Nigeria’s Population- the Ultimate Resource, not an Economic Burden

Saturday, September 11, 2010

By Thompson Ayodele and Olusegun Sotola

Nigeria flagA recent government- sponsored report warns that Nigeria is teetering on the edge of a demographic disaster as its annual population rate outpaces economic growth.

The report estimates that by 2050, Nigeria’s population would hit 213 million upsetting all the indicators of economic growth that naturally follow with an optimum population.

But is it really true that an increase in population retards economic growth? It seems the argument, though an old and discredited one is the official excuse from the real barriers to Nigeria’s economic growth. The pattern of population growth in Nigeria in the last two decades does not indicate that an increase in population will necessarily lead to a demographic disaster, much less economic difficulty.

However, a historical look at Nigeria’s population shows a percentage decrease over the years. The population increased by over 70 per cent, from 88 million to 150 million between 1991 and 2008 (17 Years), and the trend indicates that the population will grow by only 42 per cent in 44 years when we hit 2050, partly owed to a decrease in family sizes.  The problem is not too many people, but rather a lack of economic freedom.

In one of his famed writings, the ‘Ultimate Resource’, Julian Simon argues that the less populated a country is doesn’t translate into economic growth. He rhetorically asks: why are our ancestors not more prosperous when they were just a few thousands on the planet?

It is more likely for one to see highly creative and innovative people in China, India, Indonesia and Nigeria than other small countries. Across the world, there are more millionaires in big cities than sparsely populated countryside. Besides famine and starvation has occurred in sparsely populated countries than densely populated ones. If population density causes poverty, Japan and Hong Kong should be the poorest parts of the world today. These are areas with high
population density but highly prosperous despite limited landmass.

Globally, highly populated countries are important to the world economy. They provide the markets which drive entrepreneurship and exchange of
goods and services. The key factor that attracts and retains Foreign Direct Investment (FDI) in Nigeria is not the nature of our political system but the depth and size of the market. The astronomical growth in the Telecom and the IT industry in Nigeria are essentially driven by demand which is a function of the population. Because small countries produce and consume only very few items and suffer from diseconomies of scale, they are largely unattractive for big investment except when they have natural endowments.

A subtle agenda to foist on developing countries policies that aimed at artificially controlling population will undermine both quantitative and qualitative global development. Apart from making the world underachieve its full potential, it will create demographic problems. In China, there are now 32 million more males than females under the age of 20, sex selective abortion account for almost all the excess. China also has high rate of abandonment and infanticide of the girl child.

Meanwhile many developed economies are at promoting population growth due to an ageing population. This is noticeable in some Organization for Economic Cooperation and Development (OECD) countries where policy makers have designed policies aimed at arresting the ageing population. A perfect example is Australia. Since May 2004 Australia government has announced a “Baby Bonus” policy, paying women an initial A$3,000 per new child. The campaign since 2004 has been tagged: one baby for your husband and one for your wife and one for the country.

The Australian National Party has promised to double the baby bonus for stay-at-home mothers if the coalition wins the federal election. In June, Australia
Senate passed a bill which will pay all parents who stay home the minimum wage of $570 a week for 18 weeks. These measures are aimed at encouraging
families to have more children.

It is incontrovertible that human beings are the ultimate resource. Other resources are useless without human innovation and exertion. An increase human population should therefore not be viewed as a disaster. The population problem is a bogeyman. It prevents us from seeing human beings as the ultimate resource. Rather proponents of high population encourage people to think that people are a burden who are incapable of changing their economic conditions without government help. However, the truth remains that government is the biggest problem.

It is government policies which hinder wealth creation that are keeping the people poor, under-achieved and less innovative. Whether a nation is poor or rich depends on the availability of an economic framework that provides incentives for working hard and taking risks. The key elements of such framework are economic liberty, secured property rights and fair and sensible rules of the market that are enforced equally.

Nigeria should avoid fretting over the demographic implications of an increased population and stop arbitrary population control. The government should picture 150 million human brains striving daily to improve their situations, solve economic problems and above all create wealth. The projected 213 million people will be doing so in 2050.

*Ayodele and Sotola are with the Initiative for Public Policy Analysis, an independent public policy think-tank based in Lagos and affiliated with