Impacts of Population Growth on the Nigeria Economy (1980 -2006)
Chapter One
Research Objective
This study aims to examine the effect of population growth on Nigeria’s economic growth and development. The specific objectives of the study are to:
- determine the effect of the population growth rate on Nigeria’s economic growth and development.
- investigate the effect of the fertility rate on Nigeria’s economic growth and development.
- identify the effect of the mortality rate on Nigeria’s economic growth and development.
CHAPTER TWO
REVIEW OF EXISTING LITERATURE
Introduction
This chapter examines the relevant theories and works done by different authors on the subject matter and my attempt to support or go against their views while making points of my own.
Theoretical framework
Population growth is an important factor in determining economic growth across nations.
Population growth also has a direct impact on the age distribution of a country’s population, international migration, geographic mobility, social mobility, economic inequality, death and birth rates and the size of a country’s work force. These factors all affect and are affected by economic growth.
The link between population growth and economic growth has been an area of scholarly debate for over a century. Thomas Malthus (1789) put forward one of the earliest and most popular theories on the impact of population growth on welfare and growth. He argued that population has a tendency to grow faster than food supplies. The conclusion of Malthus’s model is that average incomes will be lowered by population growth to a level that is insufficient for the population’s subsistence and welfare. For Easterling (1967), the core assumption of the Thomas Malthus theorem is the limited presence of natural resources that constrains both population and economic growth.
The conclusion of Malthus theory indicated that population grows at a geometric rate, while the production capacity is recorded quarterly and grows at an arithmetical rate. Thus, in the absence of constraints through government intervention, scarce resources will have to be distributed amongst the rising number of people. In a nutshell, Malthus believed that countries with limited resources and rapid population growth were bound to experience increased poverty. Supporting Malthus’s claims, the Coale-Hoover (1969) “theory of population” argues that high rates of population growth lead to sluggish increases in per capita income due to high population densities.
Supporting Malthus’s claims, Solow (1956) put forward the neoclassic model of growth. Using population as an exogenous variable and he claimed that population growth followed an arithmetical pattern naturally, instead of a geometrical one. Solow’s (1956) model was built using the population growth rate under the assumption that a constant and natural population growth is independent on economic dynamics. He identified two distinctive impacts of population growth rate change on economic growth. Firstly, an increase in population growth rate will increase the amount of labour and consequently both the absolute level of output and the steady state output growth rate. Conversely, it will lower physical capital stock per worker leading to a decrease in productivity and in the steady state output per worker. This suggests that, higher population growth would detrimental for economic development via lowered productivity.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter is concerned with the methods used in collecting, analysing and interpreting the data for the study, also explains the population of the study, sampling techniques and sampling size; model development, method used in recording and techniques used in data analysis.
Research Design
According to (Yin, 1989), the research design chapter explains all the procedures and methods undertaken by the researcher to obtain relevant evidence to clarify and answer the research question listed in chapter 1. This study will make use of time series data for the periods under study as it allowed for the collection of previously documented data. This provided the basis for the full establishment of the relationship between the variables. The model employed is the ordinary least square method and regression model to analyse and interpret data using our Eviews application program. In order to examine the effect of population growth on Nigeria economic growth.
Sources and Method of Data
The study used secondary source of data. It consists of existing information which may be useful for the purpose of the study at hand. The data is extracted from the World Bank Annual report covering the period of thirty-four years (34) years from 1986-2019.
CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND INTERPRETATION
Introduction
This chapter presents and discusses the result of the data analysis. Analysis of the results obtained from the descriptive statistic; correlation matrix presented in tabular form followed by regression analysis. Hypotheses are tested so as to determine whether or not to reject the null hypothesis.
CHAPTER FIVE
Conclusion
This paper highlights the effects of population growth on Nigeria’s economic growth between the period of 1985-2019.
Using the time-series data and multiple regression analysis we were able to determine the relationship that exists between population growth and economic growth. Our results show that economic growth has a significantly positive relationship with population growth. This suggests that as economic growth continues to rise in Nigeria, population growth will increase as well and vice-versa. The other explanatory variables used in the paper have also proven to be significant determinants of population growth.
This paper made use of the multiple regression model to test all the available independent and dependent variables, the result suggested that PGR and FER have a significantly positive relationship with economic growth, meaning an increase in one unit of either variable will lead to an increase in economic growth. While the MOR, INR and, UNR have a significantly negative relationship with economic growth, meaning an increase in either variable will lead to a decline in economic growth.
This paper also identified the relationship between population growth and economic growth using a granger causality test. The findings suggest that RGDP and population growth have a unidirectional relationship with each other.
Recommendation;
Based on the findings from our research, the following are proposed recommendations that will help control the negative effects of population growth in Nigeria.
Firstly, The budgetary allocation for education as of 2020 is 48billion naira which is far less than the proposed budget for 2020 and only makes up for 6.7% of the entire budget plan. To adjust the effects of the illiteracy rate in Nigeria government should formulating expansionary fiscal policies that support the educational sector, and also ensure that resources and capital are efficiently distributed to the parts of the economy where they can be fully utilized to spur economic growth and also allocate more money in the budgetary planning.
The Central Bank of Nigeria should implement sustainable fiscal and monetary policies to prevent inflation from rising rapidly. Inflationary pressures automatically reduce the real wage of workers and their purchasing power most especially for those earning lower incomes. This drastically affects the standard of living in the country and widen the existing inequality gap. The government can put forward social protection programs and schemes to support vulnerable groups in society, particularly women, children, and people with disabilities.
With the implementation of strong monetary and fiscal policies, the government can regulate these policies by reducing discount rates, buying more government securities, and reducing the cash reserve ratio.
secondly, the findings of this research paper show that population growth has a positive effect on Nigeria’s economic growth. This means that Nigeria is experiencing a surge in population growth which is concomitantly leading to poorer growth outcomes. Therefore, the Nigerian government should put in deliberate efforts to not just increasing economic growth rates but also finding long-term solutions to curb the increase in population growth. One of the ways this could be achieved is through attitudinal change particularly in the northern regions of the country where the population is booming. They should also provide educational mediums that educate households on family planning.
Thirdly, for the purpose of policy formation and implementation, policy makers should put in efforts in creating sustainable and rigid policies that will help to curb population growth in Nigeria, for example the government should set up programs that strongly advise against early marriages especially on children and also find ways to control the changes in nuptiality patterns in the country.
Fourthly, the Nigerian government should also invest in priority sectors such as agriculture and manufacturing and design policies targeted towards creating productive employment. Literature posits that high levels of unemployment have a negative impact on lives and livelihoods and economic growth as a whole. Therefore, the government should as well create special employment benefits, which can be in the form of financial or non-financial aid in order to establish a competitive package for the employee.
The government should also ensure that jobs are available for university graduates. They can do so by creating job vacancies and as well as creating public awareness for available jobs in the different parts of the country.
Furthermore, because population growth is more rampant amongst the rural dwellers due to high levels of illiteracy and poor family planning (world bank data, 2018), the government should double their efforts by funding rural development projects, providing adequate social infrastructure in such areas, and also empower the people in these communities by creating a conducive environment for productive economic activities.
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