ABSTRACT
The aim of this research
work is to investigate the impact of some selected economic sectors
(Agriculture, Transportation and communication, construction) on the growth of
Nigerian economy using multiple Regression as the tool for data analysis. The
R-square 0.7139 suggest that the independent variable expenditure of selected
sectors has positive contributions on the dependent growth Domestic product.
The function shows that 75.5% variation in the dependent variable can be accounted by changes in the
independent variables(selected sectors) and variation inflation factor for
Multicollinearity shows that the explanatory variables is not collinear which
validate the reliability of the model.
TABLE OF CONTENTS
Title Page
Approval Page - - - - - - - - - -ii
Declaration - - - - - - - - - - -iii
Dedication - - - - - - - - - - -iv
Acknowledgement - - - - - - - - - -v
Table
of Contents - - - - - - - - - -vi
Abstract - - - - - - - - - - -viii
CHAPTER ONE
INTRODUCTION
1.1 Introduction - - - - - - - - - -1
1.2 Statement of the Problems - - - - - - - -6
1.3 Aim and Objectives - - - - - - - - -6
1.4 Significance of the Study - - - - - - - - -7
1.5 Scope and Limitation of the Study - - - - - - -7
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction - - - - - - - - - -8
CHAPTER THREE
METHODOLOGY
3.0 Introduction - - - - - - - - - -11
3.1 Data Collection
Method - - - - - - - - -11
3.2 Materials
/Statistical Tools - - - - - - - -11
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
4.0 Introduction - - - - - - - - - -20
4.1
Data Presentation - - - - - - - - - -20
4.2
Data Analysis - - - - - - - - - -21
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1
Conclusion - - - - - - - - - -25
5.2 Recommendations - - - - - - - - -25
References - - - - - - - - - -27
CHAPTER ONE
GENERAL INTRODUCTION
1.1 INTRODUCTION
The Nigeria economy since
independence in 1960 has remained weak, narrow and externally-oriented with
primary production activities of agriculture, mining and quarrying (including
crude oil and gas) accounting for about 65% of the GDP and over 80% of
government revenue.
The Nigerian economy performed well between
2006 and 2010 despite the negative effect of the global economic crisis which
started in 2007. The Nigerian gross domestic product (GDP) which is the measure
of what the country produces, grew consistently between 2006 to 2010, The GDP grew by 6.96% and 7.87% in 2009 and
2010 respectively. The fall of GDP growth in 2008 was due to the global
economic crisis which resulted in a decline of demand for Nigeria’s crude oil
abroad; this also affected the flow of credit into the country, resulting in a crash
in the stock market as well as a decline in foreign direct investment (FDI).
In addition, the primary product
activities account for over 75% of employment NBS, (2011). In contrast,
secondary activities comparing manufacturing and building and construction,
which traditionally have greater
potential for employment generation, broadening sustainable foreign exchange
earnings and government revenues account for a more than 4.14 and 2.0% of gross
output, respectively. Over the last seven years, certain changes have taken
place in the structure of output in the economy; prominent among these changes
is the entry of the telecommunications sector which has witnessed explosive and
sustained real GDP growth. A number of challenges that has hampered efforts at economic
transformation. The economy is yet to achieve the necessary structural changes
required to jump start rapid and sustainable growth and development.
Although the economy experience
respectable GDP growth rates, averaging over 6.5% annum between 2006 and 2012
(CBN, 2012), this growth neither brings commensurate employment nor reduce the
poverty level experienced in the country. The economy is confronted with
challenges in the form of dilapidated and chronically non-functional
infrastructure and ever-increasing securities problems.
The Nigeria government and policy
makers have come up with various strategies over the years on how the nation’s
social and economic potentials can be harnessed. The resources at Nigeria
disposal offered a solid base for ensuring rapid growth and sustainable
development, but the nation has failed to attain its potentials. In order to fast track the nation’s economy
into one of the top twenty largest economies of the world by the 2020. The
vision document addresses structural weaknesses in the economy and outlines
strategies for harnessing the country’s resources to realize the vision goals
and target (CBN, 2011). Nigerian instate of social and economic research
(NISER), 2012 asserted that for Nigeria to overcome its developmental
challenges and achieve its aspiration in the nation’s NV20:2020, all sectors
that contribute significantly to nation gross domestic product(GDP) must be
evaluated with the aim of sustainably meeting their potentials and contributing
their quota to the development of the nation’s economy.
World bank report (2009) suggested
that the need for developing countries to make efforts in diversifying their
economies from mono product and natural resources base to more sustainable man
resources that can also create jobs for the fast-growing population. To achieve
this human and infrastructure development of small-scale industries and
international micro economic development, Agriculture, transport&
communication, health, education, building and construction sectors are top
sectors apart from oil sector used in measuring the national gross capital
formation (NGCF) and the GDP of any country. The industry’s size, the nature of
their operation, the jobs creation potentials and their presence in every
deployment activity have made the sectors an attractive area for
experimentation in enhancing the effectiveness of governance and development.
therefore, the application of multiple regression on some sectors contributing
to the growth of Nigerian economy is imperative.
1.1.1 GROSS NATIONAL
PRODUCT (GNP)
Economists have devised numerous
statistics to ascertain the overall health of an economy. Historically, the
most quoted measure of economic activities is what is called gross national
product (GNP). The gross national product (GNP) is a nation’s total output of
goods and services produced by a country in one year. In obtaining the value of
GNP only the final value of a product is counted (e.g. home but not the
construction materials they are built with). The three major component of GNP
are consumer purchases, government spending, private investments and exports.
1.1.2 GROSS DOMESTIC
PRODUCT (GDP)
The gross domestic product (GDP) is
the monetary value of all goods and services perform in nation in one year. The
world ‘domestic’ implies that only the income generated in that country is
accounted for GDP measures the economic strength of a nation. It is computed by
multiplying the quantity of all goods and services by its price. When this is
done for all categories namely; consumer spending and investment, the result
are added to give us the GDP.
GDP has gained acceptance as a more
accurate barometer of the state of the economy. With growing globalization, our
economy is increasingly reliant on goods we produced beyond our national
borders, while GNP does not calculate this GDP does.
1.1.3 THE NIGERIAN
AGRICULTURE SECTOR
The Nigerian agricultural sector
comprises of fishing, crop production, forestry and livestock. In spite of the
growing importance of oil, Nigeria has remained essentially an agrarian
economy, with agriculture still accounting for significant share of gross
domestic product (GDP).
According to NBS, (2010).
Agriculture is a dominating sector of the Nigerian economy. The sector provides
employment for about 70 million people in the country and the contribution of
agriculture sector to the economy over the period under review in terms of
value added to the gross domestic product GDP showed the following percentages
41.72, 42.01, 42.13, 41.7, and 40.84 in 2007, 2008, 2009, 2010 and 2011
respectively.
The two main vegetable belts namely,
tropical rainforest and savannah grass land of the south and north respectively
make themselves naturally conductive to all forms f biotic resources. Because
of the above climatic difference, cocoa, oil palm, rubber and timber which
require humid tropical condition for effective growth are restricted to the
southern states of the country. Conversely, cotton, groundnut and gum Arabic
which thrive well with little rainfall are the major agricultural products of
the northern states. Additionally, this savannah grassland in the north
provided excellent grazing land to support animal husbandry.
Available data show that at
independence in 1960, the contribution of agriculture to the GDP was about 60%
which is typical for developing agrarian nations. However, the share declined,
over time, to only about 25% between 1975 and 1979 partly due to the phenomenal
growth of the mining and manufacturing sectors during this period and
disincentivizes created by the macroeconomic environment.
In the early 1980s, it became
apparent that the sector could no longer meet domestic food requirement which
had to be augmented through large imports. Special programs such as the
structural adjustment program (SAP), operation feed the nation(OFN) to mention
but a few were all proposed with the major objectives to restructure and
diversify the productive base of the economy in order to reduce dependence on
the oil sector and on imports and to lessen the dominance of unproductive
investment in the public sector.
1.1.4 THE NIGERIAN
CONSTRUCTION SECTOR
All over the world, the constructive
industry is continually growing. This industry is mostly concerned with
development of civil engineering works and heavy infrastructural provisions
(road, bridges, railways, etc), residential and commercial real estate and
their maintenance there in. thus the continual growth can be explained by the
dynamisms of development and need to accommodate social and demographic changes
that happen a rising middle class with their demands for better living
condition (better houses, road networks) and society needs for social
infrastructure all combine to give the sector the oils for growth.
In Nigeria, organized construction
began in the early 1940s with a few foreign companies. The oil boom that
followed about 10 years after independence led to an upsurge In construction
service, as the country at that period opened up to foreign and local
investment and the obvious need for infrastructure to drive economic growth.
Foreign companies have dominated the industry since the 60s and 70s generating
revenue for government and jobs for the citizenry. However, there have been
down sides to this as these companies have been known to import resources and
even skilled labor as opposed to using locally manufactured resources and
promoting local content.
Although the Nigerian construction
industry is still largely dominated by international firms, the local content
bill for construction services which was passed in April 2014 is meant to give
indigenous construction companies a level playing field as their international
counterpart, as well as making it easier for local business to thrive in the
industry. We expect to see a rise in the number of local business under construction,
more jobs created and continual increase in the sector’s contribution to GDP.
1.1.5 THE NIGERIAN
TRANSPORT COMMUNICATION SECTOR
Transportation in Nigeria is
traditionally under four major modes namely: road, air, water and rail.
However, it should be noted that due to the rapid growth of oil sector,
pipelines and conveyors constitute a new mode of transportation that should be
considered along with the four named above. In terms of the contribution to
gross domestic product GDP, the transport sectors share stood at 2.67%, 2.68%,
2.70% and 2.68% in 2006, 2007, 2009 and 2010 respectively. The growth of the
transport sector has been very significant due to expansion of the economy and
mostly used modes of transportation have recorded high increases of the income
in the volume of activities.
The Nigerian telecommunication
sector is one of the better performing sector of the Nigerian economy and one
of the fastest growing employers of labor in the country, as at 2010, the
sector had impact of creating 5000 jobs directly and more than 400,000
indirectly, its rapid growth has shown prospects that the industry will be
worth more than US$ 15 billion by 2015. NBS, (2010).
Despite the recent boom, the
industry is still beleaguered with relatively high tariffs, poor quality of
service including dropped calls, poor voice signal quality and inadequate
interconnectivity and poor penetration, serving only a third of the Nigerian
population.
An efficient transport and
communication system contribute to economic growth by lowering domestic
production cost through timely delivery of raw materials, enhancing economies
of scale in the production process, integrating markets, creating economic
opportunities and communication links among people. In this fashion it also enhances
the competitive advantage of the economy in the production of goods and thereby
promotes trade. A competent transport system will also encourage tourism and
foreign investment. This sector generates a large number of employment
opportunities in this country, 6% of employed labor force is said to be engaged
with this sector. The sector also contributes to the government revenues.
1.2 STATEMENT OF THE
PROBLEMS
one would
expect that in yearly budget of Nigeria the share of expenditure to main
economic-contribute sectors such as Agriculture, construction, transportation
and communication will dominates that of less economic-contribute sectors,
considering the role they plays in economic growth and human development, but
this has not been the case, hiring of foreign Construction company had left the
National construction company unfunctional and contribute little to the
National economy since all the constructions are awarded to foreign companies.
National infrastructure are in a state of decay because of poor funding and
maintenance, transportation sectors are
in near state of near-collapse, roads become death traps due to their
deplorable conditions, and whose power sector is in state of moribund. The very
high rate of unemployment, poor allocation to agricultural sectors had force
the country to import Agricultural product. Foreign companies had taken over
the communication sectors, National communication like Mtel, landline etc are
not functioning.
1.3 AIM AND
OBJECTIVES
The aim of this
study is to analyze the contribution of some selected economic sectors (the
sectors are agriculture, transportation & communication) in the growth of
Nigerian economy and the specific objectives are:
(I) Identify whether there is
significant impact of the selected sectors (Agriculture, construction,
transportation and communication) on Nigerian economy.
(II).Identify whether there is
linear relationship between Agriculture, construction, transportation and
communication with economic growth.
(III) Investigate the incidence of
multicollinearity in the estimated model.
1.4 SIGNIFICANCE OF THE
STUDY
The research work intended to
investigate the contribution of some sectors (the selected sectors are
agriculture, construction, transportation & communication) to the Nigerian
economy. The findings and conclusions drawn from this research will provide
useful information for policy making.
The country had depended on crude
oil as it's major source of revenue, the recommendation will give guide on
substitution of crude oil and help to
move the Nation forward and upward economically.
1.5 SCOPE
AND LIMITATIONS.
This research work is limited to
estimation of impact of some selected economic sectors
(Agriculture, construction, transportation and communication) on the growth of
Nigerian economy, the data for the research is secondary data from 2007 to 2021
collected from the website of central bank of Nigerian(CBN) and it's on yearly
bases.
Click “DOWNLOAD NOW” below to get the complete Projects
FOR QUICK HELP CHAT WITH US NOW!
+(234) 0814 780 1594
Login To Comment