bank noted.
However, Liberia, according to the Bank, was higher than the level in Niger and Guinea and comparable to the level in The Gambia, Sierra Leone, Burkina Faso, and Mali.
“In real terms, Liberia’s wealth in 2018 was estimated at US$57.3 billion, 105.6 percent higher than in 2000, thus growing by 4.1 percent on average per year,” Tarwo wrote in the report. “However, due to high population growth, per capita wealth increased from US$9,786 to US$11,891, growing by only 21.5 percent cumulatively in the period, or 1.1 percent on average per year.”
“Because wealth per capita is what matters for future standards of living, Liberia’s progress toward sustainable development was appreciable but very limited. Furthermore, between 2014 and 2018, total wealth and wealth per capita declined by 1.9 percent and 11.2 percent, respectively. Declining wealth per capita indicates insufficient investment in a nation’s assets, or that they are being mismanaged or misvalued.”
“Liberia’s wealth by asset categories shows a smaller share of human capital in total wealth. Liberia’s national wealth was historically dominated by natural capital. A diversified asset portfolio is more resilient than one overly dependent on a single asset. Liberia can choose to invest in different wealth components and achieve a more balanced and resilient asset portfolio,” he said.
The Bank said by analyzing the evolution of the leading wealth components, policymakers can have better tools to build and manage a comprehensive wealth portfolio and decide what mix of assets would help them achieve this goal. It added that an obvious choice for Liberia’s policymakers is to invest in human capital as high population growth makes it harder for Liberia to increase its wealth per capita, which is a “key factor limiting the ability of Liberia to increase its wealth per capita and thus raise standards of living is persistent high fertility that culminates into rapid population growth.”
According to the report, like the wealth per capita, Liberia's human capital per capita has been volatile in the last two decades, mirroring the dynamics of the Liberian economy. Between 2011 to 2014, human capital per head increased from US$2,900 to US$5,000 before stagnating at this level between 2014 and 2018,” the bank said.