Development revamp agricultural sector and 1981-85 Plan focuses on

Development
is “… not only economic growth, but also some notion of equitable
distribution, provision of health care, education, housing and other essential
services all with a view to improving the individual and collective quality of life
(Naomi, 1995).”1     

After
two years of independence, Nigeria government put into effect a Development
Plan for 1962-1968, but the plan was too much dependent to external financial
resources (50%) and failed because only 14% of them could have been reached.

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After
civil war in 1970, Nigerian government launched 1970-74 Plan, focuses on  agriculture, industry, transport, manpower,
defence, electricity, communication and water supply and provision of social
services; 1975-80 Plan, focuses on rural development and efforts to revamp
agricultural sector and 1981-85 Plan focuses on improvement in the living
conditions of people such as increase in wages and decrease in unemployment, more
even distribution of income among people and increased dependency on country’s
own resources (self-sufficiency).

 

Even
all these plans and resource endowment of Nigeria, no appreciable development
has been recorded. What was the causes of
this process, which make Nigeria only a lower-middle income country in its 67
years of life? Why did World Bank define Nigeria as a ” A Record of Development
Failure” especially before 1998?

?       
Nigeria
was a high level of corruption country and the governors who are responsible
for development were only seeking to get some privileges after colonialism era
of the country( We may refer 1960-1999 term as neo-colonialism). Since its
independence in 1960, Nigeria has received 
$400 billion aid —  six times what
the U.S. pumped into reconstructing the whole of Western Europe after World War
II, which is about $380 billion of government money has been stolen since then—
almost the total sum Nigeria has received in foreign aid.2

 

 

 

?       
 The country’s failure in development was
evident in the stagnation of GDP per capita 
which stood at $430 in 2004 compared with $444 in 1977, with a
significant fall in non-oil GDP per capita over the period.3

?       
 The national incidence of poverty rose from
approximately 28 percent in 1980 about 55 percent by 2004.

?       
Public
members, not even local Government officials weren’t informed about policies
which failed to create commitment.

?       
Before
oil and gas exports that began in 70s, Nigeria had a diversified economy with
substantial agricultural production and exports. When we come to the year 2005,
however, oil and gas form the one-third of the country’s GDP, 70% of budget
revenues, and 95 percent of exports. Despite its large labor force, agriculture
couldn’t be an export basis except 1950-60.

 

 

 

ECONOMIC MODELS

 

1)     
Linear Stages Model

 

1.1) Stages of Growth:

According
to this model, stages are “the traditional society, the pre-conditions for
take-off, the take-off, the drive to maturity, and the age of high
mass-consumption” .This simplistic theory of 1950s failed to account for
political, social and institutional obstacles to development by assuming
capital accumilation is enough for development.

Among
the 5 stages,like most of the developing countries, Nigeria is stuck in the first
two steps, traditional society with massive labor force in agriculture and pre-conditions
for take-off by building infrastructure to increase efficiency.

 

 

1.2) Harrod Domar Model:

Principal
strategy for any take off is mobilization of foreign and domestic savings to
generate enough investment to accelerate the economic growth of country because
capital accumulation is possible through savings.

In
the case of Nigeria, high level of poverty, weak financial system which cannot
properly mobilized funds internally, low level of entrepreneurial spirit cause
low levels of savings.

Nigerian
government is supporting FDI since 1986, to close the gap between domestic
savings and foreign exchange gap that stems from volatile monoculture economy
depends on oil revenues. Telecommunication and oil multintional companies did
create FDI but there was not an efficient allocation which could trigger the
economic growth as expected.

Marshall
Plan, massive amounts of U.S. financial and technical assistance to the
war-torn countries of Europe to make them rebuild their economies, worked for
Europe because the European countries accomplished the necessary structural,
institutional, and attitudinal conditions to convert new capital effectively
into higher levels of output. The Rostow and Harrod-Domar models assume the
existence of these same attitudes and arrangements in underdeveloped nations,
which is not realistic.

Recommendations
for increased level of savings: As necessary conditions, Foreign Direct
Investment (FDI) should be tailored towards the productive sector of the
economy and should be directed more to production of capital goods against the
production of consumer goods in order to enhance more domestic capital
formation. Domestic saving should be mobilized by the government through tax
reduction, creation of employment opportunities and improvement of the
financial system in order to increase the level of capital accumulation and
sustainable growth.

 

 

2) Structural Change Theory

            Two
major forms of structural-change theories; 
Lewis’ two-sector surplus model, which views agrarian societies as
consisting of large amounts of surplus labor which can be utilized to spur the development
of an urbanized industrial sector, and Chenery’s patterns of development
approach, which holds that different countries become wealthy via different
trajectories.4

            However,
researches show this surplus can only be seasonal and urban development
suppress the rural development and worsen the situation for agricultural
production. Taking European model development as role model would be a wrong
and inefficient solution for Nigeria, because of its huge labor force.

            In
1971, the share of agriculture in total GDP stood at 48.23 per cent. By 1977,
it had declined to almost 21 per cent. Agricultural exports, as a percentage of
total exports, which was 20.7 per cent in 1971, reduced to 5.71 percent in
1977. Nigeria became oil-dependent through time. 

The
agricultural sector is the largest non-oil component of the Nigerian economy,
and as was seen above it contributed to aggregate growth in part by releasing
labor into other sectors with higher labor productivity. In this sense, Nigeria
exhibited a pattern of structural change similar to that experienced by many developing
countries. Starting from 1974, the economy became a net importer of basic foods
as a result of rural to urban migration to take advantage of the higher wages
in the oil export sector. Due to migration and decreasing levels of agricultural
production, foreign exchange earnings were utilised for food importation. With
low labor productivity in agriculture, it takes a large proportion of the labor
force to provide sufficient food for the population. Only when labor productivity rises in agriculture is labor able to
move to other sectors of the economy.  To reach the full potentials of the
agricultural sector, the value-chain of the sector should be supported by improved
utilization of fertilizers and greater research efforts and mechanization of
the sector should be pursued. This enable the release of surplus labour from
the sector without sacrificing food security.

 

             Structural change
accounts for approximately one-fifth of the total change in labor productivity
in Nigeria between 1996 and 2009.

 There would be a shift of human capital from agriculture
and general services into transport, communications, trade, manufacturing and
business services. By doing this, Nigeria may increase its value-added levels
up to 25%.

 

 

3) International Dependence
Revolution

Even
after Nigeria has gained its independence in 1960, the governors of the states
were too much self-interested and under the effect of England. We refer this
term as “neocolonial”. When we consider the Nigeria’s 2020 and 2030 agendas,
financial aid is required and main resource for increasing the savings for
country, because country itself cannot generate the sustainable saving rates.

 False paradigm model suggests that,
inappropriate advice provided by uninformed, biased, and ethnocentric
international “expert” advisers from developed-countries with ignorance of
infrastructure and tastes of the country and disproportionate elite control
over public. While Nigeria is often used as a ground for experimenting imported
and irrelevant theories, home-based knowledge, expertise and innovative ideas
are often ignored in the quest for workable solutions to the myriads of
development challenges begging for urgent attention in the country. Nigeria has
spent a long period with trials with little benefit and errors. The economy is
broken into the very rich (oil and gas industry) and the very poor (mainstream
economy and agriculture) which create dualism within the country.

 

According
to Dualistic Development Theory, Nigeria shows below characteristics of the 4
features mentioned:

?      
There
is a strong superior(oil) and inferior(agriculture) sectors differences which
cause country to become monoculture economy and dependent to world in terms of
oil prices, rather than generating more revenues for its citizens with
diversified sectors’.

?      
Gap
between the developed countries and developings are widening day by day.

?      
Superior
countries are pushing down the inferiors.

?      
Among
country, there’s a strong dualism is still present and brain drain is too much
which cause people to lose their hope about the future of the country. Not only
in the global meaning, but also in the counry’s two extremes(
superior parts) push down effect is remaining. Emigration of skilled
Nigerian doctors to the West is the most in sight brain drain example of the
country. In 1995, it was estimated that 21,000 Nigerian doctors were practising
in the United States alone, almost the same as the number of doctors working in
the Nigerian public service. Nigerian government’s priority should be able to
keep these professionals in their home country.

 

 

 

4) Neoclassical Counterrevolution

 

According
to this theory, Nigeria carries out all the conditions that create an
underdevelopment situation: too much state intervention, high levels of
corruption, inefficiency in resource allocation and not enough economic
incentives for FDI.

As a solution to all these
conditions, Neoclassical Counterrevolution theorists suggest free market, like
Adam Smith’s invisible hand. Among three thoughts of this school, free market,
public choice and market friendly approaches, market friendly approach would be best for our case.

 

Market
friendly approach suggests that, there are many imperfections in developing
countries’ product and factor markets. Therefore governments have a key role to
play in facilitating the operation of markets through market friendly
interventions—for example, by investing in physical and social infrastructure,
health care facilities, and educational institutions and by providing a
suitable climate for private enterprise.

 

 

 

 

 

 

Consequently,
Nigeria’s development process fit to Linear Stages Theory and International
Dependence Revolution so far. Along with the government’s policies, Nigeria
will be following the development strategies which Structural Theory of Lewis
and market friendly approach of Neoclassical Counterrevolution in future.

 

 

What can be done
in the future for development?

 

v  Commitment to
development is the main source of success and can be attained through
elimination of electoral fraud and committed leaders.

v  Citizenship and
patriotism promotion is required to bring together of all people from all
states, religious groups and different ethnicities because Nigeria consists of
three dominant ethnic groups that constitute about 70 percent of the total
population and over 300 languages are spoken in country. 

v  Nigerian economy
is characterized by high volatility, fiscal deficits, and rapid inflation    because of the high spending rates even
during low-oil price times and this weak

economic
management should be improved to meet the population which is growing by 2.4
percent since 1970.

v  Government should
increase its expenditure on the manufacturing sector and reduce the interest
rate to attract foreigners and FDI.

v  The manufacturing
sector’s productivity level should be increased  through upgrading technologies.

v  Nigeria’s trade-to-GDP,
which stood at 31 percent in 2014, is behind South Africa’s (64 percent),
China’s (42 percent), and Ghana’s (88 percent), so trade to GDP ratio should be
increased.

v  According to
United Nations, Nigeria lacks an internationally recognized National Quality
Infrastructure (NQI) with the capacity to ensure safety, integrity and
marketability of goods and services. As example, up to 40 percent perishability
rate for agricultural products due to poor road infrastructure can be given.
This create technical barriers to local, regional and international trade. With
the help of the private finance, efficiency can be increased through
infrastructure investments, like Lagos-Calabar rail project of 2016 which aims
to increase trade.

v  Polarization in
income distribution can be eliminated through socioeconomic infrastructural
improvements such as higher literacy rates and education of women to close
gender gap.

v  Asian countries’
development processes can be taken as role model, such as Japan’s agricultural
policy or China’s efficient internal resource allocation toward industrial
production. Structural change should be accomplished for economic, social,
political and psychological aspects of development holistically.

1 http://www.iiste.org/Journals/index.php/JAAS/article/download/12071/12411

 

2 http://www.dailymail.co.uk/debate/article-2387359/Nigeria-country-corrupt-better-burn-aid-money.html

3 http://lnweb90.worldbank.org/oed/oeddoclib.nsf/DocUNIDViewForJavaSearch/3EE7F2E5A37A9BEC85257321007A7697/$file/nigeria_cae_approach_paper.pdf

4 https://en.wikipedia.org/wiki/Development_economics