The world’s population is expected to reach 8bn in November this year.

India is forecast to surpass China as the world’s most populous country in 2023.

This comes from the UN’s latest global population forecasts. The UN hedges its predictions even as it makes them. 

This is after all a very challenging exercise to say the least.

By 2100 the world will contain between 8.9bn and 12.4bn people, with a 50/50 chance that its population will be shrinking.

Just a handful of countries are expected to lie behind population growth.

The UN forecasts that 43% of the increase between now and 2050 will come from 5 countries:

•          Democratic Republic of Congo (DRC) 

•          Ethiopia

•          India

•          Nigeria, and

•          Pakistan.

America will remain the 3rd-largest country in 2050.

Nigeria will add 4 times that number and be nearly as big as America. It will displace Indonesia as the 4th-most-populous place.

Some countries are helping the Earth’s population to level out. 

This year 41 countries are expected to lose more people than they gain from births and immigration. 

Ukraine’s population, ravaged by war, will shrink by around 7 million. 

The population of Europe, the world’s oldest region, with a median age of 42 years, began shrinking in 2020. By 2050 it is forecast to have 40 million fewer inhabitants than it does today.

It is a safer bet that the distribution of humanity across the world will shift dramatically. 

Europe  started on the path to population decline in the 1970s after the number of births per woman fell below 2.1 — the level needed to replace people who die. It has since fallen to 1.5.

Fertility in Africa, the world’s youngest region, is nearly 3 times Europe’s, and it will not fall below replacement rate until 2090.

Births in Africa will increase even as the number of births per woman falls. By 2050, 25% of the world’s population will be African.

These demographic shifts will have geopolitical consequences.

Since 1950 China and India  have been responsible for 35% of the world’s population growth. 

But China’s population is projected to begin falling as soon as this year. 

Although the Chinese Communist Party now allows women to have three children apiece, they average only 1.2. By 2050 the country will be 8% smaller.

Meanwhile, India’s population will continue growing, albeit at a gradually slower rate, peaking at 1.7bn in 2064, nearly 50% higher than in China. 

That will add weight to its claim to play a much greater role in world affairs.

Source: The Economist

Potential effects of the war between the Russian Federation and Ukraine on commodity dependence in Africa

The Russian Federation invaded Ukraine on 24 February 2022, initiating a war. 

The geopolitical tensions in Eastern Europe have shaken the international economy. 

Although the two countries do not have strong trade relationships with Africa, our continent is already experiencing the impact of the war through disruptions of international trade and increased financial volatility.

The sudden rise in global commodity prices depicted in the figure below, such as oil and natural gas, tend to increase the export earnings of African fuels and metals exporters. 

Some African metals exporters with floating exchange rate regimes have observed an appreciation of the exchange rate since February 2022 due to higher commodity prices. 

The rise in commodity prices can be an opportunity for African countries to reduce their debt burden and improve their overall financial outlook, especially after being hit by the adverse effects of the COVID-19 pandemic. 

Nevertheless, the risks of falling into a resource-curse trajectory should also be a primary concern. 

A major risk is that commodity-dependent countries may increase expenditures during booms, contracting more debts. 

The evidence shows that the overall economy in commodity-dependent countries is destabilized when prices drop sharply. 

Tax revenues fall, Governments discontinue public expenditures on selected public goods, domestic economic activity shrinks, credit dries up and debt increases, along with the number of firms’ non-performing loans and bankruptcies.

Another concern is the excessive volatility of commodity prices that affects domestic commodity-dependent economies. 

Volatility exerts an adverse impact on economic growth because it leads to a lower accumulation of physical and human capital. 

Further, the negative growth effects of volatility from commodity prices can even offset the positive impact of commodity booms. 

By contrast, the hike in wheat, edible oil, corn, and fertilizer prices worsens food insecurity in Africa. 

Rising food and fuel prices tend to accelerate inflation, having negative distributional effects because the poorest segments of the population tend to spend a disproportionately high share of their income on food.

Source: Economic Development Report in Africa, 2022.