GOVERNMENT POLICIES ON NON-OIL EXPORT (AGRICULTURE) ON THE ECONOMIC GROWTH OF NIGERIA.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The agricultural sector in Nigeria was a source of foreign prior to the discovery of oil in commercial quantity. Then Nigeria was reckoned with the production and export of groundnut, cocoa, rubber, and other agricultural crops in Nigeria. The discovery of oil at large exploration in the 1970s turned the tide against the agricultural sector in favor of the oil sector. For instance, as at 2000, oil and gas exploration accounted for more than 98% of export earnings and about 83% of federal government revenue (Export Import Bank,2009).The oil sector also accounted for more than 40% of the Gross Domestic Product (GDP) in Nigeria and about 95% of the foreign exchange earnings. Despite this seemingly high revenue from oil sector, the paradox of it that over 70% of the Nigeria population is engaged in either informal sector or in agricultural production (Olaitan, 2006).
The vast employment opportunity and the quest towards diversification of the revenue by the federal government and development agencies have shifted attention towards the informal and agricultural sector. For example ,to sustain the agricultural production in Nigeria, the World Bank developed a project called Agricultural Development Projects (ADPs) which was designed to enhance the production of agricultural outputs in Nigeria .As at the year 1989 ,the ADPs were situated in 19 states in Nigeria as at then .The efforts of the ADPs were geared towards enhancing agricultural productivity (World Bank,2001).There have been other national programmes established to boost agricultural production in Nigeria .Notable among them was the Agricultural Credit Guarantee Scheme Fund (ACGSF) in 1977.
The ACGSF has lofty aims especially the need to make the agricultural sector lucrative. However, it has not lived up to its bidding, which calls for empirical assessment with a view of understanding the resultant effect from the huge investment from the government into the sector. This is germane given the increase in the capital base of the fund from a start-up capital ₦100million to a current capital base of ₦6billion in 2006.Thus, there is need to investigate if this huge investment put in place to encourage agricultural production has actually had significant impact on export especially non-oil export, which the agricultural constitute a sizeable proportion. This is the main motivation for this study.