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THE EFFECT OF POPULATION GROWTH RATE ON THE NIGERIAN ECONOMY (1980-2010)

(Economics)

THE EFFECT OF POPULATION GROWTH RATE ON THE NIGERIAN ECONOMY (1980-2010)

Abstract

The effect of population growth on economic growth has always been a subject of disagreement among economists. The rate of population growth in Nigeria is high and thus the need to evaluate its impact on economic growth is necessary. This paper evaluates the effect of population growth on economic growth in Nigeria (1980-2010)The research is conducted using primary and secondary data. Data were obtained from the World Development Indicators from 1980-2010. The data were analysed using descriptive statistics as well as chi-square. The result revealed that there is a positive relationship between economic growth (proxied by GDP growth) and population, fertility and export growth; while negative relationships were found between economic growth (proxied by GDP growth) and life expectancy, and crude death rate.

 

 

 

 

 

TABLE OF CONTENT

Title page

Approval page

Dedication

Acknowledgment

Abstract

Table of content

 CHAPETR ONE

1.0   INTRODUCTION 

1.1        Background of the study

1.2        Statement of problem

1.3        Objective of the study

1.4        Research Hypotheses

1.5        Significance of the study

1.6        Scope and limitation of the study

1.7       Definition of terms

1.8       Organization of the study

CHAPETR TWO

2.0   LITERATURE REVIEW

CHAPETR THREE

3.0        Research methodology

3.1    sources of data collection

3.3        Population of the study

3.4        Sampling and sampling distribution

3.5        Validation of research instrument

3.6        Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

 

 

 

 

 

 

 

 

 

CHAPTER ONE

INTRODUCTION

  1. 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 oneAs the twenty –first century began, the world’s population was estimated to be almost 6.1 billion people. Projections by the United Nations placed the figure at more than 9.2 billon by the year 2050 before reaching a maximum of 11 billion by 2200. Over 90% of that population will inhabit the developing world. (Todaro and Smith, 2006). “Two thousand years ago population growth and production were positively correlated. More people meant greater productivity and security.” The current modernization and technological advancement of today’s world is highly attributable to centuries of rapid population growth and economic expansion. Hundreds of years ago, when societies and economies initially began to flourish, success was dependent upon a productive agricultural sector. A growing population meant more workers and laborers who would increase overall output. With more productive labor, the economy inevitably expanded and society reaped the financial benefits. Centuries ago, population booms were positive indications of the potential for long term economic growth. High fertility rates during these times allowed for increased labourers and also helped overcome the correspondingly exorbitant death rates. The combined effects of “famine, disease, malnutrition, plague and war” resulted in death rates that were high and inconsistent. Given the lack of modern medicine that many countries faced until recently, death rates remained relatively elevated for several centuries. Thus, in order to have any net population growth and eventual economic development, fertility rates had to be elevated (Latimer and Kulkarni, 2008). In the twentieth century, modernization and technological expansion allowed societies to gain control of the ailments that previously killed large percentages of the population. Suddenly, societies were equipped to overcome famine, malnutrition, and other life threatening diseases. Rapid technological advances in modern medicine and sanitation drastically reduced global mortality rates. Increased technology also improved labour productivity. This combination of both technological and medical improvements set the conditions for unprecedented booms in world population growth.” Despite a rapid decrease in mortality rates, global fertility rates remained constant and caused exponential growth within the global population. No longer do birth rates struggle to keep up with death rates. Currently, global fertility rates far outweigh mortality rates, forcing the world to confront serious population growth issues. With almost 7 billion people, the world population is placing a huge strain on natural resources. Unfortunately, the projections for the future do not appear to be improving. At a population growth rate of 2.8 percent per annum between 1952 and 1991, Nigeria is one of the fastest growing countries in the world. Nigeria is the most populous country in Africa, and accounts for one in five of Sub-sahara’s people. By 2013, the population forecast for Nigeria is 169.7 million. However, the composition of this population is mainly in the youthful category with 49% below the age of 21 years and a dependency ratio estimated at 89%. A large proportion of this population favours and is living in the rapidly expanding urban areas, presently estimated at over 45.2% and will likely hit 55.4% mark by the year 2015(UNDP, 2000).Over the years, it has become established that the existence of an efficient and effective human capital is the key to economic growth and development in any nation. This stems from the fact that every other facility and resource required for economic growth is driven by the availability of human capital. More so, in the absence of effective human capital development, an increasing population can have adverse negative effect on the economic growth of a nation. This is because a lot more resources are taken out to manage and cater for the teeming population that the same can generate Brand (2009).It is therefore correct to state that the economic growth of a nation is significantly dependent on the growth of its population. The effect or impact can be either negative or positive dependent on the existence of certain factors and conditions, when studied and understood can be managed or controlled to ensure continuous and sustainable economic growth and development. Dennis (2004), Nigeria is one of the fastest growing countries in the world. With an estimated population of 140 million and an annual population growth rate of 2.9% (NPC 2006), Nigeria is the most populous nation in sub-sahara Africa and the tenth most populous in the world. However, the composition of this population is mainly in the youthful category with 49% being youths below the age of 21 and a dependency ratio estimated at 89%. A large proportion ofthis population favours and is living in the rapidly expanding urban area, presently estimated at over 45.2% and will likely hit 55.4% mark by the year 2015 (UNDP, 2007). With this statistics however, the population growth shows profound inequities and disproportions when analyzed with development indicators such as: 21 doctors per 100,000 people, infant mortality rate of 112 per 1000 live births, maternal mortality of over 980 per 100,000 live births, life expectancy at birth projected at 50 years.We can now define population growth as the increase in the number of human inhabitants of a given place. The total population of any area of the earth‘s surface represents a balance between two forces. One is natural change caused by the difference between the number of births and deaths. If births are more numerous than deaths in any period, the total population will increase. However, if they are less numerous it will decrease. This simple relationship is modified by a second force; migration. When immigrants are more numerous than emigrants, there will be a population increase. (We assume, of course, that we are ignoring natural change for the moment). When emigrants are more numerous, there will be a population decline. Ben, (2005).Net changes in population totals are caused by the interaction of four elements: Births and immigrants tend to push the total up: Deaths and emigrants tend to bring the total down. Although migration may be the most important factor in small areas (for example, in a small village or a city block), it is less significant on the national level.

1.2 STATEMENT OF THE PROBLEM

Much of contemporary economics on population problems have centered on what could be the optimum size and its impact on economic growth and development (Caldwell, 1990; National Research Council, 1993; Onokerhoraye, 1995; Bon goarts, 1996; United Nations 1999; FAO, 2000; UNDP, 2001 and Onwuka 2003). This line of thought originated from the question posed by Malthus (1803) as to whether food production could keep pace with the demand of a growing population and his answer that the power of population is indefinitely greater than the resources on earth to provide the needed subsistence for mankind. The debate triggered by the Malthusian hypothesis points to a lack of universal applicability of his paradigm because in industrialized countries, technological advances have spurred increases in agricultural production which ensures food security for the citizens. According to statistics from Central Bank of Nigeria (CBN), the gross domestic product (GDP) computed at 1984 factor cost for the period 1970-71 stood at N54, 148.9, it grew steadily between 1972-73 and 1979. By 1980, the GDP had risen to N96, 186.6. However, it plummeted from the 1981 figure of N70,395.9 to N77, 752.5 in 1988 then the economy recovered marginally. The GDP stood at N113, 000 in 1998 with an annual average rates of growth of GDP of 2.1% (percent) little wonder why the economy has not been able to cope with the teeming population explosion. This can be seen from available statistics on per capital income. Again, the world research institute (WRI) estimated the percentage change of Nigerian‘s capital income for the 1990‘s to be minus 75.4. Similarly, agriculture became severely difficult by the teeming population growth. For example, the percentage change of the total cropland (000 per hectare) between the last 10 years was minus 21.3. This fact that this percentage field to livestock per capital (0.13) war lower than percentage changes of cereal production within the same period indicates that environmental resources was under stress (Mantu, 2001).The actual articulation and implementation in any economy population programme would not be possible without a determination and serious commitment in the part of the government. Neither can it be realized without putting in place a comprehensive and long perspective planning machinery informed by rich and reliable database. Obviously, we cannot hope to come close to realizing the dream of a sustainable development with the present economic thrust, which places misguided confidence on a deformed and parasitic private sector as the prime mover of the economy and engine of growth (Mantus: 2001). A large body of demographic literature documents the incidence of population growth in Nigeria (see, for example, Olusanya and Pursell, 1981; Farooq, 1985 National population commission, 2002, and federal Republic of Nigeria, 2004a). Ordinarily this growth of population could be to the advantage of a country in terms of the sheer size of its domestic market, better division of labour, and increased productivity through improvement in the ratio of labour force to population as well as enhancement of its political and military power. A large population also diversifies the demand for products and services and promotes the tendency to increasing returns to scale, thereby raising economic development (Yesufu: 2000).

1.3 OBJECTIVE OF THE STUDY

The main objective of this study is to ascertain the effect of population growth on the Nigerian economy

  1. To ascertain the effect of population growth on Nigeria economy;
  2. To examine the effect of population growth on the availability of labor;
  3. To examine the relationship between population growth and Nigerian economic growth;
  4. To investigate the dangers of overpopulation in Nigeria;

1.4 RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher; 

H0: population growth does not have any significant impact on the growth of Nigeria’s economy;

H1:population growth does have a significant impact on the growth of Nigeria’s economy

H02:there is no significant relationship between population growth and Nigerian economic growth.

H2there is a significant relationship between population growth and Nigerian economic growth

1.5 SIGNIFICANCE OF THE STUDY

It is believed that at the completion of the study, the findings will be useful to the management of Nigerian population commission as the findings will help them monitor the merit and demerit of mortality and maternity rate in the country. The study will also be useful to the employers of labor as the study seek to explore the merit of Nigeria’s young population as the serve as a very important factor of production in the country. The study will also be useful to researchers who intends to embark on a study on a similar topic as the study will serve as a reference point to further research. Finally, the subject will be useful to the general public as it will contribute to the pool of existing literature in the subject matter.

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the effect of population growth on the Nigerian economy. The researcher encounters some constrain which limited the scope of the study;

a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study       

b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 DEFINE OF CONCEPT

Population

The total number of persons inhabiting a country, city, or any district or area

Population growth

In biology or human geography, population growth is the increase in the number of individuals in a population. Global human population growth amounts to around 83 million annually, or 1.1% per year

Economic growth

Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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