RENTIERISM AND NIGERIA'S AGRICULTURAL SECTOR

Author

Paul Nonso Egbo, Southern Illinois University CarbondaleFollow

Date of Award

12-1-2018

Degree Name

Master of Science

Department

Agribusiness Economics

First Advisor

Moon, Wanki

Abstract

Nigeria, despite its significant agricultural potential, has struggled to reach high levels of agricultural productivity. The country has gone from a net exporter of agricultural products from the few years after its independence to a net importer of food at present. The Oxford Business Group estimates that the country now spends as much as $23.3 billion on food import every year. To put this into perspective, the country’s entire allocation for its 2017 national budget was $23.97 billion, which in effect means Nigeria spends as much money on importing food as it spends on defense, health care, education, debt servicing, and capital expenditures combined. This study argues that the rentier nature of the Nigerian state has been a major contributing factor that has led to its poor agriculture performance. Thus, the study put forward that increasing agricultural productivity via a food self-sufficiency strategy would be of the best interest to the Nigerian government. Using a Double Log regression model, the study found that gross fixed capital formation and employment in agriculture has positive and statistically significant relationships with agricultural productivity in Nigeria. However, government recurrent expenditure in agriculture and credit to agriculture has a positive but statistically insignificant relationship with agricultural productivity in the country. In all, this study suggests that productivity in Nigeria’s agricultural sector can be improved with increased capital formation and labor in the sector under a framework of a food self-sufficiency strategy.