Growing Business Opportunities in Nigeria: A Case Study Of How Small And Medium Enterprises Can Attract FDI in the Nigeria Agriculture Sector

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Published on December 30, 2016

Author: EmmanuelJohnson7

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1. MSc MANAGEMENT (INTERNATIONAL BUSINESS) 2013/2014 Project supervisor - Des Laffey Growing Business Opportunities in Nigeria: A Case Study Of How Small And Medium Enterprises Can Attract FDI in the Nigeria Agriculture Sector CB951 – BUSINESS REPORT September 2014

2. 2 Business report MSc suite Des Laffey/Dr. Ben Lowe Module Code: CB951 Seminar Group: Surname: JOHNSON First Name: EMMANUEL OLUWASEUN Programme of Study: MANAGEMENT (INTERNATIONAL BUSINESS) MSc Login: oei2 Student Number: 13901145 Declaration: I confirm the work submitted is entirely my own and have fully referenced my sources as appropriate. I am aware of the penalties for plagiarism. Date: 19/09/2014 Official Stamp

3. 3 LIST OF CONTENTS List of figures……………………………...………………………………….........................5 Acknowledgements………………………………………………........………………...…....6 Executive summary………………………………………………........…………...................7 CHAPTER 1 INTRODUCTION 1.1 Objectives………………………………………………………......................…….……8 1.2 Problem statement……………………………………………………...........................…9 1.3 Research Question………....................……………………………………………..…....14 1.4 Specific Questions…….................…………………………………...……………..……14 1.5 Justification……………………………………....................………………………..…...14 CHAPTER 2 LITERATURE REVIEW 2.1 Nigeria as an Investment Hub in Africa.....................................................................................17 2.2 Oil as the Cornerstone of Nigeria’s Economy...........................................................................18 2.3 Agriculture and the Nigerian Economy: Unlocking the Potentials..........................................21 2.4 Investment potentials of agriculture in Nigeria...........................................................................23 2.5 FDI and Economic Growth.........................................................................................................25 2.6 FDI and the Nigerian economy...................................................................................................28 2.7 Investment Constraints in Nigeria and Determinants of FDI Inflow......................................29 CHAPTER 3 METHODOLOGY 3.1 Data Collection Method and Analysis...........................................................................................31 CHAPTER 4 ANALYSIS 4.1 Designation of Participants..............................................................................................................33 4.2 Assessment of Investment Prospects of Agriculture in Nigeria by Participants...................36 4.3 Potential investment opportunity-areas.........................................................................................37 4.4 Investment Constraints in the Agriculture Sector in Nigeria....................................................38 4.5 Policy Recommendation for Government and Investors...........................................................38 4.6 Realistic Survival Strategies of some Firms in the Agriculture Sector.....................................39

4. 4 4.7 Realistic Survival Strategies of some Firms in the Agriculture Sector……………….……39 CHAPTER 5 DISCUSSION OF FINDINGS 5.1 What and where are the Key Investment Opportunities in the Agriculture Sector of the Nigerian Economy?...............................................................................................................................40 5.2 What are the Challenges to Investment in the Agriculture Sector in Nigeria?......................40 5.3 What Realistic Strategies are available for overcoming the numerous Investment Constraints in the Agriculture Sector?.....................................................................................................................42 CHAPTER 6 CONCLUSION 6.1 Conclusion........................................................................................................................................43 6.2 Limitations………………………………………………………………………………..43 6.3 Recommendation..............................................................................................................................44 6.4 Policy recommendation to prospective MNEs............................................................................44 6.5 Policy recommendations for government......................................................................................44 Reference List......................................................................................................................................45-52 Appendices..........................................................................................................................................53-54

5. 5 List of figures TABLE 1: FDI Inflow by Region, 2010-2012 (percentage share in world FDI flows).............11 TABLE 2: Inward FDI rates of return, 2006–2011 (%)................................................................12 Table 3: Percentage Composition of FDI in Nigeria by Sectors, 1980-2009.............................15 Table 4: Twenty Most Oil Dependent Countries, 2000 (Fuel Exports as a Percentage of GDP)......................................................................................................................................................19 Table 5: Twenty Most Oil-Dependent Countries, 2000 (Fuel Exports as a Percentage of GDP)......................................................................................................................................................20 Table 6: Respondent Details…………………………………………………………………..34 Appendix 1 Letter of request for research access............................................................................54 Appendix 2 Interview plan......................................................................................................................55

6. 6 ACKNOWLEDGEMENTS First and foremost, I would like to take this opportunity thank God for everything; I would also like to thank all the people that contributed toward the completion and submission of this project. My deepest thank to my cousin, (Mr. Thomas Ogungbangbe) for his brotherly love, advice, proof reading and financial support throughout my studies in the United Kingdom, and giving me the opportunity to rewrite my history. Most importantly, I owe a great many thanks to my project supervisor (Des Laffey) who helped, guided and supported me not just throughout this project but also my MSc programme at the University of Kent. Secondly, my deep sense of gratitude to my family, friends, and well-wishers, for their support throughout this programme. I also express my thanks to a special friend, my fiancée (Dr. Fisayo Olaore) for extending her support. Lastly, I express my thanks to the entire staff from Kent business school for their helpful insight throughout my Master’s degree programme and all of the interview participants from the Nigerian agriculture sector, without whom this project would have been a distant reality. Once again, I say big thanks to Des Laffey for guiding me through this report.

7. 7 Executive summary Nigeria used to be a powerhouse in the agriculture sector; regrettably, the country now remains a net importer of agricultural products like palm oil, which Nigeria currently remains the third largest producer in the world after Indonesia and Malaysia (Ayodele, 2010 cited from New York Times). Evidently, Nigeria government has failed to ‘diversify the economy away from the capital-intensive oil sector’, ignoring sectors such as agriculture, which used to be seen as the backbone of the country’s economy (Ayodele, 2010), thus the growth of other basic infrastructure has been extremely affected (Nimad, 2013). Consequently, most Nigerians have continued to criticize its policy makers for their over dependent on the oil sector, with the country’s major source of revenue coming from oil while the agriculture sector is being overlooked (Clottey, 2014 cited from Voice of America; Euromonitor. 2014, Adetayo, 2014). Hence, there is a need to diversify Nigeria’s economy, by transforming the agriculture sector and maximize its potential as a foreign direct investment (FDI) destination of choice in Africa and the global market place. As a result, this business report will investigate and explore how multinationals can tap from the investment opportunities the Nigeria agriculture sector presents while analyze critically the investment constraints in the agriculture sector, and the market itself. In sum, the primary aim of this project is to showcase Nigeria’s agriculture sector as an investment opportunity market. The literature reviewed the Nigeria’s FDI and economic growth , the opportunities and constraints in the oil and agriculture sector respectively, aiming mainly on the issue of policy maker’s over dependent on the oil sector whereas the agriculture is being disregarded. Furthermore, collecting data for field analysis, the researcher collected primary data using the interviewing method and review of documents from relevant sources. Based on open-ended questions, interviews will be semi-structured in nature. Interview participants will be purposively selected to meet the objectives of this report. Among those interviewed are government officials, farm managers; farmers; and researchers from small and medium enterprises in the agricultural sector. Data was collected and critically analyzed through a critical discussion of field findings, and result indicated that all participants interviewed via phone and a face to face interview gave a positive assessment of agriculture as a potential investment market in Nigeria. Accordingly, recommendations were made for both Nigeria policymakers and MNEs to help guide business decisions on investment opportunities in Nigeria agribusiness. Likewise, this report successfully revealed varied, valuable and knowledgeable insides on how Nigeria MNEs can efficaciously integrate the dynamic and complex Nigerian agribusiness, which the reader would find interesting, while this work also helps the author understand how Nigeria agriculture sector is interconnected to all parts of Nigerian economies, the awareness of investment constraints and opportunities that beset the market, and the importance of agribusiness to its economy, and as well as the global market.

8. 8 CHAPTER ONE INTRODUCTION 1. Introduction The objective of the study is to present Nigeria as an investment hub based on a case analysis of investment opportunities and constraints in the agriculture sector of the Nigerian economy. Although Nigeria is presented as a country with abundant investment opportunities with huge market size and the largest economy in the sub-saharan Africa with a GDP growth of 7.3 percent and total of $523 billion (Euromonitor, 2014). The study also acknowledges that there are numerous investment constraints such as high level of corruption, poor infrastructure, poverty, Boko Haram, (militant insurgencies by the so called extremist group) which in return has crippled the Nigeria’s socio-economic development (Euromonitor, 2014). In fact, as at 2013, research indicates only 10 percent of rural population and 40 percent of the urban population gained access to electricity in Nigeria (Euromonitor, 2014). The question is how can Nigeria actualize and maximize its potential as a foreign direct investment (FDI) destination of choice in Africa and the world as a whole. Accordingly, this research explores how prospective multinational enterprises (MNEs) can overcome constraints to investment to take advantage of available investment opportunities in the agriculture sector and in the Nigerian economy as a whole. With up to 70% of the population engaged directly or indirectly in the agriculture sector (see FAO, 2012), Nigeria can be rightly described as an agro-based economy. In view of this, the investment opportunities are there for MNEs to grab in the agriculture sector of the Nigerian economy. The question however is how firms can overcome the numerous constraints to investment to take advantage of available opportunities. Answering this question is not only important for the agriculture sector, it is equally important for MNEs seeking to invest in this sector of the Nigerian economy. A critical analysis of this core research question will help MNEs to make informed position on when and when not to invest in foreign markets. 1.1 Objective The core objective of the study is to present Nigeria an investment hub through a case analysis of the agriculture sector of the economy. To this end, the study pursues the following specific objectives to: - highlight and critically analyze investment opportunities in the agriculture sector;

9. 9 - identify and examine constraints to investment in the agriculture sector; and - explore realistic ways of overcoming the numerous investment constraints in the sector. 1.2 Problem Statement The problematic of this study is set against the background of marginalization of African countries in global FDI flow and the over-reliance of the Nigerian economy on oil for foreign exchange earnings. In addition, the study explores realistic ways of overcoming investment constraints to taking advantage of potential investment opportunities in the agriculture sector of the Nigerian economy. Fundamentally, this research highlights Nigeria as an investment opportunity market. It also critically analyses the benefits and challenges first movers are presently experiencing in the Nigerian investment clime. The study aims at providing recommendations that would act as useful guide for existing and prospective MNEs in the dynamic and challenging Nigerian business environment. The impending and gradual saturation of the Asian markets creates the need for alternative markets for foreign direct investment (FDI). This when set against the marginalization of Africa in global FDI inflow despite the high rate of return on investment that the African market has been noted to manifest (see Adam, 2009), draws critical attention to issues of opportunities and constraints to investment in Africa as a whole. In this context, the potentials of Nigeria as a prospective investment hub has been variously acknowledged (see USAID, 2014; The Economist, 2014). In spite of this however, literature documents numerous constraints and challenges to FDI attraction that must be overcome if Nigeria is to actualize its potential as an alternative albeit important market for FDI in Africa and indeed the world (see AllAfrica, 2012; BBC, 2014; McKern, et al, 2010; Trading Economics, 2013; Africa Economic Outlook, 2014). On the marginalization of African countries and by extension Nigeria in global FDI flow, Aayanwu (2012) stressed the importance of FDI to socioeconomic development. In this context, FDI is identified as a key element of the globalization of the world economy capable of driving employment, technological progress, productivity improvements, and ultimately

10. 10 economic growth (Anyanwu, 2012: 425, Dunning, 2001). Citing Smith (1997) and Quazi (2007), Anyanwu posits that FDI plays the critical roles of filling the development, foreign exchange, investment, and tax revenue gaps in developing countries. Anyanwu further highlights how FDI can play an important role in Africa’s development efforts, noting that FDI can supplement domestic savings and help in generating employment and growth. In addition, it is observed that FDI could pave the way for the integration of Africa into the global economy and also lead to transfer of modern technologies, enhancing efficiency and raising skills of local manpower (Anyanwu, 2012). It is therefore instructive to note that, as part of global trend, there has been a steady increase in the flow of FDI to Africa over the last decades (see Asiedu, 2002). In this regard, Adam (2009: 179) notes that the total world FDI inflows, which stood at $59 billion in 1982, grew dramatically to $648 billion in 2004 and reached its peak of $1,833 billion in 2007. More so in Africa, FDI inflows amounted to $36 billion in 2006, which was 20% higher than the previous record of $30 billion in 2005 and twice the 2004 value of $18 billion and rose to a historic value of $53 billion in 2007 (see Adam, 2009: 179). Despite this surge in FDI to Africa, attributed largely to investment in extractive industries, the take is that FDI flow to the region is still very marginal given it represents less than 3% of global FDI flow (Adam, 2009, see also Ogunkola and Afeikhena, 2006). More so, in real value, Africa’s share of global FDI flow fell from 3.1% to 2.7% and 2.9% in 2005 and 2007 respectively (Adam, 2009). A 2013 UNCTAD world investment report shows that developing countries take the lead in global FDI inflow for the first time ever; attracting 52% of such flows in 2012 against 42% for developed economies (see Table 1). The critical question here is how well Africa and indeed Nigeria performs in the upsurge in FDI flow to developing economies in the specified period. Although 2012 marks a watershed in global FDI flow trend as developing economies for the first time ever surpass developed economies in FDI inflow (52% against 42%), Africa remains on the margin of this surge in FDI to developing economies relative to their Asian and Latin American counterparts (see UNCTAD, 2013). Table 1 shows that at 3.7% of global FDI inflow in 2012 Africa compares less favorably with Asia (30.1%) and Latin America (18.1%). Asia accounts for 58% of total FDI inflow to developing economies in 2012 (see UNCTAD, 2013: 2).

11. 11 TABLE 1: FDI Inflow by Region, 2010-2012 (percentage share in world FDI flows) Source: UNCTAD 2013 World Investment Report Ajayi (2006a: 1) notes the marginalization of Africa in the global FDI flow, positing that in comparison with all other developing regions, Africa has remained aid dependent, with FDI lagging behind official development assistance (ODA). This marginalization becomes even clearer when it is considered that between 1970 and 2003, FDI accounted for just one fifth of all capital flows to Africa (ibid). Ajayi (2006b: 13) further observes that FDI to Africa has been dominated by inflow to the extractive industry, oil in particular. Figures made available in UNCTAD (2003: 9), cited in Ajayi (2006b), show that FDI in the oil industry remained dominant in 2002, with Angola, Algeria, Chad, Nigeria and Tunisia accounting for more than half of the 2002 inflows. Contrary to global trend in the structure of FDI towards the service sector, the extractive industry where competitive advantages outweigh the continent’s negative factors continues to dominate FDI inflow to Africa (Ayaji, 2006: 14; see also Asiedu 2006 on the role of the extractive industry in attracting FDI to Africa). Gleaning from UNCTAD (2001), Ayanwale (2007: 9) sums up the marginalization of Africa in the surge in global FDI flow. Accordingly, Ayanwale notes that while FDI in the world rose from US$57 billion in 1982 to US$K271 billion in 2000, only a few countries have been successful in attracting significant FDI flows. In this context, Ayanwale observes that Africa as a whole and sub-Saharan Africa (SSA) in particular has not particularly benefited from the FDI boom. Specifically, Ayanwale (2007: 9) argues that “for most of the time since 1970, FDI inflows into Africa have increased only modestly, from an annual average of about US$1.9 billion in 1983-87 to US$3.1 billion in 1998-1992 and US$4.6 billion in 1991-1997” (Ayanwale, 2007: 9).

12. 12 In concrete terms, as noted in Anyanwu (2012: 426), Africa has never been a major recipient of FDI flows and so lags behind other regions of the world. Comparing Africa’s share of global FDI flow over extended periods with Asia’s, Anyanwu observes that the regions share of global FDI inflows was 2.6 percent in the period 1980-89; 1.9 percent in the period 1990- 1999; and 3.2 percent in the period 2000-2009. It is however instructive to note that during the same periods, the Asian region received FDI inflows 14.2 percent, 19.1 percent, and 19.1 percent of total global inflows, respectively (Anyanwu, 2012: 426). The marginal and decreasing share of Africa’s global FDI inflow notwithstanding, the region remains a very attractive investment hub. Accordingly, Adam (2009: 179) notes that despite decreasing trend being experienced in FDI flow to Africa, the rate of return on FDI into the region has been rising since 2000 and stood at 12% in 2007, which is the highest in the developing world (ibid: 180). The global rate of return on FDI climbed to 7.2% in 2011 from 6.8% in 2010 (see Table 2). The table also shows that the rate of return on FDI for developed economies stood at 4.8%, while that of developing economies was estimated at 8.4% in 2011. By implication, rate of return on FDI for developing economies is higher than for developed economies within the six-year period covered by the table (see also UNCTAD, 2013: 31). It is however instructive to note that with the exemption of transition economies, Africa has the highest rate of return at 9.3% in 2011. It is therefore worrying that the Africa’s share of global FDI has continued to fall despite the high return rate on FDI that the region has displayed since 2000. TABLE 2: Inward FDI rates of return, 2006–2011 (%) Source: UNCTAD 2013 World Investment Report

13. 13 A critical interrogation of the downward trend in FDI inflow to Africa therefore becomes imperative. In this sense, one would want to examine not just the region’s prospects in attracting FDI, but also more importantly the constraints and challenges to investment. Against this background of marginalization of Africa in global FDI inflow, this study focuses on Nigeria, which has been identified recently as one of the biggest recipient of FDI to sub- Saharan Africa (see thenigerianvoice.com, June 2013). Specifically, Adam (2009) submits that it accounts for 16% of the region’s stock. Interestingly, based on data available from UNCTAD (2013: 33), Nigeria is in the league of top 20 economies with highest inward FDI rates of return as at 2011, the latest year for which data are almost complete for most countries. This high return rate on FDI in developing economies, particularly in Africa and transition economies, has been attributed to investment activities in the extractive and processing industries (ibid). Further drawing from the marginalization of Africa in the recent surge in global FDI flow, this study argues that the saturation of the Asian market will give birth to a need for multinationals to look for new markets with potentials. In this context, Nigeria remains a promising market and one of the fastest growing economies with vigorous economic growth in the past 7 years (USAID, 2014). In fact, the Nigerian GDP economic growth will soon surpass that of South Africa’s (The Economist, 2014). While the market potentials of Nigeria cannot be overlooked, it is however instructive to note that Nigeria remains a highly corrupt and complex market; research presented by the World Bank shows that 80 per cent of organizations in Nigeria bribes government bureaucrats (AllAfrica, 2012). This problematic context notwithstanding, Nigeria remains a promising market and one of the fastest growing economies with vigorous economic growth in the past 7 years (USAID, 2014). Despite the numerous investment constraints that besets the Nigerian market, it has been included as one of the emerging giant markets; the ‘MINT’ countries (Mexico, Indonesia, Nigeria and Turkey). The term ‘MINT’ developed by an Economist, Jim O’Neill who described these four countries with distinct market potentials such as ‘inner’ demographics, huge population size and future markets to invest (BBC, 2014). In term of market size, Nigeria’s population reached almost 170 million people in 2012, making the country the leading populated area in Africa (McKern, et al, 2010; Trading Economics, 2013). In terms of locational advantages, Nigeria is extremely rich in natural resources with almost 34 different minerals, although oil remains the country’s major source of income (Africa Economic Outlook, 2014).

14. 14 1.3 Research Question How small and medium scale enterprise in the agriculture sector overcome challenges in the complex Nigerian business clime while taking advantage of available investment opportunities. 1.4 Specific questions  What and where are the key investment opportunities in the agriculture sector of the Nigerian economy?  What are the challenges to investment in the agriculture sector in Nigeria?  What can be done to tackle these numerous investment constraints in the agriculture sector, and what realistic strategies are available? 1.5 Justification The study is a deviation from traditional focus on the oil sector of the Nigerian economy to a focus on the agriculture sector, which is often overlooked by investors due to the complexity and volatility of the sector. Evidently, Nigerian government and other stakeholders’ focus have been on the oil and gas sector in the past years. There is a need to bear in mind that before the discovery of oil between 1960 and 1970s; the country’s major source of wealth was coming from the non-oil sector (Balogun, 2012 cited from Punch Nigeria). As at 1973, the agriculture sector accounted for more than 40 percent of the country’s GDP, which later declined ten years later to 1.9 percent, with export dropping to 7.9 percent (Metz, 1991). As a clear indication of the negligence the agriculture sector has endure; it has been revealed that between 1980 and 2009, while the extractive sector in general averaged 26.2% of total FDI (Table 2; also Imoudu 2012: 125), and the oil sector in particular accounting for over 60% of total FDI inflow (see Imoudu, 2012: 123; Ayanwale, 2007: 2), the agriculture sector has averaged 1.4% of total FDI inflow within this same period (Table 2; also Imoudu 2012: 125) Despite this drastic shift from non-oil to oil sector, Nigeria remains a highly blessed country with fertile land and cash crop products (Ade, 2007). The agriculture sector has continued to contribute to economic growth, creating jobs for 70 percent of Nigerian population and accounting for 30% of GDP (Balogun, 2012 cited from Punch Nigeria; Ade, 2007). In fact, in a report presented by the managing director of a private limited exporting company (Mr. Obumneme Umeokafor of Jocarol Nigeria limited), He convincingly argued that Nigeria

15. 15 stands to benefit more from the non-oil export trade buts insist the Nigerian government has to generate more ‘enabling environment’ (Balogun, 2012). In the work of Ajaero et al (2012:286), Smith (2009) described Agriculture as the ‘most vital economic activities’ of we human being and remains the foundation of distributing food to the entire world. In sum, this sector remains a vital branch of the Nigerian economy but the FDI inflow remains extremely low compare to that of the oil sector. They (Ajaero et al, 2012) went further and emphasized that if the country can shift focus back to the agriculture sector, the main country’s problem which is insecurity could be tackled by creating more jobs (Ajaero et al, 2012, p.286). Nigerian president (Goodluck Jonathan) recently seek the support of US president, Barack Obama’s administration in a meeting, encouraging Obama’s administration to invest in other non-oil sectors, especially the agriculture sector; pointing out that, despite Nigeria being a major global oil supplier, the country still possesses “untapped solid minerals and unexploited fertile lands of agriculture” (Adetayo, 2014, cited from Punch, Nigeria). Table 3: Percentage Composition of FDI in Nigeria by Sectors, 1980-2009 Source: CBN Statistical Bulletin (2009) and Imoudu (2012)

16. 16 In effect, the study will provide insights on investment prospects and constraints in the complex Nigerian market. Also, the marginalization of Africa and by extension Nigeria in the global FDI inflow despite the high return on investment that the region has been noted to manifest calls for critical interrogation of both opportunities for and constraints to investment in the continent as a whole and Nigeria in particular. The output of this research will lend itself to both academics and policy alike.

17. 17 CHAPTER TWO LITERATURE REVIEW The chapter examines Nigeria as an investment hub through an extensive and critical review of relevant literature obtained from sources that include journals from the University of Kent database and newspaper articles, statistical bulletin of international and governmental organizations, chapters in books, conference proceedings and the internet. Attention is drawn to both investment opportunities and constraints in the oil and agriculture sectors of the Nigerian economy in particular. Clearly brought to the fore in the review is the issue of over- reliance of the Nigerian economy on oil as a source of export earnings, and how it results to the negligence of the agriculture sector. 2.1 Nigeria as an Investment Hub in Africa Nigeria as a country, given her natural resource base and large market size, qualifies to be a major recipient of FDI in Africa and indeed is one of the top three leading African countries that consistently received FDI in the past decade (Ayanwale, 2007: 2). According to Onakoya (2012: 66) citing Schoeman, Robinson, and De Wet (2000), Nigeria has one of the highest rates of investment returns in the emerging markets, presently estimated to be 30 percent. Similarly, Ihugba, Odii, and Njoku (2014) view Nigeria as an investment hub pointing to its huge population and abundant mineral and oil resources, including extensive arable land. However, it is instructive to note, as pointed out in Ayanwale (2007) citing Asiedu (2003), that the level of FDI attracted by Nigeria is mediocre compared with the resource base and potential need. Imoudu (2012: 122) provides a glance through the FDI profile of Nigeria, noting that it is one of the economies with great demand for goods and services and has attracted some FDI over the years. A detailed analysis along this line of thought by Imoudu shows that the amount of FDI inflow into Nigeria was estimated at US$2.23 billion in 2003 and rose to US$5.31 billion in 2004 or an increase of 138 percent. The figure rose again to US $9.92 billion or 87 percent increase in 2005 (ibid). The figure, however, slightly declined to US$ 9.44 in 2006 (Locomonitor.com, cited in Imoudu, 2012: 122).

18. 18 2.2 Oil as the Cornerstone of Nigeria’s Economy As Ross (2003: 2) has pointed out, it would be difficult to exaggerate the role of oil in the Nigerian economy. A study by Sala-i-Martin & Subramanian (2003) shows that over a 35- year period, 1965 to 2000, Nigeria’s cumulative revenues from oil (after deducting the payments to the foreign oil companies) have amounted to about US$350 billion at 1995 prices. A similar study by Mohammad-Lawal and Atte (2006: 1) reports that Nigeria has earned about $300 billion from oil exports between the mid-1970s and 2000. Overall, Ross submits that since the first oil price shock in 1974, oil has annually produced over 90 percent of Nigeria’s export income. In 2000 Nigeria received 99.6 percent of its export income from oil, making it the world’s most oil-dependent country (Ross, 2003; also Table 3). The dependence of the Nigeria economy on oil export is further emphasized in Table 4, which shows that Nigeria is the third most oil- dependent country among crude exporters with crude export accounting for 48.7% of total GDP. In this sense, Nigeria occupies the unenviable position of the most oil-dependent country in terms of oil earnings as a percentage of total export earnings. This trend is not likely to change in the short run at least, given the large crude and natural gas reserves of Nigeria.

19. 19 Table 4: Twenty Most Oil Dependent Countries, 2000 (Fuel Exports as a Percentage of GDP) Source: Ross (2003)

20. 20 Table 5: Twenty Most Oil-Dependent Countries, 2000 (Fuel Exports as a Percentage of GDP) Source: Ross (2003) According to EIA (2003), estimates of Nigeria’s proven oil reserves range from 24 billion to 31.5 billion barrels. Ross (2003: 3) notes that at the current production rate of 2 million barrels a day, these reserves alone would last between 32 and 43 years. In addition to the large oil reserves, In view of this, Nigeria has an estimated 124 trillion cubic feet of proven natural gas reserves, the ninth largest such reserve in the world (ibid). Ross posits that there is every reason to think that over the next several decades, Nigeria’s dependence on petroleum exports will remain exceptionally high; it may even grow. However, what happens if the dynamic global oil fuel price witness slippages (Euromonitor, 2014). Consequently, the wider population has not benefited from the oil wealth instead, the country has witnessed rises in fuel prices in recent years, also, poverty continue to remain a growing issue (BBC News,

21. 21 2002), with 61 percent of Nigerians living less than a dollar a day, compare to 52 percent in 2004 (Magnowski, 2014). This is due to embezzlement of funds by the highly corrupt government (BBC, 2002). While noting that the Nigerian government has annually received over half of its revenue directly from the oil sector, Ross (2003: 2) observes that oil revenue is not only large but it is also highly volatile. The volatility of oil revenues creates a problem, since such revenues can fluctuate drastically in size from year to year, causing the size of government, and the funding of government programs, to fluctuate accordingly (ibid). Quoting figures made available in World Bank (2002), Ross notes that from 1972 to 1975, government spending rose from 8.4 percent to 22.6 percent of GDP; by 1978, it dropped back to 14.2 percent of the economy. 2.3 Agriculture and the Nigerian Economy: Unlocking the Potentials This section of the study looks at both investment constraints and opportunities in the agricultural sector of the Nigerian economy through a review of extant literature. That agriculture provides food for the human consumption and raw materials for industrial needs underscores its importance, which is further highlighted by its foreign exchange earnings and employment generation potentials. Perhaps it is recognition of the important place of agriculture to national life that the Nigerian government had over the past three decades, according to Oni (2013: 37), initiated a plethora of policies and programs which were aimed at restoring agricultural sector to its pride of place in the economy. Tombofa (2004) posits that agriculture laid the basis for and sustained the first industrial revolution that took place in England (Olajide, Akinlabi and Tijani, 2012: 107). Consistent with this line of thought, in some quarters, agriculture has been viewed as the bedrock of development and economic self-sustenance (see Todaro and Smith, 2003 in Olajide et al). Prior to the oil boom of the 1970s, agriculture was identified as the engine of growth in Nigeria, accounting for about 66% of GDP in 1958/59 (Kwanashie, Ajilima, and Garba, 1998: 4).

22. 22 Agriculture continues to remain an important sector of the Nigerian economy despite the neglect endured by the sector with the oil boom of the 1970s. As an indication of this importance, the sector is estimated to contribute 34.4 percent variation in gross domestic product (GDP) between 1970 and 2010 to the Nigerian economy (see Olajide et al, 2012; Mohammad-Lawal and Atte, 2006). Accordingly, Oji-Okoro (2011) insists on the resilience of agriculture as an important sector of the Nigerian economy by pointing out that it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy (see also Ahmed, 1993 as cited in Olajide et al, 2012: 104). Consistently, Olajide et al cites Ogen (2007) who avers that the agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of the multifunctional nature of agriculture. For Okolo (2004), the agricultural sector is the most important sector of the Nigeria economy and it holds a lot of potentials for the future economic development of the nation as it had done in the past. Emeka (2007) therefore notes that the contribution of agriculture to Nigeria’s GDP has remained stable at between 30% and 42%. This is in addition to employing 65% of the labour force in Nigeria (ibid). While also acknowledging the decline of agriculture in the 1970s, Kwanashie et al (1998: 1) maintain that it remains the mainstay of the Nigerian economy. The reason for this position is not farfetched as they submit that greater proportions of the Nigerian population depend on the agricultural sector for their livelihood and the rural economy is still basically agricultural (ibid: 1). For instance, they note that farmers make up 60% of employed Nigerians. For Oji-Okoro (2011), agriculture is the largest sector in the Nigerian economy with its dominant share of the GDP, employment of more than 70% of the active labor force and the generation of about 88% of non-oil foreign exchange earnings. Olajide et al buttressed this assertion by noting that agriculture’s share of the GDP increased from an annual average of 38% during 1992 to 1996 to 40% during 1977-2001 compared to that of crude oil which declined from an annual average of 13% in 1992-1996 to 12% during 1997-2001. However, against the economic potential it holds, Olajide et al (2012: 105) note that there has been a gradual decline in the contributions of agriculture to the Nigerian economy. Specifically in the 1960s, agriculture accounted for 65-70% of total exports; it fell drastically down to around 40% in the 1970s, and later gone down to less than 2% in the late 1990s (ibid). This decline in the fortune of agriculture has been largely attributed to rise in crude oil

23. 23 revenue in the early 1970s. That less than 50% of cultivable land in Nigeria is under cultivation further speaks volume to this decline (see Olajide et al). This decline notwithstanding, an extensive review of literature by Olajide et al (2012: 108) shows a strong correlation that has been established between Nigerian’s total GDP and the agriculture. They therefore submit that the prospects of the non-oil sub-sector and the overall economy are closely tied to the performance of the agricultural sector (ibid). It is instructive to note that when set against policies aimed at promoting agriculture in the country, no appreciable dividend has been yielded to justify the huge policy investment. In this casting, Oni (2013) points out that enormous investment and export diversification potentials for generating higher growth in the economy have remained unlocked and unexploited in the agriculture due to a host of constraining factors that must be removed. Commenting on both opportunities and challenges in the Nigerian agriculture sector, Eric Stambler remarks that while opportunities for Nigerian agriculture are vast, the components are complex. Some of the challenges identified include financing, underdeveloped input and output markets, varieties and crop management, and etc. Oni (2013: 38) identifies the peasant nature of agricultural production as a major challenge in the agricultural sector of the Nigerian economy. In this sense, Oni observed that some of the challenges associated with peasantry in Nigeria include low productivity and poor response to technology-driven strategies. There is also the problem of poor returns on investment (see Oni, 2013). Oni (2013: 39-41) identifies seven broad challenges confronting agriculture in Nigeria. These challenges include marketing problems, storage and processing, infrastructure, price instability for agricultural input and output, labor shortage, technical constraints, and policy inadequacies and failure (see Oni, 2013; Phillip, Nkonya, Pender, & Oni, 2009). 2.4 Investment potentials of agriculture in Nigeria The new policy on agriculture in Nigeria, according to Oni (2013), identifies seven areas of investment opportunities in the agriculture sector of the economy. Identified investment opportunity areas include agricultural production, which is made up of crop and livestock farming, in addition to fishery and agroforestry (see Oni, 2013: 41). Similarly, Oni (2013) identifies other investment opportunity areas to include provision of enterprise specific infrastructure, agricultural produce storage, processing and marketing, agricultural input supply and distribution, support for agricultural research. There is also investment

24. 24 opportunities in the provision of agricultural implements hiring service and collaboration with state and local government as well as farmers in implementation of the research- extension-farmer-input/marketing-linkage system (REFILS) in the states (Oni, 2013: 41). Other researchers that have identified investment opportunities in the Nigerian agriculture sector include Manyong et al (2003), who noted thirteen prospective areas that include commodity processing, agricultural commodity marketing, agro-industry/manufacturing, agricultural commodity export and agricultural support services, amongst other investment opportunities (see in Oni, 2013). While it is clear from the forgone that agriculture in Nigeria is an investment opportunity sector with huge potentials to attract FDI, Oni (2013: 41) deduced from Manyong el at (2003) that the general perception among stakeholders is that foreign investors would be attracted to activities/enterprises that are capital intensive and that add value to primary products. Accordingly, Oni notes that the capital intensive nature if downstream agricultural activities makes this sector more attractive to foreign investors and less attractive to local investors. On a general scale, Oni (2013) identifies three reasons for the attractiveness of the agriculture sector of the Nigerian economy to both local and foreign investors. Attractiveness of the sector includes high level of demand, availability of raw materials/inputs and high rate of returns (see Oni, 2013: 41). A region-specific analysis of investment opportunities and attractiveness of the agriculture sector in Nigeria shows that different reasons drive investment opportunities in different regions of Nigeria (see Oni, 2013). For instance, lack of competing local investors is identified as a major factor that makes commodity processing attractive to foreign investors in the North-East of Nigeria. Generally, while high capital requirement is a disincentive for domestic investors in specific areas of the agriculture sector, it is a huge incentive for foreign investors. It is now a commonplace knowledge that the agricultural potential of Nigeria is barely being tapped (see FAO, 2012: 16). This in FAO’s view is largely responsible for the inability of the country to meet increasing demands for agricultural produce. Accordingly, FAO identifies priority areas in need of investment to enhance agricultural production in Nigeria. Areas of priority identified by FAO include the following:  All facets of direct agricultural production, but specifically, fish production and forestry, rehabilitation of groundnut, cocoa and oil-palm production and cotton;  Investment in processing of agricultural produce and storage facilities;

25. 25  Investment in processing of agricultural input supply and distribution;  Agricultural mechanization, e.g. adoption and use of farm equipment (such as bulldozers, tractors), including the provision of land clearing and land preparation services;  Agricultural support activities, including research and funding of research activities;  Water resources development, especially for irrigation and flood control infrastructures along river basins;  Development of earth dams and construction of wash bores and tube wells;  Development and fabrication of appropriate small-scale and mechanized technologies for both on-farm processing (e.g. threshing) and secondary processing of agricultural produce for consumption or storage (see FAO, 2012: 16). 2.5 FDI and Economic Growth The believe among policymakers, according to Imoudu (2012: 122) is that FDI produces positive effects on host economies, and some of these benefits are in the form of externalities and the adoption of foreign technology (Alfaro et al, 2006, cited in Imoudu, 2012: 122). Accordingly, most countries strive to attract foreign direct investment (FDI) because of its acknowledged advantages as a tool of economic development (ibid). Imoudu, taking a clue from Ayanwale (2007), posits that FDI is assumed to benefit a poor country like Nigeria, not only by supplementary domestic investment, but also in terms of employment creation, transfer of technology, increased domestic competition and other positive externalities. This view is also supported by Onakoya (2012: 66), who submits that international investment also provides opportunities for the global transfer of technology and human capacity development in addition to the promotion of competition in the domestic input market. As noted in Onakoya, economists are inclined to support the free flow of capital across national borders because it allows capital to seek out the highest rate of return since, according to Samuelson’s (1948) capital arbitrage theory, international ventures seek higher profit. Ajayi (2006b: 12) highlights the core motive behind quest by developing countries to attract FDI gleaning from Gorg and Greenaway (2004: 189), who note that FDI is seen as a key driver of economic growth and development. It is therefore not surprising that most governments, of developing economies in particular, consider attracting FDI as priority. Ajayi (2006b) note that attracting FDI occupies a top priority in the governmental policies of most governments not just because it boosts capital formation but also because it can enhance the quality of the capital stock. Feldstein (2000), as cited in Onakoya (2012: 66), identified the provision of diversification opportunities in other climes through the international flow of capital to reduce the risk faced

26. 26 by owners of capital in their home countries, as one of the advantages of FDI. Ajayi (2006b) points to how FDI helps to stimulate domestic investment, while Carbolic and Levine (2002) emphasize the externalities, in the form of technology transfer and spillovers, produced by FDI. The FDI-economic growth nexus is well captured in Cole and Elliot (2005: 531-2) who note that at a general level, FDI has potential benefits to both host and donor countries. They further maintain that the host countries may receive, for example, financial resources, new technology and management skills, employment and a skill-upgraded work force. In addition, they note that the donor country on the other hand receives benefits over and above those associated with factor costs. This is because FDI looks for a combination of cheap labor (with qualifications), reliable infrastructures, technological capabilities, local demand within an efficient market system and the stability of a range of political, institutional and legal environments (Van den Bulcke and Zhang, 1998, cited in Cole and Elliot, 2005: 531-2). A major submission in Cole and Elliot however is that there is both a positive and negative side to the FDI-growth nexus. On the positive side, they note that the standard approach to FDI inflows to developing countries is based on endogenous growth theory where FDI increases the capital stock and technological know-how, which in turn raises income and labor productivity in the host country, which eventually results in higher GDP and tax revenues (Cole and Elliot, 2005: 532). This positive relationship nevertheless, FDI could also produce negative externality if there are substantial remittances of profits and dividends, or the MNC has obtained significant tax or other concessions from the host government that crowds out domestic investment (Cole and Elliot, 2005; see also De Mello, 1997; Ramirez, 2000). Gleaning from Ayanwale (2007), Adams (2009: 178) has attributed the global increase in FDI inflow to a general perception among countries in the global south whereby FDI is seen as an important element in their strategy for economic development. This perception nevertheless, Adam notes that empirical results do not give conclusive evidence of the impact of FDI on the economy of developing countries. Rather what obtains in the FDI-growth nexus debate, as indicated in Adam, is a cluster of theoretical positions for (see also Ndikumana and Verick, 2008; Sylwester, 2005; Lumbila, 2005) and against (see Dutt, 1997; Fry, 1993; Hermes and Lensink, 2003). In addition to those who have made a case for or against the FDI-growth nexus, some set of middle-ground theorists argued that the impact of FDI on economic growth depends on

27. 27 whether the country has minimal level of absorptive capacity that allows it to exploit FDI spillovers (Borenztein et al., 1998; Carkovic and Levine, 2002; Trevino and Upadhyava, 2003; Le Vu and Suruga, 2005; Lumbila, 2005). Conversely, Adam (2009: 178) identifies such absorptive capacity to include educated workforce, institutional infrastructure and liberalized markets. Similarly, Onakoya (2012: 67) notes that there have been several studies on the relationship between FDI and economic growth with conflicting findings. Türkcan, Duman, and Yetkiner (2008) have found that FDI and growth are important determinants of each other, and that export growth rate is a statistically significant determinant of both variables (cited in Onakoya, 2012: 67). Adopting an approach that treats economic growth and FDI as endogenous variables and estimates a two-equation simultaneous equation system with the generalized methods of moments (GMM), Türkcan, Duman, and Yetkiner (2008) test the endogenous relationship between FDI and economic growth using a panel dataset for 23 OECD countries for the period 1975-2004 (as cited in Onakoya, 2012: 67). Their results, according to Onakoya (2012: 67), indicate that there is an endogenous relationship between FDI and economic growth. Adopting a causality examination approach that is based on the Toda-Yamamoto test for causality, Karimi and Zulkornain (2009) found no strong evidence of bi-directional causality between FDI and economic growth. Rather, they found a long run relationship suggesting that FDI has indirect effect on Malaysia's economic growth (see in Onakoya, 2012, 67). A review of literature by Onakoya (2012: 67) notes that Chakraborty and Nunnenkamp (2008) investigate the FDI-growth nexus in post-reform India by subjecting industry-specific FDI and output data to Granger causality tests within a panel co-integration framework. The result of their investigation indicates that growth effects of FDI vary extensively across sectors (ibid). Onakoya (2012: 66) argues that despite the contributions of FDI in the form of corporate tax revenue that accrues to the host country, a major drawback to the growth-enhancing imperative of FDI remains that the highly capital intensive technology engendered can exacerbate the unemployment situations in labor surplus host countries. This is aside that the creation of monopolies in areas where the entry barriers have been raised in some cases, may crowd out domestic operators (ibid).

28. 28 2.6 FDI and the Nigerian Economy Gleaning from Ayanwale (2007), Adams (2009: 178) has attributed the global increase in FDI inflow to a general perception among countries in the global south whereby FDI is seen as an important element in their strategy for economic development. This perception nevertheless, Adam notes that empirical results do not give conclusive evidence of the impact of FDI on the economy of developing countries. Rather what obtains in the FDI-growth nexus debate, as indicated in Adam, is a cluster of theoretical positions for (see Ndikumana and Verick, 2008; Sylwester, 2005; Lumbila, 2005) and against (see Dutt, 1997; Fry, 1993; Hermes and Lensink, 2003). In addition to those who have made a case for or against the FDI-growth nexus, there is also a set of middle-ground theorists who posit that the effect of FDI on economic growth, depends on whether the country has minimal level of absorptive capacity that allows it to exploit FDI spillovers (Borenztein et al., 1998; Carkovic and Levine, 2002; Trevino and Upadhyava, 2003; Le Vu and Suruga, 2005; Lumbila, 2005). Adam (2009: 178) identifies such absorptive capacity to include educated workforce, institutional infrastructure and liberalized markets. Nevertheless, many analysts and experts have suggested the use of Foreign Direct Investment (FDI) as a veritable injection to kick-start the Nigerian economy (Onakoya, 2012: 66). This is because FDI is not only the transfer of ownership from domestic to foreign investors, but also a tool for better corporate governance and attendant clearness in business practice (ibid). On the one side of the FDI-economic growth nexus, some authors have called on governments to encourage the inflow of FDI to enhance economic growth (see Oseghale and Amonkhienan, 1987). These authors are of the opinion that FDI is positively associated with economic growth in Nigeria (see Oyatoye, Arogundade, Adebisi, and Oluwakayode, 2011). On the micro economic level, the review of Ayanwale and Bamire (2001) at the firm level show that productivity positive spill-over of foreign firms on domestic firm's productivity (Onakoya, 2012: 68). Emphasizing the importance of FDI to the Nigerian economy Wafure and Nurudeen (2010) identify job creation and technology transfer as some of the benefits that come with FDI inflow. They applied the error correction technique to analyze the relationship between foreign direct investment and its determinants. Wafure and Nurudeen (2010: 26) show in their analysis that the market size of the host country, deregulation, political instability, and exchange rate depreciation are the main determinants of foreign direct investment in Nigeria.

29. 29 On the impact of FDI on the Nigerian economy, a study by Ariyo (1998) shows that only private domestic investment consistently contributed to raising the GDP growth rates during the 35 years period covered by the study, with FDI playing an insignificant role. Studies employing different models have noted negative relationship between FDI boom and economic growth (see Oyinlola, 1995; Adelegan, 2000; Akinlo, 2003; Bello 2010). For instance, Bello and Adeniyi utilized the Autoregressive Distributed Lag (ARDL) approach to show that there was no existence of a long run relationship between FDI and growth on the one hand while there exists a long run causal link between environmental quality and FDI inflows on the other hand (cited in Onakoya, 2012). Imoudu (2012) analytically examine the FDI-growth nexus in Nigeria in the period 1980- 2009 using Johansen cointegration technique and vector error correction methodology in which FDI is disaggregated into various components. The result obtained shows that the impact of the disaggregated FDI on real growth in Nigeria namely: agriculture, mining, manufacturing and petroleum sectors is very little with the exception of the telecom sector which has a good and promising future, especially in the long run (ibid: 122). Besides recommending the liberalization of the foreign sector of the Nigerian economy through the reduction of tariff barriers, Imoudu also notes the importance of stable and enabling environment for FDI inflow. Specifically, Imoudu strongly proposes the creation of enabling investment climate in Nigeria through the overhauling of the security system which will help in no small measure in boosting investors’ confidence as instability scare way prospective investors. The crux of Imoudu’s study is that while FDI may not necessarily creates growths in every sector of the economy, enabling and stable environment is important for attracting FDI to an economy. In view of cases for and against the relationship between FDI and economic growth that saturates the FDI literature and particularly in the Nigerian context, Onakoya (2012: 68), positing that the findings on the FDI–growth nexus is far from being conclusive, calls for country-specific studies. 2.7 Investment Constraints in Nigeria and Determinants of FDI Inflow Onakoya (2012: 66) observes that Nigeria is believed to be a high-risk market for investment although blessed with enormous mineral and human resources. Gleaning from Auty (1993) in this context, the Onakoya further notes that co-existence of vast wealth in natural resources

30. 30 and extreme personal poverty referred to as the “resource curse” or 'Dutch disease' appears to bedevil the country. To underscore the high prevalence of poverty in Nigeria, a World Bank (2011) estimate ranks 170 out of 213 countries with respect to the Gross National Income Per Capita which is quoted at US$1,200. Amongst constraints to investment, poor corporate governance, unstable political and economic policies, weak infrastructure, unwelcoming regulatory environments and global competition for FDI flows have been identified as impediments standing in the way of attracting significant FDI flows in Dupasquier and Osakwe (2006). Jerome and Ogunkola (2004) have been noted, in a review by Onakoya (2012: 67), to ascribe low level of FDI in Nigeria to deficiency in the country's legal framework concerning corporate law, bankruptcy and labour law, in addition to institutional uncertainty. Ayanwale (2007), who focused on the link between non-extractive FDI and economic growth in Nigeria, submits that the determinants of FDI in Nigeria are market size, infrastructure development and stable macroeconomic policy. Ekpo (1995) on the other hand explains the variability of FDI into Nigeria by the political regime, real income per capita, rate of inflation, world interest rate, credit rating and debt service. For Anyanwu (2011), major determinants of FDI inflow include change in domestic investment, change in domestic output or market size, indigenization policy and change in openness of the economy. Concerning FDI-growth nexus, the review finds that the relationship could be negative and positive, since the impact of FDI inflow on the economy depends on a number of factors, in particular the domestic capacity of the host country to take advantage of benefits that come with FDI inflow. In effect, enabling business environment is critical to attracting FDI and to taking advantage of whatever benefits accrue from FDI inflow. On FDI and the Nigerian economy, no conclusion can be drawn from both theoretical and empirical literature. Rather what is clear is that a bigger chunk of FDI to Nigeria has gone to the blue chip oil sector, while the agriculture sector has lagged behind. Lastly, the review of literature identifies various investment constraints in Nigeria while also indicating that it is a genuine investment hub with huge potential to attract FDI. The huge natural resources base of Nigeria and its large human population have been singled out as two important determinants of FDI to the country.

31. 31 CHAPTER THREE METHODOLOGY This chapter details the methods for gathering data for the study and the approach adopted for analyzing and reporting field findings. The objective of the chapter is to devise a methodology that is both appropriate and adequate not only for investigating the specific research questions, but one that brings a clear answer to the core research question. 3.1 Data Collection Method and Analysis This study will be based on both secondary and primary sources of data. Secondary data will come from varied sources, which include but not limited to extant literature obtained from referred academic journals and scholarly books; internet articles; articles from newspapers and magazines, and etc. Primary data will be collected using the interviewing method and review of documents from relevant sources. Based on open-ended questions, interviews will be semi-structured in nature. Interview participants will be purposively selected to meet the objectives of the study. In this case, participants will be practitioners in the sector under study. Specific attention will be paid to managers of small and medium scale farms in Nigeria, academics and researchers, and government agriculture officials selected from relevant ministries and agencies. Two survey instruments are used for the interviews. Phone interviews were conducted for two participants using a semi-structured open-ended interview survey instrument. Personal interviews were conducted with the other three participants. Accessibility is the main factor in the choice of survey instrument administered on the different participants. As noted in Laforest (2009: 1), semi-structured interviews are useful for gathering qualitative information. They are suited to working with small samples and are useful for studying specific situations or for supplementing and validating information derived from other sources used for making safety diagnoses (Laforest, 2009). Respondents are purposively selected based on their understanding of the problem and issues under consideration, given the privileged positions they occupy in management structure of the selected cases (Laforest, 2009: 2). The face to face interview with other 3 respondents was conducted successfully as the researcher was able to control the setting in which the interview took place (Phellas et al,

32. 32 2011: 183), the interview took place in appropriate settings and questions were asked in a correct order but the cost and logistics associated with the face to face interview led to the interviewer proposing phone interview with other two respondents (Phellas et al, 2011: 183). For example, participants are scattered across the geopolitical zones in Nigeri (See limitations, p.41). However, the respondents benefited from some of the advantages Phellas et al (2011) pointed out in their work; for example, the researcher’s presence gave opportunity to ask complex questions from the participants, and these questions are well explicated (Phellas et al, 2011: 183). Conversely, the interviewee faced challenges such as keeping phone interview brief; also the author had to avoid asking sensitive questions so as not to provoke uncharacteristic responses (Phellas et al, 2011: 183). Nonetheless, the researcher ensures all questions asked via phone interview are professionally and completely standardized in a well-organized format before the conversation so as to remove every partiality from the process. This study deals with ethical issues that may arise during the conduct of research by seeking and obtaining consent and permission from appropriate authorities both in gaining access to field sites and participants and in reporting field finds. In effect, confidentiality is a hallmark of the study. Interviews are conducted using an interview plan (see appendix) and responses are recorded with the aid of audio devices and field notes after due consent from participants. New questions and meanings are allowed to emerge through the interview process, given the open- endedness of questions posed to respondents. Data that emerged from interviews are subsequently transcribed into themes to identify the principal problems raised by respondents (Laforest, 2009: 5), the emerged themes are then reported as field finds after detailed description of interview contexts.

33. 33 CHAPTER FOUR ANALYSIS 4.1 Designation of Participants This chapter analyzes the results obtained from field research in a thematic form, with each section of the chapter dealing with specific and distinct issue. The analyzed data is gathered through interviews conducted with five participants representing different stakeholders in the agriculture sector of the Nigerian economy. Among those interviewed are government officials, farm managers; farmers; and researchers in the field of agriculture economics. However, due to logistics, the researcher proposed a phone interview with 2 of the partic

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