BACKGROUND OF THE STUDY
Nigeria being the most populated African nation with a population of about 170 million people is a nation made up of people of different cultures and religions. Nigeria is endowed with many natural resources scattered in diverse parts of the country. At independence in 1960, the main source of the nation’s revenue was basically agriculture in the north most especially and extraction of solid minerals in other parts of the country. The discovery of petroleum in the country in the 1960s and the booming of petroleum in the global market led to her over reliance on petroleum and a gradual but consistent neglect of agriculture and other sectors of the economy like solid minerals. Regrettably today, petroleum accounts for over 90% of Nigeria’s export revenue and over 80% of the government’s budget (Iyayi 2007).
Most of revenue accrued from petroleum has been mismanaged basically through corruption, and disoriented, harsh economic policies. It is unfortunate that the different tiers of government in Nigeria cannot pay their workers talk less of embarking on any meaningful project without reliance on petroleum revenue. The situation has left the economy of the country at the mercy of the instability of the global petroleum prices. Again, the neglect of other sectors of the economy has left a vast majority of Nigerians who are employable unemployed or under employed who are willing tools for causing mayhem in the society. The oil industry cannot engage significant number of the Nigerians. There is a crying need for Nigeria to diversify her economy in other to root out unemployment and stabilize her economy in other to achieve sustainable national development.
A critical review of the Federal Government revenue profile in the last 10 years showed that oil revenue accounted for over 80% of the foreign exchange earnings, while the non-oil sector of the economy, despite its improved performance in recent years, contributed 20.1 % (CBN, 2010), thus revealing the extent of the instability of the economy as a result of the fluctuations of the global oil prices. The renewed emphasis on the production of Shale oil in the United States and other alternatives to fossil-fuel energy, such as solar, wind and bio-energy in the advanced economies, has reduced oil demand and price, and further weaken Nigerian earnings and by extension her economy since it runs a mono cultured economy. Thus, in the absence of concerted efforts to expand our revenue base, the nation has been plunged into the current economic recession hitting the country today. The performance of the non-oil export sector in the past three decades leaves little or nothing to be desired, in spite of the efforts to promote non-oil exports in Nigeria. Abogan, et al. (2014) note that an assessment of the trend and patterns of activities in the non-oil sector of Nigeria revealed that despite the various policies, strategies and reform programs, the contributions of the sub-sectors of this sector have been below average, nothing to write home about and below its full potential. The share of non-oil export in the country’s total export revenue has remained very poor and it was 1% in 2008 (CBN, 2008), and up 4.8% in 2013 (CBN, 2013) then it dropped to an all time low of 0.8% in 2015 (CBN 2015). Ezeudu (2014) notes that recent proactive efforts from the private sector, export processing free zone scheme and Nigeria Export and Import Bank especially efforts of the banking sector to help in financing exportation of commodities are becoming noticeable in the nation’s export profile, with the traditional commodities like cocoa, being upstaged by new ones like cashew nut, ginger and sesame seed in the foreign market. The policy concern over the years has therefore been to expand non-oil export especially agriculture in a bid to diversify the nation’s export revenue (Adedipe, 2004). The diversification of the Nigerian economy is necessary for important reasons. First, the volatility of the international oil market with the attendant volatility of government revenue gives buttresses any argument for diversification of exports. Secondly, the fact that crude oil may be an exhaustible asset makes it unreliable for sustainable development of the Nigerian economy (Utomi, 2004). The adverse consequences of over dependency on oil trade heightened the need and call to diversify Nigerian economy away from oil towards the direction of non-oil export trade.
STATEMENT OF THE GENERAL PROBLEM
Also, it was observed that a factor crucial to this lack of economic development is the lack of economic diversification which has caused the economy to rely heavily on petroleum for revenues and as the major export commodity in the economy (Osuntogun et al, 1997). Before 1970s, Nigeria’s exports were predominantly non-oil commodities with agricultural commodities accounting for over 50%. However, in the 1970s, when the price of crude oil in the international market sky rocketed, the share of non-oil exports began falling and has remained low ever since. This is majorly due to the money-spinning nature of oil exports which makes it more profitable to export oil and less profitable to export non-oil commodities. This has cause a rather heavy dependence on the oil sector and the proceeds from the exportation of petroleum. This heavy reliance has subjected the country to difficulties when the price of crude oil, the major export commodity, is low in the international market. In light of this, the government has tried to adopt various strategies to boost non-oil exports and stabilize the economy especially in the present economic recession. In spite of these efforts, the performance and contribution of the non-oil exports sector has remained very low. The sector has continued to perform below its full potential. This research is therefore carried out to determine to what extent the diversification of the economy will help enhance the economic progress of the economy, to appraise the past efforts at diversification and to discover how the current performance of the non-oil sectors can be improved.
The overdependence on petroleum in Nigeria has been a curse rather than a blessing to the economy of the country. The mono cultured system of economy of Nigeria has led to the unpredictability of the economy as a result of the fluctuations of crude oil prices in the global market thus plunging Nigeria into recession and throwing many employable Nigerians into unemployment and under employment which has left many people unemployed thus posing security threat to the society. The lack of diversification of the economy of the country has been a major reason why the country despite its abundant human and natural resources have found it very difficult to wriggle herself out the present economic recession in the country. To ensure growth and sustainable development which has been elusive overtime in Nigeria, all hands must be on deck in moving Nigerian out from its present state of mono cultured economy as it has caused more harm than good in recent years.
AIMS AND OBJECTIVES OF THE STUDY
The major aim of the study is to examine export trade and mono cultured Nigerian economy in Nigeria. Other specific objectives of the study include;
H0: There is no relationship between export trade and economic growth and development
H0: Export trade does not enhance diversification of the economy
JUSTIFICATION OF THE STUDY
The study would be of immense benefit to government at all levels, economic policy makers and relevant stakeholders as it would reveal the benefits of export trade in achieving economic diversification in creating jobs and enhancing sustainable growth and development. The study would also be important to students, researchers and scholars who are interested in developing further study on the subject matter.
SCOPE OF THE STUDY
The study is restricted to export trade and the mono cultured Nigerian economy using African catfish as a case study.
LIMITATIONS OF THE STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
OPERATIONAL DEFINITION OF TERMS
ECONOMY: The process or system by which goods and services are produced, sold, and bought in a country or region. it can also be said to be the careful use of money, resources, etc.
EXPORT: An export is a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. The sale of such goods adds to the producing nation's gross output.
TRADE: The act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries
CATFISH: A freshwater stout-bodied scaleless bony fishes having long tactile barbels
ECONOMIC RECESSION: Economic recession is typically defined as a decline in gross domestic product (GDP) for two or more consecutive quarters. GDP is the market value of all goods and services produced within a country in a given period of time.
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