1.1 BACKGROUND OF THE STUDY
Despite abundant natural and human resources, Nigeria remains a poor country. Up to the end of the 1960s, the country was self-sufficient in food production and even a net exporter of agricultural produce. Nigeria, since the 70s has been a mono-cultural economy relying heavily on oil as its major income earner. The implication is that the dynamics of the economy is at the whims and caprices of the price of oil, which for the most part, has been volatile (Enoma and Mustafa, 2011). The major fallout of this fragile structure of the Nigerian economy is a situation where the economy has been growing without creating jobs and reducing poverty (Onodugo, 2013). The on-hand explanation to this economic paradox is that the oil sector that produces about 90% of export earnings are in the hands of less than one percent of the Nigerian population dominated by expatriates and members of the political class who control production and the proceeds respectively. Worse still, the sector is disconnected from other tiers and sectors of the economy and thus offers little or no linkage and multiplier effect to the economy as a whole. 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. Proponents of this increased proportion of non-oil export argue that the non-oil trade has great potentials to propel Nigerian economy to the desired growth and development. For instance, Onwualu (2012) maintains that the value chain approach to agriculture has the potentials to open up the economy and generate various activities which are capable of creating jobs and enhancing industrialization and thus makes the non-oil sub-sector to hold the aces for future Nigerian sustainable economic growth. However, although Nigeria has made some effort towards achieving economic recovery, the full-anticipated benefits are far from being realised. Various studies such as those by Onoh (1973), Iniodu (2010) and Olakitan (1998) unanimously point to the deviation away from the non-oil sector of the economy to a mono-economy largely dominated by oil, as responsible for the despicable performance recorded by the Nigerian economy over the years. The near total dependence on a mono product (oil), which operates on a quota system, has rendered the Nigerian economy vulnerable to fluctuations in world prices of petroleum and its products (Iniodu, 2010). The diversion of attention from agriculture–which was once the mainstay of the economy, came because of the favourable oil shocks of 1970s. This ushered in the era of ‘oil boom.’ As submitted by Adubi (2004), this popular Dutch disease syndrome made agricultural products less competitive and led to importation of cheap agricultural food and capital items. Albeit so much has been said regarding the compelling need for Nigeria to urgently diversify its economy, there is paucity of research in this area. More so, no known study has incorporated tourism–which is a thriving sector in Nigeria, as an option for diversifying the economy.
1.2 STATEMENT OF PROBLEM
The Nigerian economy continues to suffer recession due to its mono-cultured nature. This stems from the discovery of Oil in Oloibori in 1956 and the period of oil boom price in the global market in early 1970's due to the Arab-Israeli war of that period (Esekumemu, 2016). The huge gains from crude oil export were enough temptation for the Nigerian government to abandon other sectors of the economy. Prior to this period, other sectors of the economy were up and running, the wealth of the country was to some extent fairly distributed among the working class of these sectors. Suddenly, Nigeria fell into the Oil boom temptation and abandoned other sectors of the economy for Oil. Oil became the mainstay of the economy. Due to the fact that the Oil industry could not employ every able bodied citizen, jobs were lost in their thousands due to the collapse of other sectors. Policies to cater for this problem were expected to be promulgated by our policy makers as other oil producing countries had policies that catered for their common citizens such as Libya before the overthrow of Gaddafi and the United Arab Emirates that caters for her citizens from the wealth garnered from oil export but Nigeria's case is different. Instead, the gains from crude oil export were shared amongst a few ratio of the large population which were mostly politicians. This apparently had a negative effect on the economy which in turn brought about abject poverty to majority of the Nigerian citizens. According to statistics provided by CBN, non-oil export in the country’s total export revenue was 1% in 2008 (CBN, 2008), and 4.8% in 2013 (CBN, 2013) then it dropped to an all-time low of 0.8% in 2015 (CBN 2015). As at the time of this research, the exchange rate is nothing to write home about as the fluctuation of the Naira to the dollar is alarming and has hit an all-time high which has never been experienced or recorded before. The Naira keeps dwindling as against the almighty dollar which is over 500 Naira to a dollar as of the time of this research. This problem is largely due to the mono-cultured nature of the economy as Oil prices have collapsed globally due to the fact that our biggest crude oil customer, US has landed alternatives to Nigeria's crude oil such as the shale oil which she discovered in commercial quantity and also the fact that they have a reserve which is believed to last them almost a century (Obama, 2012). This of course has left the Nigerian economy on its knees and various solutions have been proffered to get her out of this economic crisis.
1.3 AIMS OF THE STUDY
The major purpose of this study is to examine mono-cultural economy and the challenges of national development in Nigeria. Other general objectives of the study are:
1. To examine the extent and nature of Nigeria’s dependence on oil.
2. To examine the economic implications of a mono-cultural economy.
3. To examine the impact of Nigeria’s oil dependence has on its national growth and development.
4. To examine the influence of non-oil export trade on economic growth and sustainable development.
5. To examine the relationship between mono-cultural economy and national development.
6. To examine the challenges affecting Nigeria's national development by assessing its revenue drive.
7. To recommend a valuable commodity that can contribute to the diversification of the Nigerian mono-cultural economy
1.4 RESEARCH QUESTIONS
1. To what extent is the nature of Nigeria’s dependence on oil?
2. What are the economic implications of a mono-cultural economy?
3. What are the impacts of Nigeria’s oil dependence on its national growth and development?
4. What are the influence of non-oil export trade on economic growth and sustainable development?
5. What is the relationship between mono-cultural economy and national development in Nigeria?
6. What are the challenges affecting Nigeria's national development by assessing its revenue drive?
7. What other valuable commodity that can contribute to the diversification of the Nigerian mono-cultural economy?
1.5 RESEARCH HYPOTHESES
H01: There is no significant impact of Nigeria’s oil dependence on its national growth and development.
H02: There is no significant relationship between mono-cultural economy and national development in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
This research will benefit mankind particularly the average Nigerian citizen who is being ravaged with poverty due to the on-going economic recession that keeps coming back in every administration. It will also help policy makers promulgate sound policies that support economy diversification and condemn the mono-cultural nature of the economy. This research would proffer significant information on the challenges that serve as hindrances to national development. The knowledge garnered and analyzed here would be beneficial to students, graduates in the social sciences as well as business field, policy makers, economists, research fellows or scholars to add more to the knowledge or inspire them to make more critical findings on this issue as well as the government to understand the urgent need for the nation to make quicker steps in formulating plans to diversify the economy away from its mono-product state and in case of having formulated any, make its implementation timely, efficient and more rapid, which would do well in solving a number of the nation's development challenges. It would also bring to light the defects of the attractive but weakly implemented national development plans of the regimes in order to avoid making future errors and ultimately, this research would present workable recommendations that could be useful in solving the nation's development challenges as well as spur the attainment of true national development. This research study would be useful for students who are interested in researching in this area that pertain to Nigeria's economy and development as well as inspire scholars in the academics to embark on a further research as regards Nigeria's development.
1.7SCOPE OF THE STUDY
The study is based on mono cultural economy and the challenges of national development in Nigeria: An analysis of Nigeria revenue drive.
1.8 LIMITATION OF 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.
1.8 DEFINITION OF TERMS
Mono-cultural Economy: This simply refers to an economy characterized by a single trade-commodity. That is, in a case of a country with a mono-cultural economy, a chunk of revenue generated in that country is derived from just one commodity such as the case of Nigeria, a chunk load of her revenue is derived from crude oil proceeds. Itumo (2016) captures a mono-cultural economy as an economy mainly dependent on a single product or resource for economic growth and development. The concept could further be referred to a case where any country depends on a single product sales or exports for its budget funding especially to the tune of 70% of revenue. Mono-cultural economy could also refer to the situation when any country depends on a basic product resource for overall higher percentage of national earnings and contribution to the Gross Domestic Product (Itumo, 2016). It is important to note that a mono-product economy is the same as a mono-cultural economy. Dode (2012) has this to say about a mono-product economy:
National Development: Is the ability of a county or countries to improve the social welfare of the people e.g by providing social amenities like quality education, potable water, transportation infrastructure, medical care, etc.
Revenue: The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted. Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income. Also called sales, or (in the UK) turnover.
Can't find what you are looking for? Hire A Researchproject Writer To Work On Your Topic or Call 0806-703-7559.
Proceed to Hire a Writer »