 Hi everyone it's MJ and welcome to the actuarial podcast where in today's episode we're going to be talking about Africa's demographics. Now I am hoping that everyone listening here understands that Africa is a continent and that it is not a country like we see sometimes in some of those movies. But just some quick stats about Africa. I mean the total size of it is 30 million square kilometers so that is huge. Total population is 1.3 billion and total GDP is 2.2 trillion dollars. So Africa it is it's quite a big deal and I want to look at Africa's demography. Now demography is an actuarial subject. It's basically the statistics behind human populations. Now there must just be a little bit of a disclaimer and that is that stats can be abused, they can be distorted, they can be wrong, they can be outdated. So the sources that I'm going to be using today come from you know mainly the internet, Wikipedia, Economist magazine and I mean these stats that I'm going to be quoting they could be wrong, they could be deliberately wrong, they could be genuinely trying to be right but they just collected the data wrong. So we must always take these these numbers with a grain of salt. Also just another heads up we are going to be talking about some mature topics so yeah if you if you get you know we're going to be talking about death and some other scary stuff so if you're not wanting to hear that please don't continue listening but we are going to start on on a happy note and that is yeah let's talk about some cute little babies specifically only look at birth rates you know what what do we mean by birth rates? Birth rate is the total number of births per 1000 people in a population in a given year. So yeah birth rates grow a population whereas your mortality and migration rates reduce a population. Now estimates are saying that the world's average birth rate is around 18.6 and what that means is that four babies are being born every second so every second bam four more babies have just entered this world. Now this is quite incredible because this number has halved since 1950. Now very low birth rates are seen as a negative by by certain governments like Italy and Malaysia. Their belief is that you know we're not going to have enough workers in the future to support an aging population whereas very high birth rates are also seen as a negative by governments like China and India. They stress that you know that a big population will put a strain on their welfare system might cause unemployment and have a bad environmental impact. Now to increase birth rates governments can introduce these things known as pro-natalist policies like financial incentives or support services to new mothers. To decrease birth rates governments can introduce anti-natalist policies such as information and access to birth control or they can do some really messed up things such as mass sterilization that we saw in India or forced one-child policies that thankfully China is starting to to relax on but yeah there were some terrible terrible consequences that happened with that mass sterilization and the forcing of only one child distorted the gender demographics and it was yeah it's just a mess it's just a mess. High birth rates are associated though with low woman rights, low living standards and low education levels. But speaking about low let's look at the 10 countries with the lowest birth rates and of course we've got Vatican City with zero because the Pope says priests aren't allowed to have kids but then we do have Monaco with just 6.6. Monaco is that's the famous place where we have the formula on street circuits and the casinos. I call it Monaco some people call it Monaco. I do have a funny accent when I pronounce some of these places. St. Pierre has got 7.1 I don't know where this place was I had to look it up on google maps and it's an island off Newfoundland which if you don't know where Newfoundland is it is a place off of Canada. Then we have Andorra with 7.5 this is a tiny principality between Spain and France where my friends in Barcelona tell me they like to go and do their shopping. Then Japan Japan is at 7.7 we we know Japan pretty well they were the bad guys in World War II but they make anime and sushi so you know two sides to every coin but then yeah we've also got Puerto Rico I found Puerto Rico quite an interesting one to be one of the lowest then Slovenia Taiwan South Korea Greece Singapore I think I've gone over 10 but those are the lowest the lowest birth rate places in the world. If we have to come and look at the top 10 we'll see in first place there's a tie between Niger and Angola with 44.2 I mean a little interesting fact about Angola is that South Africa fought a war there against Cuba so you'll check that out on Wikipedia if battles interest you then we have Mali with 43 birth rates and Mali is famous for the University of Timbuktu we then have Uganda famous for exotic birds and the gorilla sanctuary Zambia it's got that beautiful waterfall called Victoria Falls then Burundi's in there Burundi's one of the few African countries to be a direct territorial continuation of a pre-colonial era although it is considered to be the least happiest place in the world according to a report done in 2018 and I want to try to say nice things about Africa but I mean if we keep going down the list we've got Pekina Faso where I've just checked the news there so the African person has been kidnapped and a blast has killed eight soldiers we then have Malawi Malawi is a nice place I think Malawi is like Africa's best kept secret Lake Malawi is a paradise so check that out if you enjoy adventure holidays although I would recommend that you stay away from the next country which is Somalia it's very dangerous home to the pirates and many terrorists which is unfortunate because Somalia does have some interesting caves to explore and then finally on our list of the top 10 is Liberia with 38.3 births per thousand and I mean Liberia is going through a very interesting macroeconomic situation I mean something weird's happened there's there's been like a hundred million dollars which apparently equates to five percent of their GDP has been printed in Sweden and Lebanon and they send the money to the country but the container was lost so everyone's like where did all the money go but as you can see Africa Africa is exciting there's a lot happening here and as you may have noticed the top 10 highest birth rate countries are all African in fact the top 25 except for Afghanistan are all African and this is this is where the stats start getting interesting in 1919 16% of the world's birth were African now they say it's around 27% it's predicted in 2050 that it might be 37% and they might say like in 2060 we might be seeing more sub-saharan African babies being born than the whole of Asia so that's including China and India look predictions are not normally accurate as they take a pattern and they extrapolate it without taking all the factors into account however this is done by the United Nations so one would hope that they did did it properly I mean and one factor that they are looking at is just for instance Nigeria one of Africa's biggest countries its fertility rate is more than double that of India and this rate is not slowing down as much as in other parts of the world so is population growth a problem some people tend to think so and not necessarily because we're going to run out of food and resources but because they say that children are quite expensive and they keep families poor I went into a website called parent 24 and it says that it costs 90,000 rand a year to raise a child in South Africa so that's around nine thousand dollars but then what they do is they say over 23 years that's 20.7 million rand and I get upset when I see these numbers because I mean come on guys you are you're abusing the statistics you're trying to get a little bit of sensationalism you can't take a straight line projection of you know of an annuity happening across a year and add it all up because you've ignored the time value of money so if actuaries were to take the present value of an annuity that has 23 annual payments of 90,000 rand each I will say a discount rate of 10 percent then I think we get I don't know I want I want you guys to check check my math I get 800,000 rand I mean 800,000 rand versus 20 million that is quite a big big difference I don't know if if my HP12c calculator is is faulty I haven't used it in a while maybe the batteries are flat but just double check my math because that is quite a big difference but I think no I think that just shows the power the power of compound interest but yeah I mean 800,000 rand that is still you know from a present value point of view that is still a lot I mean we're talking about 80,000 US dollars which is insane when you see that the average South African family's assets is only around 10,000 US dollars so children are like eight times the average family wealth so that is that is intense I mean if we even if we exclude this we can show that children cause inequality and this is this is just an example it's a very very simple illustration but let's say we have two families we've got a rich family that's worth 10 million and let's say we have a poor family that's worth 1 million rand the rich family is 10 times richer in the poor family you know 10 to 1 million but now let's say the rich family has one child and the poor family has four children so let's ignore the cost of raising the child and let's just look at inheritance in the next generation we'll see that the rich child gets 100% of the family wealth and now has 10 million rand the poor children get 25% of the family wealth and each now has a quarter of a million now the rich family is 40 times wealthier but we've also increased the number of poor families to rich families so we can see how having lots of children can cause inequality and that is a big big problem that we are seeing in in Africa now one solution is to tax the rich and I mean this sounds great in the short term take money from the people who have a lot of it and give it to the people who don't have a lot of it right now but in the long term what we tend to see is that the rich migrate so they leave the country they close their businesses down so unemployment increases and instead of them paying say 20% tax they're now paying nothing because they've left the country and gone somewhere else so the government starts actually getting less tax overall and then of course governments when they see all the tax money there I mean their temptation to take it some of them find it too strong and we do see governments stealing a lot of tax tax money so another solution is better access to to contraceptives in the short term this probably doesn't have the best effect like taxing does but in the long term we do see good results and this has been happening in Ethiopia Malawi and Rwanda their birth rates are coming down with the introduction of of contraceptives of course contraceptives are controversial when you start introducing elements of culture and certain religions and and things like that another solution which is also not that attractive in the short term but it's probably the best for the long term is is education now African schools are are awful many teachers don't show up and they aren't even educated themselves but and I hope if you're if you're an African president and you're listening this is where I want you to pay attention but if Africa starts investing in internet infrastructure we could see mass adoption of online learning as a solution to to education look Africa has around 2000 languages and I do think it's important to learn in your mother tongue so we do need that that AI that can help with translating and and just make your education available to everybody in the language that they want another extreme idea maybe this belongs in the sci-fi books is blockchain governing systems you know imagine a monetary system that works like bitcoin where a predetermined chunk of the block reward goes to government another chunk could be distributed across the population as like a universal basic income and I mean if designed properly so yeah we'll probably need to get economists involved but if designed properly this could give stability to Africa's financial markets cause a wave of investments but why I say sci-fi is because it would require government to give up significant power and I think government is is Africa's biggest problem so well education and blockchain could be solutions the biggest problem I would say is Africa's government I mean we just have to look at the mess of Nigeria's government at the moment with MTN MTN is a company providing internet infrastructure I mean that's like there's part of the solution and the Nigerian government is smacking them with a massive fine and it's just it just makes people not want to do business in Africa and I mean this is the thing is we're seeing poverty rates around the world are falling except in Africa and and this is where I think actuaries can get involved we can help governments understand the data we can show them correlations between birth rates and poverty you know we can help them with monetary policies we can assist them with setting terms with foreign investors and and I mean I'm being serious I mean you just need to see recently in the news Tanzania's president has told women to throw away birth control because he wants more people this is a country of over 50 million people where half of them live on less than two dollars a day and I mean actuaries have helped governments in the past specifically the South African government which really stuffed up with regards to HIV and AIDS which resulted in hundreds and thousands of unnecessary deaths fortunately actuaries did start getting involved and they started assisting governments with mathematical models and that's the thing by studying actuarial science you have the ability to save millions of lives and make a positive impact in this world so let this be your motivation because I know you guys are busy writing the exams I know they're difficult but it's worth it more actuaries we can help this world we can make it a better place anyway I hope you guys enjoyed this little podcast I'm gonna try I'm gonna try release one a week so yeah make sure you subscribe and let me know if you've got anything to say in the comment section below I mean it's always great having a discussion with you guys but anyway keep well cheers