Impact of Population Growth on Nigeria Economic Growth

This work investigated the impact of population growth  on Nigeria economic growth 1981-2015. A number of test was carried in the research work including granger causality test, vector error correction estimates, variance decomposition test among others. Below is the work.

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

The consequences of population growth on the economic development of less developed countries and 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. In every discussion, it is conventional to start with a definition of terms used in such discussion. However, population growths 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. Birth rates in underdeveloped countries are generally high, why those of developed countries are low. On the other hand, death tales 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 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 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 3.1 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 populations 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 1990s 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 variables 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 he 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 Problem

Fundamentally, growth is an indispensable requisite for the development that is why Nigeria’s e 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 (2008), Nigeria became worse than the early post-colonial period. In the 2000s 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. This project work is to be undertaken to assess the economic implications and eminent socio-economic danger of rapid population growth. It will also make recommendations as to how to tackle the impending problems.

1.3      Research Questions     

The following questions are to be addressed in the course of this study;

  1. To what extent does increase in population impact on Nigeria’s economic growth?
  2. Is there any long-run relationship between population growth and economic growth in Nigeria?
  • Is there any significant causal relationship between population growth and economic growth in Nigeria?

1.4       Objective of the Study                 

The objectives of this research work are to:

  1. empirically investigate the impact of increase in population on economic growth in Nigeria.
  2. evaluate the long-run relationship between population growth and economic growth in Nigeria.
  • examine if there is any causal relationship between population growth and economic growth in Nigeria.

1.5       Research Hypotheses

The hypotheses to be tested in the course of this research work are:

H01:     Population does not have significant impact on economic growth in Nigeria.

H02: There is no significant long-run relationship between population growth and economic growth in Nigeria.

H03: There is no causal relationship between Population growth and economic growth in Nigeria. 

1.6       Significance of the Study

This study will be significant as it aim to verify the impact of increasing population on the economy of Nigeria. Also it will be of high benefit to;

Government will be made aware of the need to control population since they play a crucial role in regulating the economy.

Proffer appropriately solution/recommendation to authority in charge of managing the economy on how to remedy the situation population of population growth.

Students: This research work will provide bases for further research and also serve as a reference tool to the researchers who consult this work.

It is pertinent to note that this study will serve as a source of knowledge to whoever flips through the pages of the work.

1.7       Scope and Limitation of the Study

This research is macroeconomic in nature and over the trend of population and economic growth in Nigeria from 1981 to 2014 a period of 34 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. The major limitation of the study is that the researcher was financially independent as a student, the need for material trips and logistics needed for this research was not adequately provided and finally, time constraint as there was not enough time to carry this research work as he combines same with academic work.

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