LECTURE NOTES ON

“SECTORAL ISSUES IN
DEVELOPMENT”

Presented By:

Ekwere Godfrey J.
Udo, Saviour S.,
Otei A. Otei
Ella Maureen and
Goodnews Matthew Luke

Department of Economics
Faculty of Social Science
University of Calabar, CRS
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August 2016
 OUTLINE
• Introduction
- Nature and Structure
• Composition od GDP in terms of sector
• Major sector driving driving Nigeria’s
Economy
• Importance of Agriculture
• Challenges in agriculture
commercialization
• The concept of Industrialization
- What is industrialization
• Conclusion
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• Policy recommendations August 2016
 Introduction

Nature and structure

Structurally, Nigeria’s economy can be
classified into three major sectors
−primary, secondary and tertiary. The
primary sector consists of agriculture
and natural resources; the secondary
sector is mainly industry, which is made
up of processing and manufacturing, as
well as building and construction; while
services and wholesale & retail trade
 Introduction cont.

make up the tertiary sector. The real sector

is also classified into oil and non-oil sector.
While the oil sector is made up of the crude
petroleum and gas production, the non-oil
sector is made up of agriculture, industry,
wholesale and retail and services.

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August 2016
 Composition of GDP in
terms of Sector

Nigeria GDP is made up of five

activities sector namely; Agriculture,
Industry, Whole & Retail trade,
Building & Construction and Service
sectors. The decomposition of GDP in
terms of each sector is presented in
figure 2.

5
May 2004
 GDP

NON OIL GDP OIL GDP

SERVICE

NATURAL GAS

WHOLE/RETAIL

BUILDING CRUDE OIL

INDUSTRY AGRIC
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August 2016
Figure 2: GDP Growth Rate from 1981 to 2015

Source: 2014 CBN Statistical Bulletin

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August 2016
 Composition of GDP in terms of Sector cont.

An analysis of the Sectorial contributions to GDP

(as shown in Figure 2) revealed that the share of
agriculture, Industry, Building & Construction,
Wholesale & Retail and Service in GDP averaged
31.7, 44.8, 1.7, 11.7 and 10.1 per cent
respectively during the period 1981-2015. The
agricultural sector is expected to play its
traditional roles of meeting the food needs of the
teeming population, providing the required raw
material needs of the industrial sector and
providing the envisaged surplus for exports and
thereby generating foreign
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August 2016
 Composition of GDP in terms of Sector cont.

exchange to improve the balance of

payments position. The subsistence
nature of farming characterized by low
adoption of technology, inadequate use
of fertilizers and improved seeds
accounted for low productivity of the
sector. Also, lack of access to adequate
funds to invest in the sector had been
identified as a major hindrance to
improved productivity.
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August 2016
 Major Sector Driving Nigeria’s
Economy
Agriculture: is the largest sector of the Nigerian economy with GDP
contribution of about 40%. Research shows that Nigeria has over 80
million hectares of arable land.

Telecommunication: With the growth rate of 32.5% and GDP

contribution of 7%, Nigeria has established itself as the largest
telecommunication market in Africa. The country’s telecom sector is
undergoing speedy transformation on account of explosive growth and
rapid infrastructure developments.

Manufacturing: The Nigerian manufacturing sector performed

'poorly' in the out gone year as it contributed only 5% to the nation's
Gross Domestic Product. According to data obtained from the office
of the Director-General, West African Institute of Financial and
Economic Management, "In developed countries where the real
sectors are thriving, manufacturing contribute as much as between 35
and 40% to the GDP.
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August 2016
 Importance of Agriculture
Agriculture is important to Nigeria economic development in the
following areas:
A shift in monoculture economy i.e diversifying from over reliance on crude oil
especially at a time when the price plummet which is becoming to tell on the economy.
Provision of food and raw materials through development of agriculture to the
Nigeria teaming population and the development of the manufacturing sector
respectively. Which in turn will also discourage heavy dependence on importation
Agriculture sector is also of reducing the country’s level of unemployment on the
account that the sector is labour intensive.
Agricultural will also curb the effect of rural-urban migration which will help to
decongest the urban areas and make life easier for people both in the rural or urban
area.
Agriculture will also help the government to make more effort in developing the
degrading infrastructural facilities throughout the nation in attempt to ease movement
of good from one location to the other, likewise for preservation of Agricultural
output.
Development of the Agriculture of the Agriculture sector will also help in improving
other sectors and thereby curbing the level of the existing corruption in the country.

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August 2016
 Challenges in agricultural
commercialization
The under listed are some of the challenges to agricultural
commercialization but not the least:

1. Production planning for market demand is weak.

2. Development and transfer of agricultural processing technologies
is limited
3. International market access for products with comparative
advantage to be facilitated
4. Capacity in policy formulation, implementation, regulation and
institution enhanced to participate in WTO
5. All the value chain stakeholders should be supported for the
supply of quality products demanded by the market.
6. Quality control and safety regulatory system should be effective

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August 2016
 The Concept of Industrialization
What is Industrialization?

Industrialization is the process in which a society or

country (or world) transforms itself from a
primarily agricultural society into one based on
the manufacturing of goods and services.
Individual manual labor is often replaced by
mechanized mass production and craftsmen are
replaced by assembly lines . Characteristics of
industrialization include the use of technological
innovation to solve problems as opposed to
superstition or dependency upon conditions
outside human control such as the weather, as
well as more efficient division of labor and
economic growth.
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August 2016
 Figure 3: Industrial Sub-Sector
Contributions to GDP

Source: CBN Statistical Bulletin

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August 2016
 CONCLUSION
It is also generally agreed that small and medium-sized
enterprises (SMEs) stand a better chance of creating more
jobs to match population growth. What is, however, not
clear, especially to the aspiring entrepreneur, is ‘the how’ to
engage public and private institutions turn their ideas into
thriving business enterprises. As it stands, the interest rates
from Deposit Money Banks are either unaffordable or
inaccessible to, more often than not, a semi-skilled so-
called average Nigerian living in a rural area where
agriculture remains the only means of gainful employment.
If Nigerians have access to credit at below one percent as it
is in Japan today, they would have closed the infrastructure
gap in power, transportation, financial inclusion, etc.
Creating modern economies requires specialized scientific
and technological skills mixed with management talent in
the public and private sectors, while the arts maintain or
rebuild the ethical infrastructure.
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August 2016
 Conclusion cnt.
We have a situation in Nigeria quite different from that of the West, where
labour is highly skilled and very expensive but capital is cheap. Nigeria, and
indeed sub-Saharan Africa, has very cheap semi-skilled labour but very
expensive capital. This implies that we cannot adopt the same type of
technologies developed for environments where capital is cheap to revitaliz3e
the real sector. We need technologies (education, healthcare, industrial
machinery, finance and infrastructure) that require cheap capital and labour.
It is clear from this comparison that there is a connection between access to
cheap capital and the quality of the workforce in every nation.
On the whole, the agricultural and industrial sectors contribute significantly to
Nigeria’s GDP. The employment base of the Nigeria economy is largely
dependent on these two sectors. However, the agricultural sector contributes
only 5.6 percent to the economy while the industrial sector’s contribution is
about 34 percent. This level of disparity is due for the Nigerian economy while
the industrial sector’s contribution is about 34 percent. This level of disparity
is due to the neglect of agriculture when oil was discovered in a commercial
quantity in the 1970s. it is well over due for the Nigerian economy to diversity.
The negative perception and orientation of the average Nigerian about
agriculture and agro-based industries should be disabuse so that these sectors16
can contribute optimally to GDP. August 2016
 RECOMMENDATIONS
In order to improve the agricultural and industrial sectors in Nigeria, the
following should be considered.
Government should provide funds to acquire sophisticated farm tools.
Special incentives such as tax holidays should be given to those who engage
in agriculture and agro-based industries.
The Export Promotion Council should create markets for the exportation of
agro-based industry’s products and agricultural outputs.
Economic co-operation among regions and state should be encourage. The
benefit of such cooperation is the ability to pool resource together in order to
embark on projects that are adjudged to be beyond individual’s states and
regions. It also allowed the cooperative states to reap the benefit of economies
of scale thereby improving welfare of the people. The ultimate goal of the
cooperating states should be to achieve accelerated rate of economic
development and industrialization.
Extension programmes aimed at educating farmers and bringing to their
knowledge modern production techniques should be faithfully pursued by the
government.
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August 2016
THANK YOU

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August 2016