INTRODUCTION
By
S. O. Talabi and O. Onasanya
In spite of the growing importance of oil, Nigeria
has remained essentially an agrarian economy,
with agriculture still accounting for significant
shares in Gross Domestic Product (GDP) and total
exports, as well as employing the bulk of the labour
force. Available data show that at independence in
1960, the contribution of agriculture to the GDP was
about 60 per cent which is typical for developing
agrarian nations. However, this share declined,
over time, to only about 25 per cent between 1975
and 1979. This was due, partly, to the phenomenal
growth of the mining and manufacturing sectors
during the period, and partly as a result of the dis incentives created by the macroeconomic environ ment.
Similarly, the growth rate of agricultural produc tion exhibited a downward trend during the period.
Thus, between 1970 and 1982, agricultural produc tion stagnated at less than one per cent annual
growth rate, at a time when the population growth
was between 2.5 to 3.0 per cent per annum. There
was a sharp decline in export crop production, while
food production increased only marginally
Thus, domestic food supply had to be aug mented through large imports. The food import bill
rose from a mere 14112.88 million annually during
1970-74 to N1,964.8 million in 1991. The advent of
the oil boom reduced the share of agriculture in total
exports to a mere 2 per cent. Previously the world's
leading producer and exporter of palm-oil, Nigeria
became a net importer of vegetable oils by 1976.
In the early 1980s, it became apparent that the
agricultural sector could no longer meet domestic
food requirements, supply raw materials for indus try and earn enough foreign exchange through
exports, owing to various economic, social and
other environmental problems. Consequently, the
Federal Government, in the 1986 budget, proposed
a programme of economic recovery which was
revised into a more comprehensive Structural
Adjustment Programme (SAP) by the second half of
1986.
Among the major objectives of SAP were to
restructure and diversify the productive base of the
economy in order to reduce dependence on the oil
sector and on imports, and to lessen the dominance
of unproductive investments in the public sector.
With respect to the agricultural sector, the core measures were improvement of pricing policy and
encouragement of exports through trade liberalisa tion.
The performance of agriculture since the com mencement of SAP, however, has been mixed.
Average growth rate of agricultural production was
estimated at 5.2 per cent annually between 1990 1997. Except for fishery output which declined,
crops, livestock and forestry production recorded
improvements. Domestic food supply and agricul tural exports also recorded remarkable improve ments. Apart from the rise in the share of export
crops, such as cocoa, palm kernel and rubber, in
the total volume of agricultural exports from 71.5
per cent in the pre-SAP era to 84.1 per cent, new
commodities, including food staples, entered the
export basket.
Substantial exports were recorded,
with earnings realised from agricultural exports
increasing from a mere N193.6 million in 1985 to
143,233.06 million annually during 1990-94 (Table
4.3.1). The increase in the value of exports was
traceable mainly to the improvements in both export
trade and pricing incentives since the commence ment of SAP. In particular, export prices in Naira
terms rose sharply, following exchange rate depre ciation, trade liberalisation and the abolition of the
commodity boards.
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