Journal of Economics and Policy Analysis

Harnessing Nigeria’s Huge Agricultural Potentials for Food Security: A Roadmap

Emmanuel Dele Balogun — 2024-03-06

This paper charts a roadmap for harnessing Nigeria’s agricultural potentials for food security, given resource endowments and challenges posed by the dominant smallholder farming system. The literature review notes that food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs for an active and healthy life. Agricultural potentials can be evaluated through available resources, entrepreneurial capabilities and production linkages that determine a country’s productive capacity to foster growth and development The overview of resources endowments shows that Nigeria, with a landmass estimated at about 910.8 square kilometers possesses abundant natural resources including labor, arable land, water bodies and rivers, forests and wildlife, livestock, minerals, gas, and petroleum. This provides a huge agricultural potential and indeed agriculture currently accounts for about 23% of total GDP. This study identifies three-fold problems which bedeviled Nigeria’s agricultural sector viz.: low productivity, lack of adequate finance (credit), and the dominance of weak markets for farm products. Available data shows that land, a key determinant of agricultural potential, remains under-exploited for crop, animal, and forestry production. Among the exploitation challenges are poor farmer’s access to land, finance and credit; low labor and land productivity in the face of farming system dualism; weak base for research and development, weak markets, poor infrastructure and low industrialization. Given the need to transform the relatively unproductive dominant smallholder farming system, it is imperative to promote yield improvement techniques that build on the strength of the countries factor endowments. In the light of this, the most pragmatic path is to adopt a holistic integrated research and extension services approach that serves to escalate rather than supplant indigenous capabilities to foster the desired agrarian transformation and growth. This study concludes that in addition to getting incentives right for agriculture, the provision of low-cost finance, tied to extensive farming techniques such as small irrigation pumps, hand motorized farming implements, improved seeds accompanied by integrated extension services may be more rewarding and complimentary as capabilities escalator rather than a wholesale adoption of foreign technologies as has been the case. Beyond primary production, there is the need to increase the domestic resource content of Nigeria’s agro-allied industries to replace the competing imports, while conscious effort should be devoted to adding value to our primary exports commodities. We also need to strengthen agricultural marketing, which would require some basic infrastructure and access to both the relatively unorganized and organized markets.

Implication of the Rising Debt Profile and Dwindling Revenue for Nigeria’s Public Health Expenditure

Vonke J. Dickson — 2024-03-06

This study investigated the implication of rising government debt and dwindling government revenue for public health expenditure in Nigeria, which is the study’s main objective. The study employed quantitative method of analysis, using the autoregressive distributed lagged (ARDL) model, as analytical technique. Aggregate government expenditure on health (proxy for public health expenditure) is the dependent variable, while debt, revenue and population (control variable) are the independent variables. Secondary data was used, sourced from Central Bank of Nigeria (CBN) and World Health Organisation (WHO). The main findings of the study are: the rising debt stock has negative, but insignificant impact on government health spending and aggregate government revenue’s impact on government health spending is positive, but insignificant also, while, population growth rate, has a negative and significant impact on government health expenditure. One of the key recommendations is that in order to protect health expenditure, Nigeria’s government at all levels should set borrowing rules (e.g. no borrowing unless in extreme circumstances such as recession, expected natural disaster etc.) if it must borrow and it should seriously avoid its debt turning into a burden.

Assessing the Technical Efficiency of Electricity Distribution Companies in Nigeria –The Deterministic DEA Approach

Johnson S. Olayemi — 2024-03-06

Technical efficiency (TE) is key to the productivity and profitability of firms, there is, however, a dearth of empirical assessment of the TE of the Nigerian electricity distribution companies (DisCos), raising questions about their perceived dismal performance over time. From this standpoint, therefore, it is the aim of this study to assess the TE of Nigerian DisCos using the deterministic data envelopment analysis (DEA) approach and to identify the drivers, which is significant to tackling efficiency deviations. In doing this, panel data of the eleven DisCos from 2014-2021 were used. A two-stage deterministic DEA analysis was carried out; in the first stage, the benchmarking package of R software was used to obtain the TE and the pure technical efficiency (PTE). In the second stage, the censored and truncated regression methods were used to estimate the impact of the environmental variables on TE and PTE scores. The result showed that out of 78 decision-making units (DMUs), 21 (27%) were efficient under the constant returns to scale (CRS) assumption while 34 (44%) under variable returns to scale (VRS) were also efficient. The second stage result also showed that DisCos in the north have about a 9.1% likelihood of being more inefficient than those in the south while customer metering has a negative impact on TE. Besides, subsidy and customer density did not have any significant impact on TE. The study, therefore, makes the following recommendations: a merger among DisCos that have smaller size since the industry exhibited scale inefficiency most of the time to enjoy economies of scale; that government focuses on reducing the socio-economic problems of Nigerians especially poverty and insecurity to boost the people’s economic power thereby enabling them to settle their bills. It is also, recommended that government suspends the payment of subsidies on electricity to allow such funds to be used for the provision of infrastructure.

Effect of Family Business in the Promotion of Entrepreneurship Skills among the Youths in Ebonyi State

Oforbuike F. Nwachukwu — 2024-03-06

The study investigated the effect of family business in the promotion of entrepreneurship skills among the youths in Ebonyi State. Specifically, the study dwelt to ascertain the level at which family business can promote or encourage innovative skills among Youths and to determine the level at which family business can drive good business orientation skills inculcated in the Youths in Ebonyi State. Survey research design method was adopted for the study, as it had to deal with issues of the economy as regard to effect of family business in the promotion of entrepreneurship skills among the Youths in Ebonyi State. Seventy-Two (72) respondents were sampled among the business people across the study area. The method of data analysis employed for the study was descriptive statistics and Pearson Product Moment Correlation Coefficient. The findings revealed that there was a significant relationship between family business and the level at which it can promote innovative skills among the Youths in Ebonyi State [p-value = 0.023<0.05 and it is significant at 95% confidence interval and the value of R is 0.768] and a significant relationship between family business and the level at which it can get good business orientation skills inculcated in the youths in Ebonyi State [p-value = 0.047<0.05 and it is significant at 95% confidence interval and the value of R is 0.687]. The study concluded that through family business, innovative skills among the Youths can be enhanced and as well enable them to inculcate good business orientation skills. Recommendations were made among other things that government should always encourage entrepreneurs, especially Youths with meaningful economic resources that will make them to be productive and self-reliant in the cause of doing family business and that Youths should always prioritize engaging in better businesses that provide opportunities for them to develop their business orientation skill. So doing, their business would always thrive.

Analysis of the Impact of Microfinance on Poverty Reduction in Nigeria

Bolatito O. Obaigbo — 2024-03-06

The study attempt to evaluate the relationship between microfinance and poverty reduction in Nigeria between 1992 and 2018, using the ARDL estimation technique in the advent of the directive to the financial institutions by the regulatory body to raise their loan to deposit ratio to 60% before 30^th of September 2019, larger percent of which must be advanced to small and medium scale enterprises. This necessitated the study as over 80% of the financial institutions fall below this directive at present and may have to give out loans and advances of large amount mandatorily to small and medium scale enterprises. Findings from the study reveal that an inverse and significant relationship exists between microfinance and poverty reduction in Nigeria in the long run and short run. The implication of this finding is that microfinance is an effective tool for poverty alleviation in Nigeria, and aside the positive macroeconomic impact of the directives we expect this policy action to trickle down and alleviate poverty among the people. Findings also show that income redistribution in favour of the poor is also an important means of reducing poverty in Nigeria. Therefore, an effective policy mix of fiscal and monetary policy is necessary to ensure that swift impact on poverty reduction and the achievement of one of the critical socioeconomic objective of the Nigerian Government.

Exchange Rate and its Volatility Effects of Covid-19 Pandemic: The Nigeria Case

Felix G. Olaifa — 2024-03-06

The debate on the impacts of Covid -19 pandemic on exchange rate and its volatility is up and running. This study examines the case of Nigeria. Daily data from March 20, 2020 to September 3, 2021 for relevant variables were utilized. The bounds test for cointegration and autoregressive distributed lag (ARDL) and GARCH (1,1) methods were employed to examine the effect. The bounds co-integration test results disclosed that there is both short-run and long-run relationship among the variables. The result from the ARDL estimation shows that new Covid-19 cases has a positive but insignificant effect on parallel market exchange rate while numbers of recovered patients from covid-19, oil and stock prices negatively and significantly affects parallel market exchange rate. Results from the GARCH also indicates that new Covid-19 cases have negative, albeit, insignificant effect on the parallel market exchange rate volatility while recovered cases of Covid-19 has negative and significant effect. Further, oil and stock prices have positive and significant effect on parallel market exchange rate volatility. Following these results, it was recommended that government should embark on policy that will diversify its revenue base and also intensify efforts on preventing any forms of pandemic so as not only to achieve the objective of increasing the value of Nigeria currency but also to reduce its volatility.