THE IMPACT OF AGRICULTURE ON ECONOMIC GROWTH IN NIGERIA

THE IMPACT OF AGRICULTURE ON ECONOMIC GROWTH IN NIGERIA

ABSTRACT

This study investigated and analyzed the impact of agriculture on Nigeria’s economic growth. It used secondary data from the Central Bank of Nigeria spanning the years 1985 to 2010. The modern Time Series of the Ordinary Least Squares was used in the study to test the relationship between agriculture and economic growth in Nigeria. The findings suggest that there is a significant relationship between agricultural spending and economic growth. The stated null hypothesis for this study does not hold. This implies that the agricultural revolution is a factor in economic growth. As a result, it is critical that the government place greater emphasis on this sector by increasing budgetary allocation to agriculture in Nigeria in order to meet both Food and Agriculture Organization recommendations. FAO and the African Union (AU). More funding should be provided for agricultural universities in the country to conduct more research on all aspects of agricultural output, such as livestock, crops, fishing and forestry, crop preservation, as well as the establishment of more research institutes to improve seedling production, encourage the use of irrigation farming systems, and provide storage facilities for seasonal products as a means of improving the country’s agric ultural output. Other recommendations include the need for the Central Bank of Nigeria to issue consistent policy guidelines that allow commercial banks to make loans to farmers at very low interest rates in order to assist them in expanding their production capacity. More specifically, the government must encourage more exportation. agricultural output, which will increase external foreign exchange earnings and improve Nigerian agricultural produce’s competitiveness in international markets.

CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

Agriculture is derived from the Latin words “ager,” which means field, and “cultura,” which means cultivation. This implies that crop production was the earliest form of agricultural production (Are, Igbokwe, Asadu, Bawa, 2010; Erebor, 2003). It should be noted that agriculture is about more than just crop production. It also includes animal production, primary product processing (or value addition), and produce and product marketing. Agriculture, according to Erebor (2003), is the art and science of cultivating the soil, processing crops and livestock products for human consumption, and the process of selling excess crop and livestock.

Meanwhile, (Kricher,1997) defines agriculture more precisely as “the simplification of nature’s food webs and the rechanneling of energy for human planting and animal husbandry.”

consumption. To put it simply, agriculture is the process of redirecting nature’s natural flow of the food web. The sun provides light to plants, and plants convert sunlight into sugars, which provide food for the plants (this process is called photosynthesis). Plants provide food for herbivores (plant-eating animals), who in turn provide food for carnivores (meat-eating animals). This simple food web illustration serves as the foundation for examining the impact of agriculture on economic growth.

Economic history provides ample evidence that the agricultural revolution is a fundamental prerequisite for economic growth, particularly in developing countries. Development economists have concentrated on how agriculture can contribute most effectively to overall economic growth and modernization. Todaro and Smith (2003) investigate the Lewis theory of development.

and stated that the underdeveloped economy was made up of two sectors. These are the traditional agricultural sector and the modern industrial sector, both of which have zero marginal labor productivity. Agricultural revolutions are a prerequisite for take-off and take-off stages in Rostow’s linear stages of economic growth.

The significance of a vibrant and robust agriculture is reminiscent of its role in providing employment opportunities for the teeming population, eradicating poverty, and contributing to economic growth. The relationship between agriculture and economic growth has been well documented in the literature (Ogen, 2007; Okongwu, 1986; Atte and Muhammed- Lawal, 2006 to maintain few). According to Izuchukwu (2011), agriculture has been the backbone of the Nigerian economy, providing employment and a source of livelihood for the country’s growing population.

For more than half of Nigeria’s GDP at the time of independence in 1960.

However, due to the dominance of the crude oil sector in the economy, its role in the country’s regional and economic development has dwindled over time. With rising food demand in Nigeria, the country has available natural resources and the potential to increase crop production volume in order to meet the food and nutritional needs of the country’s rapidly growing population and ensure food security. As a result, agriculture is the primary source of national wealth.

Without a doubt, the neglect of agriculture in Nigeria as a result of the discovery of oil has slowed economic growth over the past decades. The result of this Neglect could be felt in people’s poor quality of life, as the average Nigerian was quoted as living on US$ 1 per day; if converted to Naira, this equates to N165 per day at the moment. It is possible that such a remark is a political ruse. A better, more sincere, and realistic assessment of the situation would place an average income of US $0-0.5 per day on the faces we see on our streets and those we may not be able to see because of their inability to muster enough strength to walk up to the street as a result of several days of hunger and starvation, or even food-related ill-health and avoidable deaths of tens of people every day. According to research, seven out of every ten Nigerians live in abject poverty, unable to feed, clothe, or house themselves. It is an undeniable fact that Nigeria and her Sub-Saharan African neighbors have been dubiously christened as citadels of hunger, poverty, ignorance, diseases, misery, debts, filths, and crises by the world’s political and economic powers. Unless the people and government of this doomed sector of the global village take reasonable steps, this unquestionable imagery will remain indelible in the world’s archives for a long time. In this context, the study seeks to assess the impact of agriculture on economic growth.

1.2     Statement of the problem

Aside from oil, the Nigerian economy’s main strengths are its abundant agricultural resources, human resources, and vast markets. However, in order to diversify the economy and reduce reliance on oil and imports, these resources must be effectively mobilized. The economy remains vulnerable to external shocks caused by fluctuations in global crude oil prices and rising import prices. The resulting external and internal in balances manifest as an adverse balance of payment position, unemployment, and low capacity utilization in virtually all sectors, as well as a deterioration in the populace’s purchasing power (Atte and Muhammed- Lawal, 2006).

Agriculture’s contribution to Nigerian economic growth is much lower than it once was. be within the last 14 years. Nigerian agriculture retains many of the characteristics of a peasant economy that was prevalent prior to independence. Given the foregoing, this study aims to assess the impact of agriculture on economic growth in Nigeria between 1985 and 2010.

1.3     Objectives of the Study

The goal of this research is to assess the impact of agriculture on Nigeria’s economic growth.

However, the study will:

1. Investigate the impact of agricultural practices in Nigeria on agricultural productivity.

2. Evaluate the impact of budgetary allocation and agricultural policies on agricultural productivity.

3. Estimate the agricultural sector’s growth trend in Nigeria from 1985 to 2010.

4. Determine the relationship between agriculture and economic growth in Nigeria.

1.4     Research Questions

The investigation will be guided by the following questions.

1. How has the agricultural sector grown between 1985 and 2010?

2. How have budgetary allocations and agricultural policies influenced agricultural productivity in Nigeria?

3. Is there a strong link between agriculture and economic growth in Nigeria?

1.5     Hypothesis of the study

Agriculture must be promoted in order for Nigeria to achieve full economic growth.

1.6     Significance of the Study

The study is important because it will help to promote agriculture in Nigeria. The study will contribute to a radical transformation for national growth, particularly through its impact on rural incomes and the provision of resources for the transition to an industrialized economy. This study will assist policymakers and governments in dealing with the challenges of climate change, global recession, and dwindling revenue, all of which threaten food security. The Nigerian people will benefit from this research because the agricultural revolution will provide both quality and quantity of food.

Industrial and manufacturing firms will benefit from a consistent supply of raw materials, as well as large markets for industrial products. The government will benefit because the study will assist it in putting political will in place.

1.7     Brief Methodology

The study relied on secondary data from the Central Bank of Nigeria (CBN) published in their statistical bulletin from 1985 to 2010. It used descriptive and analytical statistics to analyze the data, as well as various econometric methods like unit root test, co integration, and Error Correction Model, among others, with the help of the E-view statistical package. In Nigeria, the Ordinary Least Squares method was used to test the relationship between agriculture and economic growth.

1.8     Plan of Study

This research was organized into five chapters. The first chapter covers the study’s introduction, problem statement, objectives, research questions, and hypothesis, among other things. Chapter two provides a review of relevant and related studies that cover the theories that explain the relationship between agriculture and economic growth, while Chapter three discusses and explains the analytical framework and methodology used in the study. The fourth chapter focused on the empirical results and discussion of the study, while the fifth chapter focuses on the summary, conclusion, and recommendations based on the study’s findings.