* Germany's Merkel sought to curb migration on Africa trip
* Population boom driving joblessness, desperation
* World's poorest nation Niger benefits from smuggling
By Tim Cocks and Edward McAllister
DAKAR/AGADEZ, Oct 13 (Reuters) - When German Chancellor Angela Merkel toured three African nations this week for talks on curbing migration to Europe, the leader of the world's poorest country, Niger, suggested it would take a "Marshall Plan" of massive aid to stop people coming.
Merkel politely declined the request, expressing concern about how well the aid would be spent and noting that, at a summit in Malta last year, the European Union had already earmarked 1.8 billion euros for a trust fund to train and resettle migrants.
But Niger's President Mahatma Issoufou also proposed something perhaps more significant, in the long run, than a development package - bringing Niger's population growth down from 3.9 percent, the highest in the world.
Though he gave no details on how this could be achieved, demography clearly holds the key both to Europe's migration crisis and to the African poverty feeding it. As long as population growth in African countries outstrips their ability to educate, house and employ their citizens, large numbers of people will continue to brave the deserts and seas to escape.
"You can't resolve this by just paying money," said Owoeye Olumide, a demographer at Bowen university in southwest Nigeria, one of the world's most densely populated regions.
"There are going to be too many people ... the development you need will not be possible. You have to lower fertility rates and bring down population (by educating and empowering women)."
Niger, a vast, largely desert nation to the north of Nigeria, presents the starkest example of Africa's challenges.
With an average of 7.6 children born to each woman, its population is projected to more than triple to 72 million by 2050, from about 20 million now, according to the latest U.N. figures. By then, Africa will have more than doubled its population to 2.4 billion, the United Nations says.
Frequent droughts in Niger cause hunger, and low investment in education means a dearth of skills. Yet somehow it must hugely increase food production just to stay where it is.
Ironically, Niger's location in the largely unpoliced sands of the Sahara also makes it a draw for migrants. They come from across Africa hoping to be smuggled to a better life in Libya or Algeria -- or over the Mediterranean to Europe.
In doing so, the migrants bring cash to Niger, a country that has repeatedly proved unable to feed itself.
Ousmane Diallo, 38, travelled for 10 days by bus from Sierra Leone on the Atlantic coast to Agadez, a Saharan town in Niger at the crossroads of the people-smuggling business. He spent $700 on police and military checkpoints along the way.
His is precisely the kind of ambition the German chancellor would like to discourage.
"I want to work in a car factory in Germany," he said in a dimly lit restaurant in Agadez, his few possessions - spare trousers, shoes, water and a Bible - crammed into a small bag.
The International Organisation for Migration (IOM) expects migration through the Agadez region this year to reach 300,000, more than twice the 120,000 it estimates came through in 2015.
EU officials hope to deter migrants like Diallo by making clear that life as an illegal immigrant in Europe is hardly better than staying in Africa. But that message has yet to filter down.
Diallo was swindled out of 150,000 CFA francs ($256) he paid smugglers in Agadez to reach central Libya. Desperate, he has given his last 50,000 CFA to a gang he hopes will come good.
"(In) Europe ... I can save and earn money. I cannot return back. I have nothing there," he said of his native Sierra Leone.
In 2013, Niger's corruption investigators did a study on smuggling that was never published, but which Reuters has seen. It said Niger's security forces make almost half a million CFA francs ($850) from every round trip by a smuggling truck -- just from migrants alone, not including payoffs from the gangs.
The government did not respond to a request for comment.
Agadez, a desolate town of sandy streets and mud houses, is booming. Touts flock to fresh migrants at the bus station. For $10, they offer space in padlocked courtyards where arrivals sleep on dirt floors. Landlords might squeeze 40 migrants into one yard, making hundreds of dollars a night.
Money changers and motor oil vendors throng the streets.
"Pretty much the whole population of Agadez now lives off providing services to migrants in transit," said Richard Danziger, IOM regional director for West and Central Africa.
"What we can't do right now is offer real alternatives," he said, adding that "a mixture of development aid and job creation is the only way forward".
According to a theory popular with investment bankers and management consultants, Africa's population woes will solve themselves. Africa, they say, will reap a "demographic dividend" as its bulging youth population drives innovation and consumer markets -- as happened to Asia in decades past.
The latest commodity crash highlighted reasons for being less optimistic: Africa remains over-dependent on raw materials and has failed to create the manufacturing or service jobs that helped drive Asia forwards.
And despite predictions, economic growth hasn't significantly cut birth rates in most African countries.
Yet even if Africa is 'rising', says Renaissance Capital's Charles Robertson, himself an optimist, migration will remain "pretty unstoppable".
Any bright youth who chooses to stay in most African countries has a good chance of doubling his wealth over 10 years, he says, but that still presents a dilemma:
"You can stay where you are and go back to where Germany was in 1920 or you can leapfrog 90 years of development and have a better standard of living now," he said. "That isn't going to change for half a century." ($1 = 585 CFA francs) (Additional reporting by Andreas Rinke in Niamey, David Lewis in Nairobi and Alastair MacDonald in Brussels; Editing by Gareth Jones)