AGRICULTURAL FUNDING AS SOLUTIONS TO NIGERIA ECONOMY DIVERSIFICATION

AGRICULTURAL FUNDING AS SOLUTIONS TO NIGERIA ECONOMY DIVERSIFICATION

Chapter one

INTRODUCTION

1.1 Background of the Study

Nigeria is Africa’s largest oil exporter, with a rapidly developing economy. The country’s growth plan is resource-based, with oil production and exports as the primary driver.

With the instability of global oil prices and the sometimes erratic growth of Nigeria’s economy, the country has squandered several opportunities to break free from underdevelopment, despite its vast natural and human resource endowments.

It has relied solely on its vast crude oil reserves for revenue for many years, despite the immense developmental hurdles it faces (Ojo, 1994). Unfortunately, the oil revenues are being wasted, with a significant portion of it being spent on rent seeking and red-tapism, which is endemic in Nigerian bureaucracy.

For more than a decade, Nigeria has seen strong economic growth, human development, and relative political stability. As the country continues to make economic growth, it is critical that it diversify its economy by focussing on non-traditional sectors, broadening its export product range, and engaging new economic and trade partners.

This year, Nigeria surpassed South Africa as the continent’s largest GDP, shifting Africa’s economic nerve centre northward. While GDP does not reflect income distribution or population size, it is an important indicator of Nigeria’s growing economic might.

If these rising resources are wisely invested, the country can profit and outperform the International Monetary Fund’s predicted GDP growth of 7%. Nigeria’s government must prioritise economic diversification (Jonathan, 2013).

It is the only possible option to endure the current global economic uncertainties and volatility in oil prices. It is critical that the government does not believe that oil is an unlimited source of revenue.

Obasanjo’s first full national budget in 2000 was less than N600 billion naira, but we now have an increase of up to 800%, yet we see little development but a surplus of preaching and governance by billboards, while Vision 20-2020 is in a state of rest, similar to Newton’s first law of thermodynamics.

We claim unambiguously that resource thievery and wasting are concentrated at the state level, because the majority of our governors are not just lacking, but also problematic and a major hindrance to growth.

Diversification is the most competitive and strategic option for Nigeria in view of its developmental constraints and heritage. Diversification has numerous benefits for Nigeria, including the ability to maximise the use of her abundant resource base to rebuild the economy and reap the benefits of all linkages, synergy, economies of scale, grow national technology and foreign investment profile, build human capital, exploit new opportunities, reduce average operational costs, increase national competitiveness, and raise citizens’ standards of living and confidence in the national renaissance.

Diversification does not happen in a vacuum. Furthermore, an enabling environment that allows for diversification remains required. Several significant drivers have already been identified.

Prior to the discovery of crude oil in 1956, agriculture was the primary source of income in Nigeria. Agriculture will benefit from enough investment as part of the nation’s economic diversification strategy.

Diversification refers to “movement into new fields as well as stimulation and expansion of existing traditional products.” Diversification does not discourage specialisation, but rather necessitates that resources be directed towards the best alternative uses (Iniodu, 1995).

Diversification fosters growth and development in macroeconomic planning by allowing savings from surplus sectors to be used to develop deficit parts of the economy.