Impact Of Agricultural Funding On Unemployment Reduction In Nigeria (1985 -2016)
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Impact Of Agricultural Funding On Unemployment Reduction In Nigeria (1985 -2016)
ABSTRACT
This article studied the impact of agricultural funding on unemployment reduction in Nigeria from 1985 to 2016. The information was gathered from secondary sources such as CBN statistical bulletins, journals, and government documents. To complete this task, the study used the Ordinary Least Squares (OLS) estimate technique.
To test for time series properties, the Augmented Dickey-Fuller (ADF) test was used to determine the stationarity of the variables, and the Johansen Cointegration test was utilised to test for the variables’ long-term connection. It was discovered that the series’ variables have a long-run relationship.
The regression analysis results revealed that inflation (INF) and interest rates (INR) have a negative effect on unemployment (UNPR), while bank credit to the agricultural sector (BSCR) and government agricultural expenditure (GVEX) have a positive effect on agriculture. As a result, the combined effect of the specified variables influences UNPR.
As a result, sufficient attention should be paid to the implementation of main agricultural programs, and government monies dedicated towards agriculture should be monitored by various organisations to ensure that funds are not diverted and that they are implemented correctly.
Chapter One: Introduction
Background of the study.
Unemployment is one of the developmental challenges confronting any emerging economy in the twenty-first century. Gbosi (1997) defined unemployment as a scenario in which those wanting to work at the current wage rate are unable to find work.
In recent years, the International Labour Organisation has defined unemployment as “a member of the economically active population who is without work but available for and seeking 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 criticised, particularly for the purpose of comparison and policy formulation, because countries’ commitments to resolving unemployment problems differ, and the definition of the age bracket all serve as limitations to the ILO’s definition (Douglason et al., 2006).
According to the Central Bank of Nigeria (2003), the national unemployment rate increased from 4.3% in 1970 to 6.4% in 1980. The high unemployment rate reported in 1980 was largely due to the Nigerian economy’s collapse in the late 1970s.
Specifically, the economic crisis led to the installation of stabilisation measures, which included export restrictions, resulting in import dependency for most Nigerian industrial businesses.
According to the agricultural analysis, people who have been most affected by unemployment are a large proportion of underprivileged Nigerians living in rural areas where agriculture is primarily subsistence, land is not easily accessible or fully utilisable, credit facilities are scarce, and improved production methods are not practiced.
Agriculture as a Solution to Eliminating Unemployment and Poverty in Nigeria: Innovative ways must be used to properly address unemployment and poverty. Improving agricultural production by making land available to private and public organisations to establish industries in Nigeria’s most economically depressed areas
As well as providing training in industry establishment (particularly cottage industries) to unskilled or economically deprived Nigerians, would make small-scale industry ownership a viable source of income.
Agriculture funding is primarily long-term financing (i.e., capital structure) aimed at stimulating agricultural-led growth and development in an economy.
Agricultural finance consists of governmental or private resources (in the form of equity, gifts, or loans) used to improve social welfare through the expansion of the agricultural sector (Shreiner and Yaron, 2001).
It includes both government and non-governmental organisations’ funds, which employ matching grants to promote community and sector development, income equality, and local empowerment. Public funds are subsidised; private funds, regardless of price, are not subsidised.
Over the years, the Nigerian government has worked to reduce poverty and generate jobs by establishing and sponsoring agricultural programs that provide loans to farmers. Despite all of these efforts, unemployment remains a noticeable footprint in the sands of Nigeria.
Agricultural programs such as the National Accelerated Food Production Program (NAFPP) were launched by the federal department of agriculture during the General Yakubu Gowon regime in 1972.
This program focused on funding farmers to boast the production of maize, cassava, rice, and wheat in the northern state through consistent production over a short period of time.
The programme was divided into three phases: mini-kit, production-kit, and mass adoption. This plan experienced failures because farmers supported the last two phases of the program, discouraging them from participation.
The Agricultural Development Projects (ADP), formerly known as Integrated Agricultural Development Projects (IADP), were founded later in 1974.The program’s prior remarkable results prompted its replication in 1989 to the full nineteen-state federation.
This strategy to agricultural and rural development (Amalu 1998) was built on joint efforts and a tripartite agreement between the federal government, state governments, and the World Bank.
IADP contributed significantly to job creation but was unable to achieve all of its objectives owing to insufficient finance as a result of a fund shortfall or a drop in oil prices.
Despite the failures of these programs, the Nigerian government has increased its efforts by introducing new ones, such as Operation Feed The Nation (OFN), which was established in May 1976, River Basin Development Authorities (RBDA), which was also established in 1976, and the Green Revolution (GR), which was launched by Shehu Shagari in April 1980.
These programmes were designed to subsidise agriculture in order to increase crop productivity, animal rearing, self-sufficiency, and job opportunities for the general public.
Furthermore, in the early 1990s, the National Fadama Development Project (NFDP) was developed, followed by the National Economic Empowerment and Development Strategy (NEEDS) launched by Olusegun Obasanjo in 1999.
Poverty eradication, job creation, wealth creation, and a focus on values were essential components of the approach. NEEDS provided farmers with improved irrigation, livestock breeds, machinery, and crop types to assist them create jobs and achieve self-sufficiency in the agricultural sector.
It is regrettable to note that, despite the government, private individuals, and international organisations’ funding programmes to promote agriculture and create jobs, the number of unemployed or underemployed people increased from 24.4 million at the end of the first quarter to 26.06 million in 2016.
This demonstrates that the unemployment rate has climbed from 12.1 percent in the first quarter of 2016, compared to 4.3 percent in 1970 and 6.4 percent in 1980.
Nonetheless, agriculture remains the mainstay of Nigeria’s economy, accounting for the majority of employment (Philip, Nkonya, Pender, and Oni 2009). In an effort to diversify its oil-based economy, Nigeria is focussing heavily on funding other sectors, particularly agriculture, because agriculture has the potential to stimulate economic growth by providing raw materials, food, job opportunities, and increased financial stability.
The agricultural sector requires funding to purchase land, construct buildings, acquire machinery and equipment, hire labour, and install irrigation systems. In rare circumstances, such loans may be required to purchase new and appropriate technologies.
Not only may funding alleviate financial restraints, but it may also speed up the adoption of innovative technologies. Agriculture finance is one of Nigeria’s most important economic policy instruments for stimulating development in all areas.
The federal government’s current “Go Back To Agriculture” program, if successfully executed, will usher in a new policy direction through new policy measures that will lay the groundwork for sustainable improvement in agricultural production and output.
Individual, government, and organised labour investments in crop production, livestock, and animal husbandry would help to tackle Nigeria’s job and poverty challenges.
Agriculture, if properly embraced and funded, will ensure food security while also reducing poverty and unemployment in Nigeria. Diversifying the Nigerian economy by functional agricultural investment by people, the government, and the organised private sector can assist to solve Nigeria’s unemployment and poverty problems.
Statement of Problem
Agriculture was once known as a vital contributor to national development, but it has been neglected, resulting in heartbreaking unemployment and poverty. Despite the existence of a well-articulated agricultural policy document for Nigeria since 1988, the country has never established a systematic focus in its agricultural planning history that demonstrates a conscious effort to purposefully prioritise its agricultural production based on the components that comprise modern agriculture.
Indeed, agricultural operations are typically concentrated in less developed rural areas, where there is an urgent need for rural transformation, redistribution, poverty reduction, and socioeconomic development. The neglect of the agricultural sector, as well as Nigeria’s reliance on a monocultural, crude oil-based economy, do not bode well for the country’s economic health.
Nigeria, the world’s largest black nation, should have a strong economy capable of employing nearly all employable residents; instead, unemployment in Nigeria is worrying, with the jobless rate rising year after year.
According to the National Bureau of Statistics (NBS), the country’s unemployment rate increased from 13.3 percent in the second quarter to 13.9 percent in the third quarter of 2016.
Over the years, the Nigerian government has attempted to address the issue of unemployment by subsidising agriculture through the implementation of agricultural initiatives and interventions that may eradicate poverty and create jobs.
A few of the programs introduced were the National Accelerated Food output Programme (NAFPP), which was established in 1972 to subsidise agriculture in order to increase maize, cassava, rice, and wheat output in the country’s northern states.
This did not address the issue of unemployment, prompting the implementation of the Agricultural Development Project (ADP) in 1974, Operation Feed The Nation (OFN) in May 1976, the National Fadama Development Project (NFDP) in 1990, and the National Economic Empowerment and Development Strategy (NEEDS) in 1999.
However, these programmes did not produce the intended results. When they were implemented, they were viewed as a solution to the country’s unemployment problem. Policymakers have been blamed for failing to address key elements when planning these projects from top to bottom.
It is sad that, despite these federal government funding schemes, unemployment remains. However, there appears to be a light at the end of the tunnel, as the government has implemented a “Back To Agriculture” strategy, making agriculture a primary source of creating jobs in Nigeria.
1.3 Objectives of the Study
This study examines the impact of government support on unemployment reduction in Nigeria. To this purpose, the precise goals are as follows:
To investigate the impact of agricultural funding on unemployment reduction in Nigeria.
To determine whether there is a long-term relationship between agricultural funding and unemployment reduction in Nigeria.
Research Questions
In light of the aforementioned objectives, this research aims to address the following questions:
What effect does agricultural funding have on reducing unemployment in Nigeria?
Is there a long-term relationship between agricultural funding and unemployment reduction in Nigeria?
1.5 Research Hypotheses.
This study will be directed by the following research hypothesis:
Hypothesis One.
H0: Agricultural aid has no effect on reducing unemployment in Nigeria.
H1: Agricultural funding has an impact on unemployment reduction in Nigeria.
Hypothesis Two
H0: There is no discernible link between agricultural funding and employment in Nigeria.
H1: There is a strong link between agricultural funding and employment in Nigeria.
1.6 Significance of the Study
This research will be significant in the following respects.
It will examine how agricultural finance may support agricultural activities, hence creating jobs and reducing unemployment in Nigeria, as well as how agricultural facilitation might help to boost the Nigerian economy and promote economic growth.
This research will benefit Nigerian farmers because it addresses the issue of money, which is required by these farmers to boast their productions and create jobs.
This report will act as a guide for policymakers in Nigeria’s decision-making regarding agricultural funding and unemployment eradication efforts.
This research is very relevant to researchers, and they will find it worthwhile to use it in their work.
Since most funding programs have failed in the past, several ministries in agriculture must seek to understand the impact of agricultural funding and subsequent techniques and methods they may use to create jobs through agriculture.
1.7 Scope of Study
This study aims to determine the impact of agricultural funding on unemployment reduction in Nigeria from 1985 to 2016. This study will assess the extent to which agricultural funding has generated employment and will draw on previous government efforts to fund agriculture and create jobs.
The secondary data for this study will be taken from the Central Bank of Nigeria’s Statistical Bulletin and Annual Reports 2015 edition.
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