Impact of Agricultural Funding on Unemployment Reduction in Nigeria (1985 -2016)

Filed in Nursing News by on June 26, 2020

Impact of Agricultural Funding on Unemployment Reduction in Nigeria (1985 -2016).

ABSTRACT

This paper investigated the impact of agricultural funding on unemployment reduction in Nigeria for the period of 1985-2016. The data was collected from secondary sources from CBN statistical bulletin, journal, and government documents.

To carry out this work, the study employed the Ordinary Least Square (OLS) estimation technique. To test for the properties of time series, the Augmented Dickey-Fuller (ADF) test was used to determine the stationarity of the variables, and the Johansen Cointegration test was employed to test for the long-run relationship of the variables.

It was discovered that there exists a long-run relationship between the variables in the series. The empirical findings were apparent from the result of the regression analysis that inflation (INF) and interest rate(INR) have a negative effect on unemployment(UNPR), banking sector credit to the agricultural sector(BSCR) and government Agricultural Expenditure(GVEX) has a positive effect on agriculture.

Hence the joint effect of the selected variables has an impact on UNPR.

Therefore proper attention should be placed on the implementation of major agricultural policies and Government funds directed towards agriculture should be monitored by various agencies to ensure that there is no diversion of funds and implementation.

 

CHAPTER ONE

INTRODUCTION

Background of the study

Unemployment is one of the developmental problems that face every developing economy in the 21st century. Gbosi (1997) defined unemployment as a situation in which people who are willing to work at the prevailing wage rate are unable to find jobs.

In recent times, the definition of unemployment by the International Labor Organization states that “the unemployed is a member of the economically active population, who are without work but available for and seeking for work, including people who have lost their jobs and those who have voluntarily left work (World Bank, 1990).

The application of this definition across countries has been faulted, especially for the purpose of comparison and policy formulation, as countries characteristics are not the same in their commitment to resolving unemployment problems, the definition of the age bracket all stand as limitations to the definition by ILO (Douglason et al., 2006).

According to the Central Bank of Nigeria (2003), the national unemployment rate rose from 4.3 percent in 1970 to 6.4 percent in 1980. The high rate of unemployment observed in 1980 was attributed largely to depression in the Nigerian economy during the late 1970s.

Specifically, the economic downturn led to the implementation of stabilization measures which included a restriction on exports, which caused import dependency of most Nigerian manufacturing enterprises.

The analysis from an agricultural point of view suggests that people who have been majorly affected by unemployment are a great proportion of underprivileged Nigerians in rural areas where agriculture is primarily subsistence, the land is not easily accessible or not fully utilizable, credit facilities are lacking and improved production methods are not practised.

Agriculture as a Solution to eradicate unemployment and poverty in Nigeria, innovative methods need to be used to successfully tackle unemployment and poverty.

Improvement in agricultural production by making land available to private and public organizations to set up industries in the most economically depressed areas of Nigeria, and providing training in setting up industries (especially cottage industries) to unskilled or economically deprived Nigerians would make ownership of small scale industries a viable source of income.

Agriculture funding is mainly long-term financing (that is, capital structure) that aims at inducing agriculture-led growth and development in an economy.

Agricultural funding includes public or private resources (in the form of equity, gift or loan) for improving social welfare through the development of the agricultural sector (Shreiner and Yaron, 2001).

It encompasses not only government funds but also funds of non-governmental organizations that use matching grants to attempt to promote community and sector development, income equality and local empowerment.

Public funds are subsidized funds and private funds regardless of their price, are not subsidized.

Over the years, the Nigerian government has made efforts to eradicate poverty, create employment by introducing and funding agricultural programmes that give loans to farmers. Despite all these efforts, unemployment remains a visible footprint in sands of Nigerian.

Agricultural programmes like the National Accelerated Food Production programme(NAFPP), was initiated by the federal department of agriculture during the General Yakubu Gowon regime in 197.

This programme focused on funding farmers to boost the production of maize, cassava,  rice and wheat in the northern state through subsistent production within a short period of time. The mini-kit,  production-kit and mass adoption stages where the three phases of the programme.

This programme had lapses because farmers sponsored the last two phases of the programme which discouraged them from participating in the programme.

The Agricultural Development Projects (ADP) formerly known as Integrated Agricultural Development Projects (IADP) was established later in 1974.

The earlier impressive result of the programme led to its replication in 1989 to the entire nineteen states of the federation. This approach to agricultural and rural development (Amalu 1998), was based on collaborative efforts and tripartite arrangement of the federal government, state government and World Bank.

IADP helped in a long way to create employment but failed to actualize all its objectives due to low funding as a result of a shortage of fund or reduction in oil prices.

Despite the failures of these programmes, Nigerian Government has intensified efforts by introducing more programmes which include, Operation Feed The Nation (OFN) established in May 1976, River Basin Development Authorities (RBDA) established also in 1976, Green Revolution(GR) inaugurated by Shehu Shagari in April 1980.

These programmes were geared towards funding agriculture to promote crop yield, livestock, rearing,  self-sustainability and employment opportunity to the masses.

Furthermore, in early 1990, National Fadama Development Project(NFDP) was established followed by the introduction of National Economic Empowerment and Development Strategy(NEEDS) which was initiated by Olusegun Obasanjo in 1999.

The key element of this strategy included poverty eradication, employment generation, wealth creation and value orientation. NEEDS offered farmers improved irrigation, improved livestock breeds, machinery and crop varieties which would help provide employment and self-sustainability in agriculture.

It is regrettable to note that despite these funding programmes established by the government, private individuals and international organization to boast agriculture and create employment, it is seen that according to (NBS 2016) the number of people that were unemployed or underemployed increased from 24.4 million as at the end of the first quarter to 26.06 million persons in 2016.

This shows that the unemployment rate has risen from 12.1 percent in the first quarter of 2016 compared to its lower rate of 4.3 percent in 1970 and 6.4 per cent in 1980(CBN2003).

Nevertheless in Nigeria, agriculture remains the mainstay of the economy since it is the largest sector in terms of its share in employment (Philip, Nkonya, Pender and Oni 2009).

In an effort to diversify her oil-based economy, Nigeria is placing much emphasis on funding other sectors most especially the agricultural sector, since agriculture has the potential to stimulate economic growth through the provision of raw materials, food, employment opportunity and increased financial stability.

Funding is required by the agricultural sector to purchase land, construct buildings, acquire machinery and equipment, hire labour, irrigation etc. In certain cases, such loans may also be needed to purchase new and appropriate technologies.

 

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CSN Team.

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