Population and Economic Growth

Fast growing economies have positively shown that growth in population is one of the key ingredients for rapid economic growth,in fact, it is unclear how any country can achieve a rapid economic growth rate in foreseeable future without strong population growth.Increase in population provides two major drivers of economic growth; Labor and Market.Without of which any service based economy will never start.

China with 1.3Bn, India 1.2Bn, Nigeria 180Mn , and Ethiopia’s 80Mn are among the countries supporting this school of thought.On the contrary countries with low population growth like Germany and UK have recorded modesty economic growths for the last 3 decades.It is clear that population and economic growth grow in tandem albeit at different rates. The remarkable success of china, india, nigeria and ethiopian economies can be associated with strong population growth.

Yet population growth is problematic if it outpaces increases in productivity.It has been argued that population grows at a geometric rate while resources at an arithmetic rate and increase in population will ultimately surpass the growth in resources. Malthus (1798) claimed that there is a tendency for the population growth rate to surpass the production growth rate because population increases at a geometrical rate while production increases at an arithmetic rate. Thus, the unfettered population growth in a country could plunge it into acute poverty, This has been the case in most underdeveloped countries.

A large population also provides a large domestic market for the economy. Moreover, population growth encourages competition, which induces technological advancements and innovations. Nevertheless, a large population growth is not only associated with food problem but also imposes constraints on the development of savings, foreign exchange and human resources (Meier 1995). Generally, there is no consensus whether population growth is beneficial or detrimental to economic growth in developing economies.

Growing economies need faster growth in population. This leads to increased supply of work force and consumers.

The graphs below show that high population growth is matched by high economic growth for most countries, eliminating the effects of political unsuitability and natural disasters(droughts, famine)


Kenya’s population growth rate has declined over the years from highs of 4% in early 1980s due to government’s aggressive family planning strategies. The economic growth rate shows a correlation to population growth rate.


2. Ethiopia

One of Africa’s fastest growing economies shows a high correlation between economic growth, population growth rate and the country’s population.


3. Tanzania


4. Nigeria

Africa’s most populous and one of fastest growing population, Nigeria’s population has grown at approximately 3% for the last three decades.


5. India

The link between population growth and economic growth appear to be strong in India


6. China

The population has continued to grow at extremely low rate due to one child policy and aging population. The causes of population aging in China are mainly associated with a low fertility rate, rising life expectancy, and the cumulative effect of past changes in birth and death rates


Studies by early scholars Johansen (1988) and Gregory and Hansen (1996) show that there is no long-run relationship between population and economic growth.Population growth could be beneficial or detrimental to economic growth and economic growth could have an impact on population growth.This however is the proverbial chicken and egg dilemma. What should come first? is it the population or economic growth? and what gives momentum to the other. Yes, increase in population will propel the economy, but what will you feed the population if the economy is poor. Should we first grow the economy (as the proponents of family planning advocate) or should we increase in number and the economy will follow? With all said and done; the argument of population and economic growth will stay with us longer.

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Posted by on September 13, 2015 in Economical, economics, kenya


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M-PESA Journey: The Growth of Mobile Money Transfer in Kenya

6th March 2007 M-PESA LAUNCH And this is where the story begins..

Between 31st Mar 2007 – 16th Apr 2007 M-PESA had a paltry 19,671 mobile active M-PESA users
1st November 2007 1,041,522 mobile active M-PESA users.
11th Feb 2008 – 14th Feb 2008 -Safaricom’s M-PESA “Send Money Home” campaign won the Best Broadcast Commercial award at the 13th Annual GSMA Global Mobile Awards in Barcelona, Spain. It also scooped another award for Best use of Mobile for Social and Economic Development.
18th March 2008-Housing Finance is Kenya’s premier mortgage financier. To increase accessibility to subscribers, Safaricom partnered with Housing Finance to offer M-PESA services from Housing Finance outlets all over the country..
30th March 2008-M-PESA became an economic phenomenon as it signed up it’s 2 millionth M-PESA customer. The service was popular both in urban and rural Kenya
7th May 2008-M-PESA crossed from handsets to petrol stations as Safaricom signed an agreement with Chevron Kenya Ltd. The partnership allowed customers to access M-PESA at selected Caltex service stations countrywide.
18th May 2008 -M-PESA was awarded as the best project in the Economic Development Category of the Stockholm Challenge Awards. The Stockholm Challenge is considered to be the foremost ICT Award in the World
30th June 2008 -M-PESA attained a customer base of 3 million customers. The service became ubiquitous as an income earner and economic facilitator in both rural and urban areas
14th July 2008-M-PESA Agents were not always available, especially after hours. To overcome this challenge, Safaricom and PesaPoint entered into a partnership. It allowed M-PESA users to withdraw money from PesaPoint ATMs directly on their Safaricom line. No ATM Cards are necessary for the PesaPoint withdrawals

Between 17th Jul 2008 – 6th Aug 2008 -M-PESA access PostBank To give M-PESA customers better access to the service, Safaricom signed an agreement with PostBank to allow customers to access M-PESA services at all PostBank branches

1st September 2008-increase by more than 1 Million active users in less than 4 months. 4,143,043 active mobile M-PESA users
24th September 2008-M-PESA won the World Business & Development Award for its contribution towards millennium development goals. The reliable savings mechanisms and credit services provided by M-PESA have helped poor communities increase their income and work their way out of poverty
15th October 2008- Signs a deal with Old Mutual Kenya to facilitate investments in Unit trusts  (Money markets, Equity funds, Balanced fund) and payment of premiums for life insurance products..To make it easier for investors to manage their Old Mutual accounts, Safaricom and Old Mutual Kenya formed a partnership. The partnership allowed investors to top up their Old Mutual Unit Trusts using M-PESA
18th November 2008-AFRICACOM AWARDS Best Business Solution for Rural Services
1st December 2008-Safaricom and Western Union signed an agreement that allowed M-PESA’s 5 million customers to receive money from the U.K.
16th Feb 2009 – 19th Feb 2009 M-PESA was designated the Best Mobile Transfer Service, with the judges calling it: “An accessible and intuitive solution, reflected by an unprecedented take-up rate for a service of this kind.
30th April 2009 – M-PESA SERVICE TO KPLC CUSTOMERS No more queueing at Kenya Power centres. Safaricom partnered with Kenya Power (then known as KPLC) to allow customers to pay their electricity bills via M-PESA.
6th May 2009-In a bid to help M-PESA Agents develop themselves and their businesses, Safaricom partnered with Kenya Commercial Bank (KCB). The agreement facilitated Agent to Agent transactions that improved M-PESA usage for both agents and customers
1st January 2010-Deposit Value of Kshs. 25,270,000,000 BILLION. Withdrawals of Kshs. 23,034,000,000 BILLION. Transfers of Kshs. 23,986 ,000,000 BILLION. Other Values amounted to Kshs. 712,000,000 MILLION.Airtime value of Kshs. 1,414,000,000 BILLION
18th May 2010- M-KESHO BANK ACCOUNT AT EQUITY Safaricom and Equity Bank partnered to bring customers bank accounts into their pockets. With the offering of a new banking system that allows the customer to manage their bank accounts via mobile. This is the only M-PESA related product that never really picked up well due to differences in ideological methodologies between the partners…. The corporate supremacy wars between Equity bank and Safaricom especially on profit sharing Killed this product. 
30th June 2010-10 MILLION SUBSCRIBERS M-PESA subscribers stand at 10,232,805 active mobile users. Approximately a third of the Kenyan population.
1st December 2010 DIVIDEND PAYMENT Safaricom shareholders  allowed them to receive their dividend payments through M-PESA.
31st December 2010 M-PESA customers were now enabled to book and pay for tickets to concerts, events, galas, and even sports activities right on their mobile phone courtesy of a new service called M-TICKETING
1st February 2011-

M-PESA GROWTH Deposit Value of Kshs. 39,565,000,000 BILLION. Withdrawals of Kshs. 35,990,000,000 BILLION. Transfers of Kshs. 41,351,000,000 BILLION. Other values amounted to Kshs. 3,721,000,000 BILLION. Airtime value of Kshs. 1,235,000,000 BILLION

8th February 2011-Safaricom partenered with I&M Bank to give M-PESA a whole new facet. The agreement allowed customers to transfer money from their M-PESA accounts into an international Visa Pre-Paid Card known as the M-PESA PrePay Safari Card.
6th March 2011-M-PESA Celebrates its 4th Anniversary with it’s 13,798,695 active mobile users
31st March 2011- Goes Global-Safaricom and Western Union signed an agreement that allowed M-PESA’s 13.5 million customers to receive international money transfers from 45 countries and territories including the U.S, Canada, Italy and the U.K.
5th August 2011 Kenyans for Kenya. On July 27th 2011 the Safaricom Foundation and KCB Foundation led a coalition of corporate Kenya and media in launching a massive fund-raising effort aimed at reversing the suffering of an estimated 3.5 million Kenyans faced with starvation
1st February 2012 Deposit Value of Kshs. 60,686,000,000 BILLION. Withdrawals of Kshs. 54,743,000,000 BILLION. Transfers of Kshs. 62,078,000,000 BILLION. Other values amounted to Kshs. 8,225,000,000 BILLION. Airtime value of Kshs. 2,176 ,000,000 BILLION
1st April 2012-15,000,000 Million active M-PESA user

Between 1st Jul 2012 – 20th Aug 2012- Airtime value of Kshs. 2,617,000,000 BILLION

27th November 2012 – Launch of M-SHWARI This is a revolutionary banking product exclusively for M-PESA customers provided by Commercial bank of Africa (CBA) in partnership with Safaricom. M-Shwari provides financial access to millions of Kenyans.
2nd February 2013 M-PESA GROWTH Deposit Value of Kshs. 75,000,000,000 BILLION. Withdrawals of Kshs. 65,500,000,000 BILLION. Transfers of Kshs. 72,312,000,000 BILLION. Other values amounted to Kshs. 16,845,000,000 BILLION. Airtime value of Kshs. 2,810,000,000 BILLION
1st March 2013 M-PESA GROWTH 17,000,000 Million active M-PESA users
1st June 2013 M-PESA GROWTH Deposit Value of Kshs. 81,065,000,000 BILLION. Withdrawals of Kshs. 70,312,000,000 BILLION. Transfers of Kshs. 75,339,000,000 BILLION. Other values amounted to Kshs. 20,983,000,000 BILLION. Airtime value of Kshs. 3,062,000,000 BILLION
24th June 2013 LIPA NA M-PESA This is a service that allows consumers to pay for goods and services using M-PESA. The buy goods and services functionality is available on your M-PESA Menu under “Lipa na M-PESA” . Merchants acquire a 6 digit number where customers make payments to at no extra cost.
1st October 2013 M-PESA GROWTH Deposit Value of Kshs. 93,273,000,000 BILLION. Withdrawals of Kshs. 79,917,000,000 BILLION. Transfers of Kshs. 84,882,000,000 BILLION. Other values amounted to Kshs. 25,610,000,000 BILLION. Airtime value of Kshs. 3,551,000,000 BILLION



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