Kathmandu-  Nepal is entering a pivotal phase in its demographic evolution-a period when its population structure is primed for economic growth.

 

The 2021 National Population and Housing Census reveals that 65.2 percent of Nepal's population falls within the working-age bracket of 15 to 65 years. This demographic, encompassing both the economically active and inactive, holds the potential to drive the nation toward prosperity.

Compounding this advantage is a declining age dependency ratio, which now stands at 53 dependents for every 100 workers-a significant improvement from 67 dependents in 2011. Dependents, defined as individuals younger than 15 or older than 64, place a strain on economic resources. The current shift offers Nepal a golden opportunity to leverage its working-age population for accelerated development.

But such opportunities are fleeting. Fertility rates are declining, signaling that fewer children are being born. Meanwhile, the proportion of the population over 65 is steadily increasing, threatening to offset the current demographic advantage. Without timely interventions, Nepal risks squandering this critical window.

'Data alone is not a dividend,' says Dr. Hemraj Regmi, Deputy Chief Statistical Officer at the National Statistics Office. 'No country can realize the benefits of a demographic shift without creating opportunities for its population to participate meaningfully in economic activities.'

To that end, Regmi says the government is interpreting census data to formulate strategies for harnessing the demographic dividend. 'We are studying the current status, the duration of this advantage, and the necessary policies to maximize its potential,' he explained.

However, challenges abound. More than two million Nepalis are working abroad, and those who remain often face limited opportunities. A chronic lack of job creation and an unskilled workforce further complicate the picture. Critics warn that Nepal risks turning its youthful population into an economic burden rather than an asset.

The experiences of other countries offer valuable lessons. South Korea and China, for example, have reaped the benefits of demographic dividends by investing in skill development. India, by contrast, is grappling with a shortage of skilled workers despite its vast youth population-a cautionary tale for Nepal.

For Nepal, time is of the essence. While the demographic advantage exists on paper, translating it into tangible economic gains will require bold policy decisions, investments in education and skills training, and the creation of jobs at an unprecedented scale.