Agriculture
remains the mainstay of Nigerian economy, the main source of food for the
population, providing means of livelihood for over 70% of population and 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 70s
the highest foreign exchange earner, though oil led to the increase in
petroleum export at that period. This emphasizes its preeminence in the
Nigerian economy. Agriculture helps to bring a change in the overall
development of a nation. The agricultural sector is necessary for economic
development, the provision of raw materials and for industrialization.
The
agricultural sector is salient for ensuring enough food supply and its
security, income and employment generation. It should be noted that around the
world, about two-thirds of all employees work in the agricultural sector (World
Bank, 2009). Nigeria,
though depend largely on oil industry for its budgetary revenue as she runs a
monoculture economy, is still predominantly an agrarian society. In the periods
immediately after independence, the agricultural sector performs outstanding
role to the extent that the regional development, witnessed during that period
was attributed directly to the sector.
Agricultural productivity is a crucial single
factor influencing the standard of living of both rural and urban areas (Yusuf,
2002). Agricultural production in Nigeria is mainly characterized by
small scale farmers scattered over wide expanse of land area, with small
holdings ranging from 0.05-3.0
hectares, poor access to modern input and credit, poor
infrastructure, land and environmental degradation, inadequate research and
extension service, poor response to technology, adoption of strategies with
poor return on investment. (Olayemi, 1994; Manyong et al, 2005).
Oil boom led to the rapid decline
in the agricultural sector. Nigeria
became a major importer of agricultural products as against its major position
as a major exporter of agricultural product. As a result of this, there was a
decline in the economy in terms of active population in agriculture in Nigeria,
leading to an increase in the level of unemployment. Some programs which aimed
at revitalizing agricultural sector such as Green Revolution which was launched
in 1980, centering its objective at self-reliance in food and diversification
of Nigeria’s
source of foreign exchange. But its achievement like livestock production,
forestry and fishery short-lived and the program failed due to shortage of
funds, mismanagement, poor and thorough research and extension services,
problems of land, inadequate data, inadequate executive capacity and lack of
infrastructural facilities. (Anyanwu, 1986).
It
is said that agricultural contribution to gross domestic product fell to 14.63%
in 1983 as against 61.50% in 1963/64 because agriculture was left for
white-collar jobs. Due to the multifunctional nature of agricultural sector, it
has a multiplier effect on any nation’s socio-economic and industrial fabric.
Also, it is crucial to the industrial and economic spring board from which the
country’s development can take off. Development economics have in fact
attributed the present economic situation in the country to the poor
performance of agricultural sector. The knowledge of agricultural production
landscape (Okuneye, 1995), has shown that the small scale farmers that
dominated the production landscape produces about 85% of total production.
Though, agricultural sector has
increasingly shrunk in its contribution to the gross domestic product of many
nations, it still provides the chunks of the domestic product of many nations, especially
the developing ones. Much later thinking moved agriculture to the forefront of
developing process, the hopes for technical change in agriculture and “green
revolution” suggested that agriculture could be the dynamo for growth, (Wilber
and Jameson, 1992). The industrial revolution of the nineteenth century which
catapulted the agrarian economies of the most countries of Europe
got the impetus in agriculture (Ojenagbo, 2011). All these brought tremendous
employment opportunities. The salient nature of agricultural sector in Nigeria and as
well in developing nations cannot be undermined especially in generating
employment and stimulating the overall economic development.
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 21st 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 26th
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.
The
failure of agricultural output to reduce unemployment in Nigeria as a
result of poor agricultural technology and service delivery has been a serious
problem in the country over the years. Also, continuous absence of basic
agricultural infrastructure, industrial and social services has led to a huge
disincentive in reducing agribusiness processes and set backs against the
development of agriculture over this period. Rural-Urban migration mostly seen
in our youths as they go into the city in search of white collar jobs. Lack of
agricultural long term loans that leads to long run disequilibrium relationship
between agricultural products and unemployment in Nigeria. The accessibility of small
farmers towards the process to finance sources has been so difficult in terms
of time, amount, availability and lack of security for more formal credit.
Since small farmers are unable to provide enough collateral as their farms and
other assets which they possess could not be enough to guarantee them loans
from private/banks. There is weak, undeveloped and atomistic agricultural input
and output in the market. The access towards foreign markets is been affected
by price competitiveness and product productivity.
The Nigerian government has introduced a lot
of policy measures to control unemployment (which is the major problem facing individuals
and the nation at large). This include: Operation Feed the Nation, Green
Revolution, Land Use Decree etc. Though, without much positive result, rather
it seems to be escalating as the application of this programs and policies
could not effectively solve the problem because it is based on the economic,
social and political effects of unemployment. The pertinent question often
asked is: why is Nigeria
still suffering from mass unemployment especially its youth, despite her wide
expanse of land, which can contribute to the growth and development of the
country and as well yield more revenue to the government and help to reduce
unemployment? This research work aims at addressing the factors responsible for
why measures, programs, policies used by government have not been effective in
solving the problem of unemployment in Nigeria but depicts neglect of the
agricultural sector.
1.
Does agriculture have a significant impact
on unemployment in Nigeria?
2.
Is there any long run equilibrium
relationship between agricultural productivity and unemployment?
The
main objective of this study is to assess the impact of agricultural
productivity on unemployment in Nigeria.
The following specific objectives are:
1.
to investigate the impact of agriculture
on unemployment in Nigeria.
2.
to evaluate the existence of any
significant long run equilibrium relationship between agriculture and
unemployment in Nigeria.
The
hypotheses to be tested in the course of this research work include;
1.
H0: Agriculture has no
significant impact on unemployment in Nigeria.
2. H0:
There is no significant long run equilibrium relationship between agriculture
and unemployment in Nigeria.
The
results and findings arising from this research will confer on Nigeria the
following benefits:
i.
This will enable the government and
economic planners to increase agricultural value and foreign direct investment.
ii.
Will aid in reviewing previous policies on
loans and other areas of agriculture for economic development.
iii.
The Ministry of Agriculture will promote
Agricultural sector by encouraging local investors and raise economic growth.
iv.
Serve as a benefit to policy makers,
researchers, non-governmental organization and foreign investors both for usage
and reference purposes, and
v.
Will offer suggestions on how policies
could be used to reduce unemployment by increasing agricultural productivity.
This
work covered the period of 1981-2014. The work covered the entire country (Nigeria) and
has also been narrowed down to the agricultural sector. This study will only
focus on the impact of agriculture on unemployment in Nigeria.
There
are some limitations encountered during the course of this research work which
include: inability to secure full and good materials on time, late publication
of data and insufficient data as well as non-accessibility of data needed for
the work. Financial constraint, lack of finance is another constraint which
made this work difficult. However, efforts were made to surmount these problems
and enhance the precision and accuracy of the research.
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