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International Journal of Economics, Finance and Management Sciences2015; 3(2): 107-114Published online March 3, 2015 (http:!!!"sciencepublishin##roup"co$%i%e&$)doi: 10"11'4%"i%e&$"20150302"15**+: 232'-553 (Print); **+: 232'-5'1 (nline)

Diversification of the Nigerian Economy towards a

Sustainable Growth and Economic Develoment

Suberu O. J., Ajala O. A., Akande M. O., Olure-Bank Adeyinka

.epart$ent o& /anin# and inance, he Poltechnic badan, " Post o&&ice /o, badan, o *tate, +i#eria

Email address:un6a8ahoo"co$ (*uberu " 9")

To cite this article:*uberu " 9", %ala " ", ande M" ", lure-/an deina" .iersi&ication o& the +i#erian cono$ to!ards a *ustainable

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nternational 9ournal o& cono$ics, inance and Mana#e$ent *ciences 2015; 3(2): 107-114 10

#ro!in# resources are inested intelli#entl, the countr can

bene&it and eceed the nternational Mone und>s esti$ated

s ushered +i#eria into a ne! era o& prosperit,

en%oin# a bounteous oil !ind&all due to the increase in

#lobal oil prices precipitated b the rab sraeli crisis" he

ne#atie e&&ects o& this oil !ind&all !ere re&lected in

echan#e rate appreciation, i$port subsidies, and a decline inital sectors such as #riculture and $anu&acturin# in the

case o& +i#eria, the solid $ineral sector also su&&ered as

earlier pointed out" Eo!eer, the pro&li#ac and !aste that

acco$panied +i#eria>s eleation to the status o& an oil-rich

petro state eperienced a hitch at the start o& the net decade"

he 10>s oil #lut &orced a sharp drop in oil receipts, and

conse?uentl econo$ic #ro!th" Fon&ronted !ith corruption,

capital &li#ht and $ountin# &orei#n debt, +i#eria, !as le&t

!ith no option but to under#o structural re&or$s such as the

M>s *tructural d%ust$ent Pro#ra$$e (*P) to address

the distortions caused b oil dependence" @ith the return to

de$ocratic rule in 1, a series o& $acroecono$ic and&iscal re&or$s hae been undertaen, $ost o& the$ hain#

econo$ic diersi&ication as a core ele$ent" t !as also able

to secure a debt bu bac deal &ro$ the Paris club in 200'

!hich reduced the eternal debt een thou#h her current

do$estic debt o& circa G34 billion is a threshold that is

perturbin# (lu$ide "*" odele, et al,2013")

he President said durin# an interie! !ith Fhina

eleision in /ei%in# that the increasin# utiliBation o& shale

#as and other alternatie sources o& ener# b the nited

*tates and other adanced oil i$portin# nations o& the !orld

!as a $atter o& concern &or +i#eria" Hhat is !h !e hae to

increase the pace o& diersi&in# our econo$ and $oe our

countr a!a &ro$ dependence on the oil and #as industr,I

the president said" H@e $ust !or to!ards #reater

industrialiBation; add $ore alue to our a#ricultural products;

deelop our solid $inerals potentials and other sectors o& our

econo$ be&ore the ti$e co$es !hen crude oil $a no

lon#er be do$inant as a #lobal source o& ener#"I

.iersi&ication i$plies H$oe$ent into ne! &ields and

sti$ulation and epansion o& eistin# traditional products"I

.iersi&ication does not discoura#e specialiBation, but

re?uires that resources be channeled into the best alternatie

uses ( eni, 17; niodu, 15)"

n $acroecono$ic plannin#, diersi&ication pro$otes

#ro!th and deelop$ent throu#h the $obiliBation o& sain#s&ro$ surplus sectors &or use in the deelop$ent o& de&icit

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10 *uberu " 9" et al.: .iersi&ication o& the +i#erian cono$ to!ards a *ustainable and J$inin#,> as i$peraties"

he choice o& this dual approach is in&or$ed b

.eelop$ental Polic in +i#eria and the hu#e successes

recorded b so$e sian countriesD!hich are collectiel

re&erred to as Jsian i#ers>Din applin# these i$peraties,

as !ell as the &act that these countries !ere basicall at the

sa$e leel o& national deelop$ent !ith +i#eria, at the ti$e

o& their respectie tae-o&& and still share certain si$ilarities

!ith +i#eria" he e&&ects o& diersi&ication in an econo$

(*unda " o, et al" 2013)

he sche$a belo! paints a picture o& possible i$pacts o&

diersi&ication on an econo$" t is eplicit as sho!n in

panel that dependence on a sin#le co$$odit, &or instance,

oil, in the case o& +i#eria, the econo$ is prone to both

internal and eternal shocs, !hich ulti$atel result in

structural de&ects"

s posited b eni (op" cit"), the reason &or such de&ects

is anchored on the &act that in the eent o& an de&icit, there

!ill be no other sector(s) to $obiliBe surpluses &or use b the

de&icit sector(s)"

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nternational 9ournal o& cono$ics, inance and Mana#e$ent *ciences 2015; 3(2): 107-114 110

'. A (ritical )e*ie! o+ the %i&erian

A&riculture e*eloment olicy

#riculture has su&&ered &ro$ ears o& $is$ana#e$ent,

inconsistent and poorl conceied #oern$ent policies,

ne#lect and the lac o& basic in&rastructure" *till, the sector

accounts &or oer 2'"C o& s econo$ has

re$ained critical oer the decades" Prior to the political crisis

o& 1'7-170, a#riculture>s positie contributions to the

econo$ !ere instru$ental in sustainin# econo$ic #ro!th

and stabilit" he bul o& &ood de$and !as satis&ied &ro$

do$estic output, thereb obiatin# the need to utiliBe scarce

&orei#n echan#e resources on &ood i$portation" *table

#ro!th in a#ricultural eports constituted the bacbone o& a

&aorable balance o& trade" *ustainable a$ounts o& capital

!ere deried &ro$ the a#ricultural sector throu#h the

i$position o& seeral taes and accu$ulation o& $aretin#

surpluses, !hich !ere used to &inance $an deelop$ent

pro%ects" tpical ea$ple is the &irst +i#erian sscraper D

the cocoa house in badan, !hich !as built !ith proceeds

&ro$ the sale o& cocoa" Eo!eer, the crisis that deeloped in+i#erian econo$ durin# the ciil !ar beca$e $ore serious

in the earl 170s, !hich coincided !ith the risin# &ortunes

o& the petroleu$ sector" ro$ that period to date,

a#riculture>s contributions to the econo$ beca$e relatiel

insi#ni&icant" his deelop$ent is re&lected in risin# &ood

prices and in&lation, increased i$ports o& &ood and

a#ricultural ra! $aterials &or local industries, a relatie

decline in a#ricultural eport earnin#s and deterioratin#

liin# conditions in the rural areas" he sector, !hich

e$ploed 71C o& the total labor &orce in 1'0, e$ploed

onl 5'C in 177" he nu$ber stood at 'C in 10, &allin#

to 55C in 1', 17 and 1; and 57C annuall &ro$1 to 12, and has continued to nosedie until date"

%o M" (14) classi&ied the proble$s associated !ith

+i#erian a#ricultural deelop$ent into si #roups, na$el:

eniron$ent, land, labor, capital, technolo#, and $aretin#"

he aboe constraints hae i$plications &or a#ricultural

productiit in +i#eria" or instance, the $ae productiit

in the a#ricultural sector er lo!" he &unda$ental proble$

is thus ho! to i$proe productiit"

3.2. Past Efforts at Revamping Agriculture in Nigeria

+i#eria>s a#ricultural polic ob%ecties since independence

in 1'0 hae been #eared to!ards: (i) the achiee$ent o&

increase in productiit; (ii) the achiee$ent o& sel&-

su&&icienc in &ood production; (iii) sel&-sustained #ro!th in

a#ricultural sector; and (i) the realiBation o& structural

trans&or$ation"

n pursuance o& these polic ob%ecties, #oern$ent hae

adopted the &ollo!in# policies and pro%ects

Table 1.Major agricultural policies and projects in Nigeria !"#$%&ate'.

S/% )OJE(T (OMME%(EME%T ATE A)EAS O0 EM1AS#S1 #ricultural .eelop$ent Pro%ects(.Ps) 172 tension, suppl o& inputs and in&rastructure

2" Aeor#anisation o& #ricultural Aesearch nstitute .ecree

33173

$phasis on a#riculture research and the establish$ent

o& $an research institutes

Aesearch nstitutes stablish$ent rder +ational *cience and

echnolo# .eelop$ent #enc (+*.) .ecrees173 1753" +ational ccelerated ood Production Pro%ect (+PP) 175 ood production, suppl o& inputs and ne! technolo#

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111 *uberu " 9" et al.: .iersi&ication o& the +i#erian cono$ to!ards a *ustainable

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113 *uberu " 9" et al.: .iersi&ication o& the +i#erian cono$ to!ards a *ustainable

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nternational 9ournal o& cono$ics, inance and Mana#e$ent *ciences 2015; 3(2): 107-114 114

ropics, as else!here, the current prospects &or

institutionaliBin# deelop$ent strate#ies &or sustainable

a#riculture are uni?ue challen#es a!aitin# creatie and

co$$itted solutions"

7. (onclusion and )ecommendation+i#erian #oern$ent too a bold step !ith this

#ricultural rans&or$ation #enda ()" & course, $an

challen#es arise !hen pursuin# a diersi&ication strate#" t is

o&ten necessar to $ae si#ni&icant inest$ents in hu$an

resources and in&rastructure to support econo$ic sectors and

actiities such as alue-addition in co$$odities" hese are

lon#-ter$ endeaors that need #oern$ent co$$it$ent and

political !ill, not to $ention $a%or capital inest$ents"

Moreoer, in pursuin# ne! sectors, products and partners,

+i#erian #oern$ents $ust be care&ul not to ne#lect their

traditional econo$ic bases" n &act, there are $an bene&its

that could arise &ro$ $ore diersi&ied econo$ies" nd, theseinclude less eposure to eternal shocs, an increase in trade,

hi#her productiit o& capital and labor, and better re#ional

econo$ic inte#ration" hese bene&its, in addition to e&&ectie

public $ana#e$ent, can e&&ectiel help reduce poert and

pro$ote hu$an and social deelop$ent #riculture is one o&

the e sectors that proide unrialled opportunities &or

+i#eria>s accelerated #ro!th" t shares lina#e !ith irtuall

all the sectors o& the econo$ !ith proen $ultiplier e&&ect

on the econo$" t re$ains +i#eria>s surest $ost strate#ic

and co$petitie !a to secure her rapid industrialiBation and

&uture" t creates e$plo$ent $ore than an other sector o&

the econo$, earns &orei#n echan#e, proides &ood and &oodsecurit, proides ra! $aterials &or our plants and industries"

t is the basis o& the +i#eria econo$, and een the source o&

the $uch celebrated oil (science o& oil &or$ation)" ro$ &ood

and cash crops to ani$al husbandr, horticulture to &isher,

the opportunities are nu$erous (9e&& oroa&or,2014) he

ederal s interentions in the a#ricultural sector,

#ricultural rans&or$ation #enda () o& the present

ad$inistration has no! raised the net earnin#s o& rural

&ar$ers to the su$ o& 174 billion naira due to its actiities in

&ie alue chains na$el Fassaa, Aice (.r *eason and

Aain *eason), *or#hu$, MaiBe and Fotton, Minister o&

#riculture and Aural .eelop$ent, .r" in!u$i desina

has reealed"

)e+erences

N1O dubi, "" (2004)" #riculture: ts Per&or$ance, Proble$sand Prospects" Fentre &or Local s cono$" +i#eriancono$ic *ociet and Eeine$ann ducational /oos(+i#eria), badan, 12-137"

N4O

/ao .urodola, (2014) +i#eria Must *ustain cono$

.iersi&ication Policies, FE++L* L=*+ &ricancono$ic utloo () 2014"

N5O F/+" *tatistical /ulletin" =arious ssues, F/+"

N'O

po, " E" (2012)" $plo$ent, s +on-port /ase&or *ustainable .eelop$ent" ternal rade and cono$ic.eelop$ent in +i#eria, *elected paper &or the 15 nnualFon&erence o& the +i#erian cono$ic *ociet, pp" 277-25"

N11O

9e&& oroa&or , ( 2014)" .iersi&in# he +i#erian cono$,Path!a o chiein# cono$ic *tabilit, pinion +i#eria,ddressin# oda>s opical ssues"

N12O

9onathan , (2013) +i#eria $ust ur#entl diersi& herecono$ &ro$ crude oil, Pre$iu$ i$e @iipedia, the &ree

encclopedia"

N13O

+don, /" " (2002)" he Aole o& ducation and Aesearch in#ricultural .eelop$ent in +i#eria" @orshop Paperpresented at the niersit o& o, p" 34"

N14O

lu$ide"*" odele, et al"(2013) cono$ic .iersi&ication in+i#eria: n Aole &or *olid Mineral .eelop$entMediterranean 9ournal o& *ocial *ciences Published bMF*A-FM*-*apienBa niersit o& Ao$e ol 4 +o ' pp'1-704"

N15O

%o, M" " (14)" he &&ectieness o& #ricultural Policieson +i#eria>s cono$ic .eelop$ent" n +debbio, 9" "" andpo, " E" (ds"), he +i#erian cono$ at the Frossroads:Policies and their &&ectieness" Falabar: niersit o&

Falabar Press"

N1'O laitan, " M" (1)" Petroleu$ ndustr and theMonetisation o& the +i#erian cono$, npublished M*chesis sub$itted to the niersit o& Falabar, Falabar"

N17O

Aand *trin#er,(2001) Eo! i$portant are the Knon-traditionalKecono$ic roles o& a#riculture in deelop$ent F+A A+A++L F+MF *.*, .iscussionPaper +o" 011"

N1O

*unda " o, et al (2013) /eond il: .ual-$peraties &or.iersi&in# the +i#erian cono$, 9ournal o& Mana#e$entand *trate# =ol" 4, +o" 3; 2013"