Analysis Of The Impact Of Agriculture On Economic Growth In Nigeria

Project and Seminar Material for Agricultural Engineering AE

Analysis Of The Impact Of Agriculture On Economic Growth In Nigeria


This study examined and analysed the impact of agriculture on economic growth in Nigeria. It adopted the secondary data sourced from Central Bank of Nigeria covering the period 1985 to 2010. The study employed the modern Time Series of the Ordinary Least Square to test for the relationship between agriculture and economic growth in Nigeria. The results derived infer that there exists a significant relationship between agriculture spending and economic growth. What this implies is that agriculture revolution is a determinant to economic growth. Thus, it is important that the government placed greater emphases on this sector by increasing budgetary allocation to agriculture in Nigeria in other meet the recommendations of both Food and Agriculture Organization (FAO) and African Union (AU). It is recommended that more funding be provided for agricultural universities in the country to carry out more research on all aspect of agricultural output, such as livestock, crops, fishing and forestry, crop preservation and also establishment of more research institutes to improve seedling production, encourage the use of irrigation farming system and provision of storage facilities for seasonal products as means of improving the country’s agricultural output.

Chapter One


1.1 Background to the Study

The term Agriculture is derived from the Latin words, “ager,” meaning field, and “Cultura”, meaning cultivation. This suggests that the earliest form of production agriculture was crop production (Are, Igbokwe, Asadu, Bawa, 2010; Erebor, 2003). It may be noted that Agriculture is more than crop production. It also includes animal production, processing of primary products (or value addition) and marketing of produce and products. Erebor (2003) defines agriculture as the art and science of cultivating the soil, processing crops and livestock products for man, and the process of selling excess crop and livestock.

Meanwhile, (Kricher,1997) defines agriculture in a more advanced way by saying that, agriculture or farming is the simplification of nature’s food webs and the rechanneling of energy for human planting and animal consumption. To simplify, agriculture involves redirecting nature’s natural flow of the food web. The natural flow of the food web is the sun provides light to plants convert sunlight into sugars which provide food for the plants (this process is called photosynthesis). Plants provide food for herbivores (plant-eating animals) and the herbivores provides food for carnivores (meat-eating animals). This simple illustration of food web provides the basis for analyzing the impact of agriculture on economic growth.

In literature, economic history provides us with ample evidence that agricultural revolution is a fundamental pre-condition for economic growth, especially in developing countries. Development economists have focused on how agriculture can best contribute to overall economic growth and modernization. Todaro and Smith (2003) look at Lewis theory of development, and reported that the underdeveloped economy consisted of two sectors. These sectors are the traditional agricultural sector characterized by zero marginal labour productivity and the modern industrial sector. In Rostow’s linear stages of economic growth, agricultural revolutions is a pre-condition for take-off and take-off stages

The importance of a vibrant and robust agriculture is reminiscent on its role in providing employment opportunities for the teeming population, eradicates poverty and contributing to the growth of the economy. The linkage between agriculture and economic growth is well documented in literature (Ogen, 2007; Okongwu, 1986; Atte and Muhammed- Lawal, 2006 to maintain few). According to Izuchukwu (2011), agriculture has been the backbone of the economy in Nigeria providing employment and source of livelihood for the increasing population,it accounts for over half of the GDP of the Nigerian economy as at independence in 1960.

However, the role it plays in the regional and economic development of the country has diminished over the years due to the dominant role of the crude oil sector in the economy. With the increasing food demand in Nigeria, the country has available natural resources and potential for increasing the volume of crop production towards meeting the food and nutritional requirement of the rapidly increasing population and guarantee food security in the country. Therefore, the source of national wealth is essentially agriculture.

Unquestionably, the neglect of agriculture in Nigeria owing to the discovery of oil has retarded the growth of the economy for the past decades. The effect of this neglect could be felt in the poor quality of life of people as average Nigerian was quoted as living in US$ 1 per day; if translated to Naira, this amount to N165 day at present. It may not be wrong to say that such a remark is a political cover. The faces we see daily on our streets and those we may not be able to see because of their inability to muster enough strength to walk up to the street as a result of several days of hunger and starvation, or even food associated ill-health and avoidable deaths of tens of people everyday, a better, more sincere and realistic assessment of the situation would be put an average income at US $0-0.5 per day. Studies in literature reveal that seven out of every 10 Nigerians live in abject poverty; hardly able to feed, cloth or house themselves. It is an indisputable fact that Nigeria and her sub-Saharan African neighbors have been dubiously christened by the world political and economic powers as citadels of hunger, poverty, ignorance, diseases, misery, debts, filths and crises. This unquestionable imagery will for long remain indelible in the world’s archives unless a reasonable step is taken by people and Government of this doomed sector of the global village. It is against this backdrop that the study seeks to assess the impact of agriculture on economic growth.

1.2 Statement of the Problem

Besides oil, the major strength of the Nigerian economy is its rich agricultural resource base, its human resource and its huge markets. However, these resources have to be effectively mobilized so as to diversify the economic base and reduce dependence on oil and import. The economy remains vulnerable to external shocks emanating from fluctuation in the world prices of crude oil and the rising prices of imports. The resulting external and internal in balances are manifested in the adverse balance of payment position, unemployment and low capacity utilization in virtually all sectors as well as the deteriorating purchasing power of the populace (Atte and Muhammed- Lawal, 2006). The contribution of agriculture to the Nigerian economic growth is very low compared to what it used to be in the past 14 years. Nigerian agriculture to a large extent still possesses the characteristics of a peasant economy that was prominent in the pre-independence period. Given the information above, this study seeks to assess the impact of agriculture on economic growth in Nigeria.

1.3 Objectives of the Study

The main objective of this study is to analyze the impact of agriculture on economic growth in Nigeria. But for the successful completion of the study, the researcher intends to achieve the following sub-objectives;

  1. To analyze the impact of agriculture on economic growth in Nigeria.
  2. To evaluate the contribution of the agricultural sector on economic development
  3. To evaluate the relationship between agricultural sector and economic development
  4. To proffer solution to the identified problems

1.4 Research Hypotheses

For the successful completion of the study the following research hypotheses were formulated by the researcher

  1. H0: agriculture has no significant impact on the economic growth of Nigeria
    H1: agriculture has a significant impact on the economic growth of Nigeria.
  2. H0: agricultural sector does not have any significant contribution to the economic development of Nigeria.
    H2: agricultural sector does have a significant contribution to the economic development of Nigeria

1.6 Significance of the Study

It is believed that at the completion of the study, the findings will be of great importance to the federal ministry of agriculture, as the study seeks to evaluate the contribution of the agricultural sector to economic growth in Nigeria. The study will also be of great importance to all agriculturist as the study will guide them to take advantage of the tremendous opportunity that is available in the agricultural sector and contribute their own quota to economic growth and development. The study will also be useful to researchers who intend to embark on research in similar topic, Finally the findings of this study will also be immense benefit to government, academia, scholars, researchers and the general public.

1.6 Scope and Limitation of the Study

The scope of the study covers the analysis of the impact of agriculture on economic growth in Nigeria. But in the cause of the study, there are some factors which militate against the scope of the study

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study.

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Finance:

The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover

1.7 Definition of Terms


Agriculture or farming is the cultivation and breeding of animals, plants and fungi for food, fiber, biofuel, medicinal plants and other products used to sustain and enhance human life.

Economic Growth

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP, usually in per capita terms

Economic Development

From a policy perspective, economic development can be defined as efforts that seek to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base

Government Sector

The general government sector includes all institutional units whose output is intended for individual and collective consumption and mainly financed by compulsory payments made by units belonging to other sectors, and/or all institutional units principally engaged in the redistribution of national income and wealth

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

  • Chapter one is concern with the introduction, which consist of the (background of the study), statement of the problem, objectives of the study, research questions, research hypotheses, significance of the study, scope of the study etc.
  • Chapter two being the review of the related literature presents the theoretical framework, conceptual framework and other areas concerning the subject matter.
  • Chapter three is a research methodology covers deals on the research design and methods adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five

Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was an analysis of the impact of agriculture on economic growth in Nigeria.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of agricultural sector contributions to economic growth.

5.2 Summary

Nigerian agriculture has been typified as primitive and undeveloped, yet growth in the sector has been identified as an engine of economic growth. This implies that developing the sector will result in more profound contributions to the nation‟s economic growth. Development of the agriculture sector invariably will require more investment as we have repeatedly mentioned in this study. However, the aim of these investments should be clear and disbursement strategic. From the literature, we established five inter-sectoral linkages through which agriculture contributes to economic growth: provision of food, labour, market, domestic saving and foreign exchange. These linkages can serve as reference points through which the government can target development policies and disburse investment funds, tactically ensuring agriculture development. Focusing on crop production alone may result in lopsided contributions, neglecting the potentials of other subsectors of agriculture as we have seen in our study. Thus, the emphasis should be on developing all the subsectors- including livestock production, fishery and forestry; and strengthening their linkages to other sectors of the economy through value-chain development. This will create more employment opportunities and generate additional income, enhancing the industrialization process. Furthermore, the lack of reverse causal flow from economic growth to agriculture strengthens the claim that agriculture sector has been neglected in Nigeria. Nigeria cannot achieve either economic growth or development without a developed agriculture sector. Our point of view on this subject is strengthened by our brief examination of the relationship between agriculture and development which emphasizes the linear relationship (see appendix). With evidence that agriculture has the potential to cause economic growth, spur industrialization as well as to enhance the living condition of the nation’s majority, increased investment in the development of the sector is justified.

5.3 Conclusion

conclusively, the agricultural sector contributes significantly to Nigeria’s economic growth which is measured by the gross domestic product (GDP). The employment base of the Nigeria economy is largely dependent on this sector. The study shows that agricultural sector contributes more than 30 percent to the economy i.e. 34.4 percent. As expected agricultural sector maximally to Nigerian economy more than 50 percent, but the low 34.4 percent is due to the neglect of agriculture when oil was discovered in a commercial quantity in the 1970s. It is well over due for the Nigerian economy to diversify. The negative perception and orientation of the average Nigerian about agriculture sector should be disabused so that these sectors can contribute optimally to GDP.

5.4 Recommendation

Haven completed the study, the following recommendations were put forward Government should provide funds to acquire sophisticated farm tools and increase her budgetary allocation to this sector in a consistent manner because of its importance to the national economy, hoping that with proper monitoring of fund, it would contribute more significantly to the economy of the country. An effective utilization of such funds is also advocated and all areas of wastage blocked. The peasant farmers who live in the rural areas and who are the major providers of food for the nation should be adequately catered for by making the rural areas more conducive and habitable by the provision of adequate infrastructural facilities such as good roads, pipe borne water and electricity. The provision of these facilities will no doubt impact positively on the rural farmers’ productivity.

Project Material Download

5,000 5000

The Complete Material Will Be Sent to You in Just 2 Steps

Quick & Simple…

Step One Purchase

Make Payment (Through Transfer) of ₦5,000 to Any of the Account Below

Access Bank PlcAcc No: 0811003731
Samphina Academy
Current Account
Zenith BankAcc No: 1225513212
Samphina Academy
Current Account

Or CLICK HERE To Pay With Debit Card

CLICK HERE To Purchase Material ($15)
Make Payment of 120 GHS to 0553978005 | Douglas Cloud Osabutey | MTN MoMo

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: Analysis Of The Impact Of Agriculture On Economic Growth In Nigeria

The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply

  Contact Our Help Desk

Need a Different Topic? Perform a Quick Search

List of Related Works

Click on Any Topic to Preview the Content

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.