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 macro-

economics 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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