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212 XINSHEN DIAO ET AL. Drawing lessons from its troubled economic history, the Government of Nigeria


has since recognized the importance of the agricultural sector. Its promotion is an essential ingredient of the country’s development strategy, given the country’s rich, favorable agroecological conditions and the fact that most of the population lives in rural areas. A series of strategies has recently been designed that aim to accelerate agricultural growth, strengthen food security, and reduce poverty. These strategies include the National Economic Empowerment and Development Strategies (NEEDS) (Nigeria, NPC 2004, 2007) and the National Food Security Program (NFSP) (Nigeria, FMARD 2008). Such programs as the presidential initiatives on cassava, rice, and other crops have also been implemented. Moreover, the country is a signa- tory to the Comprehensive Africa Agriculture Development Programme (CAADP), which commits the government to targeting 6 percent agricultural GDP growth rate and allocating at least 10 percent of public resources to the agricultural sector. Despite these commitments, further efforts are needed to lift more people out of poverty and to meet the fi rst Millennium Development Goal (MDG) of halving the proportion of the people living on less than US$1 a day. In this chapter we analyze the agricultural growth and public investment


options for Nigeria. This study provides evidence-based analysis to support the formation of a more comprehensive rural development component under the NEEDS that is also in alignment with the objectives collectively defi ned by African countries as part of the CAADP agenda. As with other chapters in this volume, the analysis makes use of a spatially disaggregated recursive dynamic computable general equilibrium (DCGE) model (described in Chapter 2). We also estimate the overall cost to the government of the investments needed to accelerate agricultural growth. The chapter is structured as follows. We fi rst describe the structure of the


Nigerian DCGE model and the data sources used to calibrate it. The model results are then presented for the baseline growth scenario and the accelerated agricultural growth scenarios. This is followed by the results from the investment analysis. The fi nal section draws together our fi ndings and summarizes their implications for future national and agricultural development strategies in Nigeria.


The Nigerian DCGE Model The Nigerian DCGE model includes 62 production subsectors that cover the entire agricultural and nonagricultural components of the country (see Table 8A.1 in the appendix to this chapter). More than half of the subsectors are in agriculture, which falls into six broad groups: cereal crops, root crops, other foodcrops, higher value export-oriented crops, livestock sectors, and other agricultural activities (that is, forestry and fi sheries). The model also captures regional heterogeneity in agriculture by disaggregating agricultural production into six zones, wherein representative farm- ers produce different crops and livestock across zones. In terms of nonagricultural


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