1. Introduction

At Nigeria’s independence in 1960, agriculture was the mainstay of the Nigerian economy. According to Ilugbuhi (1968), peasant agricultural production for export provided the stimulus to Nigeria’s overall economic growth. Agriculture provided employment to over 75% of the population and accounted for over 70% of total food consumption (Reynolds, 1966). It also provided raw materials for industry, export earnings to finance imports and foreign exchange (Alamu, 1981).

At the peak of the oilboom, Abdullahi (1981) observed:

Nigeria can nolonger produce enough food for its fast growing population neither could the (then) agricultural system cope with the increasing demands of the agricultural raw materials to keep the country’s oilmills, textile and other agro-based industries operating at full capacity let alone have surplusses for export. In fact many of the agro-based industries which once depended on locally produced raw materials are closing down unless of course they are allowed to import part or all of these raw materials from abroad. Numerous other parameters point to the obvious and undeniable fact that the country is ‘progressively’ becoming unable to cope with the overall needs of its food and raw materials.

Over the years several authors have attributed the decline in Nigeria’s agricultural production to the neglect of the agricultural sector as a result of the oilboom (Abdullahi, 1981; Okojie, 1991; Osuntogun et al, 1997; Asiabaka and Owens, 2002; Walkenhorst, 2007; Sekumade, 2009; Chukwuemeka and Nzewi, 2011; Izuchukwu, 2011). The purpose of this paper is to debunk this view by demonstrating statiscally that agriculture was not neglected as a result of the oilboom. However the study concedes that the period of the apparent decline in Nigeria’s agricultural production coincided with that of the oilboom.

Specifically, the study aimed at the following objectives:

i. Compare pre-oilboom and oilboom periods capital expenditure allocation to the agriculture sector.

ii. Compare capital expenditure allocation to agriculture and water resources, health, education and defence sectors during the oilboom period (1977-83)

iii. Compare capital expenditure allocation to agriculture, health, education and defence sectors during the oilboom period (1977-83)

2. Methodology

Aggregate data on planned capital expenditure allocation to the agriculture sector in the four National development Plans: First (1962-68), Second (1970-74), Third (1975-1980) and fourth (1981-1985) were sourced. In addition, the budget estimates of capital expenditure allocations to the Agriculture, Water Resources, Health, Education and Defence sectors in Nigeria during the oil boom period 1977-1983, were collected from publications of the Central Bank of Nigeria. Descriptive statistics was used to achieve objective (i). The one-way analysis of variance technique was used to achieve objectives (ii) and (iii) (see Keller and Warrack, 2003 & Snedecor and Cochran, 1980; for a description of this technique). The Tukey’s Multiple Comparison method was employed to determine which mean(s) differ, in both cases, in the one-way analysis of variance tests conducted. The data collected for this study were analysed using SPSS 16.0.

The following hypotheses were formulated and tested:

i. There are no significant differences between the mean sectoral capital expenditure allocation to Agriculture and Water Resources, Health, Education and Defence in Nigeria during the oil boom period.

ii. There are no significant differences between the mean capital expenditure allocation to agriculture, health, education and defence sectors in Nigeria during the oil boom period.

3. Results and Discussions

3.1. Capital Allocation to Agriculture in the Pre-Oilboom (1962-74) and the Oilboom (1975-85) Periods

Figure 1 shows the volume of capital allocation to the agriculture sector before and during the oilboom periods. From the figure it is clear that the volume of capital allocation to the agriculture sector during the oilboom period was more than 1200% higher than that during the pre-oilboom period. This finding support the view that the oilboom relaxed the financial constraints to development (Sanyal and Babu, 2010), and made more funds available for agricultural development.

Figure 1. Capital allocation for agriculture in National Development Plans for the pre-oilboom and the oilboom periods. Source: see Appendix Table A1

3.2. Capital Expenditure Allocation to Agriculture and Water Resources Relative to That of Health, Education and Defence Sectors in Nigeria during the Oilboom Period (1977-83)

The value of the test statistic F=24.186 and its corresponding p-value of 0.000 indicates a very strong statistical evidence (highly significant) to reject the null hypothesis and conclude that mean aggregate capital expenditure allocation differ in at least 3 of the 4 sectors under study.

Table 1. One-way ANOVA for sectoral capital expenditure allocations to agriculture & water resources, health, education and defence during the oilboom period Source Of Variation Sum Of Squares Df Mean Squares F Sig. Between Groups 2.325e7 3 7749685.529 24.186 0.000 Within Groups 7689943.520 24 320414.313 Total 3.094e7 27

To determine which among the four sectors means differ in the one-way analysis of variance test conducted, the Tukey’s Multiple Comparison method was employed. Results of the test indicate that the mean capital expenditure allocated to the agriculture and water resources sector is significantly higher than that allocated to either of Health, Education and Defence sectors in Nigeria over the oilboom period. In other words, much more resources were allocated as capital expenditure to the agriculture and water resoorces sector than to either of Health, Defence or Education sector.

Table 2. Tukey’s Multiple Comparison for sectoral capital expenditure allocations to agriculture & water resouces, health, education and defence during the oilboom period

^*Highly significant difference. Key: Agriculture and Water Resources (1); Health (2); Education (3); Defence (4).

3.3. Capital Expenditure Allocation to Agriculture Relative to That of Health, Education and Defence Sectors in Nigeria during the Oilboom Period (1977-83)

The figures for agriculture and water resources sector were decomposed and the test was repeated using capital expenditure figures of the agricultural sector alone. The value of the test statistic F=7.441 and its corresponding p-value of 0.001 indicates a very strong statistical evidence (highly significant) to reject the null hypothesis and conclude that mean aggregate capital expenditure allocation differ in at least 3 of the 4 sectors under study.

Table 3. One-way ANOVA for sectoral capital expenditure allocations to agriculture, health, education and defence during the oilboom period Source of variation Sum of squares df Mean squares F Sig. Between Groups 1324098.093 3 441366.031 7.441 0.001 Within Groups 1423629.617 24 59317.901 Total 2747727.710 27

To determine which among the four sectors’ means differ in the one-way analysis of variance test conducted, the Tukey’s Multiple Comparison method was employed. Results of the test indicate that the mean capital expenditure allocated to the agricultural sector is significantly higher than that allocated to both the Health and Defence sectors during the oilboom period. However, the mean difference of more than 60 million Naira indicates that the mean capital expenditure allocation to the agriculture sector is slightly, though not statistically significant, higher than the mean capital expenditure allocation to the education sector during the oilboom period. Thus, more resources were allocated as capital expenditure to the agriculture sector than to either of Health, Defence or Education during the oilboom period.

Table 4. Tukey’s Multiple Comparison for sectoral capital expenditure allocations to agriculture, health, education and defence during the oilboom period

^*Significant at the 5% level. Key: Agriculture (1); Health (2); Education (3); Defence (4).

The findings of this study indicate that governments in Nigeria have not neglected agriculture as a result of the oilboom. Oilboom period Nigerian governments have invested heavily in agricultural development through the establishment of the Nigerian Agricultural Bank in 1973; Integrated Agricultural Development Projects (ADPs), World Bank assisted in 1974; Operation Feed the Nation, 1976; Strenghthening of the River Basin Development Authorities (RBDAs) in 1977; Green Revolution in 1980; Accelerated Developmement Area Programme (ADA) in 1981; Livestock Development Programme (LDP) in 1981; Rural Agro-Industrial Scheme (RAIS) in 1981; and a running 75% subsidy on fertilizer (1977-83). To furhter enhance the availability of formal credit to Nigerian farmers during the oilboom period government established the Rural Banking Programme and the Agricultural Credit Guarantee Scheme Fund both in 1977. Therefore, the decline in agricultural production in Nigeria could not be statistically attributed to the neglect of the agricultural sector resulting from oil boom. The reason could be as a manifestation of Dutch Disease (Jazayeri, 1986; Ebrahim-Zadeh, 2003; Olusi and Olagunju, 2005), Natural Resource Curse (Pinto, 1987; Gelb and Associates, 1988; Sala-i-Martin and Subramanian, 2003), Rent Seeking phenomenom (Lane and Tornell, 1999) or some other reason else.

4. Conclusions

This paper set out to statistically find answer to the question: following the oilboom in Nigeria, was agriculture really neglected? The study takes a historical perspective to trace the path of capital expenditure allocations to the agricultural sector in Nigeria. The empirical findings of the study indicate significant increase in the quantity of capital expenditure allocation to the agriculture sector during the oilboom period; and that more capital expenditure was allocated to the agriculture sector than was allocated to either of Health, Education or Defence sectors in Nigeria during the oilboom period. Thus, it can be concluded that, in terms of sectoral capital expenditure allocations, agriculture in Nigeria was not neglected as a result of oilboom. Therefore, the decline in agricultural production in Nigeria was not statistically attributable to neglect of the agricultural sector during the oil boom period. The reason could be as a manifestation of Dutch Disease, Natural Resource Curse, Rent Seeking phenomenom, or some other reason else.