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IMPACT OF AGRICULTURAL SECTOR ON ECONOMIC GROWTH AND POVERTY REDUCTION IN NIGERIA.

 Format: MS WORD   Chapters: 1-5

 Pages: 72   Attributes: COMPREHENSIVE RESEARCH

 Amount: 3,000

 Feb 19, 2020 |  10:40 pm |  1171

CHAPTER ONE

INTRODUCTION

      1.1    Background to the Study

Nigeria as a single entity came into being only after the amalgamation of the Southern and Northern protectorates in 1914. This amalgamation gave birth to the British system of government. Prior to the imposition of colonial rule in 1914 Nigeria was a self-generating and self-sustaining economy in its various regions. The British system of government resulted to shifting the attention of the Nigerian farmers away from food crop production to cash-crop production to serve the colonial masters interest, thus, undermining the food situation in the country. This trend continued in Nigeria up to the time of independence in 1960 and even beyond (Hussainatu, 2008). After independence in 1960, the Nigerian economy witnessed various regimes of military rule and also civilian rule that gave birth to the present fourth republic in 1999. The Nigerian economy is somewhat of a monoculture economy which is heavily reliant on crude oil export as the major source of revenue to the nation. This has actually affected the attention that is needed in the agricultural sector. Agricultural sector is seen as an engine that contributes to the growth of the overall economy of Nigeria (Ogen, 2003). Despite this scenario, the sector is still characterized with low yields, crude equipments and limited areas under cultivation due to government neglect as a result of dependence on mono-cultural economy based on oil (Izuchukwu, 2011).

Agricultural production refers to the output produced by applying given amounts of input(s) in the agricultural sector of a given economy (Fulginiti and Perrin, 1998). More formally, it can be seen as the volume of produce that is generated from all agricultural activities in an economy in a year. During the first decade after independence, Nigeria could considerably be described as an agricultural economy because agriculture served as the engine of growth to the overall economy (Ogen, 2003). From the standpoint of occupational distribution and contribution to the Gross Domestic Product, agriculture was the leading sector contributing about 70% of the Gross Domestic Product (GDP), employing about the same percentage of the working population, and accounting for about 90% of foreign earnings and Federal Government revenue. During this period, Nigeria was the world’s second largest producer of cocoa, largest exporter and producer of palm products. Nigeria was also a major exporter of leading commodities such as cotton, groundnut, rubber, hides and skins (Alkali, 1997).

The contribution of agricultural sector to the economy cannot be over emphasized when considering its building roles for sustainable development, in terms of employment potentials, export and financial impacts on the economy. Agriculture is an important sector of Nigerian economy because, apart from laying solid foundation for the economy, it also serves as import substitution for the economy, it also serve as import substituting sector, providing ready market for raw materials and inter mediate goods. The agricultural sector contribute significantly to the nation’s economic development by increasing government revenue through tax, improving the standard of living; infrastructural growth; contribution to gross national product (GNP); employment generation; enhance man power development; it plays a key role by sourcing of food for man, animals and providing raw materials for the industrial sector, provision of employment and foreign exchange to the government among others (Okoro, 2011).

Two of the major themes in the development literature as well as thinking, that have received additional emphasis in the 1990s, have been growth and poverty reduction. The new endogenous growth theory has highlighted the importance of several factors conducive to faster economic growth, such as human capital, infrastructure, sound monetary and fiscal policies, democracy and political stability, trade openness, corruption, and others, while considerable effort has been given to exploring relationships between growth and inequality as well as poverty. This essentially macroeconomic approach to growth has placed much less emphasis on sectoral aspects of growth and poverty reduction. This lack of sectoral emphasis, however, gives little practical guidance to policy makers who have to make decisions about the allocation of public resources, as well as sources of funds to finance public expenditures. Similarly the latest World Bank Development Report titled "Attacking Poverty," that emphasizes three themes, opportunity, economic empowerment, and security, is notable for the relatively limited discussion of sectoral priorities in reducing poverty and enhancing growth. Agriculture’s importance to poverty reduction goes far beyond its direct impact on farmers’ incomes, as it is the driver for the economy and the best hope for the food security in Nigeria, Africa and world at large. Agricultural development has benefited millions through higher income, more plentiful and cheaper food and generates patterns of development that are employment-intensive and benefit both rural and urban areas. More important it has contributed to the economy even outside agriculture where growth and job creation are faster and has raised wages. In the world today, agricultural sector acts as the catalyst that accelerates the pace of structural transformation and diversification of the economy, enabling the country to fully utilize its factor endowment, depending less in foreign supply of agricultural product or raw materials for its economic growth, development and sustainability. The agricultural sector has the potential to be the industrial and economic springboard from which a country’s development can take off. Nigeria is generously endowed with abundant natural resources with its reserve of human and natural resource, Nigeria has the potentials to build a prosperous economy and provide for the basic need of the population. This enormous resources base if well managed could support a vibrant agricultural sector capable of ensuring the supply of raw materials for the industrial sector as well as providing gainful employment for the teeming population and therefore reducing the level of poverty in the country (Ukeji 2002).

1.2    Statement of the research Problem

One of the constraints of the growth and poverty rise in Nigeria has been the slow development of the agricultural sector. The performance of the sector was undermined by the disincentives created by the macro-economic environment such as shortage of working capital, inadequate farm inputs, poor storage facility, poor market opportunities, etc. Given that overall support for agriculture as an efficient growth enhancing and poverty reducing strategy can be justified, what are the most appropriate ways to support agriculture so as to maximize the effectiveness of such support in generating growth and reducing poverty? These questions will form the basis of the review and discussion of this research work.

1.3    Research Question

This study tries to find solutions to the following questions:

i.             What is the relevance of Agriculture to Economic growth and poverty reduction in Nigeria?

ii.           In what way does agricultural sector contributes to economic growth in Nigeria?

iii.          To what extent does agricultural sector contributes to poverty reduction in Nigeria?

 

1.4    Objective of the study

The main objective of this study is to investigate the impact of agricultural sector on economic growth and poverty reduction in Nigeria. In order to achieve this, the following are some specific objectives.

i.        To examine the relevance of Agriculture sector in promoting Economic growth and poverty reduction in Nigeria.

ii.      To analyze the contribution of agricultural sector in reducing poverty in Nigeria.

iii.    To analyze the extent to which agricultural sector reduces poverty in Nigeria.

1.5    Statement of the hypothesis

For the purpose of this study, the following hypothesis is tested;

H0; Agricultural sector has not contributed in the economic growth and poverty reduction in Nigeria.

H1; Agricultural sector has contributed to the economic growth and poverty reduction in Nigeria.

 

1.6    Significance of the study

The significance of this study depends on the fact that with improved economy Nigeria stands to gain in its effects toward development through generating employment and income. This work stands to benefit Nigeria as a whole by way of the research work intends to bring sound ways to increase agricultural output both for the purpose of consumption and exportation which ultimately will bring an increased favourable balance of payment (BOP) for the nation and push poverty down to a minimum level in the country. This work will also be advantageous to government and non governmental agencies, national and international organizations, schools (staffs and students) and will help them understand the importance of farming through provision of employment and income, hence reducing poverty. The study is also significant as it would provide international institutions like the World Bank, United Nations, and African Union relevant findings that could make them in ensuring the improvement of the agricultural sector especially in developing countries of the world through providing the needed aid in terms of finance and the equipments which include tractors, harvesters and the use of modern technology in the agricultural sector. It may also enhance bilateral and multilateral relationship between Nigeria and other countries who may decide to invest in the Nigerian agricultural sector. The research would also be relevant to the general public, including farmers and everyone that consumes food which is a product of agriculture as it would enlighten the general public on the contribution of agriculture to the national growth of Nigeria, the problems facing the sector, and the prospects that exist in the sector.

1.7    Scope of the Study:

The scope of this study is to inspect the contribution of agricultural sector to the growth of the Nigerian economy covering the period 1980-2018. This is with a view to investigate the impact of the sector to the Nigerian economic performance.

1.8    Organization of the study

The study consists of five chapters. Chapter One covers the background/introduction of the study, problem statement, research questions, research objectives, statistical hypotheses and the significance of the study and the scope of the study. Chapter Two covers literature review of the basic concepts and on the existing theoretical as well as the empirical literature. The methodological and analytical framework are discussed in Chapter Three, the chapter also lists out the hypothesis to be tested in the study. The empirical result of the research was presented in Chapter Four. Finally the summary, conclusion and recommendation are contained in Chapter Five.

 

 

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