THE IMPACT OF THE AGRICULTURAL SECTOR ON NIGERIA ECONOMIC GROWTH PERFORMANCE (1980-2009)
The study set out to ascertain the extent to which Agricultural sector has contributed to the growth of Nigerian economy from 1980 to 2009. As a guide to the study, the following hypotheses were formulated: (1) there is no statistical significance between Nigerian agricultural output and real gross domestic product (2) there is no statistical significance relationship between exchange rate fluctuation and real gross domestic product in Nigeria. The ordinary least squares estimation technique (OLS) was used to estimate the econometric times series data. Findings show that agricultural production exerted a significant positive influence on real gross product during the study period. However, variations in the official exchange rate was not important factor explaining the trend of agricultural output in Nigeria. The study therefore recommends that.
Background of the Study
The Nigerian economy has faced several challenges over the years. Source of these challenges include: gross mismanagement/mis appropriation of public funds, corruption and ineffective economic policies, lack of integration of macroeconomic plans and the absence of harmonization and coordination of fiscal policies; inappropriate and ineffective policies; imprudent public spending and weak sectoral linkage; as well as monoculture economy. It is evident that one of Nigeria’s greatest problems today is the inability to efficiently manager her enormous human and material endowment (Anyanwu; 2OO7). Agriculture in Nigeria is the most dominant sector and major source of livelihood for the majority of the population. It accounts for about 70% of employment, and inspite of this, Binswanger, etal (1999) say it has not been able to achieve the major objectives of agricultural development which the World Bank (1997) identified to include (I) Increase food production and firm income (ii) make household food, vvater, and energy secure and (iii) restore and maintain the natura resources. They stated further that the failure of agriculture to meet these objectives is due to limited use of purchased inputs and mechanization occasioned by lip services being paid to agricultural sector by the politicians over the years. However, the place of agriculture in Nigeria’s economy has remained critical over the decades since her political independence. Prior to the political crises of 1967-70, agricultural sector’s positive contribution to the economy were instrumental to sustaining economic growth and stability. The bulks of foodstuff consumed then were locally produced, thereby conserving the scarce foreign exchange resources that would have been spent on importing such foodstuff. The stability in growth of agricultural export was responsible for the favourable balance of trade recorded by the country within that period. More so, the primary processing industries obtained regular supplies of raw materials from the agricultural sector and hence, helped to provide some desirable linkages between agriculture and the rest of the economy. Further more, substantial amount of capital were derived from the agricultural sector and accumulation of marketing surpluses, which were used to finance many development projects. Interestingly, Nigeria is blessed with immense natural resources. She is endowed with enormous land and human resources. Available statistics reveal that Nigeria has a total area of about 91.3 million hectare of land. Out of this, only I million hectares under meadows and pastures. The remaining 43.4 million hectares are either forest and wood land or unclassified CBN (2007). Economists believe that rapid growth and development cannot be possible for any country that gives no series attention to agricultural development Zuvekas (1991). Unfortunately, the discovery of oil in commercial quantity in the middle sixties coupled with the oil...
Please join StudyMode to read the full document