Abstract Five 2005-2006

GLOBAL

DEVELOPMENT STUDIES

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Volume Four Winter 2005-Spring 2006 Numbers 1-2.

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DEPENDENCY RATIO AND THE ECONOMIC GROWTH PUZZLE IN SUB-SAHARAN AFRICA

Paulos Gutema Negari

Institute of Development Research

Addis Ababa University

Addis Ababa, Ethiopia

Bichaka Fayissa

Department of Economics and Finance

Middle Tennessee State University

Published online: February 10, 2017

ABSTRACT

Conventional growth theories explain the poor performance of African economies by stressing the inadequacy of savings, human capital, and poor institutional quality. The key question is how to spur economic growth by enhancing savings for the accumulation of both physical and human capital. By relaxing the rigid assumption that the dependency ratio remains constant over time, this paper constructs a growth-estimating equation that accommodates this demographic factor. The analytic results suggest that the Sub-Saharan Africa low economic growth puzzle may well be explained in terms of level and dynamics of the population dependency ratio of the region.