Demographic Dividend: 2.5 GDP Points Lost Every Year by 2040!

The potential economic gains for Morocco during its ongoing demographic transition are not an abstract promise. They are achievable and measurable, according to UNFPA, as demonstrated by the experience of several Asian countries.Countries such as South Korea, Vietnam, Thailand and Bangladesh have increased their GDP per capita by between threefold and 85-fold over periods ranging from one to three decades, thanks to the strategic use of their demographic window of opportunity.
If a large working-age population is educated, employed and healthy, it can act as a powerful accelerator of economic development. “Conversely, inaction or non-integrated policies come at a high socio-economic cost: mass unemployment, social instability, sluggish growth and unprepared population ageing,” warns the UN agency. Failure to capitalize on this opportunity would lead to a lasting decline in potential growth and a surge in social spending. “Indeed, the cost of inaction represents a strategic risk for Morocco. The country could face a triple shock,” UNFPA warns in its advocacy paper.
First, structurally constrained growth could result in the loss of up to 2.5 percentage points of GDP annually by 2040, due to the underemployment of young people and women. For Morocco, this could translate into hundreds of billions of dirhams in wealth not generated by 2040. Without swift action, the country also risks a surge in passive social spending, as older people are expected to account for nearly 20% of the population by 2040, placing considerable pressure on pension schemes and public finances.
Added to this is the worrying increase in the number of NEETs – young people not in employment, education or training – aged 15 to 24. Their number could exceed 2 million by 2030, more than half of whom would have no qualifications and would come predominantly from rural and peri-urban areas.
Women’s Economic Inclusion: +25% to 40% of GDP in One Generation. Benchmark studies by the World Bank, UNFPA and international strategy consulting firm McKinsey estimate that a country capable of raising its female employment rate from 20% to 60% could increase its GDP per capita by 25% to 40% within one generation.
“Applied to Morocco, where the female labor force participation rate remains stagnant at 19%, this could represent hundreds of billions of dirhams in additional GDP by 2040,” according to the same source.
Similarly, halving the NEET rate – currently estimated at 25.6% among 15- to 24-year-olds, or around 1.5 million young people (2.9 million among those aged 15 to 29) – would not only help revive potential growth, but also reduce the burden of passive social transfers, increase overall productivity and broaden the tax base needed to finance pensions and social protection.

Khadija SKALLI