Case Study 12 - Kenya - a window into Africa's demographic future

Question 1

Production Possibility Frontiers (1.1.4)

How might Kenya’s population changes affect its production possibility frontier (PPF)?

Answer 1

• Outward PPF shift: A growing population (projected to reach 100mn by 2090s) increases labor supply, expanding productive capacity.
• Limitations: Without investment in education/skills (Page 3: “human capital… squandered”), the PPF shift may be constrained.
• Case study link: Urbanization (45% in cities) shifts labor from agriculture to higher-value sectors, altering resource allocation.

Question 2

Long-Run Aggregate Supply (2.3.3)

How could Kenya’s demographic changes influence its LRAS?

Answer 2

• Increased LRAS: A larger working-age population (median age 19) boosts productive capacity, shifting LRAS right (Page 6 diagram).
• Challenges: Slow fertility decline (Page 2: fertility rate 3.2) delays the demographic dividend.
• Case study evidence: Higher savings (Page 3: “surge in bank savings”) lower interest rates, enabling investment in infrastructure/education

Question 3

Causes of Growth (2.5.1)

How do falling fertility rates contribute to Kenya’s economic growth?

Answer 3

• Savings and investment: Smaller families increase savings (Page 3: “60% of GDP savings” at fertility < 3), funding business and public projects.
• Human capital: Educated women (Page 1: “empowered… career-focused”) enhance workforce productivity.
• Case study link: Child mortality drop (1 in 25 vs. 1 in 5 in 1980) reduces dependency ratios, freeing resources for growth.

Question 4

Factors Influencing Growth (4.3.2)

Why might Kenya’s demographic dividend lag behind Asia’s?

Answer 4

• Slower fertility decline: UN projects Africa’s fertility at 2.7 by 2050 vs. Asia’s rapid transition (Page 2).
• Weak human capital: Lack of formal jobs and underinvestment in education (Page 2: “squandering… youthful populations”).
• Case study quote: Bintu Sakor notes Kenya lacks Asia’s “bulge in working-age” and investment in skills (Page 2).

Question 5

Strategies for Development (4.3.3)

What policies could accelerate Kenya’s growth amid population changes?

Answer 5

• Education: Prioritize female/youth education to boost workforce skills (Page 2: “invested in developing human capital”).
• Healthcare: Expand access to family planning and maternal care (Page 1: Jacaranda Maternity clinics).
• Infrastructure: Use savings (Page 3: “cheaper finance”) for projects like electricity to enhance productivity.
• Case study link: Robertson’s research ties fertility < 3 to bank savings for development (Page 3).

Question 6

LRAS Diagram Reference

Illustrate how Kenya’s population growth affects LRAS.

Answer 6

• Diagram: Rightward LRAS shift from LRAS₁ to LRAS₂
• Mechanism: Increased labor force and investment raise potential output (Y₁ to Y₂)
• Case study context: Population growth + savings could “bring forward development by a decade” (Page 3).