There is no doubt that petroleum (crude oil) has contributed substantially to Nigerian revenue since its discovery in 1956 and more especially, since 1970 when its price was on the upward trend. However, it is a known fact across the globe that for a country to attain growth and development, its economy has to be diversified and that cannot occur in a vacuum.
Mono-economy needs to give way to the productive development of various sectors of the economy. Following the sudden fall in the price of oil by more than 50% since June 2014 when it was $115 a barrel, which now is below $45, after five years of stability, it is a well-known fact that Nigeria’s continuous large earnings or revenue from this sector will be impossible. As a matter of fact, there is an urgent need for the Nigerian government to begin to look into diversification of various sectors of the economy so as to attain solid economic growth.
Studies have shown that there exists a positive relationship between economic growth in Nigeria and diversification of other sectors because, when there were proper management of human resources, huge investment and concentration on agriculture, Nigerian economy was recorded to be healthy and vibrant. In those golden years, agriculture offered over 70% of Nigeria’s teaming population job opportunities.
When we talk about diversified economy we come up with an example of nations who have seen various ups and downs in their economies giving them strength to face crises and letting them know about how to change threats into opportunities.
India, a nation with a population of more than one billion, is basically a service oriented economy with a presence of strong manufacturing and agricultural sector which is growing substantially. Agriculture plays a significant role in the development of India, as it is the means of living for two-third of the employing class in India. It covers about 43 percent of India’s geographical area.
There was a time when Indian economy was largely dependent on food import, however, with initiatives like green revolution which led to the rise in production of wheat, rice etc. and setting up of an exclusive ministry of food processing industries has put a spurt in the development of the sector.
Brazil has $350 billion in its foreign reserve, 80 per cent of the fund is from agriculture. Brazil is now a leading producer of sugarcane, soya beans, wheat and poultry in the World. Over the past two decades, Brazil has already demonstrated its ability to establish the rules and institutions that can put policy on a sound footing. It must do so over the coming decades as well to sustain this growth spurt.
For over four decades, the Nigerian economy has mostly depended on proceeds from the sale of crude oil. This is at the expense of other sectors such as solid minerals and agriculture that hitherto, contributed significantly to the economy of Nigeria.
The solid mineral sector in Nigeria has the potential to contribute immensely to the economy of Nigeria. Development of the solid mineral sector could help to alleviate poverty in Nigeria via job creation; especially, given its forward linkage with other sectors of the economy. Most importantly, it could help address some of the problems associated with “enclave” nature of the Nigerian economy that has for too long been vulnerable to fluctuations in global oil prices.
Nigeria is blessed with a huge endowment of solid minerals widely distributed across the different geographical belts of the country. Prior to the early crude oil booms of the 1970s and the 1980’s, solid mineral such as Coal, Tin and Columbite to mention but a few, contributed immensely to the economy of Nigeria.
Coal was the major source of power generation as well the main source of power for the railway transportation systems. Nigeria was the largest producer of Columbite at one point. In the prevailing times, the earnings from solid minerals were used to develop roads, education, hospitals and in fact develop the petroleum industry.
The decline of the solid minerals industry started with the discovery of crude oil and to an extent, that Nigeria became a mono product economy and hence vulnerable to international oil politics and its repercussions. The domineering role of oil did not allow past governments to attend to global challenges that evolved in the development of solid minerals.
No doubt, the petrodollar from these oil booms led to the neglect of these huge economic potential. This made Nigeria to experience the “Dutch disease” reflected by an appreciating exchange rate, subsidize imports while discouraging non-oil exports
Despite being blessed with series of natural resources, yet we suffer in the midst of plenty. Nigeria has a high poverty rate in comparison with other African countries despite its higher GDP. Currently, Nigeria has over 80% of its land arable but unfortunately less than 40% of the land is cultivated despite the country’s teaming population and level of unemployment. Agriculture is important to Nigeria economy development in the following areas:
A shift in mono-culture economy i.e. diversifying from over reliance on crude oil especially at a time when the price plummet which is becoming to tell on the economy.
The agricultural sector will enhance provision of food and raw materials, through development of agriculture to the Nigeria teaming population and the development of the manufacturing sector respectively. This will in turn discourage heavy dependence on Importation and crude oil.
Agriculture is capable of reducing the country’s level of unemployment on the account that the sector is labor intensive.
Agriculture will curb the effect of rural-urban migration which will help to decongest the urban areas and make life easier for people both in the rural or urban area.
It will help the government to make more effort in developing the degrading infrastructural facilities throughout the nation in attempt to ease movement of goods from one location to the other, likewise for preservation of Agricultural output.
Development of the Agriculture sector will also help in improving other sectors and thereby curbing the level of the existing corruption in the country.
The list of the importance of Agriculture to Nigeria economy is endless. Therefore, the bulk of the work lies in the hands of the government and would be entrepreneurs to take advantage of the enormous benefit that is in the Agriculture Sector instead of depending on crude oil, which seem not to be enough to sustain the country’s economy now.