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Agriculture Sector Contributions to Economic Transformation of Nigeria, Malaysia: A Comparative Perspective

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During the 1970s economic development came to be defined in terms of the reduction or elimination of poverty, inequality and unemployment within the context of a growing economy (World Bank, 2019). A substantial goal of impoverished countries is economic development or economic growth. Economic growth refers to increases in a country’s production or income per-capita while Economic development refers to economic growth convoyed by changes in output distribution and economic structure. These changes may include improvements in the material well-being of the poorer half of the population; a decrease in agriculture’s contribution to GNP and a corresponding increase in the contribution of industry and services to GNP; an increase in the education and skills of the labour force; and substantial technical advancements emanating from within the country (Agbugba & Binaebi, 2018).

A Historical Perspective of Nigeria’s Agriculture Sector
It is noteworthy to assert that Nigeria’s agriculture sector can influence itsprocess of economic growth and development, thereby driving its economic transformation. It therefore, ensures food and fibre supply for domestic consumption, as well as supply for human labour to the industrial sector. The agriculture sector can generate foreign exchange earnings through exports of food and agricultural products, thereby increasing domestic savings and the purchasing power of rural people (FAO, 2002).
In the 1960s, agriculture contributed over 80 percent of the export earnings and employment in the economy; about 65 percent of the GDP (gross domestic product) and about 50 percent of the government revenue, despite the dependence of most of Nigerian farmers on traditional tools and indigenous farming methods (NEPAD, 2013).
In order to become a developed nation, Nigeria needs to accelerate her economic growth by concentrating on important economic sectors like education, energy, agriculture and manufacturing. At this point in Nigeria’s development, the best approach is to pay more attention on the agricultural sector. By focusing on agricultural development, Nigeria can speed up its economic growth in the coming decade (Olaniyi et al, 2015)
Currently, Nigeria has 75 percent of her land suitable for agriculture, but only 40% is cultivated (Ekperiware & Olomu, 2015). This shows that there is much room for expansion the county need to look into .However, to progress, the country must increase the low productivity of current agricultural companies, engage competition within the agricultural sector, develop domestic policies and increase funding (UNCTAD, 2019).
One major tool in determining how to employ agriculture in developing Nigeria’s economy is to evaluate the historical efforts in terms of agriculture that Nigeria has embarked upon since her independence. This will ensure that the country does not make mistakes it has done in the past. In addition, this evidence will indicate whether or not it is possible for agriculture to be a key factor in Nigerian economic development. Along with historical factors, there must be an evaluation of both internal and external factors that could affect the Nigerian agriculture market. In addition, it is important to identify the strategies needed to enhance economic growth through the use of agriculture (Agbugba & Binaebi, 2018)

Muhammad Nanono

A Historical Perspective of Malaysia’s Agriculture Sector
In South East Asia, fast agricultural production profits raised millions of people out of poverty and provided the framework for diversified economic growth. The current Malaysian economy is anchored on three main sectors; these are the manufacturing, services and agriculture. During the 1970s or probably even earlier, the Malaysian economy was totally dependent on agriculture. Malaysia was well known for exports of rubber, tin, and palm oil, and to some extent, cocoa. Agriculture was the largest single contributor to GDP, with 29.1 percent. The economic metamorphosis, which transpired through the years, reduced the contribution of agriculture to GDP to only 9.64 percent from 1995 to 1998 (Tiku & Bullem, 2015).
The agriculture sector is the third most important sector in Malaysian economy to date. The agriculture sector has been the spine of the Malaysian economy for a very long period of time. During independence, it contributed 39.3 per cent to the Gross Domestic Product (GDP), generated 58.3 per cent of the total employment and about 50.0 per cent to export earnings. After independence, when the economy experienced diversification, the contribution of the sector diminished. However, in 1980 it still contributed 22.9 per cent of total GDP, 39.7 per cent to employment and less than 25 per cent to export earnings (World Bank, 2019).
In the year 1990, the sector contributed 18.7 per cent to total GDP, 26.0 per cent to total employment and 22.2 per cent to export earnings. The figures reduced further for 1995 and 2000. However, in the year 2000, despite the decrease, the sector still contributed 10.5 per cent to GDP, 13.0 per cent to employment and 7.2 percent to export earnings.
Historical &Comparative Overview of Nigeria and Malaysia’s Developmental Efforts
Nigeria and Malaysia share common historical antecedent. They gained their independence from the British rule (World Bank, 2014). They federal system of government is practiced with bicameral legislature and the regions are inhabited by different racial and ethnic nationalities. Both economies were relatively resource rich. At independence, Malaysia in 1957 and Nigeria in 1960 were leading exporters of primary product because basically the climate in the countries is tropical. A comparison of Malaysia and Nigeria’s growth record shows divergence in growth rates, and differing structural changes to the economy. Malaysia, on average has grown at a faster rate than Nigeria (Kareem, 2015).
In contrast to Malaysia’s post-independent experience, political instability was more pronounced in Nigeria. The military has ruled for 25 out of its 50 years as an independent nation (Okezie & Amir, 2011). In Malaysia, there was relatively political stability and continuity with no changes in the government and the present coalition government is still in power, after more than 50 years. Malaysia achieved sustained growth of about 6% per annum growth for the past 50 years. It maintains large external reserve in comparison to Nigeria and has continued to maintain low inflation rates. Agriculture’s share of GDP in 2009 has fallen to 7.7 from 33.6% in 1970, compared to Nigeria’s 55.8% in 1970 and 40.3 per cent in 2009. Manufacturing in Malaysia accounted for 12.8% in 1970 and 26.5% in 2009 compared to Nigeria’s 6.6% in 1970 and 15.5% in 2009, while the contribution of the service sector has increased to 57.4% in 2009, it stood at only 15.5% in Nigeria (World Bank, 2013).
Consequently, the two countries have adopted almost the same ideology in their developmental efforts, while Malaysia plans and moves vigorously towards the attainment of its vision of becoming an advanced economy in 2020. Nigeria in its Vision 2020 which to become one of the 20 most industrialized economies by the year 2020, not much has been seen in this direction (Tiku & Bullem, 2015).
Nigeria and Malaysia have similar histories, development planning patterns and climate, it is generally believed that Malaysia have outperformed Nigeria in agriculture, this study aims to compare their agricultural sectors contribution to both economies.
Nigeria’s Agro-Economic Development Plans
Development by implication is made up of two basic interrelated parts: increasing the availability of resources and improving the utilization of available resources. While the first component encompasses the natural, human and financial, the second component is a complex function of social organization, level of technology, efficiency of management and the content of public policy (World Bank, 2018).
First National Development Plan (1-NDP)
The FNP was launched in June 1962 and was expected to operate for a period of six years up to 1968 (FRN 1962). The macro-objectives of the plan included ensuring the growth rate of at least 4.0% per annum; achievement of economic take-off by 1980; developing opportunities in specific areas like health, education and employment; to enhance access to opportunities in education, health and employment; promotion of balanced development; promotion of equity in income and promotion of macro-economic stability. Agriculture, industry and manpower development were accorded highest priority rating by the first plan.
Second National Development Plan (2-NDP)
The second NDPcommenced in 1970, instead of 1969 because of the civil war which necessitated the extension of the first National Development plan to 1970 (FRN 1970). The objectives of the plan which give the impression of Nigeria’s first attempt to grapple with real development included efforts to build a united, strong and self-reliant nation; a great and dynamic economy; a just and egalitarian society; land of bright and full opportunities for all citizens; and free and democratic society. This plan recognized the importance of policy making in development planning.
Third National Development Plan (3-NDP)
The objectives of the plan were increase in per capita income; even distribution of income; reduction in the level of unemployment; increase in the supply of high level manpower; diversification of the economy; balanced development and indigenization of economic activities.
Fourth National Development Plan (4-NDP)
The objectives of this plan included increase in the real income of the average citizen; more even distribution of income among individuals and socio-economic group; increase in the level of skilled manpower; reduction in the level of unemployment; reduction of the dependence of the economy on a narrow range of activities; balanced development, increased participation by citizens in the ownership and management of productive enterprises and greater self-reliance.
The Fifth National Development Plan (5-NDP)
Due to poor implementation of the Fourth NDP, machinery was put in place for preparation of the Fifth NDP. The primary focus of the plan was to correct the structural defects in the economy and create a more self-reliant economy that would largely be regulated by market forces. The economy was therefore expected to be restructured in favour of the production sector especially those of agriculture and manufacturing. More than ever, the linkage between the agricultural and manufacturing sectors of the economy was to be emphasized during the plan (Aderibigbe & Nwafor, 2018).
Malaysia’s Agro-Economic Development Plans
Malaysia is a Federal constitutional monarchy located in South-east Asia. It comprises of 13 states, three federal territories and covers a total of 329, 847 square kilometers. Malaysia is divided into two land areas, West Malaysia and East Malaysia, both of which are divided by the South China Sea. Malaysia became independent on 31 August 1957. Before independence, Malaysia was known as Malaya. Malaysia is a newly industrialized economy aiming to become a developed nation by 2020 (World Bank, 2014). The main contributors to its economy are the service sector, followed by manufacturing, mining and agricultural sector.Despite its little contribution, agriculture is still an important sector as it supplies food and creates employments for rural people. The Agriculture sector is an important sector in Malaysia; andfor many years, this sector has been the spine of Malaysian economy by producing agricultural products for domestic consumption, also as the earner of foreign exchange. Agriculture also contributes to the national Gross Domestic Products (GDP). It provides major employment for the people, especially from the rural areas. In 2013, this sector employed more than 1.6 million people or 10.9% of the total employment, contributed more than 23% of the total export earnings and adds about 7.2% of Malaysia’s GDP (OECD, 2019).
Analysis of Nigeria and Malaysia’s National Development Plans: Focus and Objective
From the literature reviewed, Nigeria and Malaysia have several economic development plans which have focused on improving agriculture in order to bring about economic development and growth in both nations. Nigeria had several development plans which budgeted for the improvement of the agricultural sector these were the first national development plan which were five years plans , and they lasted up to the fifth national development plan, before the plans were stopped and incorporated into the structural adjustment program and subsequently changed to two years plans. In Nigeria the development plans focused on the entire sectors of the economy and less emphasis was laid on the improvement of the agriculture sector. On the other hand, Malaysia also had development plans called the Malaysia’s plans. It started with the first Malaysia’s plan, but unlike Nigeria’s plans, that of Malaysia focussed more on the improvement of the agriculture sector and Malaysia unlike Nigeria, continued with the 5-year plan schedule. This work tends to look at how well the agricultural sectors of both nations have contributed to the overall growth and development of both countries.
In conclusion, the essence of comparing the contributions of the agriculture sector to economic growth and development of Nigeria and Malaysia cannot necessarily, be over emphasized.From researches conducted and findings from quasi studies, Nigeria’s agriculture sector has contributed significantly to the overall GDP of Nigeria, compared to that of Malaysia. However, regarding the agriculture sector contribution to employment, the total employment is higher, compared to that of Malaysia.With respect to foreign exchange, Malaysia’s agriculture sectorcontribution is higher compared to that of Nigeria. Very importantly, Malaysia makes more from food and agricultural exports, compared to Nigeria. Furthermore, in the area of food security, the percentage of undernourished people in Nigeria is higher compared to that of Malaysia. In order words, it behoves on the Nigerian government to invest in the agriculture sector as that would improve on food and agricultural production, value-chain operations, as well as improve exportation to increase foreign exchange earnings. More so, Nigeria’s agriculture sector especially crop and livestock farming operationsshould engage more on food production to ensure food security, as well as cater for the food needs of the nation. Among other recommendations for policy implementation, the Federal Government of Nigeria (FGN)should increase budgetary allocation to industrialize the agriculture sector especially the agro-allied industries by creating more factories for processing and value-adding activities. Finally, long-term agricultural development plans (five to ten year plans) which are realisable should be created and implemented by the FGN.
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By Ikechi K. Agbugba (PhD), Full-time Lecturer/Researcher,
Dept of Agricultural & Applied Economics Rivers State University, PMB 5080
Port Harcourt City, Nigeria, Email:

Ebitari Binaebi, MSc (RSU) Econometrician &PhD Candidate, Dept. of Agricultural & Applied Economics, Rivers State University