The process of migration of the people from the rural to the urban areas in search of better opportunities is called urbanization.
Urbanization in Nigeria has multidimensional impacts covering the social, political and economic spheres.
It has both positive and negative effects.
- Disguised unemployment (more workforce than required is employed) which is prevalent in agriculture in rural areas can be tackled.
- Per capita income may increase IF the employment opportunities form a jig-saw fit with the people in need of them.
- Demand of goods and services may increase. This would also push the production in the economy. This can add to the GDP.
- If there is a return from the urban areas back to rural areas, then it will help in flow of new knowledge, technologies etc. to the rural areas. This may add to the standards of living in rural areas.
- Unorganised workforce will increase. This may lead to their exploitation by various parties.
- Increasing poverty if there is a lack of opportunities in the urban areas. - An increase in poverty will in turn lead to a slew of welfare schemes and thus, an aggravation of the Fiscal Deficit .
- Sudden increase in demand of essential commodities in the urban areas may lead to a spike in inflation.
- Illicit activities like theft, drug smuggling due to non-availability of opportunities in urban areas leads to an upsurge of black money.
- Basic parameters of living standards like education, health, per capita income are reduced in urban areas. This impacts the indices like Human Development Index(which takes into account these 3 parameters) negatively. These indices along with the above mentioned impact on fiscal deficit assert a negative impression on the investors from outside. Thus, investment would be affected negatively. This certainly has a bearing on employment and GDP.
- Mafeng Kim