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In the pre-and post- independence era (1930 to 1965), the Nigerian economy was
predicated on agriculture. Agriculture employed about 70 to 80% of the country‟s labour force
(Falusi and Olayide, 1980) and contributed 60% of the nation‟s gross domestic product (GDP)
and foreign exchange earnings (CBN, 1985). Nigeria was heavily dependent on agriculture. It
was the major source of funds for implementing the first development plan, 1962-1968 (Umaru
and Zubairu, 2012).
In the oil boom era (1966 to 1977) the oil sector came to a prominent position as an
important source of the national revenue. The oil sector which used to contribute a meager 2.6%
of the GDP in 1960 contributed 57.6% to the GDP in 1970 and up to 99.7% in 1972 (Keke,
1992). Agriculture, on the other hand, contributed only 12% to the GDP in 1970 which
culminated in rising food import bill leading to the persistent huge deficit in the balance of
payments over the years (Ugwu, 2007). Within a decade up to 1983 however, agricultural output
in Nigeria declined to 1.9 percent and export fell to 7.9 percent. Agricultural imports as a share
of the total imports rose from 3 percent in the late 1960s to 7 percent in the early 1980s.
Nigeria‟s unfavorable agricultural development resulted from the loss of compositeness among
farm exports as the real values of the Nigerian Naira appreciated substantially from 1970 to 1972
and from 1982 to 1983. According to the Central Bank of Nigeria report, “export-oriented
agriculture declined from 42 per cent of the total export in 1970 to less than 3 per cent in 1985.”
(Umaru and Zubairu, 2012).
In the post oil boom era (1977 to 2002), the price of crude oil started falling and/or
fluctuating and there has been a growing concern to revitalize the agricultural sector as well as
diversify the economy.
The sector has suffered from years of mismanagement, and inconsistency in the
government policies and the era of huge oil revenues has also contributed in the neglect of the
agricultural sector. Major agricultural products are Cassava, corn, millet, cocoa, palm oil,
groundnuts, rice, rubber, sorghum, yam, and livestock production. The sector still accounts for
over 26.8percent of GDP and two thirds of employments. Nigerian is no longer a major exporter
of cocoa, cotton, groundnuts, rubber and palm oil. In order to revamp the agricultural sector, the
federal government had embarked on and implemented several agricultural policies and
programmes some of which are defunct or abandoned, and some restructured while others are
still in place. These include the farm settlement scheme, National Accelerated Food Production
(NAFPP), Agricultural Development Projects (ADPs), River Basin Development Authorities
(RBDAs), National Seed Service (NSS), National Centre for Agricultural Mechanization
(NCAM), Agricultural And Rural Management Training Institute (ARMTI) and Agricultural
Credit Guarantee Scheme Fund (ACGSF). Others were the Nigerian Agricultural Cooperative
And Rural Development Bank (NACRDB)/agricultural bank, Operation Feed the Nation (OFN),
Green Revolution Programme, Directorate Of Foods, Roads And Rural Infrastructure (DFFRI),
Nigerian agricultural insurance company (NAIC), National Agricultural Land Development
Authority (NALDA), Specialised Universities for Agriculture, Root and Tuber Expansion
Programme (RTEP) and rural banking scheme, etc (Salami, 2007).
Furthermore, the Federal Government in 2004 launched another economic reform called
National Economic Empowerment and Development Strategy (NEEDS) programme to
encourage private sector participation in the development of the economy. It was also aimed at
promoting growth and poverty reduction through a participatory process involving civil society
and development partners. In the agricultural sector, NEEDS were directed to influence
improvement in the production, processing and distribution of agricultural commodities. NEEDS
was short-lived for only one year and therefore could not transform or make significant impact
on the agricultural sector (Ugwu and Kanu, 2012). During the 2007, President Yar Adua‟s 7
point agenda also places emphasis on Food security (Umaru and Zubairu, 2012). The most recent
of policies or programmes is the Jonathan Administration‟s Agricultural Transformation Agenda
(ATA), which has recorded a good amount of successes. Despite all these, agriculture has failed
to keep pace with Nigeria‟s rapid population growth. Nigeria once exporter of food, now relies
on imports to sustain its growing population.
Undoubtedly, the discovery of crude oil has contributed and assisted Nigeria’s economic
prosperity and growth. Nevertheless, the current dwindling in oil price since June 2014, after five
years of oil windfall, has immensely affected the economy of major oil exporters like Nigeria,
Saudi Arabia, Iraq and Libya, etc. and was majorly aggravated by Middle East unrest and wars.
Another huge blow to crude oil exporters was America’s reduction in the number of barrels they
import from nations. These factors have created a bad market for Nigeria and thus, her economy
is presently shaking. This scenario is worsening by Nigeria’s running mono-economic economy
and the abandonment of agriculture.
Thus today, agriculture has suffered from long years of neglect, mismanagement,
inconsistent and poorly conceived government policies, lack of government meaningful
incentive to farmers, lack of basic infrastructure and a lot of bureaucratic bottlenecks in
executing policies and agricultural programmes among government agencies (Ariyo, 1997). This
is coupled with the seeming lack of motivation and foresight to seriously pursue policies that
encourage economic diversification.
Nigeria is a country blessed with a plethora of mineral and agricultural resources. A state
whose economy was predominantly agro based as at independence and showed promise in the
exploration and development of other resources cum sectors; saw a swift turnaround from this
trajectory during the oil boom of the 1960s. The financial windfall and renewed status as an oil
producing state sowed the seed of over reliance on oil bearing the fruits of lethargy towards all
other sectors. The price, a total blind eye towards non-oil sectors and a sharp decline of the
agricultural sectors‟ influence on the Nigerian economy and in general a gradual and outright rot
of the sector.
Today, thanks to the continuous search for cleaner, more eco-friendly and healthier
sources of energy by developed states, crude oil has assumed a diminished importance. Due to
the giant strides in shale oil exploration, the United States which is Nigeria‟s principal customer
has cut its importation of crude oil by eighty percent and has decided to look inward and become
an exporter itself. The first thing that comes to mind is the search for alternative markets, but
with most states preferring to patronize cleaner energy producers, it seems the age of crude oil is
gradually coming to an end. The problem is for a country like Nigeria whose source of revenue is
dependent almost solely on the export of crude oil, this fact is apocalyptic. Even now the
governments‟ decision to embark on austerity measures, last adopted by the Shagari regime
when oil prices fell globally, shows the side effects of this development. The dwindling oil price
means dwindling revenue for the country, which in turn will stunt economic growth and
development, causing untold hardships within the polity due to lack of adequate financial clout
to cater for pressing needs. These effects call for a drastic shift in policy, which traverses along
the lines of economic diversification and resuscitation of the agricultural sector.
The objectives of the study are to:
i. To examine the flaws in policy of mono-cultural economy and sole dependence on oil.
ii. To examine the necessity of policy shift towards agricultural revolution and economic
diversification in the wake of dwindling oil revenue.
iii. To ascertain whether or not present policy adequately addresses the issue of dwindling oil
i. What are the flaws inherent in operating policy of mono cultural economy and sole
dependence on oil?
ii. What factors necessitate policy shift towards agricultural revolution and economic
diversification in the wake of dwindling oil prices?
iii. Does current policy adequately address the issue of dwindling oil revenue or not?
H0 – Policy geared towards mono-cultural economy and sole dependence on oil is not flawed.
H1 – Policy geared towards mono-cultural economy and sole dependence on oil is flawed.
H0 – Policy shift towards agricultural revolution and economic diversification is not necessary in
the wake of dwindling oil revenue.
H1 – Policy shift towards agricultural revolution and economic diversification is necessary in the
wake of dwindling oil revenue.
H0 – Current policy does not adequately address the problem of dwindling oil revenue.
H1 – Current policy adequately addresses the problem of dwindling oil revenue.
Oil prices overtime especially from the 1960s till date have been erratic, with no suitable
and accurate predictions regarding the fluctuations. This has had mixed effects on oil
producing/dependent states. With them experiencing prosperity during oil booms and devastating
economic effects, which are worsened by the price unpredictability, leading to lack of adequate
planning to counter the sudden drop in oil revenue. Beyond this are the major milestones
recorded in the search for and processing of cleaner energy sources and alternatives, which
sooner than later might render crude oil obsolete.
In view of the above, one realizes that a shift away from a mono-cultural economic
policy, promoting sole dependence on oil is inevitable. With the amount of resources available in
Nigeria, there have been calls for greater focus on the agricultural sector, the exploration of other
resources cum sectors and the diversification of the economy. Despite these calls the country
remains heavily reliant on oil even with the current crisis, leading to questions being asked about
what is being done to tackle the effects of the dwindling oil revenue. This study therefore serves
the purpose of revealing the authenticity or lack of in the formulation and implementation of
policy geared towards economic diversification and agricultural revolution.
1.7.1 Scope
The scope of this study concerns Policies implemented by government in the wake of
dwindling oil revenue. In view of this, the study discusses on whether or not the government has
done enough to ensure growth in non-oil sectors and other policies it has adopted to cope with
the shocks of dwindling oil revenue. As such, the study is situated on an analysis of the country‟s
activities in the historic present- particularly from 2014 when the global oil crisis began- and its
current activities; against this background, makes an assessment of policies, thus stating whether
they are adequate or not.
1.7.2 Limitation
There is this perception amongst many Nigerian citizens that the country is extremely
rich and that there is an infinite amount of money in government coffers. This is mixed with the
belief that only a select few have access to the riches or enjoy the benefits of the country‟s
wealth. This has created a feeling of apathy towards issues, be it within the country or how
global events affect Nigeria, and also towards government policies in general as they feel they
are not affected by them. This notwithstanding, the non-informative attitude of some wouldhave-been interviewees, and the outright non-disclosure of some officials, even at government
parastatals, pose a genuine limitation to the study.
The impact that the limitation would have had on the study was however trivialized
through the adequate adaptation of the views shared by other respondents, who readily shared
their informative views. A limitation was also faced in the collection of questionnaires that make
up the research instrument used in the primary data analysis. 160 questionnaires were distributed
but only 150 were returned, forming the sample size of the study.
This study is delineated into five chapters. Chapter 1 covers the background of study; which
gives a concise history of Nigeria from a predominantly agro based economy to an oil dependent
one. Also, the relevant issues of statement of problem, objectives of study, the research
questions, and hypotheses, significance of the study, scope and limitations to study and
organization of the study are adequately discussed.
Chapter two entails the appropriate literature that covers the scope of the work. In line with this,
associated concepts would be explained, as well as the theories that serve as the foundation for
the study.
Chapter three revolves around the methodology used in the study. It incorporates the adopted
designs, while exploring the sample population that served as a representative of the larger
Chapter four serves as the main body of the work, wherein the objectives of the study are
highlighted and treated. In delving into these, the study attempts to assess policy in the wake of
dwindling oil prices.
Chapter five contains the summary of the work, conclusion and recommendations that are
deemed relevant.
Rent Seeking: this is seeking to increase one’s share of existing wealth without creating new
wealth. The effects of rent-seeking are reduced economic efficiency through poor allocation of
resources, reduced actual wealth creation, lost government revenue, and increased income
inequality, and, potentially, national decline.
Crowding Out Effect: is argued by some economists to be a phenomenon that occurs when
increased government involvement in a sector of the market economy substantially affects the
remainder of the market, either on the supply or demand side of the market.
Diversification: the act or practice of manufacturing a variety of products, investing in a variety
of securities, selling a variety of merchandise, etc., so that a failure in or an economic slump
affecting one of them will not be disastrous.
Agriculture: Is a science or art concerned with the cultivation of animals, land, plants, fungi,
and other life forms for food, fibre, bio-fuel, medicinal and other products used to sustain and
enhance human life.
Economy: An economy or economic system consists of the production, distribution or trade, and
consumption of limited goods and services by different agents in a given geographical location.
The economic agents can be individuals, businesses, organizations, or governments. Transactions
occur when two parties agree to the value or price of the transacted good or service, commonly
expressed in a certain currency.
Public Policy: This has to do with actions and inactions of government. It constitutes what
government wants to do, does and does not do.
Revolution: A sudden, vast change in a situation, a discipline, or the way of thinking and


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