Market News

By Olu Fasan

Last year, on my 60th birthday, the legendary Uncle Sam Amuka, publisher of the great Vanguard newspapers, sent me birthday greetings, with "a poser for your birthday". The poser was: "How come Nigeria, a country with such brilliant thinkers like you, is retrogressing faster than its population is growing?" In the following week's column, I thanked Uncle Sam for his kind words, then added: "As for the poser for my birthday, well, that's a subject for another column".

Since then, I longed to write on the subject. But topicality is an essence of column-writing. Whatever cherished column idea a columnist may have, he or she should give priority to any major event of immediate relevance. And, over the past one year, it's been, for this country, "events, dear boy, events", as Harold Macmillian, a former British prime minister, reportedly said.

But, now, as I mark my 61st birthday this week, on Saturday, July 24, I want to tackle the issue, namely: Nigeria's population explosion and socio-economic retrogression. This is an existential problem that should exercise the minds of all Nigerians. For if predictions about Nigeria's future population are accurate and if Nigeria remains an unproductive economy, then, truth be told, this country is sitting on a ticking time bomb.

Let's face it, Nigeria's population has been growing at a stratospheric rate. Just consider the following statistics. At independence in 1960, Nigeria's population was 45 million, while that of Britain was 52 million. Today, Nigeria's population is 211 million, Britain's is 68 million. So, within 60 years, Nigeria added 116 million to its population, while Britain added just 16 million. Tell me, why should Nigeria's population grow by 369 per cent in 60 years but Britain's by only 30 per cent during the same period?

Well, social scientists would argue that nations with wealthier and more educated people tend to have smaller populations than those with largely poor and illiterate people. Of course, religion and tradition also matter. Predominantly Christian countries, which practise monogamy, are more likely to have smaller populations than countries with large Muslims and traditional believers, who practise polygamy. So, Nigeria's exponential population growth can be explained in terms of poverty, illiteracy, religionand tradition!

Yet, no cultural, religious or social factor can justify the alarming predictions about Nigeria's future population. According to the World Economic Forum, Nigeria will have the third largest population in the world by 2050 and overtake China to have the second largest by 2100! Paradoxically, while most major countries, including China, fret about population decline, the worry for Nigeria is about population explosion.

Thomas Malthus, the 18th-century economist, was the most famous person to raise concerns about over-population, arguing in his treatise, An Essay on the Principle of Population, that unfettered population growth could trigger acute poverty. In his 1968 book, The Population Bomb, Paul Erlich made the same point, predicting that an exponential growth in population would lead to widespread famine and social disruption. These predictions haven't happened, of course, but that's because, globally, economic growth has matched, even outpaced, population growth!

To be sure, a large population is not necessarily a problem. Given that a country's wealth derives from its gross domestic product, GDP, the value of goods and services it produces annually, it follows that a large but productive population can actually be a driver of economic growth. But where a country has a large, unproductive population that's growing faster than its economy is growing, the result would be falling per capita income, and thus living standards.

Sadly, Nigeria has a large but predominantly unproductive population that's growing at a faster rate than its national output. Currently, Nigeria's annual GDP growth rate averages 1.9 per cent, while its population growth rate is 2.6 per cent per year, resulting in a negative per capita income. Clearly, Nigeria is not harnessing the demographic dividend, where a large working-age population leads to accelerated growth. But why?

Well, the first problem is Nigeria's abysmally low human capital. Consider the following statistics from the World Bank's 2019 Nigeria Economic Update: about 50 per cent of Nigerian workers have only a primary education or less; 30 per cent never attended school; just 20 per cent of Nigerian adults aged 18 - 37 years who completed primary school can read; only 51 per cent of Nigeria's estimated labour force of 90 million are literate.

Nigeria has an appalling human development index, ranked 161st out of 189 countries in this year's Index. With such a dreadful human capital base, Nigeria lacks the productive working-age population to reap a demographic dividend.

But Nigeria faces another challenge: it lacks the capacity to export value-added goods and services and to attract high-quality foreign direct investment. China lifted 746 million of its people, 65 percent of the population, out of poverty between 1990 and 2015, a period that coincided with its aggressive export-oriented strategy and massive inward investments.

By contrast, beyond crude oil, Nigeria is not an export-oriented economy, and not an attractive investment destination. According to the World Bank, Nigeria is "one of the most closed economies in Africa with a concentrated export-base." Well, such a country can't prosper economically!

Finally, Nigeria is not making progress because it is overcentralised. One of the strongest arguments for restructuring is economic. No country succeeds by overcentralising economic governance. Nigeria needs regional economic powerhouses. It needs strong regional governments that can harness regional comparative advantages and economies of scale to boost productivity and growth.

Truth is, Nigeria's population is exploding, while its economy is retrogressing. If the trend continues, as predicted, Nigeria faces a catastrophic future. Acute poverty would trigger unprecedented socio-economic-political crises. Thus, economic growth must always outpace population growth.

But for that to happen, Nigeria must invest heavily in human capital; make itself attractive to the world as a major non-oil exporter and FDI destination; and restructure to engender the emergence of regional powerhouses. A tall order? Well, Nigeria's future depends on it!