INFLUENCE OF AGRICULTURAL SECTOR ON REVENUE GENERATION AND ECONOMIC GROWTH

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ABSTRACT               

The study descriptively examined the influence of agricultural sector on revenue generation and economic growth in Nigeria between 1981 and 2012. The study is borne out of the curiosity to examine the role agriculture plays in the growth and development of a country having being neglected in this part of the world over a considerable period of time by the government and policy makers while the whole attention is paid on the crude oil. The research takes analytical and quantitative dimension. The quantitative technique is employed in a multivariate study with the adaptation of the Solow Growth model that include Capital proxy by Gross Capital Formation (GCF), Agricultural Output and Economic Growth and Development proxy by RGDP. Restricted Error Correction Model is used with the aid of Econometrics View Package (e-view). The study reveals that the Agriculture plays a significant role in economic development of the nation. In addition, the sector has been neglected to the extent that its contribution to the GDP has been dwindling since 90’s. Consequently, the barriers to the agricultural sector performances were identified and the necessary policy recommendations were proffered.

CHAPTER ONE

INTRODUCTION

  1. Background to the Study

The responsibility of the government of any economy cannot be overemphasized. Likewise, the resources generated and infrastructural development helps to boost the economic growth of any nation. There has been overdependency of Nigerian  economy on the oil sector, the major source of revenue. However, this sector has experienced several challenges ranging from devaluation in naira and fall in prices of crude oil in the international market. Significantly, this as thrown many nations economics into worries and permanent debt zone, Nigeria inclusive, just as nations resulted into panic borrowing to enhance their budgets in the midst of economics woes worsened by global covid-19 pandemic of year 2020 that saw oil revenues dropped by 80 percent in Nigerian.

       To carry out its core responsibility of infrastructural development and people welfare, Nigeria government at different level must seek and improve on other area of source of income capable of generating foreign earnings. In the past, agricultural sector filled the role of financial backbone of Nigeria economy with high revenue generated for development of major infrastructure before oil boom in Nigeria. To this end, the main aim of this study is to examine the influence of agriculture as non oil sector in Nigeria revenue generation and economic growth. Previous studies has shown that significant relationship exists between revenue obtained in the agriculture  sector, capital in the sector, proxy by loan and agricultural output, employment, tax and capital revenue are statistically relevant to the economy, both in the short run and in long run. 

       Agricultural has been defined as production of food and livestock and the purposeful tendering of plants and animals (Ahmed, 2013). He stated further that agriculture is the mainstays of many economies, boost financing of major infrastructures and strengthen the social-economic development of a nation, because it is a major element and factor in national development and growth. In the same view, (Okolo, 2014) described agricultural sector as the most important sector of the Nigerian economy, which holds a lot of potentials for future developments in Nigeria by providing needed revenues and taxes to the government.