Human capital—the sum of a population’s health, skills, knowledge, and experience—accounts for the largest share of countries’ wealth globally. It allows everyone to reach their full potential and is increasingly becoming recognized as a primary driver of a nation’s economic growth.
The World Bank Group’s Human Capital Project is a global effort designed to accelerate the accumulation of human capital by encouraging more effective policies and investments. The project will help countries strengthen their human capital and improve ways of measuring it.
It places special emphasis on working with countries across Sub-Saharan Africa to help them meet their human capital goals. Investing in Africa’s people is central to ensuring the continent’s future prosperity and its full participation in global markets.
MEASURING HUMAN CAPITAL IN SUB-SAHARAN AFRICA: THE HUMAN CAPITAL INDEX
To provide a baseline, the World Bank’s new Human Capital Index focuses on how human capital contributes to the productivity of the next generation of a country’s workers. It measures a country’s performance in the building blocks of an economy, including the components closely linked to the Sustainable Development Goals for health, education, and nutrition:
- Survival: Will children born today survive to school age?
- School: How much school will children complete and how much will they learn?
- Health: Will they leave school in good health, ready for further learning and/or work?
Based on the new index, countries in Sub-Saharan Africa have seen major reductions in under-five mortality between 1990 and 2015, but the number of children who die under the age of five—mostly from avoidable causes, such as complications related to respiratory infections, diarrhea, or malaria—is still high at about 2.9 million every year.
Countries such as Somalia, Chad, Central African Republic, Sierra Leone, Mali, and Nigeria have child mortality rates above 100 deaths per 1,000 live births, some of the highest in the world (Figure 1).
Figure 1. Under five mortality in Sub-Saharan Africa by income groups
Source: World Development Indicators, 2017
Wide disparities also remain within countries, particularly for access to more complex interventions such as skilled birth attendance and treatment for severe illnesses. Disparities in access are often compounded by the poor quality of health care often reflected in deficits of essential drugs and medical equipment, and in the training of frontline health workers.
Investing in schooling has high returns
Africa has the largest return on
Completing the agenda for universal basic education is essential, but schooling on its own is not enough: learning levels across the region are very low (Figure 2). In some countries, more than 85% of primary (elementary) school students are unable to read proficiently.
Figure 2. Competency level in mathematics from SACMEQ 2007, Sub-Saharan countries
Source: World Development Report, 2018.
Africa is also the only region of the world where the number of out-of-school adolescents has risen in recent years, partly because of rapid population growth.
Nonetheless, data show that African countries can improve their human capital. Interventions that have worked for some countries include the reorientation of education systems through initiatives such as measuring and tracking student learning outcomes; acting on evidence of what works for all learners; using cash transfers to promote access to education for the poor; and developing a sense of urgency among key actors to address the changes needed.
Early childhood nutrition is key
One proxy for chronic malnutrition and childhood development that forms part of the Human Capital Index is childhood stunting, which is measured through a child’s trajectory in height relative to his or her age. This is a strong determinant of cognitive capacity and adult health, as well as of an individual’s future economic productivity.
Sub-Saharan Africa reports the world’s highest rates of stunting among children (Figure 3). This means children fall sick more often, miss opportunities to learn, perform less well in school, and grow up economically disadvantaged and more likely to suffer from chronic diseases in adulthood.
Figure 3. Stunting in Sub-Saharan Africa by income groups
In part because of rapid population growth and only modest reductions in stunting, the actual number of stunted children in the region increased by 12 million between 1990 and 2015—and is likely to keep rising unless these issues are addressed. However, a few countries—some of them low-income—have reduced the rate of stunting: they include Senegal, Madagascar, Lesotho, and Malawi.
Their improvement has been achieved by creating public awareness of what stunting is and implementing programs with interventions to prevent it, such as promoting breastfeeding and providing micronutrients for pregnant women and infants; and providing more access to essential health services, and cleaner water and sanitation.
HUMAN CAPITAL FOR INCLUSIVE GROWTH AND SHARED PROSPERITY: WHAT WILL IT TAKE?
The Human Capital Project aims to support country-owned action plans and facilitate cross-country learning. Progress on the ground, though, requires political leadership and action in key areas, such as:
- Expanding government investment in social services.
- Introducing reforms and innovation to improve service delivery.
- Committing to equity and inclusiveness.
- Addressing fertility and gender issues to harness a demographic dividend.
The demographic dividend is the economic growth resulting from a change in the age structure of a country's population, typically brought on by a decline in fertility and mortality rates, and leading to smaller, healthier families with higher levels of education.