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 Format: MS WORD   Chapters: 1-5

 Pages: 68   Attributes: COMPREHENSIVE RESEARCH

 Amount: 3,000

 Feb 19, 2020 |  10:40 pm |  1188



1.1 Background of the study 

Agriculture remains the mainstay of the Nigerian economy providing means of livelihood for over 70% of the population and also a major source of raw material for the agro-allied industries (Okumadewa 1997, world bank 1998). Agriculture was until the discovery of oil in the 1970's the highest foreign exchange earner .Nigeria though depend largely on oil industry for its budgetary revenue as she runs a monoculture economy, is still predominantly an agrarian society.it is said that agricultural contribution to GDP has fallen to 14.63% in 1983 as against 61.50% in 1963/1964 because agriculture was left for white collar jobs. (Olayemi 1994, Manyong et Al 2005). Agriculture has features that makes it an important part of the process of development. It does not only help in earning income within the sector but also induces growth in other sectors. It contributes to development in many ways by providing means of livelihood, environmental service as an economic activity and thus making the sector a distinctive tool for development (Obadan 1997).

Unemployment and poverty has been a great concern in developed and developing countries. Nadi (2005) stated that agriculture is indispensable in addressing them, on the average, majority of the population are considered poor. Evidences in Nigeria showed that the number of those in poverty has continued to increase. Ojo (2008) opined that Nigeria is categorized as one of the poorest twenty countries in the world in terms of her per capita income levels despite her richness in both natural and human resources. Nwaobi (2003) asserts that Nigeria presents a paradox of a rich country with poor people. This is evident by the statistics released by the Nigerian Bureau of statistics (NBS 2014) rating the country's economy as the largest in the world. In the light of this, Abiola and Olaopa (2008) stated that the scourge of poverty in Nigeria is an incontroverble fact, which results in hunger, ignorance, malnutrition, poor access to credit facilities and low life expectancy.

 Poverty reduction is one of the eight millennium development goals(MDGs)of Nigeria in the year 2000 aiming at reducing extreme poverty in the country by 2015.This is a very laudable macroeconomic objective particularly in a country endowed with abundance of human and natural resources. However, achieving this goal is becoming more challenging to the country as the poverty situation is becoming more precarious. More Nigerians are becoming victims of economic hardship as the gaps between the rich and poor keep getting wider.

Given these prevailing condition of poverty in Nigeria, it is therefore necessary to assess agricultural productivity as a key for eradicating poverty in the country which is the main objective of this study.

In spite of this, there has been a persistent increase in unemployment rate all over the world, particularly in the Sub-Saharan Africa. Unemployment is a situation where a portion of the country’s workforce who are actively searching for job, could not find work. It is a state of being economically inactive. In this 21 century, unemployment is one of the developmental problems facing any developing economy. Unemployment consequences is directed mainly on youths – 80% of Nigerian youths are without jobs with 6.9 in the fourth quarter of 2014. Following April 2014 statistical “rebasing” exercise, Nigeria emerged as Africa’s largest economy with 2013 gross domestic product estimated as US $502 billion. Nigeria with the populace of about 173.6 million in 2013 as agriculture contributes about 45% of gross domestic product, oil export contributes about 15% of the gross domestic product and gainfully employed to 90% of the rural populace.

Nigeria generates about 4.5 million new entrants in labor market annually-made up of out of school system (1 million), primary school leavers not preceding to secondary school (2.2 million) and secondary school leavers not preceding to tertiary level (1 million), tertiary graduates (300,000). Mostly, labor market absorbs about 10% of the new entrants, thereby leaving about (4 million) people who are either openly unemployed or underemployed. The Nigerian youth employment action plan (NIYEAP), 2009-2011 depicts that the time frame of NIYEAP, the number of youths requiring productive employment would be about (13 million). This number is alarming when compared to the current rate of unemployment and underemployment among youths. These results to growing conflicts, youth restiveness and militancy (Niger Delta Youths, movement for actualization of sovereign state of Biafra, Oduduwa people’s congress, Boko Haram etc.). Others include armed robbery, political thuggery, abduction, drug abuse, vandalization of oil pipelines and national power holding installation to mention but a few (NBS, 2005). The international labor organization depicts that 40% of jobless people worldwide were young. Though, government was insensitive to the plight of youths, who spend their youthful age and vigor going in search of non-existed jobs (ILO, 2012). Unemployment rate is high at about 41.6% for youths between 15-25 years while unemployed youths consist about 17% of males and 23.3% of females. In comparism to other African countries, unemployment rate in Kenya is about 40% in December 2011, Ghana has an unemployment rate of 11% in 2012, South Africa increase to 25.20% in 2013 as against 24.90% in 2012 (NBS, 2013). Nigeria economics statistics showed that the unemployment rate (% of labor force) in Nigeria is 21.1 and 23.9 in 2010 and 2011 respectively. As Nigerian agricultural sheet of Nigeria Bureau of Statistics showed that the total employment in agriculture is 44.6%. Graduates of tertiary institutions – 20%, often remaining unemployed for upward of five years after graduation (NISER, 2013). Agricultural sector if given the needed support and regulatory framework could be major player in the combat against unemployment in Nigeria and in other developing countries as it contributes about 90% of job opportunities in many developing nations.

Structural Adjustment Programs in 1986 was to reduce unemployment but failed amongst other programs. This has left the state and individuals worse off. Agricultural sector employed about 65 million persons and contributed 41% to the country’s gross domestic product (NBS, 2006). Agricultural sector comprising crop production, livestock, forestry and fishing, grew in nominal terms by 9.19% (year-on-year) in Q3 of 2014, up by 2.72% points from the previous quarter of 2014. Intra-sector performance showed that fishing activities grew the fastest by 18.76%, followed by livestock at 12.36% with crop production and livestock growing the fastest by 52.83% and 5.05% respectively. Agricultural sector contribution to nominal gross domestic product, stood at 23.77% in Q3 of 2014, with real agricultural GDP growing in Q3 of 2014 at 4.47% (year-on-year), up by 1.03% products from the corresponding period of 2013 and higher by 0.79% points from the rate Q2 of 2014. The report identified crop production as the main driver of growth in Q3 of 2014 by 4.34% while the sector grew by 38.53% (quarter-on-quarter basis) in Q3 of 2014, with crop production emerging as the main driver of growth by 43.50%. The contribution of agriculture to GDP in real time, was 26.63% in Q3 of 2014 compared to 27.08% in Q3 of 2013 and 20.89% in Q2 of 2014. (NBS, 2014).As the total allocation to the agricultural sector in the proposed 2014 budget declined by 20.06% to 66.64 billion in 2014 compared with 83.37 billion in 2013.This shows that the neglect towards agricultural sector is much as its allocation continues to decline.

Dr. Okonjo Iweala quoting figures from the Nigerian Bureau of Statistics in Abuja said that no fewer than 5.3 million youths are jobless in the country while 1.8 million graduates enter labor market every year. Agricultural sector gained employment and satisfactory livelihood to over 90% of the country’s population (NDHS, 2008). Nigeria at this period depended entirely on agriculture for food and agro-industrial raw material for foreign exchange earnings through commodity. Even as Nigeria has more natural endowment than most of her neighboring countries, unemployment problem is still a major problem facing the nation as unemployment rate continues to accumulate over the years (Olatunji, 2002) which has led to tremendous increase in criminal activities and other social vices. Although, agricultural growth is supported to be a part of solution to unemployment but appears not to be so. This was as a result of oil boom in the early 1970’s which brought about neglect in agricultural sector. Government also help in making agricultural work unattractive and enhance the lure of the cities for workers because government pay farmers low prices over the years on the food for domestic market in order to satisfy urban demands cheap basic food products. Low productivity continued as the population exceeds food produced, among others like trade restrictions, poor transportation, environmental degradation, inadequate technology and infrastructure, poor storage system and irrigation. This made Nigeria to lose its status as exporter of cash crops like oil palm (from the east), cocoa (from the west), cotton and groundnut (from the north) and began to import food. This poses as a problem and a great challenge to Nigeria. Nigeria Bureau of Statistics now estimates Nigeria’s Gross Domestic Product at 80.22 trillion naira in 2013 compared to 42.4 trillion naira prior to the rebasing. These revised figures, made Nigeria the world’s 26 largest economy up from the 33rd position prior to the rebasing as its nominal GDP stood at 509.9billion dollars last year compared to South Africa’s statistics reading 323billion rand for the South African economy during the same period. Agricultural sector contributed 35% to GDP prior to rebasing but is now only estimated to account for 22% of Gross Domestic Product.

However, government has made much efforts to revive agricultural sector as this will reduce unemployment and increase export but have only yielded modest results because of corruption, embezzlement of fund, poor planning and implementation etc. Nigerian government and policy makers are increasingly finding it difficult to deal successfully with the problem of unemployment especially that of youth. The high level of unemployment can be said to be lack of adequate provision for job creation in the development plans, the ever expanding educational growth and the desperate desire on the part of youths to acquire University education irrespective of course and course contents. As a result, greater number of skills acquired from the University appear dysfunctional and irrelevant (Okafor, 2011). The minister of youth development, Bolaji Abdullahi in 2011, reported that 42.2% of Nigeria’s youth population is out of job. Depo Oyedokun, the chairman of the house committee on youth and social development revealed that, of the over 40 million unemployed youths in the country, 23 million are unemployable and therefore susceptible to crime, hence the need to articulate what to be done to salvage the situation should be done (Emeh, Nwanguma, and Abaroh, 2012). This is to say that Nigeria’s unemployment level poses greater threat to the nation’s development, security and peaceful co-existence and should be tackled severely.

 However, this study seeks to assess the impact of Agricultural productivity on poverty and unemployment in Nigeria.

Eradication of poverty and hunger are prominent objectives of the MDGs which entails narrowing of inequality gap, access to food by the undernourished and acceleration of economic growth. The key role of agriculture in achieving the MDGs is unarguably very significant as many a scholar attested that agriculture provides food for the populace; generates employment and is a prerequisite stimulant for inter-sectoral linkages. This study is a bold move to assess the feasibility of agriculture in alleviating poverty using data from Nigeria and adopted an econometric method to test our guiding hypotheses. The findings suggested that growth in agricultural output has strong and significant influence in alleviating poverty (reducing the level of poverty). Therefore there is need to ensure a rapid increase in the output of agriculture like fishery, livestock, crops, forestry, staple, etc. through genuine investment in infrastructure, education, health and R&D to ensure sustainable economic growth and development

1.3    Statement of the Problem

Achieving the Millennium Development Goals (MDGs) of halving the proportion of people living in absolute poverty by 2015 will depend largely on increasing agricultural productivity, which remains perhaps the single most important determinant of economic growth and poverty reduction. This fact is not lost on developing countries or their developmental partners, who are seeking ways to stimulate agricultural development. But serious doubts are emerging as to whether agricultural productivity can be increased where it is needed most, and what part, if any, small-scale farming will play in the future. Underlying such doubts is a concern that the context in which small-scale agriculture could achieve productivity gains today is very different to that which prevailed in Nigeria during the past regimes. Inherent differences in production capabilities and quite fundamental changes in the international agricultural context are combining to create a set of circumstances that are probably far less conducive to achieving the type of productivity transformation witnessed in Nigeria. Poverty level can be said to have fallen rapidly over the past 40 years, though at different rates, around the world. Some countries in Asia (particularly China, India and the Asian Tigers) have achieved the most rapid poverty reduction. In contrast, little success has been achieved in sub-Saharan Africa, especially Nigeria, where a number of people live on less than a dollar per day (World Bank, 2004). Rates of poverty reduction have historically been very closely related to agricultural performance – particularly to the rate of growth of agricultural productivity. In simple terms, this indicates that as a country increases her agricultural productivity, the greater her chance of achieving significant reductions in poverty. Despite decades of investment in new agricultural technology and rural development, hunger and poverty continue to plague large areas of the developing countries. The problem is particularly acute where people depend on nature-fed agriculture where the impact of new technologies have been less apparent and agricultural productivities have generally stagnated and even fallen in some areas. Over the years, there has been a rising increase in the cost of food items. Farmers claim that the low level of farm produce is largely due to lack of investible fund. On the other hand, financial institutions precisely, the development banks, who are inclined with the problem of farmers are not giving enough credit to justify their claims on agricultural financing, hence, the low productivity in the sector. The extent to which the development banks have performed their duties of financing agricultural activities in Nigeria is incredibly vague. Consequently, the actual involvement in funding agriculture calls for an appraisal. In addition, majority of the rural dwellers have no basic amenities such as good roads, water supply, electricity, health-centers etc and generally lack access to productive input and output markets. Thus the need to analyse the relationship between Agricultural Productivity, Unemployment and poverty in Nigeria.

1.1       Research Questions

i.Evaluate the trend of agricultural growth overtime?

ii.Examine the dimension and linkage between poverty and unemployment in


1.4      Objectives of the study

      The main objective is to examine The Influence of the Agricultural Sector on Poverty and Unemployment in Nigeria. The specific objectives of the study are:

i.Analyse the trend of agricultural growth over a long period of time.

ii.Examine the linkage between poverty and unemployment in Nigeria?

1.6         Research Hypothesis

Ho – There is no significant relationship between Agricultural Productivity, Unemployment rates and Poverty rates

H1 – There is a significant relationship between Agricultural Productivity, Unemployment rates and Poverty rates.




1.7     Scope of the study

This research would be carried out using secondary data obtained from the Central Bank of Nigeria’s database and World Bank sources and the results might can be applied to various states in the nation.

1.8      Significance of this study

Agriculture was known to be one of the major contributors to national development, but suffering from neglect that has led the country to heart aching unemployment and poverty. The economic burden of unemployment on a society necessitates this study. The main objective of this study is to investigate the effect of agricultural growth on unemployment and poverty in Nigeria. The specific objectives were to evaluate the trend of agricultural growth in Nigeria, to examine the dimension and linkage between agricultural growth and poverty and also unemployment and to evaluate the effect of poverty and unemployment on agricultural production in Nigeria.

1.9        Organization of the chapters

          The study is structured into five chapters. Chapter one is Introduction which is included background to the study, objectives of the study, scope of the study, significance of the study. Chapter two is Literature Review and theoretical framework. Chapter three is research methodology. Chapter four is presentation and analysis of data obtained from the field survey and testing of hypothesis. Chapter five is summary, conclusion and recommendations.

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