ABSTRACT
The study investigated the impact of non-oil exports on Nigerian
economy during the period of 1986-2010. This study was carried
out against the background of the crucial role non-oil export can
play as an alternative source of revenue apart from crude oil
exports. To achieve this objective, multiple regressions were used
in analyzing the data. The empirical result shows that non-oil
export is statistically significant to Nigeria economic growth. On
the other hand, Government Expenditure (GEX) was not
significant to Nigerian economy. Due to this, some
recommendations were made which include encouraging
financial institutions, improving in data collection and banking,
efficient allocation and use of resources, and creating economic
environment that will help boost the activity of non-oil export
sector.
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TABLE OF CONTENTS
Title Page…………………………………………………………….…. i
Approval Page ………………………………………………………… ii
Dedication…………………..………………………………………….. iii
Acknowledgement…………………………………………………….. iv
Abstract…………………………………………………………………. v
Table of Contents……………………………………………………… vi
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study………………………………………… 1
1.2 Statement of the Problem………………………………………… 8
1.3 Objective of the Question………………………………………… 11
1.4 Statement of Hypothesis…………………………………………. 11
1.5 Significance of the Study………………………………………… 12
1.6 Scope and Limitations of the Study…………………………… 12
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Theoretical Literature……………………………………………. 14
2.1.1 The Agricultural Commodities and Products Exports…. 15
2.1.2 The Manufacturing and Craft Export Product…………… 16
2.1.3 The Solid Mineral Export Product………….……………….. 17
2.2 Empirical Literature……………………………………………… 18
2.3 Limitations of the Previous Studies…………….……………. 26
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CHAPTER THREE
3. O RESEARCH METHODOLOGY
3.1 Model Specification……………………………………………….. 27
3.2 Methods of Evaluation…………………………………………… 29
3.3 Model Justification……………………………………………….. 30
3.4 Sources of Data and Software Packages……………………. 31
CHAPTER FOUR
4.0 PRESENTATION AND ANALYSIS OF RESULTS
4.1 Presentation of Result…………………………………………… 32
4.2 Result Interpretation……………………………………………. 32
4.2.1 Analysis of the Regression Coefficients…………………. 32
4.2.2 Evaluation Based on Economic Criteria……….……….. 33
4.2.3 Evaluation Based on Statistical Criteria……..………… 33
4.2.4 Evaluation Based on Econometric Criteria……………… 34
4.3 Evaluation of the Research Hypothesis……………………. 38
4.4 Policy Implication………………………………………………. 39
CHAPTER FIVE
5.0 SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.1 Summary of Findings…………………………………………… 40
5.2 Policy Recommendations….…………………………………… 40
5.3 Conclusion….…………………………………………………….. 43
Bibliography……………………………………………………………. 44
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CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There are a number of reasons for a country to be concerned
about its rate of economic growth. Economic growth is designed
by both affluent and non-affluent economies. Economic growth is
the desire for higher levels or real per capital income, real output
which must grow faster than the production of the economy in
question. Economists, policymakers, public and private sectors
work ceaselessly forwards attaining economic growth by the use
of development and growth models and policies. Among the
policies used are trade policy (import and export policies,
monetary policy, exchange rate policy, fiscal policy, market, etc).
In this study, the non-oil exports and economic development in
Nigeria will be examined.
Non-oil exports are the products which are produced within the
country in the agricultural, mining, and querying and industrial
sectors that are sent outside the country in order to generate
revenue for the growth of the economy excluding oil product.
These non-oil export products are coal, cotton, timber,
groundnut, coca, beans, etc.
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Today, as in the past, the growth of Nigeria economy remains
partly dependent upon increasing productivity of the agricultural
sector.
Helleiner, 2002 state that no matter how much development and
structural transformation achieved, it will remain its relative
dominance in the economy to many decades to come. Precisely, it
is from agricultural exploits that the economy has received its
principal stimulus to economic growth.
Agricultural sector can assist through the exportation of principal
primary commodities which will increase the nation’s foreign
earnings and which can be used to finance a variety of
development projects. The growth of the agricultural sector can
make a substantial contribution to the total revenue, as well as
having some implications for intersectional terms of trade. Also in
the area of capital formation, the savings generated in this sector
can be mobilized in development purposes, while increase in
rural income as a result of increasing agricultural activities can
further stimulates the product of the modern sector.
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The needs of the agricultural sector could indirectly influence the
creating of additional infrastructures which are in dispensable to
rapid economic development (Olaloku, 2001).
Another non-oil export to be developed on is industrial sector. It
is the fastest growing sector in Nigerian economy. It comprises of
many manufacturing and mining. Nigeria has manufacturing
base prior to 1960 and shortly after.
The problem was due to lack of modern technological skills,
managerial experience of complex organizations and financial
back-up. The problem was further aggravated by the colonialists
merchants convincing arguments on the goodness of comparative
cost- advantage.
Nigerians were coaxed into concentrating their efforts in the
production of primary agricultural products and exporting them
to the metrological industries in Europe.
Our industrial sector took off after independent relied on satellite
firms representing British interest. The bank sector, which is
constellation of colonial bank braches and some companies that
were able to invest in manufacturing were the multi-national that
have access to funds, technology, and managerial expertise. This
greatly hindered the progress of indigenous entrepreneurs. The
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Nigerian manufacturing sector has been described by Ikediala
(1983) as consisting of more assembling plants. He says that the
implication of this is that the industries have very little
background linage in the economy, since the bulk of the inputs is
imported, thus the manufacturing sector depends or imported
raw-materials of 42%. The capacity utilization of manufacturing
industries has always been low in this country. The reasons as
put by CBN (1998) are not unconnected with raw materials
scarcity, consumers’ resistance due to high prices, and increase
in cost of manpower. Others mentioned are equipment
breakdown due to poor technology, lack of spare parts. Time lies
between when inputs are ordered for and when they arrive, cash
flow problem in industries becomes a permanent features.
The Nigeria civil war brought about the deterioration of the oil
palm grooves and plantations were abandoned and little if any
new planting was undertaken. As a result of that, the output of
palm oil and palm kernel declined drastically. But according to
Onwuka (1985), the problems of palm products are due to the
stagnation in the production of this wild palm tress, which are of
low-yield quality, and the difficulties experience in harvesting
them. In addition, the old system of pricing which guarantees low
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production prices for palm produce discourage substantial
investment from being made for further production of this
product. Also, the problem of marketing boards cannot be overlooked.
Marketing board is an institution set up by the government with
the exclusive right to buy and sell certain agricultural products.
They purchase some products locally export sales are made
through the Nigerian.
Marketing company, which is jointly owned by the state, one of
the marketing functions of the marketing board is to stabilize the
prices or our cash crops and hence creates stability of income for
formers and to accumulate funds for development purposes. But
the operation has failed to provide incentives to farmers to
increase their input. Also, the producers aid unnecessary tax and
they took from the producers some money, which should have
gone to them as income they this reduced the amount of capital
available to the producers.
This criticism, according to Adenira (1991) made the federal
Government to reform the marketing board some with a view to
increase producers’ prices and income. He said that the essential
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features of the new authority while producer taxation (export
duty and produce sale tax) has been abolished. Another major
boards with the responsibility of market specific products
wherever they are produced in the country. These boards are
likely to reduce administrative problem and be more economical
compared with all oil – produce state market boards previously in
existence.
The major fault of the successive government that are supposed
to sustain this sector through the building of macro-economic
structures and incentives diverted their attention away from
agriculture. The result was sharp in the export/import equation
as country started importing even palm oil that was hither to
imploring from Nigeria. The situation was becoming worrisome
thus by 1975 there were attempts to recapture the lost of glory of
agriculture. General Olusegun Obasanjo’s Operation feed the
nations becomes the first real expressed official attempt in this
direction. It was followed by the establishment of two river basin
development authorities in 1977 by 1978 and 1979, the federal
government made budgetary provision to establish 4,000
hectares of mechanized farms in each of the 19 states then, by
1979, there was a relunch of “operation feed the nation” with a
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new tag “Green Revolution” with various committees set up for its
implementation (Oko, 1999).
If the efforts of the two leaders – General Olusegun Obasanjo and
Alhaji Shenu Shagari’s regimes could have brought vigor to the
agricultural sector, the activities of the sic-commodity boards did
not assist much Oko said that fixing export product prices
without recourse to cost inputs discourages agriculture therefore
remained slow because food demand was growing at the rate of
3.5% in the SD’s while agricultural output was crawling at 11%.
Between 1990 and 1998, GDP in agriculture declined to 6.2%.
then the distributions of agriculture inputs to producers were
neglected, infrastructure facilities, like motor able feeder roads,
and irrigation facilities, etc made it difficult to increase
agricultural production CBN mandate to bank with regard to
bank loans to agriculture as priority sector for preferential
leading was floated
The table below shows yearly palm production and coca products
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Production in tones, which cover from 1990-2004.
Year Plan products Cocoa products
1990 730 1190
1991 760 1363
1992 792 1321
1993 825 419
1994 837 503
1995 871 403
1996 920 591
1997 938 635
1998 992 683
1999 1003 721
2000 1411 832
2001 1603 925
2002 114 1160
2003 1701 1165
2004 1770 1200
Source: CBN-Annual report and statement of Account 2000
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