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THE AGRICULTURAL SECTOR AND THE NIGERIA ECONOMY
(1980-2007).
ABSTRACT
This study sets to
investigate empirically, the impact of the agricultural sector on the Nigerian
economy. This was examined based on the method of ordinary least square (OLS) of
multiple regression premised on three equations. The three equations are
treated as discreet equations using time series data on Gross Domestic Product,
(GDP), balance of Payment (BOP), Unemployment rate (UMP), Index of Agricultural
Production (IAP), Exchange Rate (EXR), index of manufacturing production (IMP)
and capacity utilization (CU). The estimated result shows that IAP is rightly
signed with GDP. Also, the IAP was not able to employ the teeming population in
Nigeria as well as a disconnect between BOP and GDP. It is therefore
recommended that the government should urgently engage proactive measures to
boost agriculture as well as over hauling the educational curricula to place
more emphasis on self-employment in agriculture.
TABLE OF CONTENTS
Title Page i
Dedication ii
Certification iii
Abstract iv
Table of Contents v
CHAPTER
ONE: INTRODUCTION
1.1 Background
of the study 1
1.2 Statement
of the problem 4
1.3 Objectives
of the study 6
1.4 Research
questions 6
1.5 Hypothesis 7
1.6 Method
of study 7
1.7 Scope
of the study 8
1.8 Significance
of the study 8
1.9 Organization
of the study 9
CHAPTER
TWO: LITERATURE REVIEW
2.1.1 Theoretical literature 10
2.1.2 System of agriculture 11
2.1.3 The role of agriculture in the
economic development of
Nigeria 13
2.1.4 Problems of agriculture in
Nigeria 18
2.1.5 Empirical literature review 29
2.1.6 Agriculture policies in Nigeria 41
2.3 Summary
of literature review 43
CHAPTER
THREE: RESEARCH METHODOLOGY
3.1 Introduction 45
3.2 Sources
of data 46
3.3 Model
specification 47
3.4 A
priori expectation of coefficients of the variables in the model 48
3.5 Data
analysis technique 50
CHAPTER FOUR: DATA PRESENTATION ANALYSIS AND
DISCUSSION OF FINDINGS
4.1 Introduction 52
4.2 Data
presentation 53
4.3 Data
analysis/discussion of findings 57
4.4 Analysis
of model 1 57
4.3.2 Analysis of model 2 59
4.3.3 Analysis of model 3 61
CHAPTER FIVE: SUMMARY, RECOMMENDATIONS AND
CONCLUSION
5.0 Summary 65
5.1 Recommendations 66
5.3.2 For further studies 66
5.2 Conclusion 66
5.2.1 Major findings 67
5.2.2 Other findings 68
References 72
Appendix 1 74
Appendix 2 75
Appendix 3 77
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The
agricultural sector in Nigeria context embraces all the sub-sectors of primary
industry which include farming, fishing and forestry. The agricultural sector
in Nigeria is the oldest and largest sector in the economy. Before the advent
of the colonialist, rural Nigeria fairly complex organizations these social
organizations were predominantly peasant communities, producing a variety of
commodities mostly to satisfy the need of family in terms of food with small
supplies for exchange with other communities (Anyanwu et al, structured of the
Nigeria Economy 1960-1997).
The
coming of the colonial masters brought about improvement in the agricultural
sector. Agriculture was somehow Scientifics oriented. The colonialist
introduced a money economy among the peasant communities by producing
incentives for the local farmers to produce more crops for sale and eventual
export to Western Europe.
Nigeria
communities produced different types of crops and this was the reflection of
their different environment and ecology. However over the years the
agricultural sector was the mainstay of the Nigeria economy, not until the
discovery of crude oil in commercial quantity in 1956 at Oloibiri in Niger
Delta Area by Shell Bp petroleum Development Company (Good Wilson, 2002).
According
to Heueiner (1966) export production accounted for about 75% of Nigeria Gross
Domestic Product (G.D.P) in 1929. Oil palm alone accounted for between 85 and
90% of the total volume of export during the same period. In term of
employment, more than 80% of the rural population of Nigeria engaged in one type
of agricultural activity or the other, this roughly indicates the extent to
which the agricultural sector absorb the labour force in the country. However a
World Bank Report (1970) put it that the agricultural sector employed 71% of
the total labour force in Nigeria.
The
need to develop the agricultural sector alongside with the industrial sector
has been recognized by successive government of the country. This is in
realization that the single-minded pursuit of industrialization has rather been
counterproductive. For instance there has been declining food production and
the attendant rising foodstuff prices and food import, bills, which in turn
implies increasing external dependence. Apart from the problems of declining
food production. The output of agricultural raw materials is also declining and
therefore unable to provide the necessary agricultural raw materials to
industrial sector and as export.
The
contribution of the agricultural sector to the development of any nation has
been acknowledged at least since the time of Ricardo. For stance, in his
principles of political economy and taxation, he viewed the problem of
diminishing returns in agriculture as crucial because he believed that a
limitation on the growth of agricultural output sets the ceiling or upper limit
to the growth of the non-agricultural sector and to capital formation for
economic expansion.
The
role of agriculture in the developing countries in which we rightly belong,
when we realize that over 2 of about 3 billion people living in the rural areas
of the third world in the early 1990s grid out of meager and often inadequate
existence in agricultural pursuit (Todaro 1992). Therefore it is imperative to
look at the agricultural sector and the Nigeria economy.
1.2 STATEMENT OF THE PROBLEM
The
agricultural sector which was the mainstay of the Nigerian economy, seem to
suffer some setbacks since the discover of crude oil in commercial quantity in
1956. Other factors has also contributed to the downfalls, of the agricultural
sector, the period between 1929 and 1945 was a difficult one for the export
sector the great depression of the 1930s was marked by fluctuations in world
commodity, prices especially primary commodity prices, this disturbances lasted
till the end of the war.
Within
1945 and 1954 the economy was recovering from the effects of the Second World
War, the demand for primary products rose again.
The
agricultural sector needs to be developed alongside with other sector of the
economy. Because it provide food for consumption, boast industrialization by
providing inputs to industries, create employment, for the teaming population
enable balance of trade by reducing over importation of foodstuff etc. which
also lead to economic growth and development.
It
is not ideal for any country to depend solely on one sector and neglect another
because it will cause a big fall or backwardness to growth and development of
the entire economy.
Successive
government in Nigeria has proffer solution to the problems of the sector but to
no avail. This is what induced the study.
1.3 OBJECTIVES OF THE STUDY
The
aim of the this study, among other things; are,
i. Identify
the roles played by the agricultural sector of the Nigeria economy.
ii. Examine
the problems facing the sector
iii. Evaluate
past efforts made by government at revamping the sector.
iv. Identify
the factors that have been working against government effort.
1.4 RESEARCH QUESTIONS
In
course of carrying out this study the following research questions are put
forward to achieve our objectives.
i. How
does the agricultural sector contribute to economic growth?
ii. To
what extend has the government been able to set the pace in developing the
agricultural sector?
iii. What are
the constraints faced by the Nigeria farmers?
iv. Does the
type of implement used by the Nigeria farmers affect their productivity?
1.5 HYPOTHESIS
H01:
There is no significant relationship between the performance of the
agricultural sector and unemployment.
H02:
There is no significant relationship between the performance of the
agricultural sector and economic growth.
H03:
There is no significant relationship between the agricultural sector and
balance of payments.
1.6 METHOD OF STUDY
For
the researcher to achieve its objective, both primary and secondary source was
use. The tool for the analysis is multiple regressions.
1.7 SCOPE OF THE STUDY
The
study is primary aimed at examining the roles of the agricultural sector in
Nigerian economy. Its contribution to economic growth, full employment, balance
of payments equilibrium and finally constraints faced by the sector. The period
under review is (1980-2007).
1.8 SIGNIFICANCE OF THE STUDY
The
study is important first because it is an attempt to look at the contribution
of the agricultural sector to the growth of the economy.
Secondly
the study is also important because it will expose the problems faced by the
agricultural sector of the economy.
Thirdly
considering the state of the Nigeria economy today, it helps us to appreciate
the need to diversify the economy.
Finally,
as an academic exercise, it will contribute to existence knowledge and serve as
a reference document on the field.
1.9 ORGANIZATION OF THE STUDY
The
study is organized as follows chapter is one all about the background of the
study, statement of the problem, objective of study, research
question/hypothesis, method of study, scope of study, significance.
Chapter
two is the literature review, chapter three is research methodology.
Chapter
four is presentation of data and its analysis. While the final chapter is
chapter five, which include summary, recommendation and conclusion.
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