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Monthly Archives: January 2016

The weakness of Agriculture in resolving Economic problems of Nigeria.

Agriculture before the discovery of crude oil in the late 1950s was the main stay of the Nigerian economy. It was not just a source of revenue to the country, it was in fact a source of employment to many Nigerians who specialized in crop farming, fisheries, animal rearing but to mention a few. It was then that we developed the groundnut pyramids, rubber plantations, coco plantations and the big cotton fields that are gradually becoming histories today. With the discovery of the crude oil in 1956 and the commencement of full exploration in 1958 agriculture became of less importance to the government. As at of 1960 the contribution of agriculture to Nigeria’s GDP was 60% but the reduction of this value became consistent with the increase in oil exploration.
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This was because crude oil sales became a faster way of earning more money by the Nigerian government. Little did the government notice the negative impact associated with crude oil especially with respect to agriculture. This continued until 1980s when the price of oil dropped in the international market leading to a drop in the contribution of crude oil to the Nigerian GDP.
Seeing the effect of the over dependence on crude oil the economy drove the subsequent leaders of Nigeria that came after General Gowon into initiating so many agricultural boosting policies. But a question that still remains unanswered is why are we still crying out “agriculture is the way out in the year 2016” ( over 50 years since the recognition of the relevance of agriculture) when a lot of funds have being invested in agriculture continually since the regime of General Yakubu Gowon?
General murtala Muhammed didn’t present any particular policy for agriculture but Gen Olusegun Obasanjo came up with “Operation Feed the Nation”, Shehu Shagari with the “Green Revolution” program, General IBB with “DIFRI (Directorate for Food Road and Infrastructure)”. Gen Sani Abacha and Abdulsalami Abubakar didn’t also present a clear policy but after them series of other policies have being instituted in the subsequent civilian governments costing huge sums of money yet we are unable to unequivocally say we are back to our original state of strength in agriculture. Agriculture was well recognized in (NEEDS II 2008-2011), the “7-point Agenda in of Yaradua, vision 2020 and a lot of other policies that have being instituted over the years.
This brings me to a clear conviction that going back to agriculture alone will not be able to solve the current Nigerian economic problem. There is need to compliment our desire for improved and efficient agriculture with a spontaneous technological development at all levels. Nobody is doubting the fact that agricultural advocates have overtime emphasized the need for mechanisationt. Also to some subtancial extent the government has being working towards that but how mechanised are we when compared to the other countries of the world that are topping the agricultural success stories. Most efforts geared towards mechanisation in this country have simply being revolving round a few fraction of the nigerian population. crude tools are still used for agricultural activities at the grassroot which constitute the majority of farmers yet we expect to produce enough to meet the global demand of the 20th century.
My point is obvious, not until we are able to develope our technology in such a away that it can permeate the nooks and crannies of the country’s population as crude tools permeated the population before the discovery of crude oil we may never be able to get our desired results from agriculture. This without doubts is simply because the output that will keep resulting from our crude and few mechanised agricultural activities will not be able to meet our local demands not to even talk of external exportation.
Considering all these information there is need for a massive technological development and advancement if Nigeria must ever meet up with world standard agricultural relevance.

 
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Posted by on January 25, 2016 in Economy with Julius

 

The Quagmire of a Monotonous Economy

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Over the years many nations have survived via their domestically generated incomes while others have increasingly relied on external sources of finance which adversely results in increased foreign debt. As rightly stated by Hameed et al(2008) , too much of external debt could dampen economic growth by hampering investment and productivity growth which is the resultant effect of the fall in exchange rate. Although foreign debt as a topic is not the focus of this work its necessary to understand its effect as earlier stated.
The term “Monotonous Economy” as used in this article defines an economy whose income source is strictly limited to a single major source. In other words it’s an economy were diversification is absent. Nigeria for instance has over the years relied on crude oil for the financing and running of the entire government ever since the late 1970s.According to Anyanwu (1986), the major problems of the economy such as external debt obligation, unemployment, inflation et cetra are symptoms of a structural weakness in the economy which is her over dependence on crude oil.
Its really despicable that the forces of demand and supply of a singular product determines the budget of a great nation as Nigeria which has so many sectors. This is true as a large chunk of the nation’s budget has yearly since the discovery of oil being based on the price of oil in the international market. The devastating aspect of this is that, it makes the economy unpredictable and susceptible to instability. This shows how problematic a monotonous economy can be especially when the financial source is one which the government has no direct control over the price. Aside from the the already mentioned demerits, its easier to have a higher level of poverty and a state of inequality in resource distribution in a monotonous economy than in other economies. Obviously the agitation by the original producers of such finance source will be for a preferential treatment in issues such as resource allocation and distribution(the Nigeria’s Niger delta agitations).
Unemployment is also another consistent problem common with the economy of most monotonous economies as its often at a hiking rate majorly because of the limited supply of job opportunities provided by the economy.
It will be assumptions to say the governments of the so many countries practicing monotonous economy are ignorant of the many ways of handling the issues of a monotonous economy however, for reasons best known and explained by them they have not being able to use those mediums.
Diversification for instance is a practical step towards handling the issues of a monotonous economy. This widens up the streams of income in an economy and boosts investment opportunities and inherently job opportunities and economic growth.
Promotion and support of domestic products is another critical approach for controlling and subsequently eliminating the adverse effects of a monotonous economy. But the overdependence on imported goods (capital and consumer goods) over the years has being alarming in so many monotonous economy.this is why it is quite difficult to diversify in such economies because all the basic needs seems to be in supply although at a higher price.
Creation of an enabling environment for production activities will also help in eliminating the effect of a monotonous economy.
All these approaches can best be put in place when the government has seen the need to eliminate a monotonies economy otherwise it remains a common theoretical information.

 
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Posted by on January 17, 2016 in Economy with Julius