CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Nigeria is largest oil exporting country in Africa and has a
rapidly growing economy. The country follows a resource based growth strategy
driven by the production and exporting of oil. With the volatility of global
oil prices and often volatile growth of Nigeria’s economy, the country has
wasted much of its opportunities to break away from underdevelopment despite
its massive natural and human resources endowments. It has dwelled only on its
huge crude oil resources as the major source of revenue, driving a monolithic
economy for years in spite of the enormous developmental challenges it faces
(Ojo, 1994). Regrettably, the oil resources are being mismanaged and a
substantial part of it has gone on rent seeking and red-tapism common in
Nigerian bureaucracy. For more than a decade now, Nigeria has been enjoying
high levels of economic growth, human development, and relative political
stability. As it continues along the path of economic progress, it is
imperative that the country finds ways to diversify its economy by boosting
non-traditional sectors, expanding its range of products for exports and
engaging new economic and trade partners. The economic nerve centre of Africa
shifted northward this year when Nigeria took South Africa’s long-held position
as the country with the continent’s largest Gross Domestic Product (GDP). While
GDP neither reflects the wealth distribution nor accounts for the size of the
population, it is a significant indication of Nigeria’s emerging economic
power. If these growing resources are invested intelligently, the country can
benefit and exceed the International Money Fund’s estimated GDP growth of seven
per cent. As a matter of priority, Nigeria government must encourage the
diversification of Nigeria’s economy (Jonathan, 2013). It is the only viable
way to survive the current environment of global economic uncertainty with the
volatility of oil price. It is crucial that government do not believe that oil
provides an endless source of revenue.
At the advent of democracy in 1999, Obasanjo’s first full
national budget in 2000 was under N600bn naira but now we have as much as 800%
increase over this, yet we can only see little development but surplus of
preaching’s and governance by billboards while vision 20-2020 is in a state of
rest like Newton’s first law of thermodynamics. We say unequivocally that
resource looting and wastage is much concentrated at the state levels, because
most of our Governors are not just most wanting but problematic and the very
impediment to development.
Diversification presents the most competitive and strategic
option for Nigeria in light of her developmental challenges and given her
background. Diversification has a lot of benefits for Nigeria to maximally
utilize her abundant resource – base to rebuild the economy and enjoy the
benefits of all the linkages, synergy, economies of scale, grow national
technology and foreign investment profile, build human capital, exploit new
opportunities, lessen averagely operational costs, increase national
competitiveness and grow the standard of living and confidence of the citizens
for national renaissance.
Diversification does not occur in a vacuum. And, the need to
have in place an enabling environment to make diversification possible remains
necessary. A number of key drivers have already been identified. Agriculture
was the main stay of the Nigeria economy before the discovery of crude oil in
1956. Adequate funding of agriculture willbe an appropriate option in the
diversification of the nation’s economy.
Diversification implies “movement into new fields and
stimulation and expansion of existing traditional products.” Diversification does
not discourage specialization, but requires that resources be channeled into
the best alternative uses (Iniodu, 1995). In macroeconomic planning,
diversification promotes growth and development through the mobilization of
savings from surplus sectors for use in the development of deficit sectors of
the economy.
1.2 STATEMENT OF THE PROBLEM
Options for diversifying aneconomy abound, such as
agriculture, entertainment, financial services, industrialization, information
and communication technology, tourism, mining, etc. However, it is worthy to
notethat country-specific circumstances ought to as a matterof necessity, be
considered. This is cogent, since dueto structural differences, a model that
fits an economy perfectly well may prove irrelevant in another. With a major
objective of diversifying the productive base of the Nigerianeconomy with a
view to reducing dependence on the oil sector, this study zero in on
‘agriculture’ as imperatives. The choice of this approach is informed by
Developmental Policy in Nigeria and the huge successes recorded by some Asian
countries–which are collectively referred to as ‘Asian Tigers’–in applying
these imperative, as well as the fact that these countries were basically at
the same level of national development with Nigeria, atthe time of their
respective take-off and still share certain similarities with Nigeria. The
effects of diversification in an economy (Eko, et al. 2013)
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
1.
To
examine the benefits accruable from the diversification of the Nigerian
economy.
2.
To
determine the prospects of agricultural funding in the diversification of the
Nigerian economy.
3.
To
determine the contribution of agriculture in the growth and development of the Nigerian
economy.
1.4 RESEARCH QUESTIONS
1.
What
are the benefits accruable from the diversification of the Nigerian economy?
2.
What
are the prospects of agricultural funding in the diversification of the
Nigerian economy?
3.
What
is the contribution of agriculture in the growth and development of the
Nigerian economy?
1.6 SIGNIFICANCE OF THE STUDY
The
following are the significance of this study:
1.
The
results of this study will educate the general public on approaches by which
agricultural funding can be used a s a tool for the diversification of the
Nigerian economy.
2.
This
research will be a contribution to the body of literature in the area of the
effect of personality trait on student’s academic performance, thereby
constituting the empirical literature for future research in the subject area.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This
study will cover the effect of agricultural funding on the diversification of
the Nigerian economy.
LIMITATION OF
STUDY
Financial
constraint-
Insufficient fund tends to impede the efficiency of the researcher in sourcing
for the relevant materials, literature or information and in the process of
data collection (internet, questionnaire and interview).
Time constraint-
The researcher will simultaneously engage in this study with other academic
work. This consequently will cut down on the time devoted for the research work
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