A CRITICAL ANALYSIS OF THE EFFECTS OF FUEL PRICES ON NIGERIAN FOOD PRODUCTION AND SUPPLY
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FIRST PART
BACKGROUND OF THE STUDY
A historical look at and the growth of the Nigerian economy reveals that agriculture is the main economic sector and source of foreign cash. In the 1960s, agriculture accounted for more than 80% of export earnings and wages, but its contribution to economic growth has declined by around 65% over time.
In 1970, 34% of the GDP was derived from agriculture, compared to 50% in 2003 (Daramola, 2004). In 2003, nearly 50% of the GDP was derived from agricultural. Agriculture accounts for 41% of the current economy, while crude oil accounts for 13%. In 1970, agriculture contributed around 50 percent to the nation’s gross domestic product (GDP). In 2003, agriculture contributed approximately 34 percent to the GDP. (Daramola, 2004). Currently, agriculture accounts for 41% of the actual industries, while crude oil accounts for 13%. Due to the enormous growth of the oil industry as a whole, agriculture is no longer the largest contributor to Nigeria’s GNP and foreign exchange earnings.
According to Abayomi, agriculture also dominates in terms of jobs and ties to the rest of the economy (1992). Agriculture is the biggest industry in Nigeria, employing two-thirds of the workforce and contributing one-third of the country’s gross domestic product. (2002). (Agro-Ind, 2002). The growth of the Nigerian oil sector in the early 1970s caused significant systemic adjustments in the economy. In response to the oil boom, public spending has increased, which has stimulated numerous other economic activities, including infrastructure development, the creation of new institutions, the expansion of existing institutions, and the importation of consumer goods. These developments have contributed to the appreciation of the naira (Dutch disease), but there has been no similar expansion of commercial agricultural commodities (Kwanashie et al., 1998; J. Olusi and M. A. Olagunju, 2005; A.T. Edun, 2012). The majority of agricultural production’s energy requirements are met by human and animal labor. There is evidence of the usage of petroleum products in agricultural production. For agricultural mechanization, the use of motorized water and diesel-powered tractors demonstrates this limited but significant advantage over human and animal labor (Sambo,2005). In the meanwhile, a robust and productive agriculture sector will allow a nation to feed its growing population, provide jobs, trade, and provide raw materials to businesses. Agriculture has a multiplicative effect on the socioeconomic and industrial fabric of every country due to its multifunctional nature.
STATEMENT OF PROBLEM
Since the 1970s, Nigeria is one of the countries whose domestic oil prices are rising (Adenikinju, 2012). In addition to its three major refineries, Nigeria still imports petroleum products to suit its domestic need. The downstream crisis in Nigeria’s petroleum industry was thus a major issue for the majority of the population. This is owing to the fact that the country’s constant rise in fuel costs was caused not only by the destruction of bunkers, oil spills, and the acts of some dealers, but also by refinery inefficiency. Constant fuel supply constraints add to environmental and economic issues, which has an effect on the economy of the country.
The discovery of crude oil has had both beneficial and negative effects on the agricultural productivity of Nigeria. This can be viewed negatively in relation to the neighboring populace where petroleum wells are utilized. Any of these groups also face environmental devastation, leading to a lack of agricultural produce, primarily for sustenance. It also influences other social and economic factors. Consequently, this study aims to analyze critically the impact of fuel price increases on food production and supply.
OBJECTIVES OF THE STUDY
The following are the most important goals:
1. To study the causes of Nigeria’s rising fuel prices
2. Determine whether the causes of the increase in fuel prices have an impact on agriculture and food production in Nigeria.
3. To study the extent of its impact on the nation’s economy
RESEARCH QUESTIONS
What are the reasons behind the increase in fuel prices in Nigeria?
Does the rise in gasoline prices have an effect on agriculture and food production in Nigeria?
How much of an impact has it had on the nation’s economy?
THE IMPORTANCE OF THE STUDY
This report will be of tremendous value to the government as they consider methods to combat the threat posed by the rise in fuel prices.
This study will also act as a resource for students and academics who wish to conduct additional research on this topic.
SCOPE OF THE RESEARCH
This study will focus on the impact of fuel price increases on food production and supply in Nigeria, as well as the future damage it is expected to cause.
The sample responder for this study will be a Lagos resident.
LIMITATION OF THE STUDY
The significant obstacles encountered by the researcher over the course of this investigation were financial constraints, a lack of materials, and the need to balance research and academic work.
DEFINITION OF TERMS
This is a sudden or significant increase in the cost, rates, and quantity of gasoline.
This is the process of preparing food by transforming raw ingredients into final goods in the home or food processing industry.
A CRITICAL ANALYSIS OF THE EFFECTS OF FUEL PRICES ON NIGERIAN FOOD PRODUCTION AND SUPPLY
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