BULE HORA UNIVERSITY

COLLEGE OF AGRICULTURAL SCINCE

DEPARTMENT OF AGRICULTURAL ECONOMICS

SENIOR SEMINAR PROPOSAL ON SOCIO-ECONOMIC IMPACTS OF

POPULATION GROWTH IN ETHIOPIA

PREPARED BY: GETACHEW KINFIE

ID no: RU0903/12

ADVISOR: ANIMUT

May,2015

Bule Hora, Ethiopia

 TABLE OF CONTENT
TABLE OF CONTENT.....................................................................................................................................2
AKNOWLEDGEMENT.............................................................................................................................4
ACRONYM................................................................................................................................................4
SYNAPSE.....................................................................................................................................................6
1. INTRODUCTION...............................................................................................................................7
1.1 Background of the seminar..........................................................................................................7
1.2 OBJECTIVES..............................................................................................................................8
1.2.1 General Objective................................................................................................................8
1.2.2 Specific Objective................................................................................................................8
2. LITRATURE REVIEW.......................................................................................................................9
2.1. SOCIO-ECONOMIC IMPACTS OF POPULATION GROWTH RATE IN ETHIOPIA TREND. .9
2.2. Concept of population growth..........................................................................................................9
2.3. POPULATION GROWTH ON GDP AND GDP PER CAPITA....................................................10
2.4 Theories of population.....................................................................................................................11
2.4.1. Enk’s Theories.........................................................................................................................11
2.4.2. Boserup and Easterlin Theories...............................................................................................12
2.4.3 Malthusian theory.....................................................................................................................12
2.5. Birth rate and Mortality rate...........................................................................................................12
2.6. Major impacts of population growth on economic Growth.............................................................13
2.6.1 Population and Economic Development...................................................................................14
2.6.2 Population and per capita income.............................................................................................14
2.7. Social impacts of population growth...............................................................................................16
2.7.1 Population growth and unemployment.....................................................................................16
2.7.2 Population and social infrastructure..........................................................................................16
2.7.3 Population and standard of living.............................................................................................17
2.7.4 Poverty situation and rapid population growth.........................................................................17
2.7.5 Impacts of population growth on health care service................................................................18
3. Conclusions and Recommendations......................................................................................................19
3.1. Conclusion......................................................................................................................................19
3.2. Recommendation............................................................................................................................20
ACKNOWLEDGMENT

First and for most we would like to say thanks our super natural lord God for being with ours in all
aspect our life. Secondly we would say thank you very much to our advisor Tariku .A(Msc) for her
valuable support and advice from the selection of a senior research proposals topic up to the
compilation of the proposals ; he give many directions on how we do our proposals we indebted to our
group members and class mates how give necessary materials, financial resource and taking
responsibility to facilities our work and support our idea throughout work.

LIST OF ABRIVATION AND ACRONYM

AD After Democracy

CSA Central Statistical Agency

FDI Foreign Direct Investment

GDP Gross Domestic Product

LDCs Less Developed Countries

NGOs Non-Governmental Organizations

SNNP Southern Nation and Nationalities

UNO United Nation Organization

USA United States of America

USD United States Dollar

Abstract
In Ethiopia population growth increased four folds between 1870 to2013. At the beginning of 20
century the crude rate is increased to 0.3% per annum.This was very different from 2.9% of the
current population growth of population. Therefore Ethiopia is one of the developing countries
which is characterized by massive unemployment,high birth rate and declining death rate,low
income,low capital formation,poor health service compared to developed countries,problem of
social infrastructure and poor living standard are problem that resulted from rapidly increasing
of population in this country(Konya,2006).The general objective of this seminar paper is to
access the socio- economic impacts of Ethiopian relation to the population growth.socio-
economic well-being of population and at the same time required people for its technical and
manual labor.Population growth has its own effects on economic growth of a country which can
be negative or positive first we will look in to the negatively effecting factors of population
growth:The relationship between population growth and economic development is one of the
oldest themes of study in the field of economics, going as far back as the late 18th century.
Generally rapid population growth is interrelated with public service delivery like health service,
infrastructure,and living standard of the society,per capita income of the society, poverty,
capital formation and problem of unemployment.The government has to strength the family
planning program by giving awareness to the local people to perception of having many
children’s.

1. INTRODUCTION
 1.1 Background of the seminar

In Ethiopia population growth increased four folds between 1870 to2013. At the beginning of 20
century the crude rate is increased to 0.3% per annum. This was very different from 2.9% of the
current population growth of population. The total population in 1900 was estimated at 11.8
million, it look 60 years for this population to double and reached 26.3 million in
1960.According to first population and census in 1984 Ethiopia has a total population of 40.7
million. The second census in 1994 the population of Ethiopia is grew at the rate of 2.9%percent
per annum. In 10 years the population is increased by 13.4 million,with the current growth
ratethe country is projected by 1.7% annual Rapid population growth in Ethiopia is linked other
socio-economic draw backs in relation to income, capital formation, health, poverty,
employment and standard of living. From time to time the population of Ethiopia is increasing
due to high fertility rates (birth rates) and declining in mortality rates. The impacts of rapid
population growth on social and economic development are complex and adverse in nature.
Population growth and population services deliveries are directly related to each other.
Increasing number of population has an effect on the public service and rapid population growth
in the country poses serious threat basic service, such as access to health care service, education
service, capital formation, per capita income, employment opportunity and cause poverty. Due to
this problem, there is an expansion of unwanted practices such as crime; prostitution and beggary
are increasing rapidly in the country from time to
time(http://fobweb.unfa.org/SWP2011/reports/EN-SWOP2011-FINAL.pdf).

This review represents our first attempt to study the causal link between population growth and
economic growth using a long historical time series data for the period 1870-2013. Our recent
experience in economic dynamics shows that turbulence in a region may easily be transmitted to
other regions through international trade, economic and financial integration, two of the basic
activities amongst regions implying the importance of taking into account cross-section
dependency in empirical analysis. Previous studies examining the correlation between population
growth and economic growth failed to examine their two-way inter-relationship. Even though
there is strong dependence between countries, it is well known that each country sustains its own
dynamics in the developmental process. This fact calls attention to also controlling cross-country
heterogeneity when initiating an empirical modeling strategy(Galor and weil (2000)and Li and
Zhang(2007),to name a few).

Therefore Ethiopia is one of the developing countries which is characterized by massive

unemployment,high birth rate and declining death rate,low income,low capital formation,poor
health service compared to developed countries,problem of social infrastructure and poor living
standard are problem that resulted from rapidly increasing of population in this
country(Konya,2006).

So that this seminar paper receive the socio-economic impacts of population growth in Ethiopia
and put down things to be needed to minimize this problem.

1.2 OBJECTIVES
1.2.1 General Objective
The general objective of this seminar paper is to access the socio- economic impacts of
Ethiopian relation to the population growth.

1.2.2 Specific Objective

• To review the relationship between population growth and Economic growth In Ethiopia

• To review major factors for rapid population growth in the country.

• To review socio-economic impact of population growth

 2.LITRATURE REVIEW
2.1. SOCIO-ECONOMIC IMPACTS OF POPULATION GROWTH RATE IN
ETHIOPIA TREND

2.2. Concept of population growth

According to Kornblum and Julian (1995) people of the world are not reproducing at higher rate
than past, but more peoples are living to the age of fertility. This change causes advance in
sanitation disease control and public health.

suggest pressure on land are not by population growth but by reducing of arable land caused by
growth of population in rural areas not increased, its increased in urban because of to get job,
access to health, welfare and other public Services. In developing countries the issue of
population and development are interrelated because of the circular relationship between
population and development. That is direct of improving socio-economic well-being of
population and at the same time required people for its technical and manual labor. African
population is growing at the rate of 2.4% per annum at present. This is in the fact the highest
growth rate in the world. Furthermore it indicates the Africa experiences rapid population growth
rate of well over 2% in the whole world. If the present growth rate continuous, African current
population size is projected to be double in a period of 29 years from now. Hence around 2013
AD, Africans population location will be about 1.6 billion (
http://www.studymode.com/essays/Population).

This situation also proves the fact that Africa is characterized by population growth which
interim is fuelled by high fertility rate. The negative consequence of rapid population growth fall
most heavily on the poor because they are one who are landless, suffer first from cuts in
government health and educational programs, bear the brunt of environmental damage and the
main victims of job to slower growth of their economy(
http://www.studymode.com/essays/Population).
2.3. POPULATION GROWTH ON GDP AND GDP PER CAPITA

Population growth has its own effects on economic growth of a country which can be negative or
positive first we will look in to the negatively effecting factors of population growth:

1) Due to increase in Population growth, Consumption Increases which will decrease GDP/GDP
Per capita and Imports will increase and Exports Fall down Budget Defect is the result and the
prices mount high.

2) Miss use or Over use of Natural Resources. Due to increase in population Man to Land Ratio
decreases. As land is inelastic, one can’t increase the amount or supply of land.

3) Raw-Material or Primary Goods are used or processed either directly or indirectly which
produce finished goods and also yield residues some of it is recycled and some is disposed to
nature which affects it negatively. So when more and more people depend on land there are more
chances of the damage accruing to ecosystem.

4) Effect on PCI, if the population growth dose not matches the labor force there is a negative
effect on PCI.

5) Population Growth and Standard of Living, as increase in population leads to more

consumption. OR there are more mouths to feed which affects the standard of living.

6) Population and Agriculture, the pressure on land increases and also increase disguised
unemployment.

7) Population and employment, unemployment increases due to increase in population.

8) Population and Social infrastructure, pressure increases as one Doctor has to attend more and
more patents similarly in other fields also.

9) Population Increase decreases Capital Formation.

10) Population Increase results in Brain Drain.

11) Population Increase negatively effects Environment as urban slums increase.

Similarly there are some positives of population growth which can be achieved through proper
planning and management(http://www.studymode.com/essays/Population).

2.4 Theories of population

Different scholars have different understanding about the feedback of population growth, and its
cause and effect; Malthusvs. Mark, Enk’s, Boserup& Easterlin theories.

2.4.1. Enk’s Theories

The common view as far as developing countries are concerned in that population growth present
an obstacle to the growth of living standard the argument in the nut shell population growth act
as a barrier to capital accumulation and capital duping retards that the rate of productivity growth
and in general, adds more to the number be supported than the level of output.

According to Enk’s in developing countries rapid population growth reduce the community
saving, investment and developing capacity by leading to a high dependable of children and old
member of society who consume without producing. So there is no change in the living standard
of the country.Moreover the rapid population growth prevents the country from prosperity.

2.4.2.Boserup and Easterlin Theories

Boserup and Easterlin said that the feedback of population growth based on the countries status
like either developed or developing countries, rapid population growth is more difficult to keep
the growth of product. There is no balanced growth between population growth and capacity of
countries.So there is negative relationship between rapid population growth and growth output.In
developing countries, there is a view held within and outside that population and obseint supplies
of labor are obstacles to development.

Fasil wrote about consequence of population growth in Ethiopia as following.

“………consequence of rapid population growth, insecurity and vulnerability to famine in

Ethiopia among the fundamental cause of low and declining production in Ethiopian agriculture
and technological retardation and negative ecological process”(Fasil 2005).
2.4.3 Malthusian theory

According to Malthusian theory of population, population increases in a geometrical ratio,

whereas food supply increases in an arithmetic ratio. This disharmony would lead to widespread
poverty and (www.buzzle.com/articles/thomas-malthus-theory-of-population)

2.5. Birth rate and Mortality rate

Birth rate is the rate of birth in a population, the death rate is the number of deaths in a
population and the growth rate is the growing numbers of the population

Major causes of population growth are high birth rate,fast declining death rate and lack of family
planning.All writers were agreed that the population explosion could be said to have occurred
immediately after Second World War.The world population growth as a result of the excess of
birth rate over death rate in recent year has tended to fall in some countries and the decline in
the death rate to slow down in other countries, the gap between the two is still broad enough to
make possible a very high increase of population is the relationship between death rate and birth
rate (http://wiki.answers.com/Q/What)

2.6. Major impacts of population growth on economic Growth

Raising the issue of population growth was erroneously considered as distribution of

contraceptives and introducing of population control programs.Since family planning is a private
matter, population issue was considered sensitive intruding on privacy(TsegayeTegenu, 2011)

The consequences of population growth on economic development haveattracted the attention of

economist over since Adam smith wrote his book “Wealth of nation”. The annul labor over
nation is found which originally supplies it with all the necessaries and convenience of life. For
some industrialized population growth helped their economy because they are wealthy,they have
abundant capital scarcity of labor in such countries,the supply curve of labor is elastic to the
industrial sector ,so that even high growth rate of population has leadto a rapid increase in
productivity (Mr,Jhanghan 1978)
Population growth is closely tied to economic development. On the one hand, labor shortages
will slow the rate of economic growth in industrialized countries, but on the other hand, a high
birthrate in a developing country may stress limited renewable resources. Governments in
western and other industrialized countries like Japan are challenged to create effective
immigration policies and programs to increase the birthrate, while countries with weaker
economies pursue public health policies to reduce population growth. Globally, a smaller
population presents multiple benefits from an ecological perspective, but some economies are
challenged by low birthrates and are redirecting their need for unskilled labor to countries with
higher populations and lower wage demands.

2.6.1 Population and Economic Development

The relationship between population growth and economic development is one of the oldest
themes of study in the field of economics, going as far back as the late 18th century. The
pessimistic--if not alarmist--findings of many studies have led some critics to brand economics
"the dismal science." Over the years, however, many economists have revisited the issue, finding
the relationship between population and development more complicated than previously thought
(www.popcouncil.org/publications/wp/prd/prd/rd/wplist.htm/)

2.6.2 Population and per capita income

Based on data from the World Bank and using a sample of forty-three developing economies, the
author finds that the growth rate of per capita GDP is linearly dependent upon population
growth, both the young and old dependency ratios, the mortality rate. Using interaction variables
in light of the severe degree of multicollinearity among explanatory variables, the author also
find that per capita GDP growth linearly depends on population growth, the old dependency
ratio, the mortality rate, and the interactions between population growth and both the young and
old dependency ratios, between population growth and whether or not the rate of population
growth is less than 1.2 percent per year, and the interaction term between the young dependency
ratio and whether or not the rate of population growth is less than 1.2 percent per year(Todaro
and Smith, 2006).
Growth on per capita GDP growth is linear and everywhere negative. Itis stronger when
interaction the effect of population terms is included in the statistical model. Governments in
developing countries can influence population growth in order to stimulate growth. China
provides a clear example by suddenly introducing a collection of highly coercive methods to
reduce the total fertility rate from about 5.8 to 2.2 births per woman between 1970 and 1980.

Since a decline in fertility affects the age structure of the population of a developing country. It is
found to have no significant statistical impact on economic growth when both the young and old
dependency ratios are included in the model. The effect of the old dependency ratio on per capita
GDP growth is always negative and stronger when interaction terms are included in the model.

On the other hand, the interactions between the young dependency ratio and population growth
and whether or not the average annual population growth rate is less than 1.2 percent exert a
positive influence on economic growth.

Neither the level of urbanization nor urban growth has a statistically significant impact on per
capita GDP growth. This result may be due to the fact that these two dimensions of the
demographic transition exert positive and negative effects on economic growth and these effects
are self-cancelling.

The growth of population tend to reduce per capita income in three ways

I. It increase the pressure of lands

II. It leads to the rise in the cost of consumption goods because of the scarcity of corporate
factors to increase their supplies and

III. It leads to decline in the accumulation of capitalbecause with increase in family members
expense increase (answers.yahoo.com/question/index?qid=20080725123209AAh0X1j)

Population growth retard capital formation. As population increase per capita available income
decline, people required to feed children with the same income. It means more expenditure on
consumption and a further full on the already low saving and consequently in the level of
consumption to raiseinvestment.The rapid population growth adversely affect private saving by
causing consumption to rise and saving per capita to fall. In Ethiopia due to low per capita
income, the saving growth rate also low. The following table shows Ethiopian grows domestic
saving during a certain years (http://www.iiste.org/Journals/index.php/DCS/article/view/2447)

Table 4.Ethiopian gross domestic saving

year Ethiopian gross domestic saving

2002 9 3 1 . 4
2003 1 3 1 6
2004 1 7 6 . 3
2005 - 1 8 . 6
2006 8
2007 - 1 2 . 6
2008 1 5 3 . 8
Source MOFED 2009

2.7. Social impacts of population growth

The consequences of population growth of Ethiopia on its populations are such as,
unemployment, health care service problem, clean water supply shortage, problem of school
expansion through all country and poverty in Ethiopia are impacts of population growth on social
impacts of the people.

2.7.1 Population growth and unemployment

When the unemployment rates go up, it means that certain areas will be experiencing a partial or
total lack of jobs. As such, people in those areas cannot sustain themselves and move to other
areas where there are jobs. So the areas which have jobs (it can be cities or geographical areas of
the country) experience large population growth as the workers and their families move there to
obtain gainful employment. People will hear of jobs in another part of the state or country.
Moving their family to that spot there is supposed to be work to feed there families. This is
population growth, however when these families move where ever they might just find out there
is no work, thus no money adding to the unemployment(ARFIM LOKU, 2013)

2.7.2 Population and social infrastructure

Rapidly growing population necessitates large investment in social infrastructures and diverts
resource from directly productive assets.Due to scarcity of resource,it is not possible to provide
educational,healthy,medicinal,transport and housing facilities to entire population. There is over
crowdingeverywhere;as a result, the quality of this service goes down.(Nada chaya, 2007).

2.7.3 Population and standard of living

Standard of living refers to the level of wealth, comfort, material goods, and necessities available
to a certain socioeconomic class a certain geographic area. The standard of living includes
factors such as: income quality and availability of employment, class disparity,poverty rate,
quality and affordability of housing,gross domestic product, inflation rate, access to quality
healthcare, and economic and political stability.

There is disagreement about whether population growth positively or negatively affects the
standard of living. One interpretation is that increasing the population will cause the nation's
resources to become thinly spread, leading to shortages and decreasing the standard of living for
all people. Eventually this could lead to higher prices and inflation. Another view counters that
increasing a nation's population leads to greater innovation and wealth. This view contends that
more a person (or human capital) increases the likelihood of wealth generating development and
progress. In turn, increased progress and innovation offsets the economic strain of the increased
population(Birdsall, et al. 2001).

2.7.4 Poverty situation and rapid population growth

There are two major contrasting views about the relationship between population growth and
poverty. Some believe that high fertility causes poverty and that lower fertility is the key to
reducing poverty. Others, however, believe that economic policies determine poverty reduction
and that contraception is a "private good." Not everyone agreed that expanded family planning
programs would be effective in reducing poverty. Economists were quick to point out that even if
high fertility and high proportions of the population living in poverty were correlated, this
correlation would not imply causality. In fact, the relationship could run in the opposite
direction: Poverty could be the cause of high fertility. Poor people often want more children
because children represent wealth, provide household labor and are the only form of social
security available to parents in their old age (Steven W. Sinding, 2008)

Recent research has looked at the linkages between population growth and economic growth at
different stages of the transition from high to lower fertility.One of the most important findings
of this work is that when fertility begins to decline, the process creates but for only a limited
period of time—a demographic "window of opportunity" during which increased personal
savings and investment become possible.

When fertility is high, the proportion of the population made up of children and teenagers is
large relative to the share made up of working adults. This is called the age-dependency
effect(Steven W. Sinding, 2008)

2.7.5 Impacts of population growth on health care service

Health status is one major factor which can affects the efficiency and productivity of work force
of any country as a result of provision sufficient health service is one of the major objectives of
health institutions. In our country health care is practicing through the coalition of efforts by
governmental and NGO, but there is no sufficient health service as result; there is large mortality
rate in Ethiopia when we compared with other developed countries.
Although the population size of countries with high fertility and low contraceptive use will
continue to grow, the rate at which these populations grow can be slowed. High rates of unmet
need for family (Nada Chaya, 2007)
 3. Conclusions and Recommendations
3.1. Conclusion
This seminar paper reviews about the socio-economic impacts of population growth in
Ethiopia.Rapid population growth affects the socio-economic development of the country, which
creates serious problem and crowded situation in the country lead to unemployment, poor
infrastructure, poor standard of living, poverty, low per capita income and low capital formation.

High fertility rate and declining death rate are the main causes of rapid population growth in
Ethiopia. This means in Ethiopia there is large variation between this two means between birth
rate and death rate so birth rate in Ethiopia is greater than death rate which creates rapid
population growth in the country.This situation made Ethiopia is predominantly nation of young
people, almost 57% of the country population is under the age of 20 years and this creates
dependency ratio in Ethiopia.

As a result of the causes of population growth, Ethiopia is the third most populous in Africa. Due
to the Ethiopian economy heavily depends on small holder of agriculture.This using agriculture
as the main occupation is a cause for low productivity, low saving, investment, and capital
formation.

Generally rapid population growth is interrelated with public service delivery like health service,
infrastructure,and living standard of the society,per capita income of the society, poverty, capital
formation and problem of unemployment.

3.2. Recommendation

The socio-economic problem that caused by population growth in Ethiopia will be solved by the
correlation in the government, NGO’s and local community. Generally in order to solve this
problem, I recommend that;

1. The government has to strength the family planning program by giving awareness to the local
people to perception of having many children’s.
2. Improving the income opportunities of the people by expanding the economic sector in order
to generate alternative income earning activities that can absorb existing in secure labor force

3. The government also has to strengthen emphasis on education of children’s.

4. Expansion of agricultural extension service is expected from government to improve

agricultural product which used feed this large population of the country.

5. Reducing unemployment in a country by organizing and cooperating the job seekers on

different micro and small industries.

6. Initial capital and available training is expected from different stock holders including
government, private sectors and NGO’s.

7. It is better that the local people have to eliminate local beliefs having large number of
children’s by using contraceptive methods.

8. The local also expand informal sectors like, ekub and idir to save their income.

9. The NGO’s have to work hard in the countryby changing the people’s perception towards the
value of contraceptive method and also the problems of the country needs adequate intervention
to improve the socio-impacts of population growth in the country.
4.REFERENCE
Birdsall, N.; Allen C. Kelly; and steven W. Sinding(2001 eds.): population Matters: Demographic
Change, Economic Growth, and Poverty in the Developing World. New York: Oxford University
Press.

Fasil, 2005 Theories of population growth

Geoffrey MCNicoll, 1999 population growth and per capita income

Nada Chaya,(2007). Poor Access to health care service; ways Ethiopia is overcoming it

Steven W.Sinding, 2008 Population, Poverty and Economic Development

Tegenu Sileshi 2007, Major impacts of population growth in economic developmentsTodaro,

M.P. and Smith, S.C.(2006). Population growth, factor of accumulation and productivity

http://www.studymode.com/essays/Populationhttp://.prb.org/publications/datasheets/2013

http://www.buzzle.com/articles/thomas-malthus-theory-of-population

http://www.studymode.com/essays/Population