Developing the Agricultural Sector to Boost Rural Economy in Nigeria
Chapter One
OBJECTIVE OF THE STUDY
The objectives of the study are;
- to ascertain the negative relationship between government expenditure on agricultural sector and the level of unemployment
- to ascertain the negative relationship between government expenditure on agricultural sector and the level of unemployment
- to ascertain the correlation between contribution of agricultural sector and economic development
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Agricultural Growth
Nigeria is fortunate to have an abundance of fertile soil along with a climate suitable for agriculture. There is also a supply of human resources that could benefit from having the agricultural sector to work in. As stated above, Nigeria can join the league of economically developed nations by focusing on the improvement of its agricultural sector. A recent group study (Diao, Xinshen, Hazell, Peter & Thurlow, 2009) examined the effect of other channels of growth on the decrease in poverty and the overall growth rate in six low-income countries of Africa. The findings of that research can be applicable to Nigeria as well. According to the study, industrial growth is less effective in reducing poverty than agricultural growth because a major percentage of the population (about 70%) live in rural areas. The agricultural sector is favourable as it allows greater employment opportunities for the poor. It was also noted by Diao et al that even though the industrial sector is important for boosting the economy, it fails to create sufficient employment opportunities for the poor and unskilled workers. In addition, the study stated that there was little evidence to prove that African countries could launch a successful economic transformation without going through an agricultural revolution on a country-wide basis (
Agriculture/ Nigerian Economy
Nigeria has an abundance of material and human resources. The country is divided into three main regions; the Eastern, Western and Northern regions. The Northern region of Nigeria is the largest of the three. It contributes the most to the agricultural sector. A study identified that the main problems of Nigeria stem from the fact that they are unable to access the natural and human resources (Muhammed, &Atte, 2006). In the study, Muhammed et al observed growth in many different sub sectors of agriculture and their contribution to the Nigerian economy during the years 1981 to 2003. They also identified the various factors that have an impact on the national agricultural production in Nigeria. They specifically examined the sectors of crops, livestock, fishery and forest. The factors that were examined included population growth rate, GDP growth rate, consumer price index, food import values and the expenditure of government on the agricultural sector. Land, labour and machinery; which are equally important factors were not included in the analysis. In his study, Muhammed et al found that a negative coefficient exists between the values of food imports. This means that whenever food import in the country increases, national agricultural production tends to decline. Other variables in the study had a positive coefficient leading to the notion that any increase in the variable will result in an increase in the national agricultural production (2006). Muhammad et al however, did not examine the amount of output and its contribution to the GDP. He also failed to observe whether this amount was sufficient to instigate a transformation in the economy of Nigeria. One may also wonder how much more the government needs to allot to agriculture expenditure to yield a certain amount of agricultural output. Moreover, there is also a need to further investigate whether allocating such an amount in the existing budget is feasible or not. In case of a lack of availability of funds, further study needs to be carried out to find whether acquiring foreign aid to fund the agricultural sector will be a sensible decision or not.
The Role of Market and Non-Market Forces
Since its independence, Nigeria has been well known for the significant amount of its exports of items like groundnuts, cocoa and oil palm products. A formal arrangement was made to market these exports globally. These were known as marketing boards. These boards were given charge to handle the supply chain and logistics of these items. After procuring them from the local farmers, they used to arrange for the export of these items as well as sell them domestically. It was a very well established system. Due to this, the board had become the main body as it helped fund the needs of the state significantly, through its system of revenue generation which proved to be very effective. The revenue was mostly generated by selling the procured agricultural produce domestically and through exports. A widely accepted principle in economics states that “people respond to incentives” (Carbaugh, 2009). The existence of the marketing board acted as a chief incentive for key export commodity producers in early 1950s The Nigeria Cocoa Marketing Board was the first board that was setup in 1947. The other boards for crops like groundnut, seed cotton and palm produce were established two years later. Ojiowu stated that these boards were, “nation-wide monopsonistic single-commodity marketing boards” (1987, p.253). Besides the main purpose of procuring, grading, marketing arrangements and export of these crops, the board was also responsible for assisting the development of the Nigerian agricultural export industry “for the benefit and prosperity of the producers” (Ojiowu, 1987, p.23).
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 Developing the agricultural sector to boost rural economy in Nigeria
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.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information on Developing the agricultural sector to boost rural economy in Nigeria. 200 staff of ministry of Agriculture, Abia state was selected randomly by the researcher as the population of the study.
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 Developing the agricultural sector to boost rural economy in Nigeria
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 Developing the agricultural sector to boost rural economy in Nigeria
Summary
This study was on Developing the agricultural sector to boost rural economy in Nigeria. Four objectives were raised which included: 1. to ascertain the negative relationship between government expenditure on agricultural sector and the level of unemployment, to ascertain the negative relationship between government expenditure on agricultural sector and the level of unemployment and to ascertain the correlation between contribution of agricultural sector and economic development. 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 ministry of Agriculture, Abia states. 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 directors, administrative staffs, senior staffs and junior staffs were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.
Conclusion
An understanding of the nexus of agricultural production and economic growth in Nigeria with a view to drawing up lessons for poverty reduction was the kernel of this research. Using time series data on the index of agricultural production, real gross domestic product, interest rate, exchange rate and inflation rate, the bounds testing (ARDL) approach to cointegration was employed to analyse the data leading to the key finding of the study. It was established that agricultural production was positively related to economic growth in Nigeria and the relationship was significant both in the long run and in the short run. However, the trend in economic growth of Nigeria have not yielded a tangible improvement in the well-being of a larger proportion of the population especially the rural populace whose primary occupation is agriculture and therefore, an economic growth that translates into poverty reduction, enhanced food security, health status, educational capacity and empowerment of youths and women in rural Nigeria should be embraced
Recommendation
It is recommended that pro poor policies should be designed for alleviating rural poverty and this should be centred on diversifying the Nigerian economy with agriculture as the driver of the economy so that the benefits of economic growth will trickle down to the agro-based rural population that constitute a larger proportion of the population of Nigeria. Therefore, all tiers of government and the private sector should be fully involved in pursuing the course of agricultural development for the growth of Nigerian economy and ultimately poverty reduction.
References
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- ANRÍQUEZ, G. and K. STAMOULIS (2007): Rural Development and Poverty Reduction: Is Agriculture Still the Key? ESA Working Paper No. 07-02. FAO, Rome.
- AROKOYO, T. (2012): Challenges of Integrating Small Scale Farmers into the Agricultural Value Chains in Nigeria. Being a Lead Paper Presented at the 2012 edition of the annual National Agriculture Show tagged Promoting Sustainable Investment in Agriculture in Nigeria. Unpublished.
- AWOKUSE, T.O. (2009): Does Agriculture Really Matter for Economic Growth in Developing Countries? Selected Paper prepared for presentation at the American Agricultural Economics Association Annual Meeting, Milwaukee, WI, July 28, 2009.
- BADIENE, O. (2008): Sustaining and Accelerating Africa’s Agricultural Growth Recovery in the Context of Changing Global Food Prices. IFPRI Policy Brief 9. IFPRI, Washington, D.C.
- BLOCK, S. and C.P. TIMMER (1994): Agriculture and Economic Growth: Conceptual Issues and the Kenyan Experience. HIID Development Discussion Paper no. 498. Harvard Institute for International Development, USA.
- CBN (Central Bank of Nigeria) (2008): Annual Report and Statement of Accounts for the Year Ended 31st December 2008. Available at: http://www.cbn.org.ng.
- Accessed 17 August 2012. – (2010): Annual Report and Statement of Accounts for the Year Ended 31st December 2010. Available at: http://www.cbn.org.ng.
