S S 1 SECOND TERM ECONOMICS NOTE

SCHEME OF WORK
WEEKS TOPICS
1 Revision /Welcome test / Business Organisation
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2 Business Organisation II and III
3 Business Organisation IV
4 Population I
5 Population II
6 C.A
7 Population III
8 Mid – term break
9 Labour market
10 Nature of the Nigerian economy
11 Revision

WEEK 1 -- 3 : - BUSINESS ORGANISATION [FIRMS AND INDUSTRY]

FIRM
It is the basic unit or an entity which specialises in the production and distribution of
goods under one administration for the purpose of producing wealth

INDUSTRY
It is the group of firms producing similar products and under separate administration
of management. For example, firms like Oando, Total, Mobil, etc are under different
managements but all produce similar products.

PLANT
It is a place where a firm carries out its productive activities

FACTORY
It is the building where goods are produced in large quantities using machines.

BUSINESS ORGANISATION
It is an enterprise set up by an individual, or group of individuals, government or its agencies for
the main purpose of making profit and providing goods and services for the satisfaction of human
wants.

TYPES OF BUSINESS ORGANISATION

1. PRIVATE ENTERPRISES
It is an entity that operates under the ownership and management of individuals.
FEATURES OF PRIVATE ENTERPRISES
1. Private ownership of property
2. The objective of the business is to make profits

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 3. Owners borne the risk of the business
4. Individuals provide the capital
5. Owners manages the business

2. PUBLIC ENTERPRISES
It a business organization wholly or partly owned by the state and controlled through
a public authority. E.g Nigerian Television Authority (NTA), Nigerian Railway Corporation
(NRC)
FEATURES OF PUBLIC ENTERPRISES
1. Government and tax payers bear the risk
2. Management is accountable to the government
3. Government financing
4. Provision of social services
5. Board of directors manage the business

TYPES OF BUSINESS ORGANISATION

TYPES NO OF OWNERS
1. Sole proprietorship 1
2. Partnership 2 to infinity
3. Private limited company 2 - 50
4. Public limited company 7 to infinity
5. Public corporation By government
6. Co- operative society Any number of person

DIFFERENCE BETWEEN PRIVATE AND PUBLIC ENTERPRISES

1. Private enterprise is owned, managed and controlled by private persons while Public
enterprise is owned, manage and controlled by government.
2. Private enterprise main motive is earning profit while Public enterprise main motive is to
render service to general public.
3. Private enterprise involves no rules and regulations while Public enterprise involves lot of
rules and regulations.
4. Private enterprise involves funds from individuals while Public enterprise involves funds
from government.
5. Decision making in private enterprises is easy while that of public enterprises is rigorous.

REASONS FOR THE ESTABLISHMENT OF MANY ENTERPRISES IN WEST AFRICA

1. Low capital requirement
2. Favourable market
3. High level of efficiency
4. Availability of credit facilities
5. Favourable legal environment

PROBLEMS OF PRIVATE ENTERPRISES IN WEST AFRICA

1. Poor patronage
2. Low rate of capital formation in the economy
3. Poor power supply
4. Inadequate capital
5. Insufficient raw materials
6. Inefficient management

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FACTORS WHICH LIMIT THE SIZ OF INDIGENOUS FIRMS IN WEST AFRICA
1. Shortage of Labour or Capital:
2. Poor infrastructural facilities
3. Inadequate technical know- how
4. Political instability
5. Inadequate raw materials
6. Market limitation i.e low demand

FACTORS THAT DETERMINE THE SIZE OF FIRM

1. Entrepreneurial Skill
3. Managerial Ability
4. Availability of Finance
5. Availability of Labour
6. Nature of the business

SOLE PROPRIETORSHIP
He is also known as the sole trader, individual entrepreneurship, is a type of enterprise that is
owned and run by one person and in which there is no legal distinction between the owner and the
business entity.

FEATURES OF SOLE PROPRIETORSHIP

1. The business is owned by one person
2. The objective is to make profit
3. The proprietor provides the capital
4. The life span of the business depends on the owner
5. It is not a legal entity :- the owner is not separated from the business

SOURCES OF CAPITAL OF SOLE PROPRIETORSHIP

1. Sale of assets
2. Retained profits
3. Personal capital
4. Loan and overdraft from Banks
5. Loan from friends
6. Trade credit : the owner can purchase goods on credit from the suppliers, producers or
wholesalers

ADVANTAGES OF SOLE PROPRIETORSHIP

1. All the profits belong to the owner
2. Start-up costs are low
3. There is privacy
4. Establishing and operating the business is simple
5. There is a close relationship between the owner and customers

DISADVANTAGES OF SOLE PROPRIETORSHIP

1. There is unlimited liability for debts
2. He bears all risk alone
3. There is limitation in expansion
4. Problem of continuity
5. Inadequate capital

REASONS FOR THE CONTINUED EXISTENCE OF SMALL SCALE BUSINESS UNITS

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 1. Small capital requirement
2. Easy to establish
3. Availability of goods in remote areas
4. Low level of risk
5. Ability to change policies
6. They enjoy customer’s loyalty

PARTNERSHIP
It is a formal arrangement by two or more parties to manage and operate a business and share its
profits.

FEATURES OF PARTNERSHIP
1. Two or More Persons:
2. It is not a legal entity
3. The objective is to make profit
4. The business is controlled and managed by the partners
5. the partners have unlimited liabilities

SOURCES OF CAPITAL FOR PARTNERSHIP

1. Personal contributions
2. Loan and overdraft
3. Trade credit
4. Undistributed profits
5. Admission of new partners

TYPES OF PARTNERSHIP
1. LIMITED PARTNERSHIP
2. GENERAL OR ORDINARY PARTNERSHIP

LIMITED PARTNERSHIP
Each partner is allowed to restrict his or her personal liability to the amount of his or her business
investment. Limited partners does not participate in management decisions.

GENERAL OR ORDINARY PARTNERSHIP

General partners share equal rights and responsibilities in connection with management of the busine.
Each individual partner assumes full responsibility for all of the business's debts and obligations.

TYPES OF PARTNERS
1. LIMITED PARTNER
2. GENERAL PARTNER
3. ACTIVE PARTNER
4. NOMINAL OR QUASI- PARTNER
5. SLEEPING OR DORMANT PARTNER

LIMITED PARTNER : he is the one who has agreed to contribute a certain sum to a partnership
business and is prevented by law from taking any active part in the business. He is liable for debts
and obligations of the business up to the amount of capital he has contributed. He has limited
liability

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GENERAL PARTNER : he has full power of participating in the conduct of the business. He is
liable to debt. He has unlimited liability.

ACTIVE PARTNERS :- he takes active participation in the firm and the running of the business. He
carries on the daily business on behalf of all the partners. This means he acts as an agent of all the
other partners on a day to day basis.

NOMINAL OR QUASI- PARTNER : he only lend his name to the partnership. He will not make any
capital contributions to the firm, He will be liable to outsiders and third parties for acts done by any
other partners

SLEEPING OR DORMANT PARTNER : This is a partner that does not participate in the daily
functioning of the partnership firm, i.e. he does not take an active part in the daily activities of the
firm. He will continue to share the profits and losses of the firm and even bring in his share
of capital like any other partner..

RIGHTS OF PARTNERS
1. Right to manage business.
2. Right to express views and ideas.
3. Right to inspect books of account.
4. Right to share profit.
5. Right to proper use of property..
6. Right to get retirement.

FORMATION OF PARTNERS
Partners must enter agreement to express their intention which is the deed of partnership.
Deed of partnership may be defined as agreement, rules and regulations guiding the members of a
partnership.
The agreement contains the following rules
1. The name of the partners
2. The name of the firm
3. The nature of the business formed
4. The rights and duties of each partner
5. Duration of the partnership
6. Payment of partner’s salaries

ADVANTAGES OF PARTNERSHIP
1. Easy to Form
2. Large Capital
3. Greater management ability
4. The profit is always shared by the partners according to the agreement.
5. Advantages of secrecy
6. Better chance of continuity

DISADVANTAGES OF PARTNERSHIP
1. Unlimited liability
2. Limited life of firm :- it can be dissolved in case of partner’s death. Withdraws, etc.
3. Dispute among the partners
4. False records :- especially by the active partners
5. Action of one partner is binding on others

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COMPANY
It is a legal person or entity created by the association of a number of people in accordance with
the law for the purpose of pooling their capital together in order to set up a business venture

TYPES OF COMPANIES
1. UNLIMITED LIABILITIES COMPANIES :- are the type of corporation where each
member is jointly and severally liable for the debts of the company in the event of its
winding-up. The liability of the members is limitless.
2. LIMITED LIABILITIES :- the liabilities or burden of debt in the company is limited to the
amount of share capital the shareholders had agreed to contribute individually in the event
of liquidation.

TYPES OF COMPANIES UNDER LIMITED LIABILITY COMPANIES

1. COMPANIES LIMITED BY GUARANTEE :- Each member undertakes upon the
winding-up of the company to contribute to its assets up to a specified amount. They are not
formed with the aim of engaging in trading activities, they are formed by societies and
other charitable contributions
2. COMPANIES LIMITED BY SHARES :- Each member’s liability is limited to the shares
they have acquired.

TYPES OF LIMTED LIABILITY COMPANIES

1. PRIVATE LIMITED LIABILITY COMPANIES :- Is a company that is smaller than a
public company and cannot issue shares to the public. A private company must have at least
one director who is a natural person. The name of the private company must end with “
limited”
3. PUBLIC LIMITED LIABILITY COMPANIES :- it allows the public to subscribe ti its
shares. The name of the company must end with “Plc”

SIMILARITIES BETWEEN PRIVATE AND PUBLIC LIMITED LIABILITY COMPANIES

1. LEGAL ENTITIES :- both companies can sue and be sued in their own name, for they are
registered. The business name is different from the owner’s name.
2. LIMITED LIABILITY :- in the event of winding up, the debt of the shareholders is
limited to the amount they have contributed.
3. CONTINUITY OF EXISTENCE :- the death or withdrawal of a shareholder cannot affect
the existence of the company.
4. PLOUGHING BACK OF PROFITS :- gains are retained in the company in order to
strengthen the organization
5. LARGE CAPITAL OUTLAY :- they are capable of pooling large amount of money.

DIFFERENCES BETWEEN PRIVATE AND PUBLIC LIMITED LIABILITY COMPANIES

1. Shares in private limited liability are not easily transferred while that of public limited
company are easily transferred.
2. Private limited liability has a minimum of two people while public limited company has a
minimum of seven people
3. Private limited liability has a maximum of fifty owners while public limited company has
no maximum numbers
4. Private limited liability do not need certificate of trading while public limited company
needs certificate of trading before they commence business

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 5. Private limited liability is owned and controlled by those who contributed the capital while
public limited company is owned by the shareholders and controlled by the board of
directors selected by them.

FORMATION OFA LIMITED LIABILITY COMPANY

1. The promoter devise a scheme of capitalization, the cost of formation, assets to be bought
and working cap[ital.
2. The promoter secures the services of a solicitor to prepare certain documents to be filed
with the registrar of companies. The documents are :-
a. MEMORANDUM OF ASSOCIATION :- it t prepares the formation and registration
process of a limited liability company to define its relationship with shareholders.. it defines
the rules and regulations which governs the external relationships of a company with the
outsiders.
b. ARTICLES OF ASSOCIATION :- it specifies the regulations for a company's operations
and defines the company's purpose. It lays out how tasks are to be accomplished within the
organization, including the process for appointing directors and the handling of financial
records..
c. PROSPECTUS :- it is required by and filed with the Securities and Exchange
Commission (SEC) that provides details about an investment offering for sale to the public.
It is filed for stock, bond, and mutual fund offerings. It is used to help investors.
d. CERTIFICATE OF INCORPORATION :- it shows that the limited company is formed
and registered with the Companies House. This is in line with the Companies Act 2006. It
is the company's birth certificate. It shows the name of the company, its registered number
and the date it was incorporated.
e. CERTIFICATE OF TRADING :- is issued to public limited companies (PLCs). All PLC’s
are required to obtain a certificate of trading before they are able to trade.
3. The documents are stamped and lodged with the registrar
4. The registrar issues out a certificate of incorporation to the company
5. A private limited company can commence business after receiving the certificate of
incorporation, while public limited company receives the certificate of trading.

PRIVATE LIMITED LIABILITY COMPANY

It is a type of privately held small business entity, in which owner liability is limited to their shares,
the firm is limited to having 50 or fewer shareholders, and shares are prohibited from being
publicly traded.

FEATURES OF PRIVATE LIMITED LIABILITY COMPANY

1. Separate legal entity which limits the liability.
2. The objective is to make profits
3. Easy to register, manage and run.
4. There is continuity
5. Shares are not easily transferable

SOURCES OF FINANCE OR CAPITAL AVAILABLE TO PRIVATE LIMITED LIABILITY

COMPANY
1. Loan and overdrafts from bank
2. Shares raised by shareholders
3. Retained profits
4. Trade credit :- raw materials can be purchased on credit
5. Hire purchase :- facilities can be granted to the company to buy and pay in instalments

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 6. Equipment leasing :- the company’s equipment can be used by outsiders and money will be
collected,

ADVANTAGES OF PRIVATE LIMITED LIABILITY COMPANY

1. Large capital
2. Efficient management
3. Possibility of expansion
4. Continuity of existence
5. Large capitals

DISADVANTAGES OF PRIVATE LIMITED LIABILITY COMPANY

1. Registration Process.
2. Lack of privacy
3. Delay in decision making
4. Shares are not easily transferable
5. Payment of corporate tax

PUBLIC LIMITED LIABILITY COMPANY OR JOINT STOCK COMPANY

It allows the public to subscribe to its shares. It must have a minimum of seven persons but no
maximum number is prescribed.

FEATURES OF PUBLIC LIMITED LIABILITY COMPANY OR JOINT STOCK COMPANY

1. It has limited liability
2. It is a legal entity
3. Preparation of annual accounts
4. Ownership is separated from the management
5. Specific line of business

ADVANTAGES OF PUBLIC LIMITED LIABILITY COMPANY OR JOINT STOCK

COMPANY
1. Limited liability
2. Large capital
3. Loan facilities
4. There is continuity
5. Legal entity

DISADVANTAGES OF PUBLIC LIMITED LIABILITY COMPANY OR JOINT STOCK

COMPANY

1. Lack of privacy
2. Conflict of interest
3. Slow decision making
4. Lack of flexibility
5. Hard to establish

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SOURCES OF FINANCE OR CAPITAL AVAILABLE TO PUBLIC LIMITED LIABILITY
COMPANY OR JOINT STOCK COMPANY
1. Loan and overdraft
2. Sales of shares
3. Hire purchase
4. Trade credit
5. Equipment leasing

SHARES
Shares are units of ownership interest in a corporation or financial asset that provide for an equal
distribution in any profits, if any are declared, in the form of dividends.

TYPES OF SHARES
1. PREFERENCE SHARES
Dividends are paid to preference shareholders before ordinary shareholders. If the company
enters bankruptcy preferred stock holders are entitled to be paid from company assets . They have
a fixed dividend, they do not hold any voting rights.
TYPES OF PREFERENCE SHARES
(a) CUMULATIVE PREFERENCE SHARES :- it stipulates that if any dividend payments
have been missed in the past, the dividends owed must be paid out to cumulative
preferred shareholders first.
(b) PARTICIPATING PREFERENCE SHARES :- it gives the holder the right to receive
dividends equal to the customarily specified rate , as well as an additional dividend based on
some predetermined condition
(c) REDEEMABLE PREFERENCE SHARES :- They allow a company to repurchase
its shares in the future.
(d) NON- CUMULATIVE PREFERENCE SHARES :- it does not pay the stockholder any
unpaid or omitted dividends.
(e) NON-PARTICIPATING PREFERENCE SHARES - they do not have the right
to participate in the profits remaining after equity shareholders have been paid dividend.
They will not get any extra dividend in case of surplus profits to the company and they are
entitled to receive only fixed rate of dividend .

2. ORDINARY SHARES
It is also known as common shares, represent the basic voting shares of a corporation. Holders of
ordinary shares are typically entitled to one vote per share and only receive dividends at the
discretion of the company’s management. There is no fixed rate of dividend, the holders are the
real owner, they are the risks bearers and they receive dividend last, after others have been paid
TYPES OF ORDINARY SHARES
1. DEFERRED OR FOUNDER’S SHARES :- is a share that does not have any rights to the
assets of a company undergoing bankruptcy until all common and preferred shareholders
are paid.
2. PREFERRED ORDINARY SHARES :- they receive dividend after the preference shares
have been paid.
RAISING OF CAPITAL
1. BY PROSPECTUS :- The application for shares are published in it to invite outsiders to
apply
2. BY OFFER FOR SALE :- the shares are allotted to the issuing house ( merchant bank,
finance house) which offers them to the public
3. BY PLACING :- shares are issued through an intermediary such as a firm of stock brokers
4. BY A RIGHT ISSUE :- Shares are allotted to existing members on favourable terms

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 5. BY INTRODUCTION :- The company can apply to the stock exchange for sales of its
shares

TYPES OF CAPITAL
1. ISSUED CAPITAL :- It is given out to members of the public for subscription
2. RESERVED CAPITAL :- It is the type of capital that is not called-up.
3. AUTHORISED CAPITAL :- it is also known as nominal or registered capital. It is the
highest amount of capital stipulated in the memorandum of association, to set up and run a
company
4. CALLED –UP CAPITAL :- the management considered it good enough to be called up on
the issued shares.

STOCK
It is bundle of shares or mass of capital which can be transferred in fractional amounts

DIFFERENCE BETWEEN SHARES AND STOCK

Shares are a part of something bigger i.e. the stocks. Shares represent the proportion of
ownership in the company while stock is a simple aggregation of shares in a company. Shares are
issued at par, discount or at a premium. It is known as stock when the shares of a member are
converted into one fund

DEBENTURES
A debenture is a type of debt instrument unsecured by collateral. It is a bond, acknowledging a
loan, generally under the company seal and bearing a fixed rate of interest.

TYPES OF DEBENTURES
1. MORTGAGE DEBENTURES :-the loan is secured against a company's fixed assets,
specific funds or property are pledged as security.
2. SIMPLE OR NAKED DEBENTURES :- the debt carries no collateral; in case of
bankruptcy, the debt holder is considered a general creditor.
3. SECURED DEBENTURES :-are debentures secured by a charge on the fixed assets of the
issuer company. For instance, mortgage debentures secured on land of the company.
4. REDEEMABLE DEBENTURES :- refers to an agreement under which a firm issuing
a debenture agrees to repay the borrowed amount on a certain date or after a specific
period of notice.
5. IRREDEEMABLE DEBENTURES :- are not repayable at the end of a definite period.
Usually these debentures are repayable when the company goes into liquidation.

DIFFERENCES BETWEEN DEBENTURES AND SHARES

1. The shares are the owned funds of the company, while debentures are the borrowed
funds of the company.
2. Shares represent the capital of the company, while Debentures represent the debt of the
Company
3. The holder of shares is known as shareholder while the holder of debentures is
known as debenture holder.
4. Shareholders get the dividend while Debenture holders get the interest.
5. The holders of shares have voting rights while the holders of debentures do
not have any voting right.

PUBLIC CORPORATION

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It is a government owned company. They are also known as statutory corporations. They provide
services to the public. E.g Federal Radio Corporation of Nigeria (F.R.C.N), Nigeria National
Petroleum Corporation (N.N.P.C), Nigerian Telecommunication Limited (NITEL), Nigeria Ports
Authority (N.P.A).

FEATURES OF PUBLIC CORPORATION

1. It is created by law
2. It is non profit oriented
3. High capital requirement
4. It is monopolistic in nature
5. It is a legal entity
6. It is managed by board of directors.

ADVANTAGES OF PUBLIC CORPORATION

1. Provision of infrastructural facilities
2. Availability of large capital
3. There is continuity
4. Development of capital projects
5. Provision of employment opportunities

DISADVANTAGES OF PUBLIC CORPORATION

1. GOVERNMENT INTERFERENCE
2. Inefficiency in operation
3. It requires large capital
4. Danger of monopoly
5. Not profitable
6. Bureaucratic tendencies and red tapism

REASONS FOR THE ESTABLISHMENT OF PUBLIC CORPORATION OR REASONS FOR

GOVERNMENT PARTICIPATION OR OWNERSHIP OF BUSINESS ORGANISATION
1. Creation of Employment Opportunities
2. Economic Growth
3. High capital requirement
4. To Prevent Exploitation
5. Distribution of resources

WAYS IN WHICH THE GOVERNMENT PARTICIPATE IN ECONOMIC ACTIVITIES

1. Establishment of financial institutions
2. Establishment of public corporation
3. Provision of social amenities
4. Enactment of appropriate laws
5. Granting of tax holidays

ADVANTAGES OF GOVERNMENT OWNERSHIP OF PUBLIC CORPORATION

1. Provision of essential services
2. Prevention of exploitation and discrimination
3. Creation of more employment opportunities
4. High standard of living
5. Generation of revenue

DISADVANTAGES OF GOVERNMENT OWNERSHIP OF PUBLIC CORPORATION

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 1. Lack of choice by consumers
2. Frequent interference
3. High level of corruption
4. Neglect of private sectors
5. High level of inefficiency

PROBLEMS ASSOCIATED WITH PUBLIC CORPORATION

1. High level of embezzlement.
2. There is usually political instability.
3. Favoritism in appointments.
4. Political victimization.
5. Negative attitude of the workers towards their job is so alarming.
6. There is usually a frequent government interference.

SOURCES OF FINANCE TO PUBLIC CORPORATION

1. Loans and overdrafts
2. Internally generated revenue
3. Grant from government
4. Grant from international financial institutions
5. Grant from foreign countries

CO-OPERATIVE SOCIETY
It is a voluntary association of persons, whose motive is the welfare of the member. They pool their
resources together.
FEATURES OF CO-OPERATIVE SOCIETY
1. Voluntary Association.
2. Equal Voting Rights.
3. Separate Legal entity
4. Profit is shared based on patronage
5. Democratic in nature

TYPES OF CO-OPERATIVE SOCIETY

1. PRODUCERS CO-OPERATIVE SOCIETY :- are voluntary associations of small
producers and artisans who join hands to face competition and increase production.
2. CONSUMERS CO-OPERATIVE SOCIETY - are formed by the consumers to obtain their
daily requirements at reasonable prices. Such a society buys goods directly from
manufacturers and wholesalers to eliminate the profits of middlemen.
3. WHOLESALE CO-OPERATIVE SOCIETY :- is formed by small scale wholesalers who
purchased goods in bulk from the manufacturers at reasonable prices and sell in small
quantities to retail co-operatives
4. RETAIL CO-OPERATIVE SOCIETY :- they pool their resources together so as to buy in
bulk and sell their goods at lower prices to members who receive some form of patronage
returns based on the amount of goods they purchased
5. CREDIT AND THRIFT SOCIETY :- it involves low income earners who pool large
resources together by contributing on a weekly or monthly basis
6. MULTIPURPOSE CO-OPERATIVE SOCIETY:- they undertake any form of co-operative
activity that is profitable to the society.
.
ADVANTAGE OF CO-OPERATIVE SOCIETY
1. Easy Formation
2. Limited Liability

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 3. Perpetual Existence
4. Open membership
5. Tax advantage

DIASDVANTAGES OF CO-OPERATIVE SOCIETY

1. Lack of Secrecy
2. Lack of interest
3. corruption
4. Problem of loan recovery
5. High level of illiteracy

JOINT VENTURES OR ENTERPRISES

It is a business arrangement in which two or more parties agree to pool their resources for the
purpose of accomplishing a specific task. They are set up by government in collaboration with
private firms

PROBLEMS OF BUSINESS ENTERPRISES

1. Lack of Enabling Environment and Infrastructure

2. Poor Power Supply
3. Poor Transport Network
4. Poor Access to Funds
5. Not Enough Government Support
6. High level of corruption

WEEK 4,5 & 7 POPULATION

It Is the total number of people living within a definite geographical area at a particular time

POPULATION CENSUS
It is an officially conducted head count of all the people living within a defined geographical area at
a particular point in time

CHARACTERISTICS OF A GOOD POPULATION CENSUS

1. It must involve experts
2. It must involve the physical counting of people
3. It must be conducted by the government of the state
4. It must be conducted at the same time throughout the country
5. It must involve regular counting at specific intervals of time, e.g Nigeria’s population taken
in 1953,1963,1973, etc, i.e at an interval of ten years

TYPES OF POPULATION CENSUS

1. DEFACTO POPULATION CENSUS :- It involves only those who are present physically
during the census
2. DE JURE POPULATION CENSUS :- it involves the counting of people who have been
permanent residents of a specific area. It does not matter whether the person is present or
not. It is referred to as counting by proxy.

IMPORTANCE OR PURPOSE OF POPULATION CENSUS

1. It determines the level of unemployment
2. It helps government to focus attention on provision of crucial social amenities

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 3. Data provided helps government to allocate resources
4. It determines the size of the population of the country
5. It determines the standard of living

PROLEMS OF POPULATION CENSUS

1. Insufficient funding
2. Inadequacy of personnel
3. Ignorance and illiteracy among the people
4. Inadequate technology
5. Geographical barriers

DETERMINANTS OF POPULATION SIZE AND GROWTH

1. Birth rate
2. Death rate
3. Migration
A. BIRTH RATE :- It refers to the rate at which children are being given birth to in a
country. It leads to increase in population. It is also called natality rate

FACTORS AFFECTING BIRTH RATE

1. The fertility rate of females in the population
2. Early marriage
3. Acceptance of birth control measures
4. Improved medical services
5. Desire for large families
B. DEATH RATE :- It refers to the rate at which people die in a country. It leads to low
population. It is also called mortality rate

FACTORS AFFECTING DEATH RATE

1. Accessibility of the population to excellent medical facilities
2. Proportion of the old people in the population
3. Quality of nutrition
4. Poverty
5. Incidence of man – made and natural disaster
C. MIGRATION :- it is the movement of people from one geographical area to another to
settle and live.

TYPES OF MIGRATION
1. IMMIGRATION :- It is the cross-border movement of people from other country into
another country
2. EMIGRATION ;- It is the cross-border movement of people out of a particular country
to other country

FACTORS AFFECTING MIGRATION

1. Pursuit of better education
2. Desire for better standard of living
3. Search for better employment opportunity
4. Change in status
5. Business purpose

RURAL –URBAN MIGRATION :- It is the movement of people from the village to the city in search
of better social and economic opportunities.

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SOLUTION TO RURAL URBAN MIGRATION
1. Establishment of industries
2. Provision of social amenities
3. Establishment of educational institutions
4. Transformation of traditional agriculture to modern agriculture
5. Provision of recreational facilities

POPULATION DENSITY
It is the number of person per square kilometre of land.
Population density = total population / total land area

EXAMPLE :- Calculate the population density of Nigeria, having a total population of 88,514,501 as
at 1991 with a total land area of 923,768 sq km
SOLUTION
Population density = total population / total land area
= 88,514,501 / 923,768
= 95,8
= 96 persons/km

AGEING OR DECLINING P[OPULATION

It is the increase in the percentage of old people with the decrease in the percentage of children and
workers. It is also known as stationary or static population

OVERPOPULATION
It is a situation whereby the size of a country’s population is so large in relation to its natural
resources, available skills, technical knowledge and other factors of production that output per
head is dismally low.
CONTROL OF OVERPOPULATION
1. Family planning
2. Discouragement of early marriage
3. Sex and mass education
4. Provision of gainful employment for women
5. Encouragement of monogamy

ADVANTAGES OF OVERPOPULATION
1. Large market
2. Large labour
3. Quick information dissemination
4. Attraction to investors
5. Defence

DISADVANTAGES OF LARGE POPULATION

1. Unemployment
2. Insufficient food
3. Increase in crime rate
4. Traffic congestion
5. High cost of living
UNDER POPULATION

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It is a situation whereby the number of people within a country is too small and cannot supply
enough labour to tap the available resources fully , given the existing level of skills, technical
knowledge and other factor of production in the country.

CAUSES OF UNDER POPULATION

1. Decrease in birth rate
2. An increase in death rate
3. High level of emigration
4. Natural disaster
5. War

ADVANTAGES POF UNDER POPULATION

1. Low congestion
2. Availability of employment
3. Low crime rate
4. Adequate planning
5. Low pressure of social amenities

DISADVANTAGES OF UNDERPOPULATION
1. Inadequate supply of manpower
2. Low productive capacity
3. Low savings and investment
4. Small market size
5. Low level of export

OPTIMUM POPULATION
It provides the best standard of living for the people of the country as measured by some clearly
defined goal. It is the population size that gives the available natural resources, skills, technical
knowledge and management which generate the highest output per head.

Types of population
IMPLICATION OF OPTIMUM POPULATION
1. It balances population with available resources
2. The control of economy is very easy
3. It ensures a maximum return per head
4. It produces full employment
5. It ensures highest standard of living

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MALTHUSIAN POPULATION THEORY
It was derived from the political and economic thought of the Reverend Thomas Robert an
Anglican clergy man, as laid out in his 1798 writings, An Essay on the Principle of Population.
The essay he wrote was influenced greatly by the rate at which the population in Europe at that
time was growing at a very fast rate.

THE MAIN FEATURES OF MALTHUSIAN THEORY

1. That population was growing at a geometric progression such as 2,4,8,16,32,etc while food
production was growing at an arithmetical progression such as 1,2,3,4,5,etc
2. That there is tendency for all living things to grow beyond the food available to them
3. That unless population increase is matched with means of subsistence, negative and positive
checks will come into force
4. That the checks can be war, diseases, epidemics and famine
5. That population is essentially limited by the means of subsistence

DEMOGRAPHIC TRANSITION THEORY

is a theory that throws light on changes in birth rate and death rate and consequently on
the growth-rate of population. Along with the economic development, tendencies of birth-
rate and death rate are different. It involves three stages:-

STAGE 1 :- THE PRE- INDUSTRIALISATION STAGE

This stage has been called high population growth potential stage. It is characterised by
high and fluctuating birth and death rates which will almost neutralize each other. The
population is either static or increasing or decreasing at a very low rate

STAGE II :- TRANSITIONAL STAGE

It is called the stage of Population Explosion. In this stage the death rate is decreasing while
the birth rate remains constant at a high level. Agricultural and industrial productivity
increases, means of transport and communication develops. There is great mobility of
labour. Education expands. Income also increases. People get more and better quality of
food products. Medical and health facilities are expanded.

STAGE III :- POST TRANSITIONAL STAGE

It is called the stage of stationary population. Birch rate and death rate are both at a low level and
they are again near balance. Birth rate is approximately equal to death rate and there is little
growth in population. It becomes more or less stationary at a low level.

POPULATION DISTRIBUTION
It refers to the way in which the population of a given country is distributed into certain categories
such as age, sex, occupation and geographical distribution.

A. AGE DISTIBUTION
It is the proportionate numbers of persons in successive age categories in a given population. These
are
1. 0 – 17years :- it includes the infants, pupils in nursery, primary, secondary and tertiary
institution. This age is called ‘’DEPENDET POLULATION’’. They are not economically
productive as they are not employed in the labour market. They depend on other group for
their needs

17
 2. 18 –60 years :- they are involved in productive activities or employment and depend on
themselves. This age is called ‘’INDEPENDENT OR ACTIVE OR WORKING
POPULATION’’.
3. 60 years and above: - It is the old age, they do not involve themselves in productive
activities. They are ‘’DEPENDENT POPULATION’’

EFFECTS OF INCREASE IN POPULATION OF DEPEDANTS

1. Increase in demand for goods and services
2. Low supply of labour
3. Increase in prices :- the prices of goods and sevices will rise as a result of increase I
demand
4. Increase in government expenditure
5. Low savings

B. SEX DISTRIBUTION
It is the classification of a given population according to gender( i.e male and female). If the
population of the female is higher than that of the males, it means that the government will
have to plan to provide good and services for more people
C. OCCUPATIONAL DISTRIBUTION
It is the classification of population into different types of work
D. GEOGRAPHICAL DISTRIBUTION
It refers to the spread of people into separate geographical areas within a country

SOME POPULATION FORMULAE

1. POPULATION DENSITY = total population / land area
2. TOTAL POIPULATION = population density X land area OR No of males + No of
females
3. LAND AREA = total population / population density
4. RATE OF POPULATION GROWTH [R] = birth rate - death rate + migration
5. NET MIGRATION = immigrants - emigrants
6. NATURAL INCREASE = birth rate – death rate
7. PERCENTAGE INCREASE = new population – old population X 100
------------------------------------------
Old population
8. DEPENDENCY RATIO = dependent population
------------------------------
independent or working population
EXAMPLE:-
1. The table below shows the natural growth rate of the population of the country N
over a period of time. Use the information contained in the table to answer the
following questions
YEAR BIRTH RATE DEATH RATE NATURAL
PER ’000 PER ‘ 000 GROWTH RATE
1971 45 32 L
1972 39 P 12.5
1973 26 22 Q
1974 R 22.5 4.5
1975 26.5 2.5 S
1976 20.5 T 3

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 [a]. Determine L,P,Q, R, S and T
SOLUTION
NATURAL GROWTH RATE = birth rate – death rate
L = 45 – 32 = 13
P = 39 - 12.5 = 26.5
Q = 26 - 22 = 4
R = 22.5 + 4.5 = 27
S = 26.5 - 22.5 = 4
T = 20.5 - 3 = 17.5

2. Use the information below to answer the following question

TEAR 1980 1996
No of births in million - 48
No of death in million - 12
No of immigrants in - 10
million
No in million of emigrants - 4
Total population in million 56 98
Calculate:-
[a]. The natural increase of the population in 1996
[b]. Determine the net migration within the period
[c]. The rate of growth of the population in 1996
[d]. Calculate the population of the country in 1996
[e]. What is the percentage increase in the population of the country from 1980 to1996
SOLUTION
a]. natural increase = birth rate – death rate
= 48 million - 12 million
= 36 million
[b]. net migration = immigrants - emigrants
= 10 million - 4 million
= 6 million
[c]. rate of the growth of the population [R] = birth rate - death rate + migration
= [48 million - 12 million] + [10 million - 4 million]
= 36 million + 6 million
= 42 million
[d]. the population of the country in 1996
=1980 population + net migration +[no of births - no of deaths]
= 56 million + 6 million + [ 48 million - 12 million]
= 62 million + 36 million
= 98 million
[e]. percentage increase in the population of the country from 1980 to1996
= new population – old population X 100
---------------------------------------
Old population
= 98 million - 56 million X 100
------------------------------
56 million
= 42 million X 100
-------------
56 million

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 = 75%

WEEK 9 -- LABOUR MARKET

LABOUR
This is the aggregate of all human physical and mental effort used in creation of goods and services.

MARKET
It is a nominal place or point where forces of demand and supply operate, where buyers and sellers
interact [directly or through intermediaries] to trade goods, services or contracts for money.

LABOUR MARKET
It is a market where buyer and seller of labour are in close contact during which wages and other
conditions are determined and agreed upon.

LABOUR FORCE
It is all people who are of working age, and able and willing to work. It includes b the employed,
and the unemployed.

FACTORS AFFECTING THE SIZE OF LABOUR FORCE

1. Population: population increase will result in labor force increase
2. Income: higher incomes attracts more labor
3. Educational Attainment: A more educated society has a larger labor force.
4. Number of working hours and working days :- it helps to determine the supply of labour
5. Migration :- the movement of working population into a particular country will increase the
supply of labour

EFFICIENCY OF LABOUR
It is the productive capacity of a worker. It indicates the ability of the worker to do more work or
better work during a given period of time.

Factors influencing the efficiency of labour:

i. STATE OF HEALTH OF WORKERS :- The ability and willingness of the workers to work and
learn skills depends upon their health . The improvement in standard of living leads to an
improvement in health through better nourishment. It also depends on the average age of the
labourer.
ii. EDUCATION AND TRAINING :- Literacy is perhaps the first priority to improve the efficiency of
labour. Adequate provisions for imparting training to the workers will improve the efficiency of
labour.
iii. WEATHER CONDITION :- Climatic differences affect the efficiency of labour in production. The
hot and humid climate of majority states of India is a factor which prevents people from doing
more work and thus the ability to display high efficiency.
iv. A healthy and conducive work environment increases the level of efficiency. The facilities available
at the work place determine the labour efficiency to a great extent.

MOBILITY OF LABOUR
It refers to the ease with which laborers are able to move around within an economy and between
different economies.

FACTORS AFFECTING MOBILITY OF LABOUR

20
 1. EDUCATION AND TRAINING :- The more a person is educated and skilled, the greater are
his chances of moving from one occupation or place to another.
2. OUTLOOK OR URGE :- If labour are optimist and broad minded, they will move to other jobs
and places.
3. MEANS OF TRANSPORT :- it encourages labour to move from one place to the other.
4. INDUSTRIALISATION :- workers move from different occupation to work in factories. It also
leads to movement from rural area [villages] to urban area [big cities]
5. TRADE :- the development of business leads to the spread of offices, as a result workers move
from one occupation to another.
6. PEACE AND SECURITY – if the life and property of people are not safe where they work,
they wove to a safer place.

TYPES OF MOBILITY OF LABOUR

1. Geographical mobility of labour : this is when a worker moves from one place to another
within a country, or from one country to another.

FACTOR AFFECTING GEOGRAPHICAL MOBILITY OF LABOUR

1. Accommodation problems
2. language barrier
3. Family and cultural ties
4. Government policies i.e establishment of N.Y.S.C
5. Cost of transportation

2. OCCUPATIONAL MOBILITY OF LABOUR :- it refers to the movement of workers from

one job to another. This mobility is further divided into two types :-
[a]. HORIZONTAL MOBILITY:- it is the movement of labour from one occupation to
another in the same grade or level. Example , a bank clerk joins as an accounts clerk in a
company.
[b]. VERTICAL MOBILITY :- This is when a worker of a lower grade and status in an
occupation moves to another occupation in a higher grade and status. Example , a school
lecturer becomes a college lecturer, a clerk becomes a manager.

DEMAND FOR LABOUR

It is the total number of workers employers are willing and ready to employ or hire at a particular
time and at a given wage rate.

FACTORS AFFECTING THE DEMEND FOR LABOUR

1. Number of industries
2. Availability of capital and other factors of production
3. Wage rates being demanded by job seekers
4. Demand for goods and services
5. State of employment

SUPPLY OF LABOUR
It is the total number of people of working age offered for employment at a particular time and at a
particular wage rate

WAGES
It is monetary compensation (or remuneration, personnel expenses, labor) paid by an employer to
an employee in exchange for work done.

21
TYPES OF WAGES
1. NOMINAL WAGES :- It refers to the total amount of money paid to a labourer at a
particular period of time.
2. REAL WAGES :- It refers to the total amount of quantity of goods and services the labour
can use his money to buy.

WAGE RATE
It is the rate at which labour is paid for the services it renders in production
TYPES OF WAGE RATE
1. TIME RATE SYSTEM :- It is the type in which wages paid to labour are based on the
number of hours worked.
2. PIECE RATE SYSTEM :- It is the wages paid to labour based on the work done

FACTORS RESPONSIBLE FOR DIFFERENCES IN WAGES

1. Difference in efficiency: An efficient worker gives better output. Hence, he is paid higher
wages than others . Moreover, the efficiency requirement in different jobs varies. A doctor
requires more skill than a nurse does..
2. NATURE OF EMPLOYMENT :- dangerous work brings higher money. Wages are given to
attract larger supply of labour. Example, a coal miner gets higher wages than a clerk in the
office
3. TRAINING AND QUALIFICATION :- jobs with special qualification command higher
wages.
4. PRODUCTIVITY :- jods that require more efforts, time and concentration requires more
wages.
5. FUTURE PROSPECTS :- there are some jobs where promotion prospects are better than
other jobs. Even if initial salary is low, people prefer these jobs because of the promotion.

DETERMINATION OF WAGES
1. The forces of demand and supply in a market economy
2. Government activities and policies
3. The activities of trade unions

THE FORCES OF DEMAND AND SUPPLY IN A MARKET ECONOMY

1. When the supply of labour exceeds the demand, wage rate will fall
2. When the demand for labour exceeds the supply, wage rate will rise
3. When the demand for labour equals the supply, wage rate will be favourable to both the
employer and the employee

GOVERNMENT ACTIVITIES AND POLIfyuCIES

The government agency or wage commission takes the following factors into consideration:-
1. COST OF LIVING :- the higher the cost of living, the higher wages are likely to be
2. LEVEL OF PRODUCTIVITY:- the greater the level of production in the country, the
higher the wage rate
3. TYPE OF OCCUPATION :- various salary levels are fixed for different categories of
labour in the civil service.

THE ACTIVITIES OF TRADE UNION

22
 TRADE UNION :- it is an association of workers formed to enable the members to take
collective, rather than individual action against
their employers in matters relating to their welfare and conditions of work. They are
formed by workers who seek protection and promotion of their interest. Examples are
Academic Staff Union of Universities [ASUU], National Union of Road Transport Workers
[NURTW], Nigerian Labour Congress [NLC], etc.

OBJECTIVES OF TRADE UNION

1.
2. To secure good wages
3. To secure employment
4. To regulate the entry qualification
5. To safeguard the interest of members
6. To participate in policy formulation

WEAPON THAT CAN BE USED BY ATRADE UNION DURING A TRADE DISPUTE

1. COLLECTIVE BARGAINING :- representatives of the union and employers will meet
to negotiate on issues affecting the workers
2. WORK TO RULE:- this is the slowing down of the rate of work by workers.
3. PICKET LINES :- the workers stay at he entrance of the factory and refuse to work
4. THREAT TO STRIKE :- the workers’ union gives ultimatum to the employers that
they will embark on strike if their demands are not met on time
5. STRIKE :- the workers will stay away from work. It is the ultimate weapon

EMPLOYERS’ ASSOCIATION
It is formed to enable members to adopt a common policy in labour negotiations

WEAPONS THAT CAN BE USED BY EMPLOYERS’ ASSOCIATION DURING TRADE DISPUTE

1. COLLECTIVE BARGAINING :- the employers’ association and the trade union
representatives will meet to discuss the workers’ demand.
2. STRIKE BREAKERS :- the employer will use some workers to operate the plant during the
period strike
3. BLACKLIST :- all workers that participate in strike action can be dismissed
4. LOCK-OUT :- it is the closing down of the factory by the employer until the dispute
is resolved

UNEMPLOYMENT
Unemployment is a term referring to individuals who are employable and seeking a job but are
unable to find a job. Furthermore, it is those people in the workforce or pool of people who are
available for work that does not have an appropriate job.
Unemployment rate is represented by the following formulae:-
U = Number of unemployed persons X 100
-------------------------------------------------
Working population of labour force

EXAMPLE :-
A country has a working population or labour force of 4.8 million of which 3.6 million people are
employed, calculate the unemployment rate of the country
SOLUTION
U = Number of unemployed persons X 100

23
 -------------------------------------------------
Working population of labour force
= 1.2 million X 100
-----------------
4.8 million
= 25%

TYPES OF UNEMPLOYMENT
1. CYCLICAL UNEMPLOYMENT :- happens especially during a recession. When there is a
reduction in the demand for the company’s products or services, they will most likely cut
back on their production, making it unnecessary to retain a wide workforce within the
organization. In effect, workers are laid off.. It is also known as ‘demand deficiencyl
unemployment’.

2. FRICTIONAL UNEMPLOYMENT :- also called search unemployment, occurs when

workers lose their current job and are in the process of finding another one. It is when
workers are jobless and looking for work in a healthy economy. It doesn't matter if they
leave voluntarily or are fired

3. VOLUNTARY UNEMPLOYMENT :- it happens when a worker decides to leave a job

because it is no longer financially fulfilling.

4. SEASONAL UNEMPLOYMENT :- it exists because certain industries only produce or

distribute their products at certain times of the year. Industries where seasonal
unemployment is common include farming, tourism, and construction.

5. STRUCTURAL UNEMPLOYMENT :- unemployment resulting from industrial

reorganization, typically due to technological change, rather than fluctuations in supply or
demand. e.g machines are introduced in production to replace labour,

6. CASUAL UNEMPLOYMENT :- it is when the worker is employed on a day-to-day basis

for a contractual job and have to leave it once the contract terminates .e.g part –time job.

7. RESIDUAL UNEMPLOYMENT :- it remains in periods of full employment, as a result of

those mentally, physically, or emotionally unfit to work.

8. UNDEREMPLOYMENT:- it is the underuse of a worker because a job does not use the
worker's skills

CAUSES OF UNEMPLOYMENT
1. Inadequate educational system
2. Over-population

3. Lack of industrial growth

4. Use of automated machine

5. Deficiency in demand

24
CONSEQUENCES OF UNEMPLOYMENT
1. Increase in crime rate
2. Migration

3. High rate of dependency

4. Waste of human resources

5. Reduction in investment

SOLUTION TO PROBLEM OF UNEMPLOYMENT

1. Population control
2. Industrialization

3. Provision of social amenities

4. Incentives to potential investors

5. Reformation of educational system - Students learning more of practical real life issues and
problems than mere theories that are neither applicable nor relevant.

SELF EMPLOYME NT
It is the act of generating one’s income directly from customers as opposed to being an employee of
a business.

FACTORS TO CONSIDER BEFORE EMBARKING ON SELF EMPLOYMENT

1. Possession of some capital
2. Go for training
3. Start on a small scale
4. Recognize your talent
5. Recognize your potential customers

OPERATION OF THE NEW BUSINESS

1. Watch out for sources of raw materials
2. Keep accurate record
3. Customers are always right
4. Strict monitoring
5. Reward or discipline staff when necessary

ADVANTAGES OF BEING SELF EMPLOYED

1. Work is at your convenience
2. Your success is based on you
3. You do not need any other boss
4. You are able to pursue your own dreams and goals
5. Flexibility in your schedule

JOB CREATION
It is the deliberate effort made by individuals, corporate bodies and government in generating
employments of different types for the unemployed citizens in the economy

25
AGENCIES CURRENTLY SUPPORTING JOB CRAETION IN NIGERIA
1. Nigerian Directorate of Unemployment [NDE]
2. State Employment and Expenditure for Results [SEEFOR] project
3. Federal Ministry of Labour and Productivity
4. National Planning Commission
5. The World Bank

ADVANTAGES OF JOB CREATION

1. Poverty reduction
2. Reduction of crime
3. Improvement in the status of individuals
4. Income generation
5. It aids economic growth

DIGNITY OF LABOUR
It states that all job types are equally respectable and no occupation is superior to another.

WAYS TO TRULLY FOLLOW THE DIGNITY OF LABOUR

1. Respect your work and do it efficiently
2. Be honest and sincere
3. Do not look down on others
4. Spread awareness and respect other profession
5. Do not look down on any task

WEEK 10 -- THE NATURE OF THE NIGERIAN ECONOMY

GENERAL OVERVIEW OF THE NIGERIAN ECONOMY

The economy of Nigeria is a middle-income, mixed economy and emerging market, with expanding
manufacturing, financial, service, communications, technology and entertainment sectors. It is
ranked as the 27th-largest economy in the world in terms of nominal GDP, and the 22nd-largest in
terms of purchasing power parity. It is the largest economy in Africa.
Nigeria has four main regional groupings:-
1. North
2. South West
3. South East
4. South –South

ECONOMIC ACTIVITIES OF THE SIX GOE-POLITICAL ZONES OF NIGERIA

1. NORTH-WEST ;- The state are Sokoto, Zamfara, Kebbi, Katsina, Jigawa, kano and
Kaduna states. They are into farming, fishing, livestock rearing
2. NORTH –EAST ;- It consists of the following states –Yobe, Borno, Bauchi, Gombe,
Adamawa and Taraba state. They are into farming, fishing,livestock.
3. NORTH- CENTRAL :- It comprises of Benue, Kogi, Nasarawa, Niger, Plateau states, FCT.
They are into farming, fishing, hunting, trading, weaving, blacksmithing, dying and mat
making.
4. SOUTH –WEST :- the states are Lagos, Ogun, Oyo, Ondo, Ekiti and Osun states. They are
into agricultural, livestock and commercial activities.
5. SOUTH – EAST :- the state are Anambra, Imo, Enugu, Abia and Ebonyi states. They are
into farming, mining, trading and local manufacturing.

26
 6. SOUTH- SOUTH :- the states are Edo, Delta, Rivers, Bayelsa, Cross River and Akwa-
ibom. They are into production of crude oil, mining, trading, banking and sea port
activities.

NATURE AND STRUCTURE OF INDUSTRIES IN NIGERIA

1. PRIMARY INDUSTRIES :- they are concerned with the extraction of raw materials
provided by nature, they are called extractive industries, e.g mining, fishing, lumbering,
farming and livestock production
2. SECONDARY INDUSTRIES :- They turn raw materials into finished goods, e.g
construction, building, textile, iron and steel and chemical industries.
3. TERTIARY INDUSTRIES :- they render services, e.g direct services like trading, banking,
teaching, medical and transportation and indirect services like the job of police, custom,
soldiers, navy etc.

27