CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Over the years if has become established that the existence of an efficient
human capital is the key to economic growth and development in any nation. This
seems from the fact that every other facility and resources required for economic
development 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.
It is therefore correct to state that the economic growth of a nation is
significantly dependent on the growth of its population. This effect or impact can
be either negative or positive depending at 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. Meier (1984).
Economic development and growth depend on many factors or variables.
These variables include variable resources, capital, population and technology.
Development is also dependent on growth. Lipase (1963).
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People have often said to crucial to the development of every society.
Growth in population is one of the components of economic growth (wish the
associated, although delayed increase in the labour force) has traditionally been
considered a positive factor in stimulating economic growth and development.
Lipase (1963).
The relationship between economic development and the growth of
population is theoretically held to be positive especially when the population is
largely productive and not dependent. Increased economic growth does not by
itself guarantee economic development it makes economic development possible.
Havey (1983). Economic growth enables improvements or positive changes to take
place in various of economic activity due to increased production of goods and
services. Larger population provide the need consumers demand to generate
favourable economies of scale in production to costs of labour force means more
productive man power in the economy.
The ability for a country to effectively exploit natural resources is dependent
on among other things, the managerial and technical skills of its people. It is the
people who exploit natural resources, accurate capital and carry out national
political organizations and carry out national development programms. Thus,
labour is the major contributor to prosperity and growth. Tadaro, (1982).
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According to the theory of demographic transition growth occurs only after
country would have undergone different levels of population growth to arrive to an
optimum wide will naturally lead to growth.
A more conventional economic argument is that population growth in many
third world countries a region is in-fact desirably to stimulate economic growth
and development.
This is not a case in Nigeria; Nigeria is a less developed country and a
highly populated one at that, more so her growth rate has always been very low,
compared with the increase in population. This features of the nation is an cause
for concern.
During the study, it is necessary to state that because development has no
unit if measurement and because of lack of reliable date on its components
economic growth will be used as a proxy for measuring development. This is
because economic growth is the one component from which other components spin
off and to which other components are related.
1.2 STATEMENT OF THE PROBLEM
Growth is a complex process as development is a multi dimensional one.
The nature and causes of growth go beyond what is expressed by improvement in
Gross Domestic Product.
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Every economics primary objective is to develop in the medium or
intermediate, this objective is stated as the need for growth. In the short run it is
stated as the need for growth to attain whatever improvement is necessary for
growth. In relation to this study the condition necessary for economics
development and growth is population growth while growth itself is a condition
necessary for development.
Population growth is the rate of which a given population multiplies itself.
The population growth rate is as important to economists as the size of the
population. Governments and economists would like to know if the population is
growing faster or slower than the rates of other economic indicators.
Economics growth refers to the study process by the productive capacity of
the economy is increased overtime to bring about increase in the output of goods
and services and rising levels of national income. (Hodder’s (1980).
The growth in the output of goods and services (i.e growth in GDP). It is the
process by which national income or output is increased. An economy is said to be
growing if there is a sustained increase in the actual output of goods and service
per head. Meier GM (1984).
The rate of economic growth therefore measures increase in real national
income, during a given period of time, usually a year.
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Economic development is not the same as economic growth. It means more
than mere growth of the economy (in terms of increased output) it is in the process
of increasing substantial positive transformation in the various sectors of the
economy. Meier GM (1984). The positive changes which take place improve the
general rise in the standard of living of the masses with economic development;
there are structural transformations in the different sectors of the economy as well
as general improvement in different areas of the country, leading to increase
economic welfare of the citizens. Economic development on the other hand is
generally defined as consisting of “Improvement” in the various aspects of the life
of the entire population of a country such improvements are generally manifested
in greater numbers of useful tools for employable persons, higher real incomes,
better health conditions, (literacy) and better government services.
Given Nigerians economic structure, population and rate of economic
expansion, most people have blamed Nigerians low growth and development on a
high population that is large and not very productive. Other has opined that the
little growth the country has attained is a direct consequence of a large population.
These divergences question the theoretical relationship between populated
but not growing but China is highly populated and growing rapidly. Also the
growth of population in Western Europe has lead to its rapid industrialization. This
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study is prompted by the need to understand population growth and economic
development in Nigeria.
The Nigeria population has been growing while the rate of economic growth
has such little improvement the question on how best to exploit the theoretical
relationship between population growth and economic development has persisted
for long and it has become necessary to asses the issues. Thus, this scenario
prompts us to find out whether the increasing population growth has a positive or
negative effect on Nigerians development.
1.3 RESEARCH QUESTION
The following questions point to our research
1. Does population growth hamper economic growth?
2. Does population growth have any effect on income?
1.4 OBJECTIVES OF THE STUDY
The following of the study research includes the followings
1. To determine whether a relationship exists between population growth and
economic development.
2. To determine the direction of causality between population growth and
economic growth.
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1.5 HYPOTHESIS
The study will be guided by the following hypothesis
HO: There is no significant relationship between population growth and economic
development in Nigeria.
Ha: b1=0: There is no direction of causality between population growth and
economic development in Nigeria.
1.6 SIGNIFICANT OF THE STUDY
The importance of the research is to be appreciated by all since concepts of
population growth economic growth and development affects everybody
irrespective of class, status or occupation.
However, the study will be importance to the following categories of
persons.
i. Government (policy makers)
The government will benefit from the study since it will provide the basics for
making policy changes and formulating future policies. It helps the economy in
planning for development.
ii. Students: The study is important to students since it will reveal more details
and provide more information for those who are interested in finding out
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population trends in Nigeria and its consequences to economic growth in Nigeria
and also for further studies.
iii. Research: This study will provide more information for further research
about the population trend in Nigeria.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
Chronologically the study covers the period of about twenty nine years
(1981-2011). The data or any other pieces of information utilized in the conduct of
the study will be restricted to those published by national institution to ensure
consistency.
The population under study covers an estimate for the entire population of
the Nigeria economy.
Geographically the study is restricted to the territory of Nigerians
sovereignty. In terms of context, the study scope is primary inclined to macroeconomics is nothing but an aggregate of micro-economics.
During the course of its conduct, this study has been limited or hindered
from early completion due to factors such as
i. Financial constraints
ii. Unwillingness of certain institution to provide needed information.
iii. Discrepancies between data from different sources.
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