Empirical analysis of the impact of population increase on the economic growth of Africa’s most populous country

Abstract

The concern about population growth in many developing countries has become a burning issue in the literature. Furthermore, many divergent views exist on whether increasing population is useful or harmful to growth in the economy. This study therefore, analysed the impact of population increase on economic growth in Nigeria, as an Africa’s most populous country. The study employed time series data from 1985–2018 using the framework of the Autoregressive Distributed Lag (ARDL) Model. The findings of this study revealed that the population growth of the economy supports economic growth both in the short and long term. However, it may become explosive in the long run if vital measures are not taken to control it. Since population increase has a huge impact on economic growth, the government should take steps to ensure that the population continues to increase the country’s growth trajectory by equipping the workforce with the appropriate skills. Therefore, to enhance sustainable development, the study proposes to formulate an effective government policy in order to ensure the growing labour force with jobs and modern qualification skills in accordance with the requirements of the labor market and increasing the country’s GDP. Also, there is need to formulate effective financial policies and support competitive interest rates in order to improve the economy’s savings rate. Effective monitoring of the economy’s capital-output ratio should ensure its increase in GDP, and the prohibition of effective state policy should be enacted to maintain stable and non-escalating population growth rate.