Comparative Analysis of Investment Funding in Nigeria Oil and Agricultural Sector
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain the contribution of oil sector to Nigeria GDP
- To ascertain impact of agricultural sector to Nigeria economy
- To ascertain the impact of investment funding on oil and agricultural sectors
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Investment financing and agriculture output growth
Oyejide (1999) in his study, “taking stock of long-term financing for sustainable development in Africa” argues that that the SSA region’s poor economic growth performance since the mid-1970s is not unrelated to its low investment rates. In addition, the author suggested that since the region’s domestic savings have been inadequate for financing even these low investment rates, it has historically relied rather heavily on external resource inflows. It is tempting, in these circumstances, to suggest that the solution to the growth problem in the SSA region is increased investment that is financed even more than in the past by inflow of foreign capital, both official and private. Recent theoretical research, typified by endogenous growth models, suggests that high investment rates can result in a permanent increase in an economy’s overall growth rate (Romer, 1986; Lucas, 1988). The credibility of macroeconomic policy may be perceived through at least three main indicators: inflation (INF) rate and its variability; real exchange rate variability; and sustainability of fiscal balance. These three indicators interact with an economy’s degree of openness trade and the ease of cross-border financial transfers, as moderated by foreign exchange control regulations. Capital flow may also be stimulated by exchange rate fluctuations and volatility, which in itself can also be influenced by inflationary pressures. For instance, high INF may create increasing expectations about future exchange rate depreciation, and may provide incentives for capital flight. While Hermes and Lensink (1992) found a strong support for a positive link between real effective exchange rate and capital flight in Cote d’lvoire, Nigeria, Sudan, Tanzania, Uganda, and Zaire (now Democratic Republic of Congo) for the period 1978–1988. The level of exports, adjusted for country size, reflects the economy’s openness, and openness generally is good for growth (Sachs and Warner, 1995; Edwards, 1998; Frankle and Romer, 1999). Gylfason (2000) opines that the link between openness and growth is through INF, however, one of the reasons why INF is inversely related to growth, may well be that INF hurts export through the real exchange rate, all else being the same. According to Gylfason (2000), sustained economic growth requires high-quality saving and investment. High net saving rate do not necessarily stimulate growth if they are accompanied by rapid depreciation and depletion of capital. Fry (1995), McKinnon (1973) and Shaw (1973) in their studies show that positive real interest rate stimulates saving and financial intermediation thereby increase supply of credit to be allocated to productive sectors. This, in turn, increases investment and economic growth.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to comparative analysis of investment funding in Nigeria oil and agricultural sector
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain comparative analysis of investment funding in Nigeria oil and agricultural sector
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of investment funding in Nigeria oil and agricultural sector
Summary
This study was on comparative analysis of investment funding in Nigeria oil and agricultural sector. Three objectives were raised which included: To ascertain the contribution of oil sector to Nigeria GDP, to ascertain impact of agricultural sector to Nigeria economy and to ascertain the impact of investment funding on oil and agricultural sectors. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of CBN, Abuja. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up HRMs, administrative staff, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The finding contradicts Adesoye et al. (2011a) regarding TB for the two sectors. However, empirical results negate findings of Adesoye et al. (2011b) that TCB enhances productivity of both sectors. In contrary, it supported findings that financial sources from international lending clubs de-likes of Paris Club, London Club, etc., should be avoided at all costs since it has negative externalities on the sectors. Loan from these international lending clubs are neglected ever since 2006 till 2011 due to the recognition of such debt implications over the years. However, the two investment financing options have significant impact on development programs of the two sectors. The benefits of the two investment financing options should be well articulated so that maximum or optimal use are not only ensured but also enhance development and output growth of the sectors
Recommendation
The federal government should utilise the use of national resources in financing developmental projects meant for economic prosperity and standard of living improvement. Considering the heavy reliance of the Nigerian economy on oil revenues, excess crude funds should be channelled towards the financing of developmental projects and maintenance of obsolete infrastructures in the country.
References
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- Adedipe, B. (2004) ‘The impact of oil on nigeria’s economic policy formulation’, Paper presented at the Conference on Nigeria: Maximizing Pro-Poor Growth: Regenerating the Socio-Economic Database, Organized by Overseas Development Institute in Collaboration with the Nigerian Economic Summit Group, pp.1–23.
- Adesoye, A.B., Maku, E.O. and Atanda, A.A. (2011a) ‘Strategic development financing mix and economic growth in Nigeria’, Pakistan Journal of Social Science, Vol. 8, No. 1, pp.8–12.
- Adesoye, A.B., Maku, E.O. and Atanda, A.A. (2011b) ‘Non-debt development financing mix and implications on nigerian economic growth’, Pakistan Journal of Business and Economic Review, Vol. 1, No. 1, pp.1–13.
- Akpan, E.O. (2009) ‘Oil price shocks and Nigeria’s macro economy’, paper presented at CSAE Conference, 21st–23rd March, Oxford University, Oxford, UK.
- Ariyo, A. (1999) ‘Appropriateness of development financing mix of Sub-Saharan African economics: evidence from Nigeria’, Nigerian Journal of Economic and Social Studies, Vol. 41, No. 1, pp.159–173.
- Central Bank of Nigeria (CBN, 2012) Statistical Bulletin, Vol. 23.
- Edwards, S. (1998) ‘Openness, productivity and growth: what do we really know?’, Economic Journal, Vol. 108, pp.383–398.
