The sectorial contribution to gross domestic product revealed a fluctuating behavior and the lapses in the economy.
Figure 1 above revealed the sectorial contribution of four selected sector to GDP within 1980 to 2015. Manufacturing, financial and educational sector contribution is drawn in left side Y’axis (vertical axis) while the contribution of agriculture sector was plotted on same Y’ axis but on the right hand side. It should be also noted that both manufacturing sector contribution and agriculture sector contribution to GDP was plotted with trends (line) while both finance and education contribution is plotted with bar chart.
The graph above revealed that within 1980-1984 manufacturing sector was contributing highest to GDP accounting for the second most important sector after oil. The reason is mostly because of the oil boom in the 1970’s which led to the establishment of many assemblage industries in the country and the industrialization policy pursued in late 1970’s. Another reason is also the neglect of the agriculture sector due to boom in oil price in the international market. It was in late 70’s that oil price went as high as $106 per barrel.
Since 1986, government had reduced its role as the major driving force of the economy through the process of economic liberalization entrenched in the IMF pill of Structural Adjustment Programme. Emphasis, therefore, has shifted from large-scale industries to small and medium- scale industries, which have the potentials for developing domestic linkages for rapid and sustainable industrial development. Attention was focused on the organized private sector to spearhead subsequent industrialization programmes. The incentives given to encourage increased participation in these sectors were directed at solving and/or alleviating the problems encountered by industrialists in the country, thereby giving them opportunity to increase their contribution to the Gross Domestic Product (GDP).
Also, due to the oil shock or oil price fall in early 1980’s and the adoption of Structural Adjustment Programmes (SAP) in 1986 attention was shifted again from oil to agriculture sector. The shift in the real sector to agriculture sector which is the main base of the economy in the 60’s caused the sector to upsurge again in terms of its contribution to GDP. By 1987 agriculture sector was contributing about 50.29billion naira to Nigeria GDP being the second largest sector in the country after oil sector. The sector maintained its leadership roles as revealed in the graph above in figure 1.
Figure 1 above revealed that agriculture sector was maintaining almost same proportional contribution to GDP with manufacturing sector but from 2000 during the democracy dispensation the sector contribution to GDP upsurge very fast. A look at the graph will revealed that agriculture sector maintained a linear behavior increasing at a very fast pace.
It should be noted that from 2009 till date agriculture sector assume the it first position as it was at independent. Agriculture currently contributes about 38.4% to Nigeria gross domestic product (NBS, 2015). If the sector is properly harnessed it will soon not only contributes highest to GDP but will contributes highest to our foreign exchange earnings.
The education and financial sector has not been fully harnessed especially the educational sector. Within 1980’s financial sector was witnessing series of downturn, many of the financial institution were going on bankrupt and recess thereby killing depositor confidence. The financial sector was really improved in its contribution to GDP after the recapitalization exercise in 2004 by Prof. Charles Soludo the then CBN governor. A look at the graph will revealed that the bar chart of financial sector upsurge fast from 2006 after the confidence of the public was restored on the banking sector.
On the other hand the educational sector has not really contributed to GDP up to its full potentials. The reason for this may not be far from the fact that government has not really invested much in Nigeria educational sector to attract foreign direct investment. The budget allocation to education sector is below 5% over decades now. It thus call for serious policy frame work to address such lapses.
In conclusion, the data used in plotting the graph is as presented in table 1 below and was extracted from CBN bulletine 2015. The analysis so far clearly revealed that government has long dependent on oil sector and has neglected the importance of others sectors like agriculture and manufacturing sector.
It is therefore impertinent for government as a matter of urgency to quickly increase investment in other sector to ensure total diversification of the economy from a mono-product country to a multi-product country. The present government need to modernize the agriculture sector and employ the youth to work in the sector, some graduates should be enrolled in agriculture activities like fisheries, pigries, crop processing after which the government help them to secure soft loan or give them grants to start up. This will not only increase agricultural output but will also solve the problem of unemployment.
More investment should be made in the manufacturing sector and the educational sector, tax should be reduced to make the industry attractive for both local investors and foreign investors. The financial sector should be better regulated to ensure its competitiveness with global banks through innovation among others.