THE EFFECT OF URBANIZATION AND UNEMPLOYMENT ON THE NIGERIAN ECONOMY

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  • Name: THE EFFECT OF URBANIZATION AND UNEMPLOYMENT ON THE NIGERIAN ECONOMY
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ABSTRACT

The work is motivated by the seeming inability of the public sector to make and implement polices and programmes to curb the high rate of rural – urban migration and unemployment that is usually experienced in Nigeria. The study was geared towards an overview of the issues of urbanization and unemployment as well as their implication on the development of Nigeria. Secondary data were collected and analyzed using ordinary least square method. The result obtained from the analysis shows that urbanization has a significant impact on economic growth. It was then recommended that government should strive more to make access to higher education, scholarship and agricultural facilities available to the rural populace and further enhance effort towards population control through public – private sector to make a productive life worth living in rural areas.

TABLE OF CONTENTS

Title Page i
Approval Page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Contents vi
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 1 1.2 Statement of Problem 5 1.3 Objective of the Study 6 1.4 Research Question 6 1.5 Statement Of the Hypothesis 7 1.6 Significant of the Study 7 1.7 Scope of the Study 7 1.8 Definitions of Terms 8 1.9 Organization of the Study 12

CHAPTER TWO: REVIEW OF LITERATURE
2.1.1 Theoretical review of Literature 27 2.2 Causes of Urbanization 30 2.3 Changing Forms of Urbanization 36

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2.4 Review of Urbanization in Nigeria 37 2.5 Theoretical Literature on Unemployment 42 2.6 Review of Unemployment in Nigeria. 45 2.7 The Link Between Urbanization and Unemployment in Nigeria 47 2.8 The Empirical Study of Unemployment and Urbanization 48

CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Urbanization and Unemployment 56 3.2 Sources of Data 56 3.3 Method of Data Collection 57 3.4 Restatement of Hypothesis 57 3.5 Model Specification 58 3.6 Method of Data Analysis 60 3.7 Education of the Estimates 61 3.8 Testing of Hypothesis 62 CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA 4.1 Presentation and Analysis of Data 64 4.2 Interpretation/Evaluation of Result 65 4.3 Hypothesis Testing 74 CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION 5.1 Discussion of Findings 75 5.2 Summary 75 5.5 Conclusion 76 5.6 Recommendations 77 BIBLIOGRAPHY 78

CHAPTER ONE

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The rate of urbanization is increasing in both the developed
and developing countries. However, rapid urbanization, particularly
the growth of large. Cities and the associated problems of
unemployment, poverty, inadequate health care, poor sanitation,
urban slums and environmental degradation pose a formidable
challenge in developing countries. Available statistics shows that
more than half of the world lives in urban areas at the end of 2010
from 49% (3.2billion) in 2008. the same report projected that figure
is likely to rise to 60% (4.9billion) by 2030. according to the UN state
of the world population 2007 report, the majority of people
worldwide will be living in towns or cities, for the first time in
history, this is referred to as the arrival of the “urban millennium” or
the ‘tipping point’. In regard to future trends, it is estimated 93% of
urban growth will occur in developing nations, with 80% of urban
growth occurring in Asia and Africa
Urbanization simply defined, is the shift from a rural to an
urban society and involves an increase in the number of people in

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urban areas during a particular year. Urbanization is the outcome of
social, economic and political development that lead to urban
concentration and growth of large cities changes in the land use and
transformation from rural to metropolitan pattern of organization
and governance.
Although Urbanization is the driving force for modernization,
economic growth and development, there is increasing concern
about the effect of expanding cities, particularly on human health,
livelihood and environment. The implication of rapid urbanization
and demographic trends for employment, food, security, water
supply, shelter and sanitation, especially the disposal of waste (solid
and liquid) that the cities produce are staggering (UNCED, 1992). The
question that arises is whether the current trend in urban growth is
sustainable considering the accompanying urban challenge such as
unemployment, poverty and environmental degradation especially in
the developing countries.
Thus, of significant attention to us is the problem of
unemployment as a result of urbanization in the Nigerian urban
areas. Urban unemployment or unemployment in the urban Nigeria

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stands for the conglomeration of people with diversity background,
willing and able to work in the urban areas resulting in pressure of
supply of labour over the demand for labour. Thus causing
joblessness. Implicit in this definition are the following for excessive
manpower supply of labour over manpower demand for labour,
there may have a risen a situation whereby job seekers irrelevant or
not needed education qualification, both the public and private
sector may not have involved a calculated policy to afford them the
opportunity for self employment through planned programs. In
Nigeria it is estimated that in 1900 about 95% of Africa’s inhabitants
South of Sahara lived from the Primary occupations of
farming, hunting & gathering, cattle anomalism, and fishing (Aase,
2003:1) meaning that less than 5% were urban. In 1950 (the start of
the independence period) 14.7% of Africa’s inhabitants were urban
in 2000 had it risen to 37.2% and it is expect 3.76%, 3.35% per year
(UN, 2002) the Nigerian city of Lagos in 1963 had 665000
inhabitants (Rakodi, 1991) and 8.7miliion in 2000 is expected to
become the worlds 11th biggest city by 2015 with 16million
inhabitants (UN, 2002).

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Therefore, a survey by the UN international labour
organization (ILO) indicated that as many as 3 million Nigerians fall
within the working age out of this, 90 percent or about 3 million are
unemployed. A further study on the geographical distribution of
those unemployed shows that as many as 2.7million out of the 3
million live in urban area (ILO survey report African concord 1996).
Surely, it is very difficult to ascertain the current rate of
unemployment in Nigeria but evidence and indication of urban
unemployment overwhelming. There is no gainsaying that there are
significant correlation between urbanization and unemployment in
Nigeria though Urbanization is also a consequence of
industrialization or economic specialization. It connotes the
movement of people principally from agricultural productivity. The
process involves changing relationship and interaction.
Conclusively, there exists convincing evidence that the bulk of
urban unemployment in the country is among able bodied youths.
Data shows that in 2009 at the recent Nigerian economic summit,
group (NESG) policy dialogue on the Nigeria economy, Nigeria’s
minister of finance quoted data from the National Bureau of statistics
(NBS) saying that “unemployment in Nigeria is running at around

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19.7 percent on average and almost half of 15-24 year olds living in
urban areas are jobless” the theme of the policy dialogue growth
through public private partnership.

1.2 STATEMENT OF PROBLEM
The Nigeria population of about 150 million with a growth rate
of 3.2%, more youths are getting into the educational system, more
.youths are also graduating, more are getting into the urban labour
market while more are also becoming unemployed. Some of the
manifestation of the failing of both the educational system and the
economy are unemployment and underemployment. Urban
unemployment is growing progressively worse due to rural to urban
migration. This migration is as a result of high concentration of
Infrastructure and amenities in the urban areas, coupled with
favourable living conditions and standard of living.
Some adolescents do not think about any job at all until they
are faced with the issue of locating one in the urban center. The
contributing fact to this is that career guidance is minimally
emphasized in our school curriculum. When the youths are not

15
formally provided with occupational information which forms the
basis for realistic occupational choice, some often accept any job for
which they are not well prepared for these result into inefficiency,
low productivity, low or lack of job satisfaction and they all
culminate into underdevelopment.
1.3 OBJECTIVES OF THE STUDY
The objectives of the study are:
1. To examine the relationship between urbanization and
unemployment in the development of Nigeria.
2. To determine the implication of urbanization on the development
of Nigeria GDP per say.
3. To determine also the implication of unemployment of Nigeria.
GDP per say.
4. To proffer solution that will bring these problems to the barest
minimum in Nigeria.
1.4 RESEARCH QUESTION
The research questions for this study are as follows:
1. Does urbanization and unemployment have any
relationship in development of Nigeria?

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2. Does urbanization contribute to the output of Nigeria?
3. What are the implications of unemployment on the development of
Nigeria?
4. What are the possible solutions that will bring these problems to
the barest minimum in Nigeria?

1.5 STATEMENT OF HYPOTHESIS
For the purpose of this study, the following hypothesis will be tested.
H0: Urbanization has no significant impact on economic growth.
H1: Urbanization has significant impact on economic growth.
H0: Unemployment has no significant impact on economic growth.
HI: Unemployment has significant impact on economic growth.

1.6 SIGNIFICANCE OF THE STUDY
The significance of this study are as follows:
The study would provide an econometric basis upon which to
examine the effect of urbanization and unemployment on Nigeria’s
economy which would be useful to Nigeria as a whole. ,
The study will add to intellectual value of Nigerians. The
knowledge of the effect of urbanization and unemployment will be

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very useful as it will broaden individuals outlook, sharpen their
intellect. and inculcate in them the habit of balanced thinking.
The study will also .educate the government and youth who ignored
agriculture in pursuit of white collar jobs in the office.
Finally, the study will serve as a reference material for further
studies.

1.7 SCOPE OF THE STUDY
Though the issue of urbanization and unemployment moves in
the same direction and this problem has eaten deep into the
marrows of the society of Nigeria and our main focus is how to solve
the problem of urbanization and unemployment in Nigeria.

1.8 DEFINITION OF TERMS
Unemployment: (According to Pigou,) the greatest exponent
of the classical view, unemployment defined as a resulted from the
rigidity in the wage structure and interference in the working of free
market system in the form of trade union legislation, minimum wage
legislation, e.t.c.

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Unemployment: {According to everyman’s Dictionary of
Economics) defines unemployment as “involuntary idleness of a
person willing to work at the prevailing rate of pay but unable to find
it”.
“Economic Growth”: (Berger 1965) stated that Economic
growth means more output and changes in the technical skills,
knowledge productive education, health managerial capacity)
arrangement by which it is produced and distributed. Growth may
well not only involve more output derived from greater amounts of
inputs but also greater ,efficiency.
Economic Growth refers to the steady process by which the
productive capacity of the economy is increased over time to bring
about increases in the output of goods and services and rising levels
of national income. This corroborates kindle Berger’s view of
economic in (1965).
The economic growth of any country is measured by the rate of
increase in its (GNP) or (GDP) or better still by the total output or by
per capital output. .

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Gross Domestic Product (GDP): According to Okowa, W. J.
(1995), defined gross domestic product as the money value of the
total output of goods and services produced within the geographical
confines (that is, inhabitants) of a country’s territory in a given year.
Economic Development: refers to as the problems of the
economic development of underdeveloped countries. Though the
study of economic development has attracted the attention of
economists right from Adam Smith down to Marx and Keynes, yet
they were mainly interested in the problems which essentially static
in nature and largely related to a western European framework of
social and cultural institutions.
Economic Development: (According to Schumpeter) defines
development as a discontinuous and spontaneous changer in the
stationary state which forever alters and displaces the equilibrium
state previously existing. This view of Schumpeter has been widely
accepted and elaborated by the majority of economists.
Economic Development: (According to kindle Berger,)
Economic Development implies both more output and changes in the

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technical and institutional arrangement by which it is produced and
distributed.
Development: goes beyond this to simply changes in the
composition of output) and the allocation of inputs by the sectors.
Recent statistics released by the National Bureau of Statistics (NBS)
showed that about 10million Nigerians were unemployed in Nigeria
at March, 2010. The NBS defines the unemployment rate as the
percentage of Nigeria’s labour force that is qualified to work but did
not work for atleast 39 hours
in the week preceding the survey. The total labour force is made up
of people aged between 15 to 64 years and excludes students, home
keepers, retired persons, stay-at-home parents and persons unable
to work or not interested in work.

1.9 ORGANIZATION OF THE STUDY
After the preliminary pages which consist of the cover,
certification, dedication, acknowledgement, abstract and table of
.content pages. The study will be set under five chapters; they are the

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introductory aspect of the work which forms the chapter one, the
review of related literature, in chapter two,
the research methodology, in chapter three, the presentation I of
Analysis an 3 interpretation of data in chapter four and summary,
conclusion and recommendation which forms the aspect of chapter
five. The work will be rounded up with references and Appendix.
What is Urbanization?
It’s the physical growth of rural or national land into urban areas as
a result of population in-migration to an existing urban area. Effects
include change in density and administration services. While the
exact definition and population size of urbanized areas varies
among different countries, urbanization is attributed to growth of
cities.
Urbanization is the social process whereby cities grow and
societies became more urban in nature, as opposed to being mostly
rural and agricultural. Urbanization is what occurs when the rural
character of a town is gradually replaced by housing and industrial
development, resulting in more suburbs. Its an increase in the

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proportion of people living in urban or developed areas compared
to rural areas.
Urbanization is not merely a modern phenomenon, but a rapid
and nutoric transformation of human social roots on a global scale,
whereby predominantly village culture is being rapidly replaced by
predominantly urban culture. The last major change in settlement
patterns was the accumulation of limits- gatherers into villages
many thousand years ago. Village culture is characterized by
common bloodiness, intimate relationships and communal
behaviour whereas urban culture is characterized by distance
bloodiness, unfamiliar relations, and competitive behaviour. This
unprecedented movement of people is forecast to continue and
intensify in the next few decades, mushrooming cities to size
incomprehensible only a century ago.
Urbanization is not about simply increasing the number of urban
residents or expanding the area of cities. More importantly, its about
a complete change from rural to urban style in terms of industry
structure, employment, living environment and social security.

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The rapid urbanization of the world’s population one the twentieth
century is described in the 2005 revision of the UN World
urbanization prospects report. The global proportion of urban
population rose dramationlly from 13% (220 million) in 1900,
to29% (732 million) in 1950, to 49% (3.2 billion) in 2005. The same
report projected that the figure is likely to rise to 60% (49 billion)
by 2030.
According to the UN State of the World population 2007 report,
sometime in the middle of 2007, the majority of people worldwide
will be living in towns or cities for the first time in history, this is
referred to as the arrival of the “urban millennium or the typing
point. In regard to future trends, it is estimated 93% of urban
growth will occur in developing nations, with 80% of urban growth
occurring in Asia and Africa.
Urbanization occurs as individual, commercial and
governmental efforts to reduce time and expense in communing and
transportation while improving opportunities for jobs, Education,
housing and transportation. Living in cities permits the advantages

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of the opportunities of proximity, diversity and market place
competition.
Urbanization rates very between countries. The united states
and united kingdom have a higher urbanization level than China,
India, Swaziland or Niger, but a few slower, annual urbanization rate
since much less of the population is living in a rural area.

INTERNATIONAL YOUTH ENVIRONMENT SUMMIT SITUATION
TO RAPID URBANIZATION
1. Citizens have the right to an environment that is not harmful to
their health or well being.
OBJECTIVE
To improve environmental conditions and provide safe habits for
all life.
METHODS

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Government passes law to plan and provide environmentally sound
cities considering that people should not live in polluted or unsafe
areas
EVALUATION
Each country subscribing to the Declaration of environmental rights
and responsibilities will send six representatives, composed of
people with medical, legal, political, economic, educational and
scientific expertise, to a general assembly. The collective assembly
will review the review the sustainable solutions outlined in the
Declaration of emonmatal rights and responsibilities through the
internet. The group will elect a chairman and vice chairman, from its
members to lead annual meetings. The meeting will be held in each
country, based on a rotating schedule for the purpose of amending
solutions to make them more affective.
2. Citizens have the right to an environment that is protected for
the benefit of present and future generations.

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OBJECTIVE
To make environmental resources sustainable and make the
economy reliant upon a sustainable environment
Method
Government encourages private investment in sustainable
industries like solar energy, public transportation and water
reclamation with financial rewards
3. Citizens have the right to basic services including adequate
shelter, health services, Electricity, water supplies and food.
OBJECTIVE
Government with private help, provides essential services that
will improve the quality of life
METHOD
Information should be gathered about what is needed and where
implement and provide opportunity for employment so that
citizens can earn a living to pay for maintenance of services
homes should be subsidized by government and corporations,

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government provides basic health services using advanced
technologies and medicines at minimum costs with alternatives
available.
4. Citizens have the right to basic Education including Adult basic
education
OBJECTIVE
To empower citizens with knowledge and skills
Methods
Government improves Educational systems to include curriculum
focused on Job skills and life skills to prepare people for
employment opportunities. Also Education is made more accessible
by creating schools, technical university and universities with
licensed teachers who help students, including adults and the
disabled, toward earning a basic Education certificate.
5. Citizens have the right to gainful employment opportunities

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OBJECTIVE
To create more jobs
METHOD
In order to prevent rapid urbanization and conserve natural
ecosystems, private industry will utilize natural resources to
promote tourism and create jobs in both rural and urban areas using
subsides, government promotes private and foreign investment in
environmentally sound development in rural areas
6. citizen have the right to environmentally safe and cost effective
technologies.
OBJECTIVE
To allow environmental technologies to be more accessible and at
lower cost to the community.
METHOD
Government and private industry provide funding for research,
development and improvement of environmentally safe and cost-

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effective technologies by sponsoring engineers and creating
institutions.
7 Government and individuals have the responsibility to control;
population growth and the spread of disease through effective
health education and family planning
OBJECTIVE
To control population growth and disease.
METHOD
Government provides counselling for effective family planning and
medical health clinics, making them both mobile for rural areas and
accessible for urban areas.
8. Government and local authorizes have the responsibility to
improve public transportation, upgrade basic civil services to ensure
sustainable housing, better health services, sanitation, and
electricity also so that the use of private motor vehicles is
minimized, thus reducing congestion and air and noise pollution.

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OBJECTIVE
To make public transportation clean, efficient and accessible, to the
community also Government with private help. Provides essential
services that will improve the quality of life
METHOD
Industries improve cars to be environmentally friendly. Government
reduces the manufacturing of private cars and sponsors
manufacturing of public transportation vehicles, encouraging people
to use them by raising parking and gasoline prices.
1.10 PROBLEMS CAUSED BY URBANIZATION
Environmental effects due to urbanization have been observed
since early in the 18th century until the mobile of the 20th century,
urbanization lends were too low and the number of large cities was
too small for there to be any significant effects other than local
climate and hydrologic impacts
As late as 1900, there were barely 43 cities in the world exceeding,
500,000 population, of which only 16 exceeded 1,000,000. Since
1950 the number of large cities has increased very rapidly (about

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400 exceed 1,000000) metropolitan areas have grown to form even
large agglomeration and some very large urban areas with
population in the tens of millions have emerged for example by the
year 2,000 and calculate, Bornbay, cairo, Jakarta and seeul are each
expected to be in the 15-20 million people range. The environment
in large urban areas has deteriorated and resulted in an increased
incidence of diseased and viments.
The effects of urban development can be defined by many
factors. The most important of these factors related to and quality,
the availability of safe water supplies, and provisions for sanitation
and waste management. In this chapter we will consider the effects
of urbanization on the atmosphere.
Mexico city today is one of the largest cities in the world. The
environmental issues present in this megapolis are a good example
of the problems that plague many cities around the world.
The population of Mexico city is over 20 million people the
population has gone from approximately 3 million people in 1950 to
near 20 million in 1997, with an average growth rate close to 5%
much of the high growth rate of migrants from the economically

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depressed rural areas. Rapid urbanization has out stripped society’s
capacity to meet basic human needs, leaving enormous portions of
the city’s population with inadequate incomes, diets, housing,
services and health care. The land area of Mexico, D.R 1,499 Knz, the
area of Mexico D.F plus suburbs is near 3,129 KMz. The growth rate
of the city in spatial extent is close to that of the population (5%).
Mar developments are more dense and less planned, and generally
include less open space. Mary developments are now built on hills
slopes, generating a considerable amount of soil erosion and a
significant increase in flash floods enter rainstorms. Overcrowding
and inadequate housing respiratory disease and tuber culosis.
Water
Mexico city is built on an underground a guider which significantly
depleted. In general much of the water in the basin is heavily
polluted, acquitters and over that supply its water are over extended
and polluted; cholera recently have killed many people.
Today most of the food and water consumed writhen the basin
comes from outside its boundaries may parts of the city suffer from
water shortage and industrial use of water is very inefficient water

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receding uses only 7% of the savage, and nearly 20% of the water
supply is lost through deficient pipe system. Pipe breakage
represents a countries health hazard, as microorganisms from the
sewage system can contaminate the fractured pipes.
Waste
Approximately 4-5 m3.5 of sewage water are treated and used
mainly for irrigation in parks and public spaces. The remainder is
eliminated from the basin by means of the deep drainage system
that was built in the early 1970s and by the old surface drainage
canals. This waste is mostly used for irrigation, constituting an
important source of agricultural pollution.
The health and environmental effects of inadequate solid waste
disposal are felt for beyond the city in the form of water, land and
air contamination on a wide area. The city produces appropriately
10,000 loans of domestic garbage per day. In consrate to developed
countries, which generate liter wish a low proportion of organic
residues, the garbage of Mexico city is rich in vegetable and fruit
waste, and consequently could be used for making compost at a
relatively low cost. Until 1987 most the residues were dispraised of

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in open field, recently a mix modern systems of sanitary filling into
dredged pits has become operational.
Extending and huproving waste collection, processing and
disposal services is vital to control mounting health problems and
prevent further damage to the environment.
Air
City streets citoged with traffic and air pollution is perhaps the
worse protean the city faces. Photochemical smog is critical during
the winter months when a temperature mersion stabilizes the
atmosphere above the basin and the air pollutants accumulate in the
stationary layer of air that covers and factories.
Most of the air pollution originates from automobile exhaust,
which are responsible for 72% of all atmospheric pollutants in
mexicocity mean ozone levels in Mexico city are ten time the normal
atmospheric concentration and are more than twice the Mexico
limite allowned in the united states. In order to alleviate this
problem, the vehicles of Mexico city are under a permanent vehicles
program called “Hogno circuld” all vehicles according to the last

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digit of their license plate are distributed by colours along the week,
and are not allowed to be driven once in a week.
Air quality report are published daily through the national
media. Based on this reports vehicle use and industrial activity are
restricted, in order to protect Mexican people’s health.