Análisis de las condiciones organizacionales

With an increasing population trend in the country, creating an enabling macroeconomic environment is important for job creation and infrastructural development. Public spending, however, is expected to spur economic activities by addressing infrastructural gaps across various sectors of the economy. We examined the sensitivity of economic services spending to demographic changes in Nigeria. The estimated ECM result is presented below.

Table 5.1.4: Error Correction Model – Economic Services and Population Dynamics

Dependent Variable: D(EXECON) Method: Least Squares

Date: 01/23/14 Time: 12:54 Sample(adjusted): 1981 2010

Included observations: 30 after adjusting endpoints

Variable Coefficient Std. Error t-Statistic Prob. C -26145.77 26245.06 -0.996217 0.3305 D(POP5) 0.346210 0.252398 1.371683 0.1846 D(POP6T11) -0.172755 0.203550 -0.848710 0.4056 D(POP12T17) -0.080165 0.061203 -1.309810 0.2044 D(POP25T34) -0.917144 0.951189 -0.964208 0.3459 D(POP35T44) 0.264149 0.693832 0.380710 0.7072 D(POP45T54) 1.595785 2.169844 0.735438 0.4702 D(POP65T74) -0.107615 1.321568 -0.081430 0.9359 RESECON(-1) -0.514267 0.264400 -1.945035 0.0653 R-squared 0.645492 Mean dependent var 33779.35 Adjusted R-squared 0.510441 S.D. dependent var 105733.7 S.E. of regression 73980.31 Akaike info criterion 25.50431 Sum squared resid 1.15E+11 Schwarz criterion 25.92467 Log likelihood -373.5647 F-statistic 4.779619 Durbin-Watson stat 2.132337 Prob(F-statistic) 0.001878

Table 5.14 above shows a positive relationship between population less than 5 years of age (coefficient – 0.346) and public spending on economic services. This result was however not statistically significant, but the findings (statistical insignificance) was rather consistent for the population within the age of 35 – 44 and 45 – 54 years of age.

The population below the age of 5 requires sustained increase in public spending on economic services that would galvanize their inert potentials and benefit the society in the long-run. While this has the a-priori expected sign, it is not statistically significant. Economic services that can benefit the population within

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this age should aim at achieving lower prices for food and nutrition, reduced cost of health care services and improved government funding for day care services. Designing policy frameworks to stimulate a healthy relationship between public spending on economic services and Age Group less than 5 years of age would support positive, Target 2 (MDG 1: Eradicating Extreme Poverty and Hunger) and Target 5 (MDG 4: Reduction of Child Mortality).

Furthermore, econometric results of the sensitivity of population within the ages of 35 – 54 to expenditure, also suggest that demographic changes in the population within this age group, leads to an increase in public spending on economic services but not significantly. It should be noted that this population are typically married and with children, but largely unemployed in present day Nigeria or when employed, usually over burdened with dependency. Thus increasing public spending targeted to this age group will have a positive spillover effect on extended family welfare. Public spending on this age group could also take the form of unemployment benefit, would help keep the crime rate lower and increase economic participation. This course of action would support Target 1 and 2 (MDG 1: Eradicating Extreme Poverty and Hunger). However, this seems doubtful because, the relationship in the model is not significant, indicating that the improbability of the variation in the dependent variable (Economic Services) is high.

The population groups with a negative relationship with public spending on economic services are: 6 - 11, 12 – 17, 25 – 34 and 65 – 74. The same results observed for health expenditure is also observed in the working class, age bracket (35-44) for economic services. The probability of any impact not occurring is very high. This supports the evidence that there are huge unemployable persons in the country. Results indicate that resource allocations for this category would not address the problem; rather the remote causes of unemployment must be tackled first. The statistical evidence above suggests that as the population within these age group increases, public spending on economic services decreases. This evidence lends credence to the behavioural pattern in both the southern and northern parts of Nigeria. In the northern part of Nigeria, those within age 6 – 17

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are caught up in the Amajiri’s25 while their counterpart in the south is usually caught up as road hawkers of consumables or are already signed up to learn a trade to receive their freedom in five (5) to ten (10) years’ time. This is usually due to the need to make children within this age to contribute to the well-being of the family due to harsh economic conditions. The negative relationship between the variables in question further indicates the impossibility of meeting Target 1 and 2 (MDG 1); Target 3 (MDG 2: Achieving Universal Primary Education) and Target 6 (MDG 5: Improvement in Maternal Health).

Also, changes in the population within age 25 – 34 shows a negative relationship with public spending on economic services. This implies that rising population of this group has been met with decreasing public spending. The inability of this group to find sustainable economic opportunities in the system is a derivative of the above facts. This scenario serves as a source of social tension, as unemployment could lead to aggravated crime rate. In a recognition of this fact, the government had in the past and in recent times introduced policies to deliberately create employment opportunities for the teeming youths through NAPEP26 programme and YouWIN27 programme, while the problem is not abating. Consequently, the possibility of Target 6 (MDG 5: Improvement in Maternal Health) is slim because the age group in question is within the child bearing stage. Howbeit, the estimated model indicates a not too significant relationship between the independent and dependent variables.

The long run relationship between population dynamics and public spending shows a statistically significant relationship. This implies that there is a long run relationship between population dynamics and public spending on economic services. Estimated speed of adjustment was, however, lower compared to that estimated for public spending on education. This shows that while public spending on economic services is important to support the rising youth population trend, direct government spending on economic services should be complemented by sustainable policies that seek to achieve macroeconomic stability. The overall estimates of the model are robust. The adjusted R-square is higher than 50

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percent, implying that population dynamics explains over 51 percent variation in public spending in economic services. Nonetheless, the estimated model indicates that population dynamics do not have a significant impact on economic services expenditure, rather other factors other than population dynamics influence the former. Durbin Watson statistic is robust as it shows no evidence of first order autocorrelation. F-statistic, which is significant at 1 percent, also shows the robustness of the model.

Inverse Roots (Autoregressive Model) stability test below shows that the model is not unstable as more points lie within the circle (Figure 5.0.3 below). Also, the plots outside implies that public spending on economic services has not been consistent with population dynamics over the study period.

Figure 5.0.3 Vector Autoregressive Model – Economic Services and Population Dynamics

Source: Derived from the Estimated VAR Model

Notwithstanding the above results, the indirect impact of economic services on poverty alleviation, through sustained growth and productivity, has long been recognized. Therefore, deploying economical services to facilitate government administration and service delivery has the potential for improving efficiency and service delivery towards MDG targets in Nigeria, which would lead to enhancing and improving government responsiveness to citizens. This scenario is achievable through the reduction of operating inefficiencies and redundant spending, which will further support the transformation of the Nigerian government into a citizen- centered government and improve productivity for the government and its institutions. In general terms, the cumulative effects of all these on the different age groups on developmental process would be very significant.

-1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5

Inverse Roots of AR Characteristic Polynom ial

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