CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
There are a number of reasons for a country to be concerned about its rate of economic growth. Economic growth is designed by both affluent and non-affluent economies. Economic growth is the desire for higher levels or real per capital income, real output which must grow faster than the production of the economy in question. Economists, policymakers, public and private sectors work ceaselessly forwards attaining economic growth by the use of development and growth models and policies. Among the policies used are trade policy (import and export policies, monetary policy, exchange rate policy, fiscal policy, market, etc). In this study, the non-oil exports and economic development in Nigeria will be examined.
Non-oil exports are the products which are produced within the country in the agricultural, mining, and querying and industrial sectors that are sent outside the country in order to generate revenue for the growth of the economy excluding oil product. These non-oil export products are coal, cotton, timber, groundnut, coca, beans, etc.
Today, as in the past, the growth of Nigeria economy remains partly dependent upon increasing productivity of the agricultural sector.
Helleiner, 2002 state that no matter how much development and structural transformation achieved, it will remain its relative dominance in the economy to many decades to come. Precisely, it is from agricultural exploits that the economy has received its principal stimulus to economic growth.
Agricultural sector can assist through the exportation of principal primary commodities which will increase the nation’s foreign earnings and which can be used to finance a variety of development projects. The growth of the agricultural sector can make a substantial contribution to the total revenue, as well as having some implications for intersectional terms of trade. Also in the area of capital formation, the savings generated in this sector can be mobilized in development purposes, while increase in rural income as a result of increasing agricultural activities can further stimulates the product of the modern sector.
The needs of the agricultural sector could indirectly influence the creating of additional infrastructures which are in dispensable to rapid economic development (Olaloku, 2001).
Another non-oil export to be developed on is industrial sector. It is the fastest growing sector in Nigerian economy. It comprises of many manufacturing and mining. Nigeria has manufacturing base prior to 1960 and shortly after.
The problem was due to lack of modern technological skills, managerial experience of complex organizations and financial back-up. The problem was further aggravated by the colonialists merchants convincing arguments on the goodness of comparative cost- advantage.
Nigerians were coaxed into concentrating their efforts in the production of primary agricultural products and exporting them to the metrological industries in Europe.
Our industrial sector took off after independent relied on satellite firms representing British interest. The bank sector, which is constellation of colonial bank braches and some companies that were able to invest in manufacturing were the multi-national that have access to funds, technology, and managerial expertise. This greatly hindered the progress of indigenous entrepreneurs. The Nigerian manufacturing sector has been described by Ikediala (1983) as consisting of more assembling plants. He says that the implication of this is that the industries have very little background linage in the economy, since the bulk of the inputs is imported, thus the manufacturing sector depends or imported raw-materials of 42%. The capacity utilization of manufacturing industries has always been low in this country. The reasons as put by CBN (1998) are not unconnected with raw materials scarcity, consumers’ resistance due to high prices, and increase in cost of manpower. Others mentioned are equipment breakdown due to poor technology, lack of spare parts. Time lies between when inputs are ordered for and when they arrive, cash flow problem in industries becomes a permanent features.