CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND TO THE
STUDY
By the time Nigeria
became politically independent in October 1960,agriculture was the dominant
sector of the economy, contributing about 70% of the Gross Domestic Product
(GDP) employing about the same percentage of working population and accounting
for about 90% of foreign exchange earnings and the federal government revenue
(CBN, 2005). The early period of post- independence up until the mid-1970’s saw
a rapid growt and output as the contribution of the manufacturing sector to GDP
rose from 4.8% to 8.2%. This pattern changed when oil suddenly became of
strategic importance to the world economy though its supply price nexus.
Crude oil was first
discovered in commercial quantity in Nigeria in 1956, while actual production
started in 1958. It became the dominant resources in the mid 1970’shemassive.Tincrease
in oil revenue as an aftermath of the Middle East war of 1973 created and
unprecedented, unexpected and unplanned wealth of Nigeria. The relative
attractiveness of the urban centres made many able bodied Nigerians to migrate
from hinder land, abandoned their farm lands for the cities and hoping to
partake in the growing and prosperous (oil driven) urban
economy. This created social problems of congestion, provision, unemployment
and crimes.
Notwithstanding, the
enviable position of the oil sector in the Nigerian economy over the past three
decades, the agricultural sector has remained the largest and arguably the most
important sector of the economy. Agriculture contributes to the gross force in
Nigeria (Aigbokhan, 2001). It is estimated to be the largest contributor to the
non-oil foreign exchange. A strong agricultural sector is essential to economy
development both in its own rights and to stimulate and support the growth of
industries. Economy growth has gone hand in hand with agricultural progress
stagflation in agriculture is the principal explanation for poor economy
performance, while rising agricultural activities has seen the most concomitant
of successful industrialization (Ukeje 1999). The labour-intensive character of
the sector reduces its contribution to the GDP. Nevertheless, agricultural
exports are a major earner of foreign exchange in Nigeria, in the non-oil
sector.
Like in most developing
countries, agriculture remains the backbone of the Nigeria economy. Typically,
it is the largest source of employment often two-third or more of the
population is dependent on this livelihood on farming. Its is a well-known fact
comparative that advantage Nigeria’s in the production of certain
food and other agricultural commodities that can earn foreign exchange for
imports of other food. it has been recognised that sustained agricultural
development requires striking an appropriate balance between investments that
are directly productive in agriculture and investment in infrastructure. Poor
infrastructural services in developing countries will lead to low productivity.
Much of the high productivity of agriculture in the developed countries is as a
result of massive form of investment over many years in physical and
institutional infrastructure (Manyong, et al, 2003).
Conversely, the low
productivity of agriculture in many developing countries reflects among other
things, limited investment in rural roads and electricity. This streams from
the concentration of public investments in urban areas, where the unit cost of providing
services is typically less and logistic are problems fewer.
1.2 STATEMENT OF
THE PROBLEM
One of the constraints
of the growth 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. The economic stabilization Act
enacted in 1982 affected expenditure on agriculture and restricted income.
Indeed, the contribution of the sector to total GDP has been
falling, not
necessarily because a strong industrial sector is displacing agriculture as a
result of low productivity. Emerging problem which constraint the full
realisation of the potentials in the agricultural sector includes inadequacies
in the supply and delivery of farm input, shortage of working capital, low
level of technology, diseases and pest infestation, poor post-harvest
processing and shortage, environmental hazard, labour and land use constraint.
There is need to
correct the existing structural distortions in Nigerian agricultural sector and
put the economy on the part of sustainable growth. This study seeks to find
answers to the following research questions:
1) What role does the agricultural sector play in
the development of economic growth in Nigeria?
1.3 OBJECTIVES
OF THE STUDY
The main objective of
this study is to evaluate the role of the agricultural sector as an accelerator
for economic growth and development in Nigeria. Specifically, this study aims
to achieve the following objectives:
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