The Impact Of Population Growth On The Nigerian Economy

Project and Seminar Material for Economics

The Impact Of Population Growth On The Nigerian Economy

Chapter One


1.1 The Background of the Study

The consequences of population growth on the economic development of less developed countries are not the same because the condition prevailing in these countries are quite different from those of developed economy. Therefore the body of literature on population growth in Nigeria has always emphasized either the negative or the positive effect.

Therefore in every discussion, it is conventional to start with a definition of terms used in such discussion. However, population growth can be seen by a demographer as a change in the size of the population. But when this change occurs in such a way that it reduces the size of population, the demographer refers it as a negative growth but when it adds to the size of the population he regards it as a positive one. What we get from this concept is that population growth can be positive or negative depending on whether there is an increase or decrease in the size of a given population. Population whether positive or negative is derived from three demographic variables such as birth, death and migration rates.

Udabah (1999) Threw more light on this by adding that birth and death rates in underdeveloped countries are quite different from that of developed countries. Births rate in underdeveloped are generally high, why those of developed countries are low. On the other hand, death rates are higher in underdeveloped nations. The higher rate of population growth is therefore a major characteristic of underdeveloped nations and is partly responsible for the low rates of economic development.

Moreover, the population of any country constitutes the most vital component of its resource base. This aspect is based mostly on its size, growth rate, spatial distribution, demographic structure and quality in terms of level of education, fitness and social welfare. Population statistics are indispensable impute into the planning process in any area.

To government issuing programmes for instance in the efforts of government in the developing countries to feed the people and also provide quality services for them are being frustrated by rapid population growth. This growth is attributable on the one hand to improvement in human survival associated with the application of modern medical science to health matters, better sanitation and immunization of children which have caused the death rate to decrease.

On the other hand, so many socio-cultural issues have complimented the growth of population in Nigeria positively (Lee and Miler 1990, Rennne 1995, Ainsword et al 1996).

Consequently, the world population has been increasing and the last two decades have been demographically unprecedented as it rose from 4.2 billion people in 1985 to 6.4 billion in 2010. Much of this occurred
in the developing nations as their population grew from 3.7 billion to 5.1 billion as against that of developed nation which grew from 1.1 billion to 1.2 billion over the same period (United Nation 2001 billion).

Nigerian’s population is one of the fastest growing population in the world and Nigeria is the most populous country in Africa, ranked the tenths as obtained from two major sources, viz the 1991 census and the Population Reference Bureau World Population Data Sheet.

Obviously, the population of Nigeria is large which makes it a “giant” relative to the other Africa countries. The large population of Nigeria implies a large market for goods and services as well as large pool of human resources for development. However, the impact of population on development depends not only on the absolute size but also on its quality. The major function responsible for the rapid increase in the population of the country is the relatively high fertility level as portrayed by a total fertility rate of about 6.0 life – birth per woman in
the 1990‟s.

Having seen from theoretical and empirical view that the population growth is an impediment to the economic growth and development especially under developing countries. It is then important to answer this question, how detrimental is population growth to the economic growth? To answer these we look into the interactions between population growth and any of the economic variable such as, population growth, unemployment, savings ,interest, and inflation etc.

So in this research work, our demonstration of the impact of population on economic growth will be based on the study of the relationship between population growth, interest, unemployment and inflation. Now
the question to answer becomes how those population growth influences unemployment? Since we are working on the impact of population growth on Nigeria, as whose population according the 2006 census was estimated to be at a growth rate of 3%, our limitation of this study would be on the Nigeria GDP (Gross Domestic Product) or GNI (GROSS NATIONAL PRODUCT) versus the population growth rate of Nigeria.

Nevertheless, economic growth is the GDP OR GNI divided by the total population of the whole country. This measures the level of output in the economy. This equation implies that if population is rapidly growing, the economic growth will reduce marginally and people income will also decrease. So according to the finding, GDP can be improved that is GDP per capital by checking the population growth rate through birth control, death rate, migration and some other economic variables and demographic variables.

1.2 Statement of the Problem

Fundamentally, growth is an indispensible requisite for the development that is why Nigeria‟s economic growth had continue to dominate the main thrust of government paramount objective more importantly, growth is associated with policies of control population growth because a high population lead to a vicious depletion of a nation‟s financial and material resources. According to CBN (1997) the population growth rate of Nigeria is at an average of 2.83% from 1993 to 1997 as compared to developed country like United States whose population rate is 1.00% on the average. This rapid population growth has efficiently induce wide spread poverty. According to Chege (1992),
Nigeria became worst than the early post-colonial period. In the 1980‟s the agricultural sector declined in productivity by 1.3% while population grew by 3.1% thus creating severe food shortage, a fall in capital income, a fall in savings and living standard . Because of this type of situation economic growth been severely retarded and dwarfed.

The above presentation points to the critical stance of the economy and therefore makes a clarion call for adequate measure to control the growth rate of Nigeria‟s population which is at 2.8%per annum. To check this, we require constructive demographic policy approaches that will seriously enlighten citizens of the eminent socio-economic danger of rapid population growth.

1.3 Objective of the Study

  1. To find out the relationship between population growth and economic growth.
  2. To examine the impact of population growth on economic growth.
  3. To proffer appropriate solution / recommendation to authority in charge of managing the economy on how to remedy the situation population growth.

1.4 Statement of the Hypothesis

The hypothesis to be used is stated thus:

  1. H0:= The impact of population growth on Nigerian economy is not significant.
    H1:= The impact of population growth on Nigerian economy is significant.
  2. H0:= There is no casual relationship between population growth and economic growth.
    H1:= There is casual relationship between population growth and economic growth.

1.5 Significant of the Study

  1. It provides information on population trends and their implication to the policy makers, educators, the media and the concern public Servant.
  2. To ascertain the truthfulness whether population growth impact negatively or positively to the economic development.
  3. This study will also serve as a reference research work for the society further studies

1.6 Scope of the Study

This research is macroeconomic in nature and over the trend of population growth rate and economic growth rate in Nigeria from 1980 to 2010 a period of 30 years. The study also focuses on the effects of population growth on economic growth in Nigeria in a bid to analyze the options available to accelerate economic development, taking into cognizance of the fact that other factors outside the sphere of population are also important in the determination of the face of economic growth.

1.7 Limitation of the Study

The utility of this research work is restricted to the exclusive focus on population size and growth.

Chapter Five

Summary, Recommendations and Conclusion

5.1 Summary

The main purpose of this study is to determine or assess the impact of population growth on Nigeria economy. This work was motivated by hypothesis of Rev T. Mathus, which point to or predict a universal socio-economic malady. Looking at Nigerian instance presently, we observed that there is a positive fulfillment of Malthus preposition of 1803.from the statement of problem we notice the population have severally truncated economic growth and eroded other factors that facilitates economic development. The objective of study also reviewed that population growth and economic growth had a negative relationship and that population growth had a negative impacton economic growth.

The methodology of our research was based on three methods, which range from Economic, Statistical and Econometric criteria.

These three methods were used in order to make an elaborate evaluation of our work leaving it with little or no loop hole. The other explanatory variables used were included considering their influence on economic growth and their relationship with population growth.

In the literature review we observed that relationship between population growth and economic growth is a global puzzle that has continued to preoccupied the thought of many philosophers. In this section of the work we observe that three theorists (school of thought) abound, namely; the pessimist, the optimist and liberal theorist. We
also found out that so many factors affect population growth and they are either cultural, natural or manmade.

Empirically, we noticed that population growth in Nigeria frustrates government’s effort to enhance economic growth and also it further deepens employment and scarcity of social amenities. Due to rapid population growth in Nigeria. Is equally associated with unemployment with figures ranging from 17% per annul for. The entire population to 60% for the youth because job opportunities are fewer than the numbers seeking for them and stagnating economic performance because a large proportion is consumed instead of invested to generate growth.

In the presentation and evaluation of our results, we observe that unemployment, interest rate and inflation rate have negative impact on GDP while population have a positive impact on GDP. However, 72 % for the variation in the GDP_GR in Nigeria is explained by population growth and other explanatory variables and also population growth was found significant.

Finally, the model used was a semi logged model, and it showed and there is a negative auto correlation and that most of our independent variables show a separate impact on our dependent variables.

5.2 Recommendation

Firstly, the government should embark on a family planning programme (FPP) and also try to use that means to enlighten the populace on the eminent danger of rapid population and its consequences on the economy.

Secondly, the government should try to increase their expenditure in order to increase the volume of money in circulation, which will on the other hand reduce interest rate. Also through the central monetary authority, the government should try to keep interest rate at a level that will encourage private planned investment and by so doing unemployment will be reduced.

Finally, there should be an even distribution of income among the states. Also the government should increase capital investment in order to bridge the gap between population growth and unemployment.

5.3 Conclusion

We cannot take it hook, line and sinker that population growth is detrimental to economic growth rather we should be rational to think it to have a two – track impact. When population growth is not matched with equal level of industrialization, production and productivity it bleaks economic growth but when it matched with those factors it promotes economic growth. That‟s why USA and China are the strongest economics in the world today.

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