ROLE OF AGRICULTURE IN ECONOMIC GROWTH AND POVERTY REDUCTION IN NIGERIA
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Abstract
This study aimed to assess the role of agriculture in driving economic growth and reducing poverty in Nigeria. Data for the analysis was sourced from the Central Bank of Nigeria’s statistical bulletin and the World Bank’s development indicators, spanning 33 years from 1981 to 2014. Multiple regression analysis was employed to examine the data. The findings revealed that agriculture significantly contributes to economic growth in Nigeria and plays a crucial role in poverty reduction. Conversely, the non-agricultural output included in the model did not show a significant impact on poverty reduction. Based on these findings, the study recommends that the government increase funding for agricultural universities in Nigeria to support research across various areas of agricultural production. This investment would enhance export potential and improve the competitiveness of Nigerian agricultural products in global markets. Additionally, the Central Bank of Nigeria should establish a stable policy for loan disbursement to farmers, ensuring reasonable interest rates for repayment.
Background of the Study
The role of agriculture in promoting economic growth and alleviating poverty has become a significant concern for both developed and developing nations. Nnadi (2005) emphasized that agriculture is essential for addressing economic growth and poverty reduction, which are among the most challenging issues facing many countries, particularly in the developing world, where a large portion of the population is considered impoverished. In Nigeria, evidence shows a persistent rise in the number of people living in poverty. The author further noted that the growing poverty levels in Nigeria have reached alarming proportions, as confirmed by empirical studies. In alignment with this, Ojo (2008) observed that in Nigeria, a sub-Saharan African nation, at least half of the population lives in extreme poverty. The UN Human Poverty Index in 1999 highlighted this issue, assigning Nigeria a poverty rate of 41.6%, which placed the country among the 25 poorest in the world. By 2004, Nigeria’s Human Poverty Index (HPI) value of 40.6 ranked it 76th out of 102 developing countries. The country faces increasing poverty rates both regionally and nationally, along with high unemployment, significant income inequality, low-quality human capital, a high percentage of the population relying on welfare, and substantial out-migration despite periods of economic growth.
Agriculture, defined as the production of food, feed, fiber, and other goods through the systematic cultivation and harvesting of plants and animals (Akinboyo, 2008), is crucial in this context. Brandt (2011) further described agriculture as the cultivation of land and the raising and rearing of animals to produce food for humans, animals, and industries.