IMPACT OF GOVERNMENT SPENDING ON AGRICULTURAL SECTOR IN NIGERIA
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Prior to the discovery of oil boom of the 1970s, the importance of agriculture to the economic development of Nigeria is enormous owing to the fact that agriculture was the main source of food and employment for a sizeable number of the people. The Nigerian economy during the first decade after independence could be described as an agrarian economy because agriculture served as the engine of growth of the overall economy [Ogen, 2003]. Until the exploitation of oil reserves in 1980s, Nigeria’s economy was largely dependent on agriculture. Akinboyo [2008] defines Agriculture as the science of making use of the land to raise plants and animals. It is the simplification of nature’s food webs and the rechanneling of energy for human planting and animal consumption. It is not an overstatement to assert that the growth and development of any nation depend, to a large extent, on the development of agriculture. Agriculture has serve as an engine of growth in the Nigerian economy.
The contribution of the agricultural sector to any economy cannot be over emphasized when considering its employment potentials and financial impacts. Nigeria’s wide range of climate variations allows it to produce a variety of food and cash crops. The importance of agriculture to the economic development of Nigeria is enormous owing to the fact that agriculture was the main source of food and employment for a sizeable number of the people.
In the 1960s, more than 80% of the rural population of Nigeria was engaged in one type of agricultural activities or the other and between 1963 and 1964, the sector contributed as much as 65% of the nation’s Gross Domestic Product (GDP) (Muftau and Gafar, 2003; Aina, 2015). During this period, Nigeria was the world second largest producer of cocoa, largest exporter of kernel and largest exporter of palm oil [Ogen, 2003], even though most of the small-holder farmers in Nigeria lack access to inputs to increase productivity. Rural farmers lack access to credit facilities, fertilizers.
Over the past two or three decades, the dormant role of agriculture in the economy, especially in terms of ensuring food security, gave way to massive importation of basic food [Egbuna, 2003], this is a clear indication of the failure of the agricultural sector in performing its duties of food production. Government expenditure, which serves as the bed rock of financing of the agricultural sector has consistently decline. A collaborative study carried out by the International Food Policy and Research Institute (IFPRI) and the World Bank in 2008 revealed that Nigeria’s Public expenditure on agriculture is less than 2% of total federal annual budget expenditure. In realization of this, the government has embarked on various policies and programmes aimed at strengthening the sector in order to continue performing its roles.
IMPACT OF GOVERNMENT SPENDING ON AGRICULTURAL SECTOR IN NIGERIA