THE EFFECT OF POPULATION GROWTH ON NIGERIAS ECONOMIC GROWTH 

Abstract

 

Over time there has been mixed and controversial evidence in the literature regarding the relationship between population growth and economic growth and development. This study is an empirical analysis of economic growth and population growth in Nigeria, some writers have found a positive relationship between the two variables, others noticed a negative relationship, and some examined little to no correlation between the two variables. The purpose of this research paper is to observe and analyse the effect of population growth on economic growth in Nigeria, examine whether our findings using the OLS method and our regression model holds and suggests probable and effective policy recommendations to help control over population in Nigeria.

Our secondary data was obtained from the world bank and the National Bureau of Statistics making use of the E-views programme to carry out our research. the granger causality test was also conducted and the result shows that RGDP does granger cause population growth in Nigeria, based on the statistic of this result as well as the results of our other regression models, government is advised to employ these measures so as to not only catalyse economic growth and control population growth and ensure equitable redistribution of public resources  

 

 

 

 

 

 

 

 

 

 

Chapter 1

 

Introduction

 

Over the years, it has become evident that human capital is a vital component in driving growth and development. This is because the productivity required to stimulate economic growth can only be achieved in the presence of human capital. In this regard, a growing population could be perceived as a blessing; especially if the demographic composition consists of youths who are active participants in economic activity. However, when population growth outperforms growth, the effects can be unfavorable; especially for per capita income (Handbook of Economic growth; O. Galore 2005).

 

A rapid growth in population can lower per capita incomes through three key channels.

Firstly, it increases the pressure of the population on natural resources; especially land. Secondly, it can lead to a scarcity of goods and services which often leads to an increase in price (consumption cost). Finally, it leads to a decline in capital accumulation and savings because the larger a family, the higher their expenses, and the lower their propensity to save (world population review, 2019). Population growth also negatively impacts poverty and inequality, education, employment health, food, migration, and the environment; all of which feeds into economic growth. Other aspects of population asides from numbers that influence economic outcomes for individuals and society as a whole include age, geographic, and social mobility.

 

Nigeria, popularly referred to as the “Giant of Africa” (WHO, 2006) has one of the largest and fastest-growing populations in the African continent. According to the National Bureau of Statistics (2016), Nigeria accounts for about half of West Africa’s population with an estimated 202 million people. At around 2012 a large proportion of Nigeria’s population consists of youths which made up around 42.54% of the entire population. The rapid population growth in Nigeria has had severe consequences on the nation’s development. The most profound being unemployment, endemic poverty, high levels of inequality, and insecurity issues.

 

This study explores the interactions between population growth and other economic variables such as unemployment, savings, interest, and inflation affect economic growth in Nigeria. So, in this study, our focus is on Nigeria’s population growth rate over the years, with an emphasis on the causes and consequences of a burgeoning population growth.

 

 

1.0 Statement of Problem

 

Overall, Nigeria’s current economic situation is not promising (World Bank, 2020). The economic recession period which occurred in 2014, due to diminishing commodity prices retarded economic growth and has severely negatively affected living standards (world bank, 2008). While the Nigerian government has consistently implemented economic and social policies, that are directed at improving the social welfare of individuals which will serve as a catalyst for economic activities, all their efforts have been rendered ineffective by the rapidly growing population and limited resources. According to the world bank 2008, Unemployment rates have been increasing, insecurity particularly in the north is dire, infrastructure is dilapidating, disposable incomes are falling as prices remain volatile. If the current population trend persists in the coming years, Nigeria faces a real problem.

In the past, Nigeria has made modest attempts to try and reduce population growth. The first population policy in Nigeria was created in 1988. The goal of the policy was to reduce the number of children a couple would have to 4 by 1995. However, the policy failed to achieve its goals which included decreasing the fertility rate, reducing the level of early marriages which will reduce the population growth rate. In 2005, Nigeria put forward another population policy called “The National Policy on Population for Sustainable Development

(NPP)”, which was aimed at increasing the standard of living and providing quality livelihood for the citizens of Nigeria but also failed due to a fraud, lack of policy commitment and political will. (Ministry of National Planning, Nigeria).

 

1.1 Research Questions

 

• What is the relationship between population growth rate and economic growth in Nigeria?
• Is there a causal relationship between population growth and economic growth in Nigeria?

 

1.2 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:

1. determine the effect of population growth rate on Nigeria’s economic growth and development.
2. investigate the effect of fertility rate on Nigeria’s economic growth and development.
3. identify the effect of mortality rate on Nigeria’s economic growth and development.

 

 

1.3. Statement of Hypothesis

 

Hypotheses to be tested in this study are stated below in their null forms:

• What is the relationship between population growth rate and economic growth in

Nigeria?

• Is there a causal relationship between population growth and economic growth in

Nigeria?

 

 

 

1.4 Significance of the study

 

This study is relevant as it aims to improve and understand the relationship that exists between economic growth and population growth in Nigeria.

This study will also be essential for policymakers to grasp the potential consequences of a rapidly growing population on the environment and enable them to formulate more constructive demographic policies that will tackle the problem of population encompassing economic growth rate.

 

1.5. Scope and limitation of the study

 

This study covers the effect of population growth on Nigeria’s economic growth and development. The study covers the period of thirty-four years (34) from 1986 to 2019.

 

1.6. Definition of terms

 

• Trends: a pattern of gradual change in a process, output, or condition.
• Human capital: this is seen as a measure of talents, knowledge, education, and attributes of labor that shows the economic significance of a worker.
• Capital accumulation: this has to do with all the efforts put in investing money with the main aim of increasing one’s initial monetary outlay.
• population: is the total amount of people living in a particular geographical area.
• Economic growth: this is the increase in the manufacturing of goods and services over a specific period.

Fertility rate: is the total number of live births per women (per 1000 women

THE EFFECT OF POPULATION GROWTH ON NIGERIAS ECONOMIC GROWTH 

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