Agricultural Sector Performance and Employment in Emohua local

Government Area of Rivers State Nigeria

1
 CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Agriculture has long served as the backbone of Nigeria’s economy, providing

employment, food, and raw materials for the nation’s growing population. Despite

the increased attention given to oil since the 1970s, the agricultural sector

continues to account for a significant proportion of Nigeria’s employment and

gross domestic product (GDP). According to the National Bureau of Statistics

(2023), agriculture contributes about 25% of Nigeria’s GDP and employs over

35% of the labor force. This reality is particularly pronounced in rural and semi-

urban areas like Emohua Local Government Area in Rivers State, where

agriculture remains the primary source of livelihood for the majority of the

population.

Despite Nigeria's rich agricultural resource endowments, the agricultural sector is

seen to be growing at a very low pace; and less than 50% of the country's

cultivable agricultural land is under-cultivated. This would suggest that there is the

need to explore the enormous potential inherent in the agricultural sector and use

it to achieve sustainable economic growth of the country (CBN, 2008; Onunwo

and Amadi-Robert, 2022). Orji, Ogbuabor, Anthony-Orji and Alisigwe (2020)

mentioned that a high proportion of those engaged in agricultural practices are

2
rural dwellers with low levels of education, these rural dwellers make up about half

of the Nigerian population, yet rural poverty is on the increase. Rural dwellers find

it very difficult to access useful information in their acquisition of necessary inputs

needed to increase output this abnormality can be attributed to the absence of basic

rural infrastructure in such areas. More so, economic development theorists have

identified infrastructure as important in agricultural production. This means that

agricultural production capacity is greatly connected to adequate infrastructure.

Emohua Local Government Area (LGA), situated in the upland part of Rivers

State, is endowed with fertile land and a favorable climate for the cultivation of

crops such as cassava, maize, yam, and vegetables. The area also has significant

potential in animal husbandry and fisheries, owing to its proximity to rivers and

streams. Yet, despite this potential, the agricultural sector in Emohua faces

numerous structural and institutional challenges that obfuscates its ability to absorb

labor and reduce unemployment. Issues such as inadequate access to credit, poor

infrastructure, land tenure insecurity, and low adoption of modern farming

technologies are prevalent (Okeke et al., 2022; Akpan & Omorogbe, 2021).

Moreover, the Nigerian government at various levels has initiated several policies

and intervention programs aimed at revitalizing the agricultural sector. Programs

like the Agricultural Transformation Agenda (ATA), Anchor Borrowers’

3
Programme (ABP), and the National Agricultural Technology and Innovation

Policy (NATIP, 2022–2027) are intended to stimulate production, enhance value

chains, and create employment opportunities. However, the effectiveness of these

policies in rural areas such as Emohua remains under-examined. Many of these

initiatives are often not tailored to local realities and frequently encounter

implementation bottlenecks (Ibrahim & Umeh, 2023).

The role of agriculture in employment generation is a cardinal issue in discussions

on rural development and poverty alleviation. Several studies have pointed out that

in areas where the agricultural sector is performing optimally, there is a

corresponding reduction in youth unemployment and rural-urban migration (Eze &

Nwosu, 2021; Ude & Chukwu, 2023). Yet, Nigeria continues to grapple with high

rates of unemployment, particularly among the youth, indicating a disconnect

between policy intentions and on-ground realities. In Emohua, anecdotal evidence

suggests a rising trend in youth disengagement from farming, influenced by poor

infrastructure, lack of mechanization, and inadequate support services.

Agricultural sector performance in this context does not only refer to output levels

but encompasses a broader set of indicators including productivity, innovation

adoption, investment flows, and employment absorption capacity. According to

Olawuyi and Adetunji (2023), effective performance of the agricultural sector is

4
closely tied to the provision of supportive rural infrastructure-such as feeder roads,

storage facilities, and irrigation systems-which remain grossly underdeveloped in

Emohua and much of Nigeria’s rural communities. These infrastructural deficits

hinder access to markets, reduce farm profitability, and discourage sustained youth

involvement in farming activities.

Another key factor affecting agricultural performance and employment generation

in Emohua is the issue of land access and land tenure. Although the community-

based land ownership system offers some flexibility, it also creates ambiguity that

deters investment in long-term agricultural ventures. Nwachukwu et al. (2022)

argue that secure land tenure is critical for enabling farmers, especially youth and

women, to invest in productivity-enhancing practices. In Emohua, traditional

landholding patterns often exclude women and young people, thereby limiting their

active participation in agriculture despite their potential.

The neglect of agricultural extension services in the area is also a major concern.

Extension workers are critical in the dissemination of improved farming practices

and technologies. However, the National Agricultural Extension and Research

Liaison Services (NAERLS, 2023) notes a wide extension-to-farmer ratio in Rivers

State, with many LGAs including Emohua having fewer than one extension agent

per 2,000 farmers. This gap hampers efforts to modernize agriculture and improve

5
productivity, thereby limiting the sector’s ability to generate employment on a

large scale.

Climate change and environmental degradation further compound the situation. In

Emohua, seasonal changes, flooding, and soil erosion have negatively affected

farming patterns and yields. This environmental uncertainty has contributed to the

reluctance of youths to engage in agriculture, perceiving it as an unstable and

unrewarding venture (Amadi & Worlu, 2023). The lack of insurance schemes and

risk management frameworks for smallholder farmers worsens this vulnerability,

thereby undermining the agricultural sector’s potential to sustainably reduce

unemployment.

Despite these challenges, the agricultural sector in Emohua still holds untapped

potential for growth and employment generation. With a youthful population,

abundant arable land, and favorable climatic conditions, there is a unique

opportunity for agricultural revitalization if appropriate policies are implemented.

The local government can play a crucial role in facilitating access to inputs,

enhancing extension services, improving rural infrastructure, and encouraging

agribusiness development. As emphasized by Adesina (2023), unlocking the

potential of agriculture for job creation requires a value chain approach that

integrates production, processing, marketing, and export.

6
Recent advancements in agritech also offer promising avenues for enhancing

agricultural performance in Emohua. The integration of mobile platforms for

accessing weather updates, market prices, and farming advice has improved farmer

efficiency in other parts of Nigeria (Akinbode & Oyeleye, 2022). Introducing such

innovations at the local level can attract the youth and reduce unemployment if

complemented by skill-building initiatives and access to affordable credit.

However, the digital divide remains a barrier, necessitating targeted efforts to

bridge the gap between technology and rural farmers.

Given these considerations, this study seeks to critically examine the relationship

between agricultural sector performance and employment generation in Emohua

Local Government Area. It will assess the extent to which agricultural activities in

the area contribute to local employment and explore the factors that enhance or

constrain this contribution. Furthermore, the study will analyze how current

policies and practices can be improved to boost employment through agricultural

development. By focusing on a localized context, this research contributes to the

broader discourse on rural employment and agricultural transformation in Nigeria,

offering practical insights for policy makers, development agencies, and local

communities.

7
1.2 Statement of the Problem

Agriculture has historically played a pivotal role in Nigeria’s economic

development, particularly in employment generation and rural development.

However, despite the sector’s critical importance, there has been a persistent

decline in its ability to provide gainful employment, especially in rural areas such

as Emohua Local Government Area of Rivers State. Although Emohua is endowed

with fertile land, abundant water resources, and a predominantly agrarian

population, the area continues to experience high levels of unemployment and

underemployment. This situation presents a paradox -agricultural potential is

present, yet widespread joblessness remains a challenge. The inability of the

agricultural sector in Emohua to effectively absorb labor calls into question the

performance of the sector and the efficacy of related policies and interventions

(Eze & Nwosu, 2021; Udo & Ibrahim, 2023). Unemployment, particularly among

the youth in Emohua, is on the rise despite national and state-level efforts to

revitalize agriculture. Government initiatives such as the Anchor Borrowers’

Programme (ABP), the Presidential Fertilizer Initiative, and the Rivers State Youth

Empowerment Scheme were designed to empower local farmers and improve

productivity (CBN, 2023; Rivers State Ministry of Agriculture, 2022). However,

there is limited evidence that these initiatives have significantly translated into

employment opportunities or improved agricultural performance in Emohua. Much

8
of the problem lies in the implementation process, which is often plagued by poor

targeting, political interference, and weak institutional capacity (Akpan &

Omorogbe, 2021). As a result, the youth -who should ideally be at the center of

agricultural transformation -remain disenchanted and increasingly migrate to urban

centers in search of better opportunities.

Furthermore, structural and infrastructural limitations continue to constrain

agricultural activities in Emohua. Farmers in the area contend with poor road

networks, inadequate storage facilities, lack of mechanization, and limited access

to extension services. These challenges significantly affect productivity and reduce

the attractiveness of agriculture as a viable employment sector. The absence of

rural infrastructure not only affects the production side but also impedes access to

markets, thereby limiting income generation and discouraging reinvestment in the

sector (Olawuyi & Adetunji, 2023). This creates a vicious cycle where low

performance leads to poor income, which in turn results in declining labor

participation and increasing unemployment.

A critical issue further compounding the problem is land tenure insecurity. In

Emohua, land ownership is predominantly governed by traditional institutions,

which often restrict equitable access, especially for women and youth. This

restriction significantly hinders their participation in agriculture and limits their

9
ability to scale operations (Nwachukwu et al., 2022). Without secure land rights,

farmers are reluctant to invest in long-term improvements, leading to low

productivity and further discouragement of labor absorption. Despite policy

recognition of this barrier, there has been limited progress in formalizing land

rights or integrating customary tenure systems with statutory frameworks.

The problem of low technological adoption also persists. Most farmers in Emohua

still rely on rudimentary tools and traditional farming practices, which significantly

limits productivity. The lack of access to improved seeds, fertilizers, irrigation

systems, and information technologies keeps the agricultural sector in a low-

productivity trap. According to NAERLS (2023), fewer than 10% of farmers in the

Niger Delta region have access to functional extension services, which are

essential for the dissemination of improved techniques. The limited reach of

agricultural extension services in Emohua has left many farmers uninformed about

modern agricultural practices, resulting in stagnation and poor labor productivity.

In addition, climate variability has further exposed the vulnerabilities of Emohua’s

agricultural sector. Irregular rainfall patterns, flooding, and environmental

degradation have led to crop failures and loss of livelihoods, making agriculture

even less appealing to young people (Amadi & Worlu, 2023). With limited access

to agricultural insurance and credit facilities, farmers often face significant

10
financial setbacks, which discourages continuity and investment in farming. As

climate risks grow, so too does the uncertainty surrounding agricultural

employment, thereby deepening rural poverty and unemployment.

Another dimension of the problem is the disconnect between national agricultural

policies and local realities. While Nigeria has developed several robust agricultural

development plans, such as the National Agricultural Technology and Innovation

Policy (NATIP 2022–2027), these policies often fail to trickle down effectively to

grassroots areas like Emohua. Poor coordination between federal, state, and local

governments, along with a lack of community involvement in policy design and

implementation, has led to poor outcomes (Ibrahim & Umeh, 2023). This policy-

practice gap undermines the objectives of inclusive rural development and

contributes to the persistent unemployment problem.

Moreover, youth perception of agriculture as an unattractive and unrewarding

profession exacerbates the situation. Agriculture in Emohua is often seen as a last

resort rather than a career of choice due to its association with drudgery, low

returns, and poor social status. This perception is fueled by the visible disconnect

between agricultural labor and prosperity, with many farming households

remaining in poverty despite years of hard work (Okeke et al., 2022). Without

efforts to rebrand agriculture as a modern, profitable, and technologically-driven

11
enterprise, it will be difficult to attract youth and reduce unemployment through

this sector.

Despite these challenges, Emohua’s agricultural sector still holds promise for

employment generation if systemic issues are addressed. The area’s abundant

natural resources, youthful population, and favorable location offer significant

opportunities for agricultural expansion and agribusiness development. However,

there is a need for context-specific empirical research to assess the actual

performance of the sector and its employment generation capacity. Currently, there

is a dearth of localized studies examining how agricultural activities in Emohua

translate into job creation and what specific barriers hinder this potential.

Indeed, the persistent unemployment in Emohua Local Government despite the

agricultural endowments in the area highlights a fundamental development

problem. It signals a performance gap in the agricultural sector and the inadequacy

of existing interventions to create sustainable livelihoods. This study is therefore

necessitated by the need to critically examine the factors responsible for the

underperformance of the agricultural sector in Emohua and its limited impact on

employment generation. Addressing these challenges is vital for reducing rural

poverty, improving food security, and achieving inclusive development in the area.

That is the crux of this study.

12
1.3 Aim and Objectives of the study

The chief aim of this research is to investigate the link between agricultural sector

performance and employment in Emohua Local Government Area of Rivers State

Nigeria. Outlined objectives include to:

1. Examine the current state of agricultural sector performance in Emohua

Local Government Area.

2. Assess the extent to which the agricultural sector contributes to

employment generation in Emohua.

3. Identify the major challenges hindering the agricultural sector from

effectively reducing unemployment in the area.

4. Evaluate the effectiveness of government and private sector interventions in

promoting agricultural-based employment in Emohua.

1.4 Research Questions

The study will be guided by the following research questions:

1. What is the current state of agricultural sector performance in Emohua Local

Government Area?

2. To what extent does the agricultural sector contribute to employment generation

in Emohua?

13
3. What are the major challenges hindering the agricultural sector from effectively

reducing unemployment in the area?

4. How effective are government and private sector interventions in promoting

agricultural-based employment in Emohua?

1.5 Research Hypotheses

This study shall be streamlined with the following hypotheses:

1. There is no significant level of agricultural sector performance in Emohua

Local Government Area.

2. The agricultural sector does not significantly contribute to employment

generation in Emohua.

3. Challenges in the agricultural sector do not significantly affect its ability to

reduce unemployment in Emohua.

4. Government and private sector interventions have no significant effect on

agricultural-based employment in Emohua.

1.6 Significance of the study

This study is important because of its potential to address the persistent issue of

unemployment through a critical examination of the agricultural sector's

performance in Nigeria especially in agrarian rural areas. In Nigeria, agriculture

14
remains a cornerstone of the economy, employing over 35% of the labor force and

contributing about 25% to the Gross Domestic Product (GDP) (National Bureau of

Statistics [NBS], 2023). Despite this, many rural areas, including Emohua,

experience high levels of joblessness, particularly among youth and women. This

contradiction between the sector's economic role and the reality of unemployment

demands a localized, evidence-based exploration. The findings of this study could

serve as a critical resource for policy makers, development agencies, local

authorities, and researchers in understanding and addressing this disconnect.

At the academic level, this research contributes to the growing body of knowledge

on agriculture and rural development and by extension economic development,

particularly within the Niger Delta context. Although numerous studies have

examined agricultural employment generation in Nigeria (Udo & Ibrahim, 2023;

Akpan & Omorogbe, 2021), few have focused specifically on the micro-level

realities of rural local government areas such as Emohua. By providing empirical

data and insights at the community level, this study fills an important research gap,

offering a more nuanced understanding of how agricultural performance relates to

employment in a specific locality. This level of granularity is often overlooked in

national or regional studies, yet it is crucial for formulating effective, context-

sensitive economic development strategies.

15
From a policy standpoint, the study is significant because it provides a framework

for evaluating the effectiveness of existing agricultural and employment

interventions. Programs such as the Anchor Borrowers’ Programme (ABP),

National Agricultural Technology and Innovation Policy (NATIP 2022–2027), and

various youth empowerment schemes in Rivers State have been designed to

promote productivity and employment in agriculture (Central Bank of Nigeria

[CBN], 2023; Rivers State Ministry of Agriculture, 2022). However, the

implementation of these programs is often criticized for poor targeting, limited

local participation, and weak institutional follow-through (Ibrahim & Umeh,

2023). This study provides a platform to assess the impact of such initiatives in

Emohua and suggest actionable recommendations for improvement.

The study also holds practical relevance for stakeholders directly involved in

agriculture: farmers, cooperatives, agribusiness entrepreneurs, and community

leaders. By identifying the specific barriers hindering agricultural performance-

such as land tenure issues, lack of access to technology, poor infrastructure, and

environmental challenges- the research can inform local solutions tailored to

Emohua's socio-economic and ecological conditions (Olawuyi & Adetunji, 2023;

Amadi & Worlu, 2023). Moreover, understanding the employment potential of

various agricultural activities (crop farming, livestock, aquaculture, etc.) can help

16
stakeholders channel their resources and efforts into the most promising areas,

enhancing productivity and livelihoods.

Youth empowerment is another critical area where this study can make a

substantial impact. The demographic profile of Emohua, like much of Nigeria,

shows a large proportion of young people who are either unemployed or

underemployed (NBS, 2023). Unfortunately, agriculture is often perceived as

unattractive by youth due to its association with low income, manual labor, and

poor social status (Okeke et al., 2022). By demonstrating the latent opportunities

within the agricultural sector- especially when modernized through improved

practices, access to markets, and value chains- this study could help shift

perceptions and encourage youth participation. This is particularly important in

light of increasing rural-urban migration and its long-term implications for food

security and rural development.

In terms of sustainable development, this research is aligned with global goals,

particularly Sustainable Development Goal (SDG) 1 (No Poverty), SDG 2 (Zero

Hunger), and SDG 8 (Decent Work and Economic Growth). The agricultural

sector, when properly developed and supported, has the potential to absorb labor,

increase income, and reduce rural poverty. However, achieving these outcomes

depends on localized insights and data to inform implementation strategies. This

17
study provides such insights, making it a valuable resource for both national and

international development organizations working in agriculture and rural

employment.

Another critical dimension of this study’s significance is its relevance to inclusive

governance and local development planning. Local government areas like Emohua

often receive less academic attention, yet they are the frontline actors in delivering

services and fostering development. The findings of this research can assist local

government officials and councilors in designing agricultural development plans,

allocating resources, and setting employment priorities that are both realistic and

impactful. It can also support the planning of rural infrastructure projects- such as

farm-to-market roads, irrigation schemes, and storage facilities- which are essential

for both agricultural performance and employment generation (Eze & Nwosu,

2021).

For non-governmental organizations (NGOs) and civil society groups working in

Rivers State, this study offers reliable data for advocacy and program design.

Development efforts are often more successful when they are informed by research

that reflects community-specific challenges and opportunities. By highlighting the

structural and operational gaps in Emohua’s agricultural sector, the study provides

a solid foundation for civil society actors to engage government agencies and

18
private stakeholders more effectively. This can enhance community resilience,

gender inclusion in agriculture, and increased access to financial and technical

support.

The study also serves as a wake-up call regarding climate risks and environmental

sustainability in agriculture. Emohua, like other parts of the Niger Delta, is

vulnerable to flooding, soil degradation, and unpredictable weather patterns- all of

which affect crop yields and job stability. Without adequate adaptation strategies,

such climate challenges will continue to undermine both agricultural performance

and employment outcomes (Amadi & Worlu, 2023). This research brings these

issues to the fore and can serve as a guide for integrating climate-resilient

agriculture into local planning.

Therefore, this study is significant in its potential to influence future research and

stimulate academic debate. By providing baseline data and methodological

approaches, it offers a foundation for longitudinal studies, comparative research

with other LGAs, and interdisciplinary collaboration. Students, researchers, and

academic institutions can build on this work to explore further themes such as

agribusiness innovation, gender roles in rural employment, or the digital

transformation of agriculture in the Niger Delta. As Nigeria continues to seek

19
alternative employment pathways beyond oil, such studies are critical to shaping

sustainable and inclusive economic futures.

1.7 Scope and Limitations of the Study

This study is focused on examining the relationship between agricultural sector

performance and employment generation in Emohua Local Government Area

(LGA) of Rivers State, Nigeria. The scope is both geographically and thematically

delineated to ensure a detailed and context-specific analysis. Geographically, the

study is restricted to Emohua LGA, which comprises several communities with

varying levels of agricultural engagement. The selection of this area is informed by

its significant but under-researched agricultural potential, high unemployment rate

among youth and women, and the presence of state-supported agricultural

initiatives that offer a fertile ground for empirical investigation. The study does not

extend to other LGAs in Rivers State or other regions in Nigeria, although insights

drawn may be useful for comparative analysis or policy extrapolation.

Thematically, the study centers on two key variables: agricultural sector

performance and employment generation. Agricultural sector performance is

20
explored in terms of productivity, access to inputs and extension services, market

access, infrastructural support, land availability, and the role of public and private

sector interventions. Employment, on the other hand, is assessed in both

quantitative and qualitative dimensions—such as the number of individuals

engaged in agriculture, the nature of their engagement (full-time, seasonal, or part-

time), income levels, job satisfaction, and demographic spread across age and

gender. The study also attempts to examine government and donor-supported

agricultural programmes (like the Anchor Borrowers’ Programme, youth

agricultural schemes, and community cooperatives) within Emohua and their

effectiveness in boosting both sectoral output and employment rates.

In terms of methodology, the study adopts a mixed-methods approach, combining

both quantitative and qualitative data. Surveys are administered to farmers,

agricultural workers, and unemployed youth, while interviews and focus group

discussions are conducted with key stakeholders such as officials from the Rivers

State Ministry of Agriculture, local government representatives, cooperative

societies, and traditional leaders. Secondary data are also obtained from

institutional reports, previous studies, and publications from the National Bureau

of Statistics and other government agencies. This triangulation ensures a holistic

understanding of the dynamics between agriculture and employment in the study

area.

21
However, the study is not without its limitations. First, the scope of generalizability

is limited due to the study’s focus on only one local government area. While

Emohua may reflect certain trends found across rural Nigeria, caution must be

exercised in generalizing the findings to other regions, especially those with

different agro-ecological or socio-economic profiles. Future research may consider

comparative or multi-site studies to broaden the applicability of the conclusions.

Secondly, data availability and reliability pose a significant constraint. In many

rural areas, agricultural data are either outdated, inconsistent, or unavailable at the

local government level. Although this study makes efforts to rely on primary data

collection and official sources, gaps in institutional reporting and respondents’

reluctance to disclose accurate information (due to distrust or fear of taxation) may

affect the precision of some findings. Additionally, some official figures may be

aggregated at the state level, making it difficult to isolate Emohua-specific data.

A third limitation concerns time and resource constraints. Given the expansive

nature of Emohua and the diversity of its communities, the study cannot cover

every village or farming cluster comprehensively. Sampling is therefore done using

purposive and stratified techniques to ensure representation, but this inevitably

means that some micro-level dynamics may be overlooked. Limited funding and

logistical challenges such as poor rural transportation, flooding during rainy

22
seasons, and communication barriers (including language and dialect differences)

also impact the depth of fieldwork in remote areas.

Another limitation lies in respondent bias and perception-based data. Since part of

the study relies on interviews and surveys, there is a risk of response bias where

participants may exaggerate, underreport, or misrepresent their experiences for

various reasons, including expectations of government support or personal

grievances. To mitigate this, the study employs cross-verification with secondary

data sources and includes multiple respondent categories to balance perspectives.

Finally, policy dynamism and ongoing reforms within Nigeria’s agricultural sector

may affect the long-term relevance of some of the study’s findings. Government

programmes are often revised, repackaged, or discontinued due to political

transitions, budgetary shifts, or donor influence. As such, some recommendations

provided in this study may need periodic review to remain applicable in a changing

policy landscape.

Despite these limitations, the study remains significant in its contribution to local

development research and policymaking. It provides a grounded understanding of

how agricultural development can serve as a viable pathway for employment

generation in a specific rural context. The insights gained from Emohua LGA can

inform more inclusive, targeted, and sustainable strategies for revitalizing

23
agriculture and reducing unemployment- not just in Rivers State, but in other parts

of the Niger Delta and Nigeria as a whole.

Chapter Two

Literature Review

2.1 Conceptual review

2.1.1 Concept of performance and agricultural sector performance

Performance is less about the economic aspects of effectiveness and efficiency and

more about the concept of outcome, goal attained, and quality. The perception

states that the term "performance" was crudely coined from the sports and

mechanics fields and then applied to other fields to refer to the outstanding results

obtained.

This implies that only a select few entities-those that achieve the best outcomes-

are able to achieve performance.

Performance is only linked to a particular outcome and cannot be linked to any

other outcome. What is meant by "special"? First, the net results were better than

those from a previous period; second, they were better than results from "others";

and third, they were different from the clearly stated goals and were positively

accepted (El-Ghalayini, 2017). Because the concept of performance is subjective,

there are currently many different definitions attached to it. There are numerous
24
studies and articles in the literature that conceive performance in relation to

environmental factors.

Rather than being an objective reality that is awaiting measurement and evaluation,

Whooley (1996) posited that performance is a phenomenon that exists in the minds

of the people, if it exists at all. Performance can also involve components,

products, consequences, and impact, in addition to being connected to efficiency,

effectiveness, economy, cost effectiveness, or equity. Whooley (1996), noted

performance is relative and interpretive, and it is also connected to the cost lines.

The performance of the agricultural sector is a critical determinant of economic

development, food security, and poverty alleviation, particularly in agrarian
economies. Agricultural sector performance encompasses various dimensions,
including productivity, efficiency, sustainability, and competitiveness (Osabohien
et al, 2020). This literature review delves into these facets, drawing upon recent
scholarly works to provide a comprehensive understanding of the concept.

Agricultural sector performance refers to the effectiveness with which the

agricultural sector utilizes resources to produce goods and services that meet

societal needs. It is often assessed through indicators such as crop yield, livestock

productivity, income levels of farmers, and the sector's contribution to Gross

Domestic Product (GDP). Osabohien et al. (2019) emphasize that robust

agricultural performance is pivotal for ensuring food security and reducing

undernourishment in developing countries.

25
Indicators of Agricultural Performance

Key performance indicators (KPIs) are essential tools for evaluating the success

and areas of improvement within the agricultural sector. According to

PerformYard (2025), these KPIs include financial metrics like cost of production,

operational metrics such as yield per acre, and environmental metrics like water

usage and carbon footprint. Accurate data collection and interpretation of these

indicators enable farmers and policymakers to make informed decisions that

enhance productivity and sustainability

Agricultural Productivity and Economic Growth

The nexus between agricultural productivity and economic growth has been

extensively studied across both developed and developing economies, with

growing consensus on agriculture’s pivotal role in stimulating broader economic

development. Agricultural productivity, which refers to the output per unit of input

(such as land, labor, or capital), is often seen as a key engine of growth, especially

in agrarian societies where the majority of the population depends on farming for

their livelihood.

In the case of Nigeria, agriculture remains a major contributor to GDP,

employment, and rural livelihoods despite the rapid growth of other sectors such as

26
oil and telecommunications. Ehighebolo (2023) conducted an empirical

investigation into the performance of various agricultural sub-sectors- including

crop production, forestry, and fisheries- and their respective impacts on Nigeria’s

GDP. The study revealed that among these, crop production remains the most

dominant contributor to economic growth, followed by forestry and fisheries,

which also show promising potential when adequately developed and supported by

policy. This underscores the strategic importance of investing in key agricultural

sub-sectors. By enhancing crop yields through improved seed varieties,

mechanization, irrigation, and extension services, the country can significantly

increase its agricultural output. Similarly, better forest management and sustainable

fishing practices can lead to more stable income streams and employment

opportunities, especially in rural areas where these resources are abundant.

Furthermore, the multiplier effects of agricultural productivity are far-reaching.

Increased agricultural output leads to more food availability, reduced food prices,

and improved food security. It also stimulates growth in agro-allied industries such

as food processing, transportation, and marketing. These linkages create additional

jobs and income-generating activities, thereby reducing poverty and enhancing

overall economic welfare. Studies by the Food and Agriculture Organization

(FAO, 2022) and the World Bank (2021) affirm that a 1% growth in agricultural

GDP is at least twice as effective in reducing poverty compared to the same level

27
of growth in other sectors. This is particularly relevant in regions like Emohua

Local Government Area, where agriculture forms the backbone of economic

activity. Hence, improving agricultural productivity is not just about increasing

output—it is a cornerstone for inclusive and sustainable economic development.

Additionally, scholars like Osabohien et al. (2020) argue that the role of agriculture

in economic transformation extends beyond food production to rural development,

infrastructure provision, and national stability. As such, policies that aim to

revitalize the agricultural sector- through credit schemes, capacity building, land

reforms, and infrastructure development- are vital for enhancing productivity and

stimulating growth.

Indeed, agricultural productivity plays a crucial role in driving economic growth,

especially in developing countries like Nigeria. Targeted interventions and holistic

policies aimed at strengthening agricultural sub-sectors can yield significant

dividends in terms of GDP contribution, employment creation, and poverty

reduction. As empirical evidence consistently shows, when agriculture performs

well, the entire economy benefits.

Institutional Frameworks and Agricultural Performance

28
Institutional frameworks encompass the formal and informal rules, structures, and

systems that govern behavior and interactions in society, including how resources

are allocated and how policies are formulated and implemented. In the context of

agriculture, these frameworks significantly influence the performance of the sector

by affecting access to land, inputs, finance, markets, and government support.

Effective institutions provide a stable environment where farmers, agribusinesses,

and policymakers can operate with confidence, thereby fostering productivity and

long-term growth.

Institutional quality is especially critical in developing countries, where the

agricultural sector often suffers from systemic inefficiencies. Osabohien et al.

(2020) provide a compelling analysis of how institutional variables- such as

political stability, adherence to the rule of law, and control of corruption- directly

impact agricultural outcomes and food security in Nigeria. The study highlights

that weak institutions contribute to poor policy implementation, diversion of

resources, lack of accountability, and limited farmer support, all of which

undermine agricultural productivity and discourage investment in the sector.

The presence of strong institutional frameworks helps create enabling

environments for agricultural innovation, efficient resource allocation, and

equitable access to land and capital. For instance, well-functioning land tenure

29
systems provide farmers with secure rights to land, encouraging them to invest in

long-term improvements such as irrigation and soil management. Conversely,

ambiguous or corrupt land policies often lead to conflicts, disincentivize

investment, and limit agricultural expansion (FAO, 2022).

Moreover, governance institutions determine how effectively agricultural policies

are executed. Ineffective bureaucracy, political interference, and corruption in

agricultural financing schemes can severely distort resource allocation. Akinola

(2023) argues that in many parts of Nigeria, including rural areas like Emohua,

poor governance and institutional inefficiencies have limited the success of

programs aimed at improving farming practices, distributing subsidies, or offering

credit to smallholder farmers. Where institutions are weak, farmers face increased

risks and uncertainties, which often drive them to underproduce or shift away from

farming altogether.

On the other hand, countries and regions that have made conscious efforts to

reform their agricultural institutions- by increasing transparency, strengthening

rural governance structures, and empowering local farmer cooperatives- have seen

marked improvements in productivity and rural development. According to the

World Bank (2021), institutional reforms that decentralize agricultural services,

provide platforms for stakeholder engagement, and ensure accountability in

30
agricultural projects lead to better policy outcomes and higher levels of farmer

participation.

Furthermore, regulatory institutions play a crucial role in standardizing agricultural

inputs and outputs. For example, agencies responsible for certifying seeds,

fertilizers, and pesticides help maintain quality and protect consumers and

producers alike. Weak regulatory oversight, however, often results in the

circulation of substandard inputs, which harms yields and compromises food safety

(IFPRI, 2020).

Ultimately, the relationship between institutions and agricultural performance is

symbiotic. While good institutions can drive agricultural growth, a thriving

agricultural sector also contributes to institutional development by reducing

poverty, strengthening rural voices, and promoting socio-political stability. In

places like Emohua Local Government Area, the establishment of transparent,

responsive, and well-coordinated agricultural institutions is essential for realizing

the full potential of the sector.

Therefore, the findings of Osabohien et al. (2020) remain highly relevant: the

agricultural sector cannot thrive in isolation from the broader governance context.

Strengthening institutional frameworks- by promoting good governance, rule of

law, and accountability- should be a top priority for policymakers seeking to boost

31
agricultural productivity and ensure food security in Nigeria and similar

developing regions.

2.1.2 Concept of employment generation

Employment generation is a foundational component of economic development,

particularly in emerging and developing economies. It refers to the processes,

strategies, and institutional frameworks that create jobs across different sectors of

the economy. In development discourse, employment generation is not only seen

as a means of income distribution and poverty alleviation but also as a catalyst for

social inclusion, stability, and long-term economic growth (World Bank, 2022). In

recent years, there has been growing scholarly and policy interest in how

employment can be created sustainably, especially for vulnerable and underserved

populations such as youth, women, and rural communities. The concept integrates

both the quantitative aspects number of jobs created and qualitative dimensions

such as job security, working conditions, and wages (ILO, 2022).

Historically, employment generation was primarily associated with

industrialization, where large-scale manufacturing offered vast employment

opportunities. However, in the context of Sub-Saharan Africa and other agrarian

societies, the focus has increasingly shifted toward agriculture, informal sectors,

and small- and medium-sized enterprises (SMEs). These sectors, although less

32
formalized, absorb a significant proportion of the labor force and are thus vital in

employment discussions. According to De Vries et al, (2021), employment

generation in the 21st century requires structural transformation moving labor from

low-productivity sectors like subsistence agriculture to higher-productivity

activities in manufacturing and services. Yet, this transformation must be inclusive

and context-specific to avoid creating new forms of exclusion or economic

dualism.

One of the key issues in employment generation is the mismatch between labor

supply and demand. Many developing countries, including Nigeria, experience

high population growth and a burgeoning youth population, which places

significant pressure on the labor market (Ajakaiye et al., 2020). Unfortunately, the

formal sector is often unable to absorb these new entrants, leading to high levels of

unemployment and underemployment. Scholars like Ozughalu and Ogwumike

(2022) argue that employment generation strategies must therefore go beyond

macroeconomic growth metrics to include labor market policies, education

reforms, and incentives for private sector investment in labor-intensive sectors.

Jobless growth- economic growth without a corresponding increase in

employment- has been particularly problematic in many African economies,

reinforcing the need to design growth strategies that are employment-intensive.

33
The informal sector has emerged as a significant contributor to employment

generation, particularly in low-income and rural contexts. Informal employment

refers to jobs that are not regulated or protected by the state, and while they often

lack social protections, they offer critical income opportunities for millions.

According to the ILO (2022), over 85% of employment in Africa is informal,

underlining the sector’s importance. However, the quality and sustainability of

such jobs are frequently questioned. Scholars like Chen (2021) advocate for the

formalization of informal employment through progressive regulation, improved

labor rights, and access to financial and technical services. Employment

generation, therefore, must consider the continuum between formality and

informality and seek to enhance working conditions across this spectrum. The role

of agriculture in employment generation cannot be overstated, particularly in

agrarian economies such as Nigeria. Agriculture provides direct employment to

millions of rural inhabitants, yet the sector is characterized by informality, low

wages, and underemployment. Modernizing agriculture through mechanization,

irrigation, value chain development, and agribusiness promotion has the potential

to enhance labor absorption and improve job quality. Ehighebolo (2023)

underscores that agricultural productivity is a key driver of rural employment,

noting that targeted policies to boost sub-sectors like crop production, livestock,

fisheries, and agro-processing can significantly reduce rural unemployment.

34
However, such outcomes depend on the availability of extension services, rural

infrastructure, land reforms, and access to inputs and markets.

Environmental and climate considerations are increasingly influencing the

discourse on employment generation. Climate-smart agriculture and green jobs

have emerged as sustainable pathways for job creation in rural areas. Initiatives in

renewable energy, reforestation, waste management, and ecosystem restoration not

only protect the environment but also generate meaningful employment. The Food

and Agriculture Organization (FAO, 2021) notes that integrating environmental

sustainability into rural development strategies can lead to the emergence of “green

rural economies” that create jobs while conserving natural resources. These

approaches require integrated planning and cross-sectoral collaboration to align

employment policies with environmental objectives.

Another vital dimension of employment generation is the role of entrepreneurship

and micro, small, and medium enterprises (MSMEs). In many developing

economies, MSMEs account for over 80% of employment, especially in rural and

peri-urban areas (AfDB, 2021). Entrepreneurship is seen as a tool for self-

employment and for absorbing excess labor, especially among youth who face

barriers in accessing wage employment. Programs that promote access to credit,

business development services, and digital tools have shown potential to catalyze

35
employment generation. However, challenges such as market access, regulatory

burdens, and infrastructural deficits remain persistent barriers (Oyelaran-Oyeyinka,

2022). Therefore, employment generation must be underpinned by coherent

entrepreneurship ecosystems that are supported by enabling policies, infrastructure,

and institutions.

The gender dimension in employment generation is also prominent in the

literature. Women often face structural barriers that limit their participation in the

labor market- ranging from discriminatory norms and lack of childcare to unequal

access to assets and education. Addressing gender disparities is critical for

inclusive employment generation. UN Women (2022) stresses that increasing

women’s participation in economic activities could add trillions to global GDP and

improve household welfare. Consequently, employment generation strategies that

target women’s empowerment- such as affirmative action, gender-sensitive

training programs, and social protection measures- are increasingly being

prioritized by governments and development agencies.

Education and skills development are central to the employment generation

discourse. As labor markets evolve with technological change and globalization,

there is an urgent need to equip the workforce with relevant skills. This includes

not only basic literacy and numeracy but also vocational training, digital literacy,

36
and soft skills. A mismatch between what is taught in schools and what is required

in the labor market has been identified as a major bottleneck in many African

countries (UNDP, 2022). Hence, employment generation strategies must include

reforms in educational curricula, expansion of technical and vocational education

and training (TVET), and stronger linkages between schools and industries.

Lifelong learning and reskilling programs are also necessary to ensure workers

remain relevant in dynamic labor markets.

indeed, employment generation is closely linked to macroeconomic policies,

including fiscal policy, trade policy, and public investment. Public works

programs, such as infrastructure development, have historically been used as tools

for job creation, particularly during economic downturns. These programs offer

dual benefits- stimulating the economy while creating immediate employment

opportunities. The World Bank (2022) highlights how public investment in roads,

irrigation, and energy can generate not only direct jobs but also unlock private

sector employment through enhanced productivity and connectivity. Moreover,

well-designed social protection programs, such as conditional cash transfers and

unemployment insurance, can support vulnerable populations during job transitions

and economic shocks, thereby complementing employment generation efforts.

37
Indeed, the concept of employment generation encompasses a broad array of

strategies, sectors, and policies that aim to create decent and sustainable jobs. It

intersects with issues of economic growth, human capital, gender equality,

institutional capacity, and social protection.

2.1.3 Employment generation in rural areas

Employment generation in rural areas remains a central focus in development

policy, particularly in developing countries where a significant proportion of the

population resides in rural communities and relies on agriculture and informal

activities for livelihood. Rural employment encompasses a range of economic

activities including farming, agro-processing, rural crafts, informal trade, and

increasingly, digital and service-based enterprises. The emphasis on rural

employment is driven by the need to reduce poverty, curb rural-urban migration,

and stimulate inclusive growth. As highlighted by the International Labour

Organization (ILO, 2022), more than 70% of employment in low-income countries

is rural-based, and in Sub-Saharan Africa, agriculture alone accounts for over 60%

of rural jobs. However, these jobs are often informal, low-paying, and vulnerable

to shocks, prompting a need for structural transformation and employment

diversification.

38
Agriculture continues to play a dominant role in rural employment, particularly in

agrarian economies like Nigeria. Yet, its potential to generate sustainable

employment remains largely untapped due to persistent constraints such as low

productivity, inadequate infrastructure, land tenure issues, and limited access to

credit and technology. Diao, McMillan, and Rodrik (2021) argue that with proper

investment in irrigation, mechanization, improved seed varieties, and value chains,

agriculture can be transformed from a subsistence activity to a source of productive

employment. Moreover, agricultural employment is no longer limited to on-farm

activities. The rise of agribusiness and agro-processing industries has created

downstream opportunities in logistics, marketing, storage, and food technology,

which are vital for engaging rural youth and women (FAO, 2021; Olayemi &

Yusuf, 2022).

Beyond agriculture, non-farm employment is increasingly recognized as a critical

component of rural development. Non-farm sectors- such as rural manufacturing,

petty trading, rural tourism, and ICT services- offer diversification and buffer rural

households against the seasonality and volatility of agriculture. Ellis and Freeman

(2020) underscore the growing importance of non-farm employment in poverty

reduction strategies, particularly in regions with limited arable land or changing

climate conditions. Evidence from Sub-Saharan Africa and South Asia shows that

households engaged in both farm and non-farm work tend to have more stable

39
incomes and better resilience to shocks. Furthermore, investments in rural

electrification and internet access have facilitated the emergence of digital jobs and

remote services, offering rural youth new employment frontiers. Deichmann,

Goyal, and Mishra (2021) note that digital transformation in agriculture and rural

services-through platforms offering mobile banking, online marketplaces, and

extension services- has opened up employment opportunities that were previously

inaccessible to rural populations.

The role of human capital in employment generation cannot be overstated. Skills

development, education, and vocational training are critical enablers of productive

employment. The ILO (2022) reports that in many developing countries, rural

youth are underemployed not because of a lack of opportunities alone, but due to

mismatched or inadequate skills. Rural education systems often fail to provide

practical and market-relevant skills, leaving youth ill-prepared for the changing

world of work. Programs such as Nigeria’s Youth Employment and Social Support

Operation (YESSO) and N-Power have sought to bridge this gap through skills

training and internships. While these programs have provided short-term

employment relief, UNDP (2022) emphasizes that without integration into a

broader strategy of economic transformation, their impact may not be sustainable.

Long-term gains require coordination with industrial policy, infrastructure

development, and private sector engagement.

40
Institutional and policy support is crucial for fostering an enabling environment for

rural employment. Governments must play a proactive role in land reforms,

regulatory frameworks, access to finance, and infrastructure investment. According

to the Asian Development Bank (ADB, 2021), decentralized governance systems

enhance employment outcomes by aligning development strategies with local

needs and realities. In Nigeria, however, despite the existence of several

employment generation schemes, implementation has been hampered by

corruption, poor coordination, and inadequate monitoring mechanisms (Ayinde,

Okunlola & Bolarinwa, 2021). Strengthening institutional capacity at local and

regional levels can ensure that employment interventions are more responsive and

inclusive. Moreover, collaboration between governments, civil society,

cooperatives, and the private sector is essential to scale up successful employment

initiatives.

Rural-urban migration patterns also reflect the dynamics of rural employment.

Migration is often driven by the absence of attractive economic opportunities in

rural areas. While remittances from urban migrants support rural households, out-

migration can deplete the rural labor force, particularly among the youth. Tacoli

and Mabala (2021) advocate for regional planning strategies that link rural and

urban economies through transportation, trade, and labor networks, thereby

reducing the push factors for migration. Importantly, circular migration—which

41
involves seasonal or temporary movement between rural and urban areas—can be

harnessed as a development strategy. Programs that promote mobile labor rights,

social protection, and rural reintegration can allow migrants to contribute to both

urban economies and rural revitalization (IOM, 2023).

Gender and youth dimensions are critical when discussing employment generation.

Women, who make up a large percentage of the rural workforce, often face barriers

related to land ownership, cultural norms, limited access to capital, and unpaid care

responsibilities. Addressing these inequalities is not only a matter of equity but

also of efficiency, as UN Women (2022) estimates that closing gender gaps in

agriculture and rural employment could raise productivity by up to 20%. Similarly,

youth face obstacles such as land inaccessibility and limited financial services,

which restrict their participation in agriculture and entrepreneurship. Initiatives

such as the African Development Bank’s ENABLE Youth program combine

finance, training, and mentoring to engage youth in agricultural value chains.

However, sustained youth involvement requires more than targeted programs—it

requires systemic transformation of rural economies to become more inclusive,

dynamic, and innovation-driven (AfDB, 2021).

2.1.4 Link between agricultural development and poverty reduction

42
Agricultural development has long been recognized as a key driver of poverty

reduction, particularly in low-income and rural economies. The relationship

between agriculture and poverty alleviation is deeply embedded in the structure of

many developing countries, where the majority of the population depends directly

or indirectly on agriculture for livelihood and food security. According to the Food

and Agriculture Organization (FAO, 2021), agricultural growth is up to four times

more effective in reducing poverty compared to growth in other sectors. This is

especially true for Sub-Saharan Africa and parts of South Asia, where a significant

proportion of the labor force is engaged in smallholder farming. As a result,

agricultural development not only boosts income and food availability but also

promotes rural employment, empowerment, and inclusive growth.

The theoretical underpinning of this link is well established in development

economics. Classical economists such as Schultz (1964) emphasized that

agricultural transformation is essential for overall economic development, as it

provides surplus labor and capital for industrialization. More contemporary models

focus on agriculture-led growth pathways, where increased agricultural

productivity leads to lower food prices, increased farm incomes, and higher

demand for non-agricultural goods and services. These pathways have the potential

to create a multiplier effect in rural economies, thereby enhancing household

consumption, investment in education and health, and local employment

43
generation (Christiaensen & Martin, 2018). Empirical evidence confirms that

countries that experienced significant reductions in rural poverty over the past

decades- such as China, Vietnam, and Ethiopia- did so on the back of sustained

agricultural growth (World Bank, 2022).

In Nigeria and much of West Africa, agricultural development is considered a

strategic entry point for poverty reduction due to the sector's dominance in rural

livelihoods. The Nigerian agricultural sector employs about 70% of the rural

workforce, yet it remains underdeveloped due to poor infrastructure, inadequate

access to credit, limited mechanization, and climate-related shocks (NBS, 2022).

Studies such as Olomola and Nwafor (2021) argue that if these challenges are

addressed, the agricultural sector could significantly contribute to poverty

alleviation. Their analysis reveals that productivity improvements in smallholder

farming can lead to increased income and reduced vulnerability among rural

dwellers. This is supported by Eboh et al. (2020), who found that investment in

rural roads, irrigation, and extension services significantly enhances the capacity of

rural farmers to escape poverty.

One of the key mechanisms through which agricultural development impacts

poverty reduction is through employment generation. In agrarian economies,

agricultural modernization creates job opportunities in both farm and off-farm

44
activities. As productivity increases, surplus labor is absorbed into agro-

processing, marketing, and input supply chains, thus diversifying income sources

and reducing dependency on subsistence farming. According to IFAD (2021),

integrating smallholders into value chains and providing them with access to

markets, finance, and technology not only increases their productivity but also

enhances their resilience to economic shocks. Moreover, the growth of agricultural

value chains stimulates the rural non-farm economy by creating demand for

services such as transportation, retail, and equipment maintenance, which further

drives employment and income growth.

Another dimension of the agriculture-poverty nexus is the role of food security and

nutrition. Agricultural development improves the availability, affordability, and

diversity of food, which has a direct impact on health and productivity, especially

among children and women. Improved nutrition enhances cognitive development

and school attendance, which are critical to breaking intergenerational cycles of

poverty. Studies like that of Headey and Ruel (2020) highlight the role of

diversified agriculture—including horticulture and livestock- in improving dietary

quality among poor households. They argue that policies that promote crop

diversification, food fortification, and gender-sensitive agricultural interventions

yield long-term poverty-reducing outcomes. Thus, food systems development is

45
increasingly seen not just as a tool for food security but also as a means of

promoting sustainable poverty alleviation.

However, the impact of agricultural development on poverty reduction is not

automatic. It depends on factors such as land tenure systems, access to inputs,

market integration, education, and the inclusivity of agricultural policies. For

instance, land fragmentation and insecure tenure hinder long-term investments in

land productivity, while gender disparities in access to land and credit limit

women’s capacity to benefit from agricultural growth (FAO, 2021). Furthermore,

climate change and environmental degradation pose new risks to the poverty-

reducing potential of agriculture. Extreme weather events, soil erosion, and water

scarcity threaten rural livelihoods, particularly in fragile and ecologically sensitive

areas. According to the African Development Bank (AfDB, 2022), building

climate-resilient agricultural systems and supporting farmers with adaptive

technologies and insurance mechanisms is essential for sustaining the poverty

reduction gains of the sector.

Government policies and institutional support also play a critical role in

strengthening the agriculture–poverty linkage. Targeted interventions such as

subsidies, agricultural credit, farmer cooperatives, land reform, and input

distribution schemes have been used with varying degrees of success across

46
developing countries. In Nigeria, the Anchor Borrowers’ Programme (ABP) and

the Agricultural Transformation Agenda (ATA) were launched to boost food

production and enhance farmers' incomes. While these initiatives show potential,

issues of policy inconsistency, corruption, and limited reach have constrained their

effectiveness (Adeniran et al., 2023). Scholars like Ojo and Akinbode (2022)

advocate for better monitoring, stakeholder engagement, and alignment with

broader development goals to ensure that agricultural interventions translate into

tangible poverty reduction outcomes.

2.2 Theoretical Framework

Lewis Two-Sector Model (Dual Sector Model)

The Lewis Two-Sector Model, introduced by Sir Arthur Lewis in 1954, remains

one of the foundational theories in development economics. This model articulates

how the transformation of economies from traditional agricultural sectors to

modern industrial sectors can be a catalyst for economic development. The model

is particularly relevant for economies undergoing structural transformation,

especially those that are initially agrarian and are transitioning toward

industrialization. In essence, Lewis' dual-sector model focuses on how surplus

labor from the agricultural sector can be absorbed into the industrial sector, thereby

driving growth and reducing poverty.

47
Key Concepts and Assumptions of the Lewis Model

The Lewis Two-Sector Model is grounded in the existence of a dual economy,

characterized by two distinct sectors: the traditional agricultural sector and the

modern industrial sector. These two sectors are assumed to have different

productivity levels, with agriculture being characterized by low productivity and

surplus labor, and the industrial sector being associated with higher productivity

and wages (Lewis, 1954). The model posits that the industrial sector is the engine

of growth and poverty reduction, while agriculture serves as the source of labor

needed for industrial expansion.

1. Dual Economy: The concept of a dual economy underpins the Lewis model,

where the economy is divided into a rural, traditional agricultural sector and

an urban, modern industrial sector. The agricultural sector typically

represents the subsistence economy with low levels of technological

advancement, low wages, and excess labor (Lewis, 1954). In contrast, the

industrial sector is marked by higher wages, better productivity, and the

potential for growth through capital accumulation (Becker et al., 2019). This

duality highlights the stark differences between the two sectors, which are

central to understanding the economic transition in developing countries.

48
2. Surplus Labor: A critical component of the model is the concept of surplus

labor in agriculture. Lewis (1954) argues that the agricultural sector, because

of its low productivity, has a large surplus of labor that can be transferred to

the industrial sector without affecting agricultural output. This surplus labor

is assumed to be relatively unproductive in agriculture, and its movement to

the industrial sector increases overall economic output without reducing

food production (Gollin, Lagakos, & Waugh, 2014). The shift of this labor

to industrial jobs leads to higher wages and increased productivity in the

industrial sector, thereby contributing to economic growth.

3. Capital Accumulation: The Lewis model underscores the importance of

capital accumulation in facilitating the growth of the industrial sector. The

model suggests that as surplus labor moves from agriculture to industry, it

allows for higher industrial output. This industrial output generates profits,

which are reinvested into the economy, fostering further industrial growth

and contributing to the broader development of the economy (Aghion et al.,

2014). The continuous reinvestment of profits and capital is key to

sustaining growth in the industrial sector and the broader economy.

4. Wage Differentials: A central element of the Lewis model is the wage

differential between the agricultural and industrial sectors. The model

assumes that wages in the industrial sector are higher than those in

49
 agriculture, which creates an incentive for rural labor to migrate to urban

areas. This wage gap encourages labor to move from the low-wage

agricultural sector to the higher-wage industrial sector, thereby driving

industrial growth (Narayan & Khandker, 2020). As more labor is absorbed

by the industrial sector, the economy experiences an increase in wages and

productivity, which benefits the broader economy by reducing poverty

levels.

5. Economic Growth and Poverty Reduction: The movement of surplus

labor from agriculture to the industrial sector underpins the growth process

in the Lewis model. The absorption of labor into industry leads to higher

wages and increased productivity, which contribute to a reduction in

poverty. The growth generated by industrialization is assumed to be

inclusive, improving living standards for those who transition from

agriculture to industry (Szirmai, 2015). By raising wages and increasing

incomes, the model proposes that industrial growth can directly reduce rural

poverty and improve overall national welfare.

Application of the theory to the study

In many developing countries, especially those in Africa and South Asia, where

agriculture remains the dominant sector, the Lewis model offers valuable insights

50
into how agricultural development can be leveraged to reduce poverty. In these

countries, agriculture accounts for a significant portion of GDP and employment,

yet it often operates at low productivity levels. The movement of labor from

agriculture to more productive industrial activities is seen as a potential pathway to

economic growth and poverty alleviation (Christiaensen et al., 2011). As labor

moves to urban centers, the industrial sector is assumed to experience enhanced

productivity, which can lead to higher national income and welfare.

In the context of Nigeria, for example, where over 60% of the population is

engaged in agriculture (National Bureau of Statistics [NBS], 2021), the Lewis

model offers a framework for understanding how policies aimed at boosting

industrial growth can have far-reaching impacts on poverty reduction. Agricultural

development in this context is seen not only as a means to increase food production

but also as a way to facilitate the labor shift necessary for the expansion of the

industrial sector.

Furthermore, the model aligns with the idea that agricultural development,

especially through enhanced productivity, can act as a driver of economic growth

and poverty reduction. In this regard, policies that improve agricultural

productivity- through mechanization, improved seeds, and irrigation- are crucial

for increasing rural incomes and facilitating the migration of labor to industrial

51
centers (Mellor, 2017). However, the model’s assumptions of a smooth transition

and the automatic absorption of labor into the industrial sector have been

challenged in modern contexts where urbanization often leads to informal

employment or unemployment (Rodrik, 2016).

Criticisms and Limitations of the Lewis Model

While the Lewis Two-Sector Model has been instrumental in shaping development

policy, it has also faced several criticisms, particularly in the context of

contemporary economies. One of the major critiques is the assumption that labor

can be transferred from agriculture to industry without any productivity loss or

impact on food production. In reality, many countries face challenges in absorbing

labor into industry, especially when the industrial sector is not sufficiently

developed (Gollin et al., 2014). Moreover, the model has been criticized for

ignoring the informal sector, which often provides a significant portion of urban

employment, especially in developing countries (Narayan & Khandker, 2020).

Additionally, the model’s assumption of a continuous wage gap between the two

sectors may not hold in the face of globalization, technological change, or labor

market dynamics in modern economies (Rodrik, 2016).

Another limitation is the model's failure to account for environmental

sustainability. Industrialization often leads to environmental degradation, and the

52
model does not adequately address the long-term consequences of such growth. In

today’s world, development policies must consider climate change and

sustainability in promoting industrial growth (Szirmai, 2015).

Despite its limitations, the Lewis Two-Sector Model continues to offer valuable

insights into the dynamics of agricultural development and its role in poverty

reduction. The model's emphasis on labor mobility, capital accumulation, and the

importance of industrialization in driving growth and reducing poverty remains

relevant in many developing economies. However, modern adaptations of the

model must address challenges such as informal employment, urbanization, and

environmental sustainability to ensure that the benefits of industrialization are

equitably shared and environmentally responsible.

References

ADB (2021). Rural Development and Employment Generation. Asian

Development Bank.

Adeniran, A. I., Yusuf, B., & Ajayi, O. (2023). Evaluating agricultural intervention
programs and their impacts on poverty reduction in Nigeria. Journal of
Development Policy and Practice, 8(1), 45–61.
https://doi.org/10.1177/24551333231123241

Adesina, A. (2023). Unlocking Africa’s agricultural potential: Youth, innovation,

and inclusive growth. African Development Bank.

53
Adesina, A., & Fadeyi, O. (2023). Youth employability and skills development in
Nigeria: Challenges and prospects. Journal of African Development
Studies, 10(2), 87–101.

AfDB (2021). ENABLE Youth Programme. African Development Bank.

AfDB. (2021). Promoting youth employment through entrepreneurship and

innovation in Africa. African Development Bank Group.
https://www.afdb.org

African Development Bank (AfDB). (2022). Building climate-resilient agriculture

in Africa. https://www.afdb.org

Aghion, P., Akcigit, U., & Howitt, P. (2014). The future of growth: This time
it's different. NBER Working Paper No. 20125.

Ajakaiye, O., Jerome, A., Nabena, D., & Alaba, O. A. (2020). Addressing youth
unemployment in Nigeria through enterprise development: An analytical
framework. African Journal of Economic Policy, 27(2), 17–34.

Akinbode, A., & Oyeleye, S. (2022). Leveraging digital agriculture for food
security and youth employment in Nigeria. Journal of Agritech and Rural
Development, 4(1), 22–37.

Akpan, S. B., & Omorogbe, E. (2021). Performance of agricultural transformation

programmes in rural Nigeria: An impact assessment. African Journal of
Agricultural Economics and Development, 9(2), 55–68.

Amadi, R., & Worlu, G. (2023). Environmental change and rural livelihoods in the
Niger Delta: A focus on farming communities in Rivers State. Nigerian
Journal of Environmental Research, 7(2), 101–115.

Asaju, K., & Arome, S. (2020). The impact of public works programmes on youth
employment in Nigeria. International Journal of Public Administration,
43(7), 601–616. https://doi.org/10.1080/01900692.2019.1634179

Ayinde, O., Okunlola, A., & Bolarinwa, K. (2021). Challenges in the

Implementation of Youth Employment Programs in Nigeria. Journal of
Development Policy Review, 3(2), 112–127.

54
 Becker, S. O., Egger, P. H., & von Ehrlich, M. (2019). The effects of labor
market policies on industrial development. Journal of Development
Economics, 138, 1–14. https://doi.org/10.1016/j.jdeveco.2018.07.005

Central Bank of Nigeria. (2023). Performance report on Anchor Borrowers’

Programme (ABP). Abuja: CBN Publications.

Chen, M. A. (2021). The informal economy revisited: Examining the past,

envisioning the future. WIEGO Working Paper. https://www.wiego.org

Christiaensen, L., & Martin, W. (2018). Agriculture, structural transformation and

poverty reduction: Eight new insights. World Development, 109, 413–416.
https://doi.org/10.1016/j.worlddev.2018.05.027

Christiaensen, L., Demery, L., & Kuhl, J. (2011). The evolving role of
agriculture in poverty reduction: An empirical perspective. World
Development, 40(10), 2150–2162.
https://doi.org/10.1016/j.worlddev.2011.03.002

De Vries, G., Timmer, M. P., & de Vries, K. (2021). Structural transformation in

Africa: Static gains, dynamic losses. The Journal of Development Studies,
57(2), 221–242. https://doi.org/10.1080/00220388.2020.1790516

Deichmann, U., Goyal, A., & Mishra, D. (2021). Will Digital Technologies
Transform Agriculture in Developing Countries? Agricultural Economics,
52(S1), 15–25.

Diao, X., McMillan, M., & Rodrik, D. (2021). The Recent Growth Boom in
Developing Economies: A Structural-Change Perspective. World Bank
Economic Review.

Eboh, E. C., Oduh, M., & Achike, A. I. (2020). Rural infrastructure and
agricultural productivity in Nigeria. Nigerian Journal of Agricultural
Economics, 10(1), 21–37.

Ehighebolo, O. (2023). Agricultural sub-sectors and economic growth in Nigeria:

A sectoral analysis. Nigerian Journal of Agricultural Economics, 15(1), 1–
17.

55
Ellis, F., & Freeman, H. A. (2020). Rural Livelihoods and Poverty Reduction
Strategies in Four African Countries. Journal of Development Studies, 56(3),
441–458.

Eze, S. O., & Nwosu, I. (2021). Agricultural productivity and rural employment
generation in Nigeria: Empirical insights and policy implications. Journal of
Development Policy and Practice, 6(1), 14–29.

FAO (2021). The State of Food and Agriculture: Making Agri-Food Systems More
Resilient to Shocks and Stresses.

FAO. (2021). The state of food and agriculture 2021: Making agrifood systems
more resilient to shocks and stresses. Food and Agriculture Organization of
the United Nations. https://www.fao.org

Food and Agriculture Organization (FAO). (2021). Green jobs for youth in
agriculture. Rome: FAO. https://www.fao.org/publications

Gollin, D., Lagakos, D., & Waugh, M. E. (2014). The agricultural productivity
gap. Quarterly Journal of Economics, 129(2), 939–993.
https://doi.org/10.1093/qje/qju002

Headey, D., & Ruel, M. (2020). Economic development and the nutrition
transition: A global comparative analysis. Global Food Security, 26,
100403. https://doi.org/10.1016/j.gfs.2020.100403

Ibrahim, U., & Umeh, C. (2023). Agricultural policy implementation in Nigeria:

The gap between formulation and practice. African Public Policy Review,
5(2), 33–47.

IFAD (2021). Rural Development Report: Transforming Food Systems for Rural
Prosperity.

IFAD. (2021). Rural development report 2021: Transforming food systems for
rural prosperity. International Fund for Agricultural Development.
https://www.ifad.org

ILO (2022). World Employment and Social Outlook: Trends 2022.

ILO. (2022). World Employment and Social Outlook: Trends 2022. International
Labour Organization. https://www.ilo.org

56
International Labour Organization (ILO). (2022). Decent work and employment
generation: Global trends and outlook. Geneva: ILO.
https://www.ilo.org/global/publications

IOM (2023). Migration and Rural Development: Opportunities for Action.

Lewis, A. (1954). Economic development with unlimited supplies of labor.

Manchester School of Economic and Social Studies, 22(2), 139–191.

Mellor, J. W. (2017). Agricultural development and economic transformation

in developing economies. Oxford University Press.

NAERLS (National Agricultural Extension and Research Liaison Services).

(2023). Annual Performance Report on Agricultural Extension Delivery in
Nigeria. Zaria: Ahmadu Bello University.

Narayan, P. K., & Khandker, S. R. (2020). Poverty reduction, agricultural

productivity, and migration in the context of urbanization. Journal of
Development Economics, 148, 102520.
https://doi.org/10.1016/j.jdeveco.2020.102520

National Bureau of Statistics (NBS). (2023). Labour Force Statistics:

Unemployment and Underemployment Report (Q2). Abuja: NBS.

NBS. (2022). Labor force statistics: Unemployment and underemployment report

(Q4 2022). National Bureau of Statistics, Nigeria.
https://www.nigerianstat.gov.ng

Nwachukwu, C. A., Okoro, J. E., & Ezeaku, E. C. (2022). Land tenure security and
youth participation in agriculture in South-South Nigeria. Journal of Rural
Studies and Governance, 10(3), 49–63.

Ojo, M. O., & Akinbode, S. O. (2022). Agricultural transformation and food

security in Nigeria: A review of policies and programs. Journal of African
Policy Studies, 13(2), 78–95.

Okeke, T. I., Nnadi, E. C., & Ogu, R. (2022). Youth perception of agriculture and
employment in rural Nigeria: A case study of Rivers State. Journal of Youth
and Sustainable Development, 8(1), 25–39.

57
Olaniyan, T., & Bankole, A. (2022). Integrated employment policies and labor
market efficiency in Nigeria. Nigerian Journal of Economic Policy, 29(2),
94–110.

Olawuyi, S. O., & Adetunji, M. O. (2023). Rural infrastructure and agricultural

productivity in Nigeria: A structural analysis. Nigerian Journal of
Agricultural Economics, 12(4), 87–101.

Olayemi, S. O., & Yusuf, S. A. (2022). Agricultural Mechanization and Rural

Employment in Nigeria. Nigerian Journal of Agricultural Economics, 14(1),
33–46.

Olayemi, S., & Yusuf, S. (2022). Digital tools and youth employment in Nigeria's
rural economy. African Journal of ICT Development, 6(3), 55–72.

Olomola, A. S., & Nwafor, M. (2021). Enhancing agricultural productivity for

poverty reduction in Nigeria: Evidence from selected states. Nigerian
Agricultural Journal, 52(1), 32–46.

Omodero, C. O. (2021). SMEs as catalysts for employment creation in Nigeria.

Global Journal of Management and Business Research: Administration and
Management, 21(4), 29–39.

Osabohien, R., Okorie, U., & Urhie, E. (2020). Institutional quality and
agricultural productivity in Nigeria: A quantile regression approach.
Economics of Agriculture, 67(1), 239–254.
https://doi.org/10.5937/ekoPolj2001239O

Oyelaran-Oyeyinka, B. (2022). Industrialization as a driver of employment

generation in Africa. UNIDO Working Paper Series. https://www.unido.org

Ozughalu, U. M., & Ogwumike, F. O. (2022). Tackling jobless growth in Nigeria:

The role of pro-employment macroeconomic and industrial policies.
Nigerian Journal of Economic and Social Studies, 64(1), 99–122.

Rivers State Ministry of Agriculture. (2022). Annual Agricultural Report on Youth

Engagement and Food Production in Emohua. Port Harcourt: RSMoA.

Rodrik, D. (2016). The globalization paradox: Why global markets, states, and
democracy can’t coexist. W.W. Norton & Company.

58
Schultz, T. W. (1964). Transforming traditional agriculture. Yale University
Press.

Szirmai, A. (2015). The dynamics of industrialization and economic

development. Oxford University Press.

Tacoli, C., & Mabala, R. (2021). Exploring Mobility and Migration Patterns in
Urbanizing Africa. Environment and Urbanization, 33(2), 287–305.

Ude, D. K., & Chukwu, B. (2023). Agricultural productivity and youth

unemployment in Nigeria: A time series analysis. Journal of Development
and Agricultural Economics, 15(2), 56–67.

Udo, A., & Ibrahim, R. (2023). Revitalizing the agricultural sector for youth
employment in the Niger Delta. Policy Brief Series No. 17. Centre for Rural
Development, University of Uyo.

UN Women (2022). Gender and Rural Employment: Progress and Challenges.

UN Women. (2022). Progress of the world’s women 2022: Gender equality in the
world of work. United Nations Entity for Gender Equality and the
Empowerment of Women. https://www.unwomen.org

UNDP (2022). Skills for Employment: An Assessment of Youth Programmes in

Africa.

UNDP. (2022). Skills mismatch and youth unemployment in sub-Saharan Africa.

United Nations Development Programme. https://www.undp.org

World Bank (2022). Pathways Out of Poverty: Rural Employment Strategies for
the 21st Century.

World Bank. (2022). Creating more and better jobs: Nigeria economic update.
Washington, DC: World Bank.
https://www.worldbank.org/en/country/nigeria/publication

World Bank. (2022). Jobs for resilient societies: Report on employment strategies
in fragile contexts. World Bank Publications. https://www.worldbank.org

World Bank. (2022). Poverty and shared prosperity 2022: Correcting course.
World Bank Group. https://www.worldbank.org

59