ABSTRACT
This study examined
and analysed the impact of agriculture on economic growth in Nigeria. It
adopted the secondary data sourced from Central Bank of Nigeria covering the
period 1985 to 2010. The study employed the modern Time Series of the Ordinary
Least Square to test for the relationship between agriculture and economic
growth in Nigeria. The results derived infer that there exists a significant
relationship between agriculture spending and economic growth. The null
hypothesis stated for this study does not hold. What this implies is that
agriculture revolution is a determinant to economic growth. Thus, it is
important that the government placed greater emphases on this sector by
increasing budgetary allocation to agriculture in Nigeria in other meet the
recommendations of both Food and Agriculture Organization (FAO) and African
Union (AU). It is recommended that more
funding be provided for agricultural
universities in the country to carry out more research on all aspect of
agricultural output, such as livestock, crops, fishing and forestry, crop
preservation and also establishment of more research institutes to improve
seedling production, encourage the use of irrigation farming system and
provision of storage facilities for seasonal products as means of improving the
country’s agricultural output. Further
recommendations include the need for the Central Bank of Nigeria to come out
with stable policy guideline to enable the commercial banks disburse loans to
farmers at a very lower interest rate, in order to help them expand their
production capacity. More so, the need for government to encourage more
exportation of agricultural output as this in turn will enhance external foreign
exchange earnings and improve the competitiveness of Nigerian agricultural
produce in the international markets.
CHAPTER
ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The term Agriculture
is derived from the Latin words, “ager,” meaning field, and “Cultura”, meaning
cultivation. This suggests that the earliest form of production agriculture was
crop production (Are, Igbokwe, Asadu, Bawa, 2010; Erebor, 2003). It may be
noted that Agriculture is more than crop production. It also includes animal production,
processing of primary products (or value addition) and marketing of produce and
products. Erebor (2003) defines agriculture as the art and science of
cultivating the soil, processing crops and livestock products for man, and the
process of selling excess crop and livestock.
Meanwhile,
(Kricher,1997) defines agriculture in a more advanced way by saying that,
agriculture or farming is the simplification of nature’s food webs and the rechanneling of energy for
human planting and animal consumption. To simplify, agriculture involves
redirecting nature’s natural flow of the food web. The natural flow of the food
web is the sun provides light to plants convert sunlight into sugars which
provide food for the plants (this process is called photosynthesis). Plants
provide food for herbivores (plant-eating animals) and the herbivores provides
food for carnivores (meat-eating animals).
This simple illustration of food web provides the basis for analyzing
the impact of agriculture on economic growth.
In literature,
economic history provides us with ample evidence that agricultural revolution
is a fundamental pre-condition for economic growth, especially in developing
countries. Development economists have focused on how agriculture can best
contribute to overall economic growth and modernization. Todaro and Smith
(2003) look at Lewis theory of development, and reported that the
underdeveloped economy consisted of two sectors. These sectors are the
traditional agricultural sector characterized by zero marginal labour
productivity and the modern industrial sector. In Rostow’s linear stages of
economic growth, agricultural revolutions is a pre-condition for take-off and
take-off stages
The importance of a
vibrant and robust agriculture is reminiscent on its role in providing
employment opportunities for the teeming population, eradicates poverty and
contributing to the growth of the economy. The linkage between agriculture and
economic growth is well documented in literature (Ogen, 2007; Okongwu, 1986;
Atte and Muhammed- Lawal, 2006 to maintain few). According to Izuchukwu (2011),
agriculture has been the backbone of the economy in Nigeria providing
employment and source of livelihood for the increasing population,it accounts
for over half of the GDP of the Nigerian economy as at independence in 1960.
However, the role it plays in the regional and
economic development of the country has diminished over the years due to the
dominant role of the crude oil sector in the economy. With the increasing food
demand in Nigeria, the country has available natural resources and potential
for increasing the volume of crop production towards meeting the food and
nutritional requirement of the rapidly increasing population and guarantee food
security in the country. Therefore, the source of national wealth is
essentially agriculture.
Unquestionably, the
neglect of agriculture in Nigeria owing to the discovery of oil has retarded
the growth of the economy for the past decades.
The effect of this neglect could be felt in the poor quality of life of
people as average Nigerian was quoted as
living in US$ 1 per day; if translated to Naira, this amount to N165 day at
present. It may not be wrong to say that such a remark is a political cover.
The faces we see daily 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 associated
ill-health and avoidable deaths of tens of people everyday, a better, more
sincere and realistic assessment of the situation would be put an average
income at US $0-0.5 per day. Studies in literature reveal that seven out of
every 10 Nigerians live in abject poverty; hardly able to feed, cloth or house
themselves. It is an indisputable fact that Nigeria and her sub-Saharan African
neighbors have been dubiously christened by the world political and economic
powers as citadels of hunger, poverty, ignorance, diseases, misery, debts,
filths and crises. This unquestionable imagery will for long remain indelible
in the world’s archives unless a reasonable step is taken by people and
Government of this doomed sector of the global village. It is against this
backdrop that the study seeks to assess the impact of agriculture on economic
growth.
1.2 STATEMENT OF THE PROBLEM
Besides oil, the
major strength of the Nigerian economy is its rich agricultural resource base,
its human resource and its huge markets. However, these resources have to be
effectively mobilized so as to diversify the economic base and reduce
dependence on oil and import. The economy remains vulnerable to external shocks
emanating from fluctuation in the world prices of crude oil and the rising
prices of imports. The resulting external and internal in balances are
manifested in the adverse balance of payment position, unemployment and low
capacity utilization in virtually all sectors as well as the deteriorating
purchasing power of the populace (Atte and Muhammed- Lawal, 2006).
The contribution of
agriculture to the Nigerian economic growth is very low compared to what it
used to be in the past 14 years. Nigerian agriculture to a large extent still
possesses the characteristics of a peasant economy that was prominent in the
pre-independence period. Given the information above, this study seeks to
assess the impact of agriculture on economic growth in Nigeria from 1985-2010.