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PROJECT TOPIC AND MATERIAL ON POPULATION GROWTH, AGRICULTURAL OUTPUT AND ECONOMIC GROWTH IN NIGERIA – A CO-INTEGRATION APPROACH (1970- 2015)
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- Name: POPULATION GROWTH, AGRICULTURAL OUTPUT AND ECONOMIC GROWTH IN NIGERIA – A CO-INTEGRATION APPROACH (1970- 2015)
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This study investigated the relationship between agricultural output, Population growth and Economic growth in Nigeria for the period of 35years (1981-2015) using Ordinary Least Square estimation technique. The secondary data was obtained from the CBN Statistical Bulletin 2016. The Augmented Dickey-Fuller (ADF) Unit Root Test was used to determine the stationarity of the variables and the Johansen Co-integration test was employed to testfor the long-run relationship between the variables in the series. The pairwise Granger causality test and error correction Mechanism was also adopted. It was discovered that there is a long-run relationship among the variables. Also the empirical findings was apparent from the regression result that agricultural output has a positive and significant impact on economic growth in Nigeria while population Growth exert a negative effect on economic Growth in Nigeria for the understudy, This latter finding is in tandem with Robert Malthus expectation. Therefore, Government should make effort to capture more Nigerians unto agricultural productivity, enhance human capacity building and yield meaningful and positive effect on Economic Growth in Nigeria.
1.1Background of Study
Agriculture is the most important single activity in the Nigerian economy with about 70% majority of the total workforce actively engaged in it (Ijirshar, 2015).Yusuf (2014) defined agriculture as any activity which joins labour, land or soil, live animals, plants, solar energy, with a sole aim of making a living through food and meet production. Odetola and Etumnu (2013) opined that reducing poverty, improving nutrition and general well-being of the population would imply improving the livelihood of this majority and this hinges critically on the performance of the agriculture sector.
Agriculture has been the backbone of the economy of Nigeria providing employment and source of livelihood for the increasing population it accounts for over half of the GDP of the Nigerian economy as at independence in 1960 (Izuchukwu, 2011). Statistical evidence shows that in the 1960s, agriculture contributed up to 64% to the total GDP but gradually declined in the 70s to 48% and it continued in 1980 to 20% and 19% in 1985, this was as a result of oil a structural shift from agriculture to oil due to the oil glut of the 1980s. Evidence from the recent decade, has shown that agricultural activities has increased contributing about 25.38% and a slight decrease to 23.11% of the total GDP for the period 1995-2005 and 2005-2015 respectively (CBN, 2015).
This increase could be attributed to the diversification campaign pursued by successive Nigerian government since the oil crash of the 1980s.
Policies and programmes such as; Farm Settlement Scheme; National Accelerated Food Production Programme (NAFPP); Agricultural Development Projects (ADPs); River Basin Development Authorities (RBDAs); Nigerian Agricultural, cooperation and Rural Development Bank (NACRDB); Operation Feed the Nation (OFN); Green Revolution Programme; Directorate of Foods,Roads and Rural Infrastructures (DFFRI); and Agricultural Credit Guarantee Scheme Fund (ACGSF) were all aimed at ameliorating agricultural contribution to the overall GDP. On the other hand, Economists are dithering between three theories on the effect of population growth; one that state’s that population growth helps a nation’s economy by stimulating economic growth and development and another that bases its theory on Robert Malthus’ findings that population increase is detrimental to a nation’s economy due to a variety of problems caused by the growth. With the third school of thought being that population growth does not have any impact on economic growth (Thuku, Gachanja and Almadi, 2013 cited in Abu et al,2015).
The world’s population was about a billion in 1800 and rose to 2.5 billion in 1950. In the year 2007 the world’s population was 6.7 billion and is projected to rise to 9.2 billion by 2050 with almost all population growth projected to occur in what are now considered less developed regions –Africa, Asia and Latin America (Martin, 2009). Nigeria which is also a developing country is not excluded and has a rapidly growing population. The 1991 census figure puts Nigeria’s population at about 89 million people with a growth rate of 2.82 percent and total fertility rate of 5.89 percent as revealed by Post Enumeration Survey (PES) Abu et al (2015). In the 2006 National Population Census, Nigeria had a population of 140,003,542 (NBS, 2010) with a growth rate of 3.02 percent per annum, a population that is capable of doubling itself in less than twenty three years. In addition, the 2009 United Nations estimate of Nigeria’s total population stood at 151,030,400 (UN, 2009) and currently over 173.6million people (NBS, 2012). According to Abu et al (2015) Population is one of the central problems of poverty and sustainable economic development and has become of increasing concern throughout the world. However Nwosu et al (2014) argued 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 and the absence of effective human capital development, an increasing population can have adverse negative effect on the economic growth of a nation. In essence Nwosu et al (2014) asserts the effect of increasing population can be either negative or positive depending on the existence of certain factors and conditions. When these conditions and factors are studied and understood, population growth can be managed or controlled to ensure continuous and sustainable economic growth and development. Nigeria is a high fertility country and there is evidence that its large population inhibits government’s efforts in meeting the basic needs of the people (Onwuka, 2006). When it is noted that the high fertility countries are mainly resource constrained with low levels of social and economic development, it becomes obvious why theyhave accepted responsibility to control the growth of their populations through endorsement of family planning programmes mapped out at various international conferences. Nigerian population has gathered momentum and will continue to increase over time irrespective of a favorable change towards family planning and birth control. Evidently from the foregoing the effect of population growth and agricultural productivity on the economy of any nation particularly a developing agrarian economy like Nigeria cannot be overlooked. Over the years agricultural productivity has fluctuated with a seemingly downward trend mostly in response to fluctuations in international crude oil price nonetheless the population growth has constantly maintained a rising trend. One interesting thing about this outcome is based on the fact that over 70% of the Nigerian population depends on agriculture for their daily survival thus it is expected that, ceteris paribus, with an increase in population, agricultural output should increase following the increase in available labour and as such invariably promote growth and development but this has not been the case for Nigeria. Thus it is against this background that this study tends to investigate the relation between agricultural output, population growth and economic growth in Nigeria.
- 2 Statement of Problem
Much of modern economics on population problems have focused on what could be the optimal size of population and its effect on economic growth and development. This line of thought was first brought into economics limelight by Malthus (1803) with his assertion that food production increases at an arithmetic rate whereas population grows with a geometric speed and thus questioned the ability of food production to keep pace with the demand of a faster growing population. This assertion has been greatly criticized basically on the fact that the Malthus hypothesis neglects of the effect technological change which brings about increase in agricultural productivity in the industrialized countries however there are still claims of the Malthusian hypothesis being present in the developing world. The Nigerian population currently stands at 174million persons and is projected to grow at an annual rate of 3% (NBS, 2013). Nigeria is regarded as the most populated country in Africa and 10th most populated in the world. According to statistics from the statistical bulletin of the Central Bank of Nigeria (2015), The GDP growth rate recorded negative growth in the early 1980s (-1.053 in 1982, -5.05 in 1983 and -2.022 in 1984). The growth rate increased steadily between 1985 and 1990 but fell sharply in 1986 and 1987 by -8.754% and -10.752%. Except in
1991 when the growth rate was recorded at 2.206% while, 1990s witnessed an unstable growth. However, the growth rate has been relatively high since 2000, with an average of 5.91% from 2005-2015. Comparing the performance of the agricultural sector it can be seen that during the 1980s agriculture suffered a negative growth rate particularly during 1983, 1984 and 1987 with growth rate -0.69576, -4.38244 and -3.18608 respectively. Since the year 2000 agriculture contributions to GDP (AG-GDP) has continued to fluctuate downwards, statistics shows that AG-GDP grew by -2.46%, -2.69%, 35.75%, -2.28%, -3.78%, 0.05%, 0.64%, -0.11%, -0.86%, -2.28%, -3.38%, -2.27%, 2.39%, -2.41%, -1.83%, 0.90% from 2000 – 2015 (CBN, 2015) little does one wonder why the economy has not been able to cope with the teeming population explosion. The actual articulation and implementation in any economy population programme would not be possible without a determined 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 and irrational total dependence on the oil sector as the prime mover of the economy and engine of growth (Nwosu et al, 2014). Rapid population growth has the tendency of inducing unemployment, pressure on resources and social amenities, decreasing peasant income accompanied by widespread poverty among the rural dwellers, and incessant food shortages as a result of diminishing returns on agricultural land productivity and if not properly controlled could lead to the poverty trap and make true the Malthusian claim. Thus this study tends to investigate the relationship between agricultural output, population growth and economic growth and forthwith make recommendations on how to avoid such unpleasant occurrences as anticipated above.
1.3 Research Questions
From the above problem statement, the following research questions upsurges:
- What is the effect of agricultural productivity on economic growth in Nigeria?
- Does population growth have any effect on economic growth in Nigeria?
- What is the relationship between population and agricultural output in Nigeria?
1.4 Research Objectives
The broad objective of this study is aimed at determining the relationship between population growth, agricultural output and economic growth in Nigeria. The specific objective is stated as follows;
- To determine the effect of agricultural productivity on economic growth in Nigeria.
- To determine the effect of population growth on economic growth in Nigeria.
- To determine if there is a significant relationship between population and agricultural output in Nigeria
1.5 Hypotheses of the Study
The following hypotheses will guild the study:
- H0: Agricultural productivity has no significant effect on economic growth in Nigeria.
- H0: Population growth has no significant effect on economic growth in Nigeria.
- H0: There is no significant relationship between population and agricultural output in Nigeria
1.6 Significance of the Study
This study will be of significance to the government institutions in charge of population control (National Population Commission) for policy making, also to farmers and investor who have investment or planning to invest in the agricultural sector for wise investment decision making and also to students and researchers as a source of reference and substratum for further study
1.7 Scope of the Study
The study covers all areas relating to agriculture and population growth as they affect economic growth in Nigeria for the period 1981 to 2015.
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