Economic Growth, Air Pollution Standards Enforcement and Employment Generation Nexus in the Nigerian Context

Abstract

Contrary to theoretical expectation, available data show a positive correlation between economic growth and unemployment in Nigeria between 2000 and 2014 (WDI, 2015). At 7.87 percent average annual growth rate from 2000 to 2014, Nigeria's economic performance could be classified as a growth miracle. This impressive performance resulted in more than eight-fold increase in the country's gross domestic product (GDP) per capita($377 in 2000 to $3184 in 2014). In spite of this performance unemployment rate in the country has continued to soar. Overall unemployment rate increased persistently from 12.3 percent in 2006 to 23.9 percent in 2011. Youth unemployment has remained consistently high at over 13 percent since 2000. This is an indication of non-inclusive growth. Economic growth is associated with a variety of costs such as pollution and environmental degradation. An ineffective regulation of firms' productive activities and household consumption has a chain effect on sustainable economic growth. For instance, increased output in Nigeria will result in an increase in carbon monoxide emission. The health effect of carbon monoxide (CO) has two adverse economic implications: first, the health effect of CO could lead to loss of productivity and death; secondly, it leads to higher expenditure on health, lower savings and eventually lower investment. An effective enforcement of existing environmental and air pollution rules could serve the dual purpose of engendering both inclusive and sustainable economic growth. Thus, the paper presents a dynamic model that explains the relationship among economic growth, air pollution standards enforcement and employment generation.