Compliments of the season to all...
As those who have seen me speak recently – and I have been speaking a lot – have heard, I constantly point out that Nigeria needs to have GDP growth of at least 6-7% per year to make a difference to our rates of poverty and unemployment. This is because we have working-age population growth rates of almost 3%.
This concept is now widely understood and Nigeria’s leaders – including the Vice President and the CBN Governor – are also pointing out this demographic reality and the pressure it puts on our economy and society.
Some of the ways these demographics pressure us to include the amount of investment we need (particularly Foreign Direct and Foreign Portfolio Investment, so we are beholden to foreigners). In addition, as a recent PwC recent report states, if we lose momentum on reforms (such as Ease of Doing Business, where we did manage to move from 169th to 145th), we are not going to get to the 6-7% growth rate in the next few years, which raises the possibility we will go 5-7 years (starting in 2015) with GDP growth rate below population growth … basically getting poorer every year. Can Nigeria survive this? (Here is full report: https://www.pwc.com/ng/en/publications/nigerias-economic-recovery.html)
In fact, under the current United Nations medium projections, the population of Nigeria will be over 750m in 2100. The population of Lagos is projected to be 88m … how many of us truly believe we can have a successful and prosperous Nigeria with over 750m in just 83 years?
So we need to ask a hard question: do we need to take on the population issue? Around the world, working-age population growth rates have plummeted. From 2015-2050, here are the annual working age population changes in some key countries: India: 0.8%, China: -0.1%, Brazil: 0.1%, France: 0.0%, Germany: -0.7%, USA: 0.6%.
Now, if your economy is growing 6-7%, and your population (or working age population) is growing at less than 1% (like India), people are getting appreciably richer.
So rather than putting this enormous pressure on ourselves, should we not think about taking on one of the root causes of our inability to alleviate poverty and unemployment: our sky-high population growth rate.
In the FG’s Economic Recovery and Growth Plan (ERGP), this issue was actually addressed – but buried deep with the report, and I have not heard on any tangible action since the ERGP’s release.
But there are lots of potential public policies that can reduce the population growth rate without moving to the draconian (and unworkable in Africa) Chinese system of one child per household: education, healthcare for women, tax policy. Many of these have been successful around the world, and are certainly making it easier to lift incomes without the unrelenting pressure of demographics
I would like to hear what people think and please share this if you think is helpful.
Written by: Andrew S Nevin, Ph.D. (Leading global thinker, with over 30 years of professional experience as a strategy consultant, economist, line manager, failed entrepreneur and private equity investor, and in his professional career has lived in Asia, North America, and Europe. He has been based in Lagos, Nigeria since early 2012.)
Courtesy of LinkedIn.