International Trade and Nigeria's mono-product oil-based Economy. A Study of the African Catfish Aquaculture Industry

Table of contents

1. Introduction
1.1. Background of the Study
1.2. Problem statement
1.3. Research Questions
1.4. Objectives of the Study
1.6. Significance of the Study
1.7. Scope and Limitation
1.8. Organization of the Study

2. Literature Review and Theoretical Framework
2.1. Operational Definition of Terms
2.1.1. International Trade
2.1.2. Economy
2.1.3. Mono-cultural Economy
2.1.4. Economy Diversification
2.1.5. African Catfish
2.2. Conceptual Review of Related Literature Emanating from Key Terms
2.2.1. International trade in Nigeria since 1960
2.2.2. International trade as a tool for economic growth
2.2.3. Nature of the Nigerian Economy
2.2.4. Logical Basis for Export Diversification
2.2.6. Government Strategies to Promote the Non-oil Sector
2.2.7. The Nigerian export promotion council
2.2.8. Decree no. 18 of 1986
2.2.9. The NEXIM bank
2.3. Export processing zones
2.3.1. Challenges of Economic Diversification in Nigeria
2.3.3. Poor Infrastructure
2.3.5. Endemic Corruption and Mismanagement of Resources
2.3.6. Poor and Unstable Educational System
2.4. Theoretical Review
2.4.1. The Theory of absolute advantage
2.4.2. The Theory of comparative advantage
2.5. The African Catfish Aquaculture Industry in Nigeria
2.5.1. Origin of the African Catfish
2.5.2. Governmental Projects pertaining to Catfish Aquaculture
2.5.3. Consumption Styles
2.5.4. Boiled and Cooked With Spices
2.5.5. Grilled
2.5.6. Smoked
2.5.7. African Catfish Cultivation
2.5.8. African Catfish Feed
2.5.9. Economy of African Catfish
2.6. Cryopreservation
2.7. The Lucrative Benefits of African Cat Fish
2.9. Summary of Identified Gaps in Literature

3. Research Methodology
3.1. Introduction
3.2. Method of Data Collection
3.3. Primary Source
3.4. Secondary Sources
3.5. Instrument of Data Collection
3.6. Study Area and Target Population
3.7. Sampling Technique
3.8. Technique of Data analysis

4. African Catfish Export, a Contribution to Economy Diversification in Nigeria
4.1. Economic Implications of a Mono-cultural economy
4.1.1. Recession
4.1.2. Salary Debts
4.1.3. Exchange Rate Fluctuation
4.1.4. Unemployment
4.2. Influence of Non-oil Export on Economic Growth and Sustainable Development
4.3. Challenges to Effective African Catfish Export in Nigeria
4.4. Demand for African Catfish
4.4.1. Viability of African catfish
4.4.2. Exportation of African Catfish
4.5. Preferred Form of Export
4.6. Destination of Export
4.6.1. Airfreight
4.6.2. Accompanied Baggage
4.6.3. Overland from Europe
4.7. Quantity Exported Annually
4.8. Challenges of Export

5. Conclusions and Recommendations
5.1. Recommendations
5.1.1. Hatcheries and Seed
5.1.2. Feeds
5.1.3. Land
5.1.4. Loans
5.1.5. Institutions
5.1.6. Attract support
5.1.7. Global market Strategy
5.1.8. Firm negotiations and Conformity
5.1.9. Consistency
5.2. Conclusion

6. Bibliography

7. Appendix

7.1. Appendix A

7.2. Appendix B

1. Introduction

1.1. Background of the Study

Nigeria is a country strongly characterized by diversity in ethnicity, culture, religion and even in natural resources. Minerals such as coal, limestone, marble, uranium, lead, iron ore, bitumen, gold, ruby, topaz, gemstone etc. are embedded in the soils of this country and this is enough proof of God's blessings (Chinago, et al, 2015). According to Ghaji Bello, the current Director-General of National Population Commission, NPC, Nigeria has a population of about 182 million with more than half of its population under 30 years of age (NPC, 2016). This alone is enough potential for the country due to the large population of youths who are believed to be a vibrant human resource. Unfortunately, most of this population are unemployed and even most of the employed live below a dollar a day despite its Agricultural potentials and the availability of numerous solid minerals (Ogujiuba, 2015). Independence from her British colonial master was gained on the 1st of October 1960. According to literature, some scholars are of the view that we were too much in a haste to gain independence as we were not ready to govern ourselves. This might be true based on facts of numerous mismanagements of public funds as evident in the first republic where our leaders were bold enough to be ostentatious and flaunted their flamboyant lifestyles with no remorse at the expense of the citizens whom they profess to govern. This indeed brought about the overthrow of democracy in 1966 by a group of young middle-ranked army officers who sacked the politicians of the Nigerian First Republic through a bloody coup (Ogbeidi, 2012). Over the years, mismanagement and misappropriation of public funds seem to be the norm even despite the takeover of military governments that claim to fight this. Nigeria's major economic woes are rooted in the discovery of crude oil in Oloibiri in January 15, 1956 after a long period of exploration. The Yom Kippur war, otherwise known as the Arab-Israeli war or October war in 1973 was characterized by a massive boom of oil price in the global market when the Arabs boycotted oil from the Western states because of their support for Israel (Esekumemu, 2016). Due to this fact, Nigeria who was now an oil producing country concentrated its forces solely on the exploitation of this commodity. Other sectors that once created wealth, employment and a good standard of living for the average Nigerian were abandoned. At this point in Nigeria, we became mono-cultured as Oil now became the mainstay of the economy with the export revenue accruing to over 90% and 80% of the government's budget (Anyaehie and Areji, 2015). Of course, not everyone had the opportunity to work in the oil sector which further made millions of able bodied Nigerians jobless as non-oil sector of the economy was abandoned and redundant. Our leaders at this point were short-sighted, thinking the wealth garnered from oil will continue to be so. But of course time will tell and in the 21st Century, it has. Now, Oil prices have collapsed globally, USA, our major consumer of crude oil has stopped purchasing from us since 2014 due to the discovery of shale oil and natural gas in commercial quantity which serves as a better substitute for Nigeria's crude oil since it is cheaper and also due to the fact that they have a reserve of oil which is believed to last them nearly a hundred years (Obama, 2012). This is trouble for the mono-product Nigerian economy and in solving this problem, recommendations of diversifying the economy is made (Olaleye, et al, 2013). Various scholars have made different recommendations but this research introduces a somewhat different recommendation by contributing a new commodity that will help diversify and save the ailing economy from the recession it suffers today. The African Catfish is the most popular species of Nigeria's aquatic life. An average fish farmer prefers to stock African Catfish due to its ruggedness, high mortality rate and of course the increased and consistent demand for it (InterAfrican Bureau for Animal Resources, 2015). Also, the African Catfish is a cheap source of protein which is needed by everybody in order to function optimally has a normal human being. The reality of its consumption in various ways of preparation is also an added advantage to why African Catfish is preferred to other species. The African Catfish could be boiled and seasoned, it could be grilled and it could also be dried for the sake of preservation and exportation.

1.2. Problem statement

The Nigerian economy continues to suffer recession due to its mono-cultured nature. This stems from the discovery of Oil in Oloibori in 1956 and the period of oil boom price in the global market in early 1970's due to the Arab-Israeli war of that period (Esekumemu, 2016). The huge gains from crude oil export were enough temptation for the Nigerian government to abandon other sectors of the economy. Prior to this period, other sectors of the economy were up and running, the wealth of the country was to some extent fairly distributed among the working class of these sectors. Suddenly, Nigeria fell into the Oil boom temptation and abandoned other sectors of the economy for Oil. Oil became the mainstay of the economy. Due to the fact that the Oil industry could not employ every able bodied citizen, jobs were lost in their thousands due to the collapse of other sectors. Policies to cater for this problem were expected to be promulgated by our policy makers as other oil producing countries had policies that catered for their common citizens such as Libya before the overthrow of Gaddafi and the United Arab Emirates that caters for her citizens from the wealth garnered from oil export but Nigeria's case is different. Instead, the gains from crude oil export were shared amongst a few ratio of the large population which were mostly politicians. This apparently had a negative effect on the economy which in turn brought about abject poverty to majority of the Nigerian citizens. According to statistics provided by CBN, non-oil export in the country’s total export revenue was 1% in 2008 (CBN, 2008), and 4.8% in 2013 (CBN, 2013) then it dropped to an all-time low of 0.8% in 2015 (CBN 2015). As at the time of this research, the exchange rate is nothing to write home about as the fluctuation of the Naira to the dollar is alarming and has hit an all-time high which has never been experienced or recorded before. The Naira keeps dwindling as against the almighty dollar which is over 500 Naira to a dollar as of the time of this research. This problem is largely due to the mono-cultured nature of the economy as Oil prices have collapsed globally due to the fact that our biggest crude oil customer, US has landed alternatives to Nigeria's crude oil such as the shale oil which she discovered in commercial quantity and also the fact that they have a reserve which is believed to last them almost a century (Obama, 2012). This of course has left the Nigerian economy on its knees and various solutions have been proffered to get her out of this economic crisis.

1.3. Research Questions

The research is framed according to the following questions:

1. What are the economic implications of a mono-cultural economy?
2. What is the influence of non-oil export trade on economic growth and sustainable development?
3. What are the challenges to effective African catfish export in Nigeria?
4. How can the African Catfish contribute to the diversification of the mono-cultural Nigerian economy?

1.4. Objectives of the Study

Specifically, the objectives of this research are to:

1. Examine the economic implications of a mono-cultural economy.
2. Determine the influence of non-oil export trade on economic growth and sustainable development.
3. Determine the challenges to effective African Catfish export in Nigeria.
4. Recommend the African Catfish as a valuable commodity that can contribute to the diversification of the Nigerian mono-cultural economy.

1.5. Research Propositions

1. A mono-cultural economy has no economic implications.
2. The non-oil export trade has no influence on economic growth and sustainable development.
3. There are no challenges to the effective export of the African Catfish.
4. The African Catfish cannot contribute to the diversification of the mono-cultural Nigerian economy.

1.6. Significance of the Study

This research will benefit mankind particularly the average Nigerian citizen who is being ravaged with poverty due to the on-going economic recession that keeps coming back in every administration. It will also help policy makers promulgate sound policies that support economy diversification and condemn the mono-cultural nature of the economy. Since Nigeria leads the production of African Catfish on the continent of Africa according to (InterAfrican Bureau for Animal Resources, 2015), this research should make the government see sense in investing in the production of African Catfish on a large scale which in turn will generate massive employment and contribute to the diversification of the economy leading to economic wealth and sustainable development instead of spending $700 million USD on importing fish every year (The Guardian, 2016). Lastly, it will help future researchers in the field of international trade and economy since the motive is to add to the growing body of academic knowledge.

1.7. Scope and Limitation

This study is focused on changing the culture of Nigeria's economy from a mono-product oil based economy to a diversified economy. Although, the non-oil sector of Nigeria's economy is a vast one, this study focuses on the African catfish aquaculture industry because of its huge lucrative potentials of contributing to the diversification of Nigeria's economy.

The study is faced with certain limitations such as the lack of ample time to effectively engage more stake-holders of this industry in an in-depth interview and the impossibility of reaching every catfish farm in Nigeria.

1.8. Organization of the Study

This study is divided into 5 chapters.

Chapter One is an introduction to the study. It provides the background of the study and states the problems as to why the study is being conducted. It also reflects the importance of the study. Propositions are provided in this chapter to guide the actualization of the objectives of the research. A scope and limitations are also discussed in this part of the work.

Chapter two provides a literature review and a theoretical framework. It sheds light on key concepts pertaining to this study and identifies the gap it sets out to fill.

Chapter three provides the method employed in the study. That is, the method engaged in sourcing data and information.

Chapter four provides the research findings that is, the data retrieved from the field work.

Chapter five which is the last part of the study summarizes the study, provides recommendations and then concludes.

2. Literature Review and Theoretical Framework

This chapter is divided into 3 sections. The first section provides insight into certain key terms particular to this work. These terms include; Export trade, Economy, Mono-cultured economy, Economy diversification and African Catfish and also reviews further concepts emanating from these key terms. The review covers the following areas: previous works on export trade, economic growth and sustainable development.

The second section provides a theoretical review then goes ahead to pick the most suitable theoretical framework for this study.

Lastly, the third section suggests a commodity that could serve as a contribution to the diversification of the Nigerian economy. It also identified the gap in development literature and makes a unique contribution to the ever growing body of academic knowledge.

2.1. Operational Definition of Terms

2.1.1. International Trade

First and for most, it is paramount to have a vivid understanding of what trade means before the term export-trade could be comprehended. Trade in its simplest explanation means the action of buying and selling. That is, a business transaction between a seller and a buyer. This transaction is characterized by mutual benefits. The seller is involved for the sole benefit of making profit while the buyer on the other hand is involved for the benefit of satisfaction. It is expedient to also state that trade between two traders is referred to as a bi-lateral trade while the trade that transpires between more than two entities is called multi-lateral trade. It is paramount to note that trade exists due to the reality of specialization and division of labor. The output from this reality is used in trade for the purpose of meeting needs and acquiring other commodities (Dollar and Kraay, 2004). Having understood the meaning of trade, the term export trade connotes those goods and services provided by an entity (Seller/Producer), be it an individual, a company or even a state (country) to another entity(buyer/consumer) be it an individual, a company or even a state (country) outside its geographical location or better still, outside its borders. Since export simply means an outward movement, export trade therefore refers to those goods and services shipped or flown out of a country to consumer destinations. It is characterized by the provision of goods and services to consumers beyond suppliers' borders (Joshi, 2005).

International trade refers to the processes of importation and exportation that is, those trades that transcends borders.

According to Azeez, et al (2014), international trade can be interchangeably referred to as ‘foreign trade’ or ‘global trade’. It encompasses the inflow (import) and outflow (export) of goods and services in a country. A country’s imports and exports represent a significant share of her gross domestic product (GDP); thus, international trade is correlated to economic growth. In an open economy, development of foreign trade greatly impacts GDP growth (Li, Chen & San, 2010 cited in Azeez et al, 2014).

The citation above gives credit to the positive impact International trade has on a country’s economy.

2.1.2. Economy

According to Paul, et al (2015), “The economic[sic] is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources” (p. 53). That is, the management of resources in all its ramifications such as production, exchange and transfer, accounting and regulation, consumption and use, labour and welfare, technology and infrastructure, wealth and distribution. Economy in the simplest form refers to the general well-being of a country. That explains why some countries experience recession and why others experience boom (Paul, et al, 2015).

The position of the Nigerian economy is mostly blamed on the oil boom factor between the period of 1973-1983 based on a consensus in literature but it is also important to observe a different view of one Ammani (2011) whose work statistically proves that there was a significant increase in the capital expenditure allocated to the agriculture sector during the oil boom period. His study also finds out that more capital expenditure was allocated to the agriculture sector than in any other sector of the economy at that period (Ammani, 2011). The questions to ask are what then happened to the agriculture sector that boomed prior to the oil boom era? And if according to Ammani, funds were disbursed to this sector, what then happened to the funds? There is only one simple and straight forward answer to the questions- the funds allocated were mismanaged due to a distraction by the oil boom period. The revenue the oil sector was generating was enough temptation for the federal government to overlook the misappropriation of funds disbursed to the agriculture sector hence, the agriculture sector was abandoned whether huge funds were disbursed or not.

Index Mundi (2016) has this to say about Nigeria’s economy:

Following an April 2014 statistical "rebasing" exercise, Nigeria has emerged as Africa's largest economy, with 2015 GDP estimated at $1.1 trillion. Oil has been a dominant source of income and government revenues since the 1970s. Following the 2008-9 global financial crises, the banking sector was effectively recapitalized and regulation enhanced. Nigeria’s economic growth over the last five years has been driven by growth in agriculture, telecommunications, and services. Economic diversification and strong growth have not translated into a significant decline in poverty levels, however - over 62% of Nigeria's 170 million people still live in extreme poverty.

Despite its strong fundamentals, oil-rich Nigeria has been hobbled by inadequate power supply, lack of infrastructure, delays in the passage of legislative reforms, an inefficient property registration system, restrictive trade policies, an inconsistent regulatory environment, a slow and ineffective judicial system, unreliable dispute resolution mechanisms, insecurity, and pervasive corruption. Regulatory constraints and security risks have limited new investment in oil and natural gas, and Nigeria's oil production has contracted every year since 2012.

Because of lower oil prices, GDP growth in 2015 fell to around 3%, and government revenues declined, while the nonoil sector also contracted due to economic policy uncertainty. President BUHARI, elected in March 2015, has established a cabinet of economic ministers that includes several technocrats, and he has announced plans to increase transparency, diversify the economy away from oil, and improve fiscal management. The government is working to develop stronger public-private partnerships for roads, agriculture, and power. The medium-term outlook for Nigeria is positive, assuming oil output stabilizes and oil prices recover (Index Mundi, 2016).

Considering Ogochukwu (2016) stand on the Nigerian economy, he is quoted as saying:

The impact of the oil price fall is felt all over the world and affected the world’s financial market. Nigeria miraculous financial survival during the financial crisis was due to the dependence on the protection offered by its huge and enormous oil resources which was the source of its major wealth for foreign exchange earnings and revenue.1 This came at a time when the oil price was lucrative at the international market, as against subprime mortgages which some countries largely engaged upon on which led to the financial burst. Conversely, the nondiversification of the Nigeria economy was also a reason while the aftermath of the financial crisis touched the Nigeria banking sector. In this recent time of falling oil prices, the impact is felt on the Nigerian economy through inflation, job loss and Naira depreciation. This is because; Nigeria is a mono economy, dependent on oil importation and exportation for its survival (Ogochukwu, 2016).

His stand reflects the implication of a mono-cultural economy in that when the price of the single exported and heavily depended upon product starts collapsing, the adverse effect is reflected in the economy of such country such as Nigeria.

He further explains these adverse effects that the impact of the oil price fall spills over to the banks in such a fluid manner, because activities in the oil sector are financed by the banks and a well-developed banking sector contributes to economic growth by mobilizing savings and efficiently allocating them among the competing investment projects and other demands for funds (Chris and Onyinye). 3 The falling oil prices cause serious financial problem for the oil sector and the capital market due to their link to the financial world and the Nigerian banks. Since, banks sit at a vantage position in the economy, failure to repay the loans advanced to the oil marketers left a bad effect on the banks’ balance sheet, and such loans became bad loans, which is a strain on banks’ capital adequacy. Hence, the oil price fall calls for several regulatory measures to be adopted to cushion the effect on the economy because, only a sustained and stable macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve our national desire to become one of the 20 largest economies in the world by the year 2020 (Soludo 2007 in Ogochukwu, 2016).

2.1.3. Mono-cultural Economy

This simply refers to an economy characterized by a single trade-commodity. That is, in a case of a country with a mono-cultural economy, a chunk of revenue generated in that country is derived from just one commodity such as the case of Nigeria, a chunk load of her revenue is derived from crude oil proceeds. Itumo (2016) captures a mono-cultural economy as an economy mainly dependent on a single product or resource for economic growth and development. The concept could further be referred to a case where any country depends on a single product sales or exports for its budget funding especially to the tune of 70% of revenue. Mono-cultural economy could also refer to the situation when any country depends on a basic product resource for overall higher percentage of national earnings and contribution to the Gross Domestic Product (Itumo, 2016).

It is important to note that a mono-product economy is the same as a mono-cultural economy. Dode (2012) has this to say about a mono-product economy:

A mono-product economy, from the fore-going, implies an economic system that is essentially based on the existence of only one major economic product; depended upon for the economic sustenance of that economy. The implication is that the economic life and existence of that economy revolves around the existence, relevance and currency of that product. That economy remains a potentially buoyant one only if such product does fine in the international market. The reverse though would be the case, if it’s showing at that level is poor (Dode, 2012).

All the citations point to the fact that a mono-cultural economy is characterized by deriving most of the revenue from one single exportable product and Dode (2012) provides the synonym of a mono-cultural economy which is the mono-product economy. This synonym in itself is self-explanatory of what the term entails.

2.1.4. Economy Diversification

Economy diversification as it implies is the process of redeeming a mono-cultured economy by re-focusing on other sectors of the economy for the sake of growth, development and fortification in times of economic woes such as recession.

2.1.5. African Catfish

African catfish also known as Claria gariepinus is a type of fish with whiskers like that of a cat. It has a tendency to weigh from 8kgs to 59kgs and can grow to between 1.4 and 2 meters long. According to statistics provided by Food and Agriculture Organization, Nigeria is seen to be the largest producer of African Catfish in the world (FAO Fishery Statistics, 2006).

According to dictionary.com (2017), catfish refers to “any of the numerous fishes of the order or sub order Nematognathi (or Siluroidei), characterized by barbels around the mouth and the absence of scales.”

It is called the African catfish simply because 40 African catfish gotten from the wild waters of Central African Republic served as the first brood stock that were introduced to Europe in 1976. It is worthy of note that African catfish in Europe originated from Africa and that there is also the American catfish. The point proves that catfish has its origin from the African waters.

2.2. Conceptual Review of Related Literature Emanating from Key Terms

2.2.1. International trade in Nigeria since 1960

Adeleye, et al (2015) examined the impact of international trade on economic growth in Nigeria from 1988 to 2012. They used net export and Balance of Payment as proxies for international trade while Gross Domestic Product represented economic growth. The study employed regression analysis as the method of analysis using co-integration and error correction modeling techniques to find the long-run relationship between economic performance and international trade. It was discovered that only Total Export (TEX) remained positive and significant while others remained insignificant, which connotes that Nigeria is running a monoculture economy where only oil act as the sole income generator of the economy without substantial support from other sectors (Adeleye, et al, 2015). In the same vein, Sanusi (2010) observed that “successive governments in Nigeria have since independence in 1960, pursued the goal of structural changes without much success”. He further says that these past leaders engaged economic policies which were supposed to result to economic growth but that the growth dynamics have been propelled by the existence and exploitation of natural resources and primary products. At the beginning, the agricultural sector, driven by the demand for food and cash crops production was the main stay of the economy standing at the centre of the growth process, contributing 54.7 per cent to the GDP during the 1960s. Then suddenly, the 1970s witnessed the boom of the oil industry as the main driver of growth. Agriculture was relegated to the background and out rightly abandoned. Since then, the economy has wallowed in the comfort of falling into the temptations and gyrating within the boom-burst cycles of the oil industry. This is evident in government expenditure as it majorly focuses its revenue generation solely on oil which dictates the pace of growth of the economy. Taking a keen look at the past, it is apparent that the economy has not performed to its full potential especially with the rate of the growing population. Sanusi points out to the fact that there is almost no gap between economic growth and population growth rates that the margin cannot induce the required structural transformation and economic diversification. This simply means that a reasonable gap between economic growth and population growth rate enhances the possibilities of economy diversification which in turn will need to a healthy economy reflecting in the lives of her numerous citizens. As at 2010, Nigeria had the 6th largest gas reserves and the 8th largest crude oil reserves in the world (Sanusi, 2010). It is endowed in commercial quantities with about 37 solid mineral types and has a population of over 150 million persons (Sanusi, 2010). Yet, economic performance has been rather woeful and does not reflect these endowments. Compared with the emerging Asian countries, notably, Thailand, Malaysia , China, India and Indonesia that were far behind Nigeria in terms of GDP per capita in 1970, these countries have transformed their economies and are not only miles ahead of Nigeria, but are also major players on the global economic arena. Indeed, Nigeria’s poor economic performance, particularly in the last forty years, is better illustrated when compared with China which now occupies an enviable position as the second largest economy in the world. In 1970, while Nigeria had a GDP per capita of US$233.35 and was ranked 88th in the world, China was ranked 114th with a GDP per capita of US$111.82 (Sanusi, 2010).

According to Nigeria Bureau of Statistics (2016),Nigeria’s economy has over the years remained a mono-cultural economy heavily dependent on crude oil export for economic development. With this scenario, crude oil exports account for Nigeria’s major source of foreign exchange earnings representing about 90% of export products. The value of oil export rose from below 1% in 1958 to about 97% in 1984 and to less than 90% since then. Oil was[sic] produced about 1.8 million bpd accounting for over 95% of exports and contributing 25 to 30% to the GDP. Nigeria has since moved to become the sixth largest producer of oil at the global level. Unequivocally, crude oil export dominated the greater percentage volume of the Nigeria’s export product and accounts for over 95% of total value of merchandise exports (Nigerian Bureau of Statistics, 2016 cited in Itumo, 2016).

Emeka, Frederick and Peter (2012) in Azeez, et al (2014) evaluated the role of trade on Nigeria’s economy for the period 1970 to 2008. By applying a combination of bi-variate and multivariate models, the relationships between the selected macroeconomic variables was estimated. \The findings indicated that exports and foreign direct investment inflows have positive and significant impact on economic growth. The study suggested that there should be congruence of exports and fiscal policies, towards a greater diversification of non-oil exports by the Nigerian government in order to attain the desired growth prospects of external trade (Azeez et al, 2014).

2.2.2. International trade as a tool for economic growth

Adenugba and Sotubo (2013) provide a satisfactory explanation of exportation as a tool for economic growth. It is implied that exportation is a crucial requirement for the assurance of sustainable growth and economic development of an economy. Any country that intends to generate huge wealth and revenue therefore needs to implement policies that help support and encourage exportation for the sole sake of economic growth and development since exportation is unarguably a catalyst for economic development in all its ramifications (Abou-Strait, 2005 in Adenugba and Sotubo, 2013). Literature has also proven the fact that foreign trade is an essential ingredient in generating inflow of foreign capital which definitely has a drastic impact on an economy (Ricardo, 1817 in Adenugba and Sotubo, 2013). This foreign capital inflow leads to an increase in a country’s earnings thus, improving the national income of a country. Exportation has immense significances such as creating avenues for employment since an economy that highly demands exportation requires more output which definitely brings about an immense creation of employments. Another apparent benefit is the reality of a reasonable equilibrium between import and export which is known as balance of trade and also the position of payment provided the country in question engages more exports than importation. Export trade literature has proven the fact that developing economies such as Nigeria needs foreign capital to bring about rapid development. Therefore, measures must be put in place to attract foreign capital. Such measures must provide a blue print to a diversified export in order to achieve the desired capital that will in turn boom the economy. Buttressing this, Ricardo (1817) in Adenugba and Sotubo (2013) is of the view that foreign trade is paramount for a nation’s economic growth and sustainable development. Singh (2010) in Adenugba and Sotubo (2013) also observes that export trade is a major prerequisite for productivity and growth. The practicality of this has helped shaped the economy of many nations and set them on the path to achieve economic growth and development. This has informed Nigerian policy makers to adopt those policies that bring about export-led growth and neglect import substitution policies. These adopted policies gives room for exportation via the process of removing embargos that affect the free movement of the factors of production (Todaro & Smith, 2011 in Adenugba and Sotubo, 2013). Abou-Strait (2005) in Adenugba and Sotubo (2013) suggests that the export-led growth strategy is capable of providing manufacturers with zeal and incentives to engage in the process of exporting their manufactured products via various economic policies. These strategies are designed to bring about an increase in the output of the country which will bring about an increase in the volume of the goods the country exports. The government has the power to promulgate policies that help encourage and enhance the production output of the home industries so as to exceed the domestic demand so that the surplus can be sold in the international market for the sake of garnering wealth by earning foreign exchange. The promotion of export involves embracing and supporting domestic production for the sake of exportation which is done by providing incentives for the home producers. These incentives come in various ways, such ways are: tax reductions, subsidies, finding markets for such local products, provision of loans and grants, among others. However, one should take note that this strategy of promoting export is largely bent on diversification and the expansion of domestic products (products that were traditionally produced for domestic consumption) (Dunn Jr. &Mutti, 2004 in Adenugba and Sotubo, 2013). Various studies in 1970s agree that developing countries that ran with the vision of supporting exportation tell a good story today. It is observed that these countries had a speedy economic growth compared to those countries that promulgated policies of protectionism. These countries that experienced an immense growth in their economy based on their export-led policies are the Four Asian Tigers. These countries are: South Korea, Taiwan, Hong Kong and Singapore. It is also important to note four other Asian countries that sprang up after following the footsteps of the Asian Tigers. These Asian countries are: China, Thailand, Malaysia and Indonesia. In contemporary times, countries like Mexico, Brazil and India are also seen as economic giants based on adopting same approach as the previous countries (Dunn & Mutti, 2004 in Adenugba and Sotubo, 2013).

Azeez, et al (2014) evaluated that “overall, international trade is a catalyst to boost the economic prosperity of Nigeria” in their investigation on the effect of international trade on economic growth in Nigeria (Azeez et al., 2014).

2.2.3. Nature of the Nigerian Economy

Omotor (2011) says that “Nigeria is one of the world’s resource rich economies most at risk from the current economic crisis”. This is due to the nature and structure of her economy and as Bruggemans and Associates (2016) puts it;

Warren Buffett likes to say that when the tide goes out, we can see who has been swimming naked. That applies to overborrowed households and overleveraged companies. But it also applies to monoculture countries, ones who have allowed any narrow dependency to form or to linger, that can become a great weakness once a greater global unraveling strikes (Bruggemans, 2016).

Apparently, these words are true considering the present situation of the Nigerian economy. Too much overdependence on a single commodity has revealed its negative tendencies which are reflected in the realities of the present economy. A global unraveling according to the terms of Bruggemans and Associates (2016) has struck and now, the overwhelming yet disheartening degree of Nigeria’s economic weakness is vivid.

Taking Indonesia and Malaysia into consideration, it is observed that both countries share the multiplicity feature in ethnicity and religion with Nigeria but comparing their economy with Nigeria’s ends these similarities in that in 1987, Indonesia’s industrial output was 29.0 million dollars as against Nigeria’s 7.1 billion dollars. A decade earlier (1977), Nigeria’s economy had been more promising than Indonesia. The main difference between 1977 and 1987 is that Indonesia invested very heavily in human infrastructure through science and technology, in research and development and pursued their goals with discipline and dedication. In the same period, Nigeria failed to diversify and borrowed heavily to subsidize consumption (Anya O. Anya in Bassey (2012).

Onodugu, et al (2013) provides the information on Nigeria since the 1970’s becoming a mono-cultural economy that relied heavily on oil as its major income generator. They further provided the implication of running a mono-culture economy being that the dynamics of the economy is at the whims and caprices of the price of oil, which for the most part, has been volatile (Enoma and Mustafa, 2011 in Onodugu, et al, 2013). The major fallout of this fragile structure of the Nigerian economy is a situation where the economy has been growing without creating jobs and reducing poverty (Onodugo, 2013 in Onodugu, et al, 2013). A straight forward explanation to this economic paradox is that the oil sector that produces about 90% of export earnings are in the hands of less than 1% of the Nigerian population dominated by expatriates and members of the political class who control production and the proceeds respectively. Unfortunately, the sector is separated from other tiers and sectors of the economy, thus offers little or no linkage and multiplier effect to the economy as a whole (Onodugu, et al, 2013).

The Nigerian economy is driven by one major commodity of which when looked at keenly, one observes that even the commodity we export is primary. That is, exported crude oil is processed abroad then sold back to us in fractions of finished products. It can be deduced from this process that even the economy generally agreed by scholars in literature as mono-cultured is semi-mono-cultured based on the export-import-chain. This therefore calls for the creation of refineries where crude oil could be fractionized and by-products exported. This will lead to a larger output which in turn will earn more income. But since history reminds us of the refinery issue, it is therefore wise the government maintains its focus on non-oil sector for the sake of a diversified export base.

Itumo (2016) lists certain implications of Nigeria’s oil based economy. These implications are cited as:

Decline in Government Revenue: as pointed to above in the subsisting presence of a volatility of global oil price, Nigeria’s realizable revenue from crude oil export has declined greatly. With Nigeria’s oil production of 2.2 million bpd, the country unequivocally earned more oil revenue in the past years when oil price was above USD 100, compared to the second half of 2014 when the oil price came under USD100 and had continued to decline to below USD 30 in early 2016, only to climb a little higher to above $40. With a reduced crude oil price, Nigeria loses even more, given that the cost of its oil production is more than some other oil producing nations. It cost Nigeria about USD 20 to extract a barrel of crude oil from the ground, unlike Saudi Arabia that The Economist (2014) notes it costs $5 - $6 per barrel to extract its oil. Budget funding crisis: Nigeria has three tiers of government, which are the federal, the state and the local government administrations. The three tiers of government rely on crude oil revenue for budget funding which is shared from the distributable pool fund of the federal government. With this as the case, the annual budget of state governments and local governments are predicated on the federal government budget as their major source of funding comes from the federal government. The other source of revenue available to state governments or the local government administrations are the internally generated revenues and levies collected locally to which the federal government has no percentage share from. The crude oil export revenue contributes about 70 percent of the distributable pool account of the country from where federal government, state governments and local governments’ administrations receive monthly allocations to fund their independent annual budget estimates. Essentially, the decline in global oil price practically decreased revenue for a country like Nigeria that depends heavily on crude oil revenue. For instance, with Nigeria’s crude oil production at about 2.2 million bpd and oil price selling above $100, Nigeria made more in 2013 than in 2016 when oil price had gone down below $50. By implication, crude oil price halved from the price in ending of 2013 and beginning of 2016, bringing about serious shortage in budget revenue. Nigeria has begun borrowing from both local and international sources in a bid to fund its national budget, as reflected in 2016 budget of 6 trillion naira (about USD 30 billion) which government projects revenue of 4 trillion naira (about USD 20 billion) and would source 2 trillion naira (about USD 10 billion) through borrowing. Scarcity of foreign exchange for a high consumption nation: Nigeria is unequivocally a consumption nation. This is attributed to the high level of imported goods. Nigeria amongst other things, imports large stock of refined crude oil due to lack of requisite refining capacity. Nigeria has four refineries, but the cumulative output does not still meet local demand of the country with estimated population of over 180 million. The declining oil revenue accruable to Nigeria means that foreign exchange which earlier stood at about 90% sourced from crude oil export had equally reduced. Many importers have begun to face challenges of raising needed foreign exchange to import products which are crucial to national survival. A product like crude oil imported into the country certainly needs foreign exchange to import and the scarcity means reduced import and supply leading to scarcity that in turn negatively affects the lives of the citizenry. Recently, some airlines operating in Nigeria began to force passengers to pay for flight tickets in foreign currency, a problem elicited by the huge airlines fund trapped within the country because of shortage of foreign exchange. In like vein, some foreign investors have faced challenges of operation arising from scarcity of foreign exchange making it hard to repatriate capital or use it as may be officially required from time to time for purchase of equipment from outside Nigeria. Nigerian indigenous businesses which rely heavily on foreign exchange to import goods are also suffering as a result of the scarcity of forex. To be clear, the bulk of importation into the country is said to have reduced in the first quarter of 2016, the cause of this situation may be closely linked amongst other things to the scarcity of foreign exchange for imports. Naira loss of value: since the advent of the recent fall in crude oil price at the global level that began about mid-2014, the naira has lost value, moving from about 170 naira to $1 to the first quarter of 2016 when the naira pitched at 400 naira to $1 at the parallel market. At the central bank of Nigeria’s official price, the naira equally slipped downward. The government with the conviction that the naira should not be devalued continued to defend the currency on the official exchange rate of 197 to $1 for a long time. But in the second quarter of 2016, the government let go and allowed the exchange rate of the naira to be determined by market forces of demand and supply, especially the interbank rates in Nigeria. The loss of value of the naira is enormous. If drawing from the example above, naira moved from below N175 to $1 in 2014 to about N400 to $1 in first half of 2016. Implicitly, naira loss of value could be adjudged to be more than hundred percent. The impact of naira’s loss of value had been enormous. Businesses which borrowed money to invest would have to pay more in loan refunds. The loss of value of the naira also affected the Nigerian stock market which shed value of market capitalization over time as a result of the loss of value of various stocks. Early in 2015, market investors had thought that the stock at the year end of 2015 would be up, but in a disappointing turn of event, the market ended the year lower than it started. The public sector workers in Nigeria, under the umbrella of the Nigeria labour Congress have in 2016 asked for a pay raise as a result of the loss of value of naira and their sustained argument that the current minimum wage of the nation at below one hundred dollars ($100) does not represent a living wage with which workers would survive (Itumo, 2016).

Adefolaju (2014) on the other hand provides that oil mono-product countries suffer similar predicaments. Citing her, she says that the social consequence of the resource curse is that countries solely dependent on oil exports have unusually high poverty rates, poor health care, high rates of child mentality, and poor educational performance. This is caused much because of the inability of such countries to diversify from oil dependence into other self-sustaining economic activities particularly agriculture and labour-intensive industry. A former Minister of Education, Dr Oby Ezekwezili recently noted that the rising level of poverty in Nigeria was due to poor governance and the monotonous economic structure of the country (The Punch, 23, October, 2013 cited in Adefolaju, 2014).

Adefolaju (2014) further says that countries dependent on oil earnings also display unusually high rates of child mortality and child nutrition, low life expectancy, poor health care, and reduced expenditures on education as well as other sectors of the economy. The Nigerian government spends about $2 per person/ year on health care, a far cry from the $34 per year recommended for developing countries by the World Health Organization (WHO). Furthermore as against the world average of 26.5 malnourished children per thousand, the rate is 37.7 per thousand in oil-rich Nigeria. Generally, the country lacks basic socio-economic infrastructures like good road networks, electricity supply and portable water, among others (Adefolaju, 2014).

Irrespective of the huge export earnings from crude oil, the poverty rate in the country is still high. The huge export earnings is not reflected in the lives of the Nigerian citizens. This implies that only few share this wealth at the expense of the well-being of the rest.

Dode (2012) has this to say about the Nigerian economy:

The Nigerian economic system continued on this diversified note for a number of decades, up to the middle 1950s, when crude oil was discovered in 1956 and in commercial quantity in 1958 at Oloibiri, in Brass Local government area of present Bayelsa State. Subsequently, Nigeria gained independence on October 1, 1960, with a diversified economy, even in the midst of crude oil exploration and exploitation. Unfortunately, not too long after that period, this history of diversification could not be sustained by the emerging ruling elite. The early 1970s witnessed a complete shift of economic focus from other sources of revenue earnings for the state, to a natural resource (crude oil). This act of abandoning, to a large extent, all other sources of revenue generation and societal sustenance to concentrate on only oil has continued till date. The data available in this regard shows that for the past three decades, oil has accounted for between 80% and 90% of the country’s foreign exchange earnings. This practice is not healthy for any nation that must record growth and development in all spheres of human endeavours (Dode, 2012).

From Dode’s assertion, it can be deduced that the period when oil was discovered in Nigeria was not a lucrative one in that crude oil was explored while the Nigerian economy remained diversified until the oil boom period of 1973-1983 where oil prices sky rocketed in the global market and the Nigerian economy drastically tended towards a mono-cultural direction until it totally relegated other sectors of the economy to the background and concentrated its forces on oil.

2.2.4. Logical Basis for Export Diversification

In order to achieve sustainable growth, the structural models of economic development holds that countries should diversify from primary exports into manufactured exports (Chenery, 1979; Syrquin, 1989 cited in Hesse, 2008). Hesse (2008) further explains that export diversification can lead to immense growth provided that developing countries diversify their exports in order to enjoy the benefits of overcoming export instability or the negative impact of terms of trade in primary products. He further says that economic development is a process typical of structural transformation where countries move from producing “poor-country goods” to “rich-country goods.” Thus, export diversification is instrumental in this process (Hesse, 2008).

Mejia (2011) holds that the dependence on primary-product exports has been frequently mentioned as one of the main features of developing nations. As stated by Todaro and Smith (2006), less developed countries (LDCs) tend to specialize in the production of primary products, instead of secondary and tertiary activities. Consequently, exports of primary products play a very significant role in terms of foreign exchange generation in these countries, traditionally representing a significant share of their gross national product. Specially in the case of the non-mineral primary products exports, markets and prices are frequently unstable, leading to a high degree of exposure to risk and uncertainty for the countries that rely on them (Todaro and Smith 2006). Primary-products exports have been characterized by relatively low income elasticity of demand and inelastic price elasticity, being fuels, certain raw materials, and manufactured goods, some exceptions that exhibit relatively high income elasticity (Todaro and Smith 2006 cited in Mejia, 2011).

As stated by Ali et al. (1991) cited in Mejia (2011), export diversification entails changing the composition of a country’s export mix, being it “directly related to the structure of the economy and how it changes as development proceeds” (1991, p. 6). The underlying consideration behind export diversification as a possible developmental strategy is related to the expectation of achieving stability-oriented and growth-oriented policy objectives (Ali et al. 1991). A broader exports base, coupled with a special promotion of those commodities with positive price trends, should be beneficial for growth. Hence, the value-added export commodities would be stimulated, by means of additional processing and marketing activities (Ali et al. 1991). A country’s degree of diversification is usually considered as dependent upon the number of commodities within its export mix, as well as on the distribution of their individual shares (in Mejia, 2011).

Contributors to the Nigerian Economic Society Conference on Diversification Strategy for Nigeria’s Economy in 1983 argued that in order to achieve diversification, a number of factors are to be considered to ensure a successful Nigerian Economy (one not based solely on petroleum). These factors are:

First, there is need to give priority to the development of industrial raw-materials locally…. In this way, the industrial capability of the country in producing exportables will be greatly enhanced. Secondly, policies must be deliberately shifted away from inward-looking industrialization around the home market towards systematic efforts to export industrial products. Third factor of marketing and export promotion strategy…. Developing countries that are successful exporters of manufacturers export success has been based in part, on learning special skills involved in marketing and producing customer specifications (cited in Bassey, 2012).

According to Onayemi and Akintoye (2009) export trade is an instrument for growth. It increases foreign exchange earnings, improves balance of payment position, creates employment and development of export oriented industries in the manufacturing sector and improves government revenue through taxes, levies and tariffs. These benefits will in turn enhance the process of growth and development in such economy. However, before these benefits can be fully realized, the structure and direction of these exports must be carefully tailored such that the economy will not depend on only one sector for the supply of needed foreign exchange (cited in Adenugba and Sotubo, 2013).

This calls for the diversification of Nigeria’s economy since it is heavily dependent on the oil sector. Evidence that Nigeria’s economy can thrive based on non-oil export is provided in the growing body of literature. Such contributions made by non-oil export proponents who argue that non-oil trade has great potentials to propel Nigeria’s economy for desired growth and development. Such proponents as Onwualu (2012) cited in Onodugo, et al (2015) is of the view that:

The value chain approach to agriculture has the potentials to open up the economy and generate various activities which are capable of creating jobs and enhancing industrialization and thus makes the non-oil sub-sector to hold the aces for future Nigerian sustainable economic growth (cited in Onodugo, et al, 2015).

Evidence provided by Soludo (2007), Olayiwola and Okodua (2010) and Aigbakham (2008) cited in Onodugo, et al (2015) points to noticeable increase in the contribution of non-oil sector to the growth of the Nigerian economy over the last ten years.

As cited in Onodugo et al (2015), the Central Bank of Nigeria (CBN) has attributed the growth in Nigeria’s Gross Domestic Product (GDP) from 6.9 per cent in third quarter 2012 to 7.1 per cent in the fourth-quarter of the same year to the increase in the contribution of the non-oil sectors, particularly the industrial sector (NBS, 2012). In its report titled “Economic Report Fourth-Quarter 2012” CBN submits that non-oil receipts stood at N589.98 billion (24.4 per cent of the total). Adekunle (2012) maintains that Nigeria has the potential to realize N310bn from non-oil export. National Bureau of Statistics (NBS) further reports that the non-oil sector grew at 9.07% in the fourth quarter of 2011 higher than the 8.93% increase recorded in the fourth quarter of 2010. The growing body of literature indicating possible linkage between non-oil export and growth of the Nigerian economy notwithstanding, there is still paucity of empirical evidence as to the magnitude of the contribution of non-oil export to the growth, and specific sectors and factors that are behind such growth. Further, it is observed that most time series studies in this line of investigation on Nigerian economy have focused on export promotion strategy of industrialization, as a way of diversifying the productive base of the Nigerian economy (Onayemi and Ishola, 2009) without clear information on how strong the impact of non-oil export has on the rate of change in the Gross Domestic Product (GDP) (cited in Onodugo, et al, 2015).

The revenue profile of the Federal Government of Nigeria in the past half-decade shows that oil earnings accounted for over 80.0% of the foreign exchange earnings, while the non-oil sector, despite its improved performance, contributed 20.1%(CBN, 2010 cited in Onodugo, et al, 2015). This reveals how heavily the Nigerian economy is dependent on the oil sector to generate revenue and of course raises a red flag of potential danger asking the question “what will happen when oil prices collapse in the international market?” The answer is evident in today’s economy where recession has become the order of the day due to the overdependence on oil and the neglect of other sector of the economy. Quoting Ajayi in Bassey (2012),

The economic dangers of extreme dependence on a single product are too obvious to need repetition. This danger assumes a greater degree of fear in the case of petroleum which to all intents and purposes can be seen as a commodity of international importance which can be subjected to both economic and political manipulation (cited in Bassey, 2012).

Hence, to be safe from both economic and political manipulation, policies that support diversification must be implemented.

Ibanga and Obi (2001) also contributes to the growing literature. They note that reflections on oil price slump of the early 1980s should prick the mind of policy makers. A forcefully lowered consumption or welfare level has never been desirable. A deliberate effort to ensure optimal consumption for present generation and a release of funds for reinvestment in appropriate man-made capital that would ensure similar consumption for future generations is desirable, and it is attainable (cited in Bassey, 2012).

It seems as though the issue of oil price slump re-occurs. Yet, lessons are not learned. For instance, from the 1980 oil slump price, it was evident that the need for economy diversification cannot be overlooked. Yet, the government kept falling into the temptations of oil prices when it picks up back in the global market.

Another logical reason for export diversification particularly for the Nigerian economy, is the believe that oil is exhaustible and as postulated by Bassey (2012), that if no new discoveries as to oil substitute is made, the stock of oil in Nigeria will be exhausted in the year 2065.

It is also important to consider Itumo’s reasons for Nigeria to diversify and move away from a heavily oil based economy. Citing Itumo (2016), acute shortage of infrastructure: Nigeria has acute shortage of infrastructure in virtually all areas of the society. The roads infrastructure still needs a lot of attention. There is lack of access roads in some cases for the agricultural products produced locally to be evacuated to urban centres for food supply and further processing as in agro-allied industries. Lack of good road infrastructure also impedes on transport system in movement of people. In very many cases, bad roads have led to fatal accidents that claimed multiple lives. This scenario is applicable to rail transport; it is moribund and is only being revived at the moment. Same applies to seaway transport and air transport; which are not yet at a higher level of operation. In the power sector, there had been a huge crisis of inadequate supply, vandalizing of power installations and disruptions of gas-to- power turbines by pipelines sabotage. There is no doubt about the considerable potentials Nigeria has in power generation as the country is located on the equator and can tap into solar source of power supply. It also has the advantage of oil resources which makes it easier for her to supply gas to power stations, but the sabotage impedes on it. This situation is similar to the deficiency in the water resources sector, Nigeria has many water bodies, but good drinking water has not been made available to all Nigerians. Invariably Nigeria needs heightened economic boost to make huge investments in infrastructure and other sectors. There is also the persisting infrastructural shortage in housing sector with about 17 million housing deficit, which continues to grow with profound increasing population of Nigeria. Also in the health sector, fewer hospitals, lack of access and/or reduced access to Medicare, inadequate number of physicians, drug counterfeiting, etc., all still exist and urgently needs to be addressed. Bridging these kinds of gaps in housing infrastructure will need serious funding which can only be possible by economic buoyancy and boost that is not undermined by dependence on volatile product resource like crude oil. Nigeria’s exploding population: Nigeria’s population according to analysts represents one fifth of the black race on earth. The Central intelligence Agency (CIA) World Fact book (2015) puts Nigeria’s population at 181,562,056 people. The Guardian (2013) observed that the Nigeria population would expectedly surpass the US Population by 2050 based on the United Nation’s projections. It further notes that the United Nation’s projections also predict that Nigeria would by the end of the century be the third most populous country. The data from CIA World Fact book (2015) indicates that youth population is more in Nigeria’s case. 30.56% of the population is made up of the 25-54 years age bracket, 19.38% is made up of the 15-24 years age bracket while 43.01% is made up of the 0-14 years age bracket. Cumulatively, the 0-54 years age bracket accounts for 92.95% of Nigeria’s population. Invariably, Nigeria has a huge youth active population that is growing. Nigeria now has the challenge of feeding her growing population by ensuring food sufficiency. Nigeria also has the challenge of good and effective planning that caters adequately for the population by ensuring economic growth and development. Nigeria is also faced with the challenge of providing and ensuring quality education for its youthful population. Nigeria’s current Minister of Agriculture and Rural Development is credited with saying that Nigerians may be starving from lack of food by 2050, while making a case for increased investment in agriculture. By all measure and standard, Nigeria’s exploding population stands out as one of the major reasons why Nigeria must diversify away from single product resource like crude oil. Security concerns: There are serious security concerns within the Nigerian geographic space. The Boko Haram meaning ‘Western Education Is Evil’ have engaged in endless acts of terrorism which has displaced millions of people and seen to the death of tens of thousands of people. The North Eastern part of Nigeria which is the hotbed of the Boko Haram activities has been seriously devastated economically with destruction of properties, business interest, viable investments and desertion by indigenes. In like vein, investors think little of establishing in this geopolitical zone and that is a minus for economic wellbeing and growth of this area of Nigeria. The South region of Nigeria also has militancy problems with new groups emerging by the day, targeting and destroying oil installations. Their activities include blowing up of pipelines, kidnapping of expatriates, theft of crude oil, establishing of illegal local refineries, etc. These activities have huge negative impacts on Nigeria’s economic growth as serious reduction is often occasioned in her crude oil quota supply at the international oil Market. Nigeria, therefore, needs to diversify away from crude oil and begin to enjoy economic boost in order to have funds to adequately combat the scourge of terrorism and militancy. To continue to depend on crude oil export has the implication of reduced revenue since the activities of the militants in the Niger delta region of Nigeria reduces daily crude oil output and similarly shrinks revenue earnings. The Boko Haram menace continues to exact more pressure on the government for security of lives and property, with the government in high need of adequately arming its military, dependence on a dwindling revenue source would hamper serving these objectives. High youth population and rising rate of unemployment: as noted earlier, Nigeria’s youth population accounts for about 92 percent of Nigeria’s population which continues to grow. The implication of this statistics is that Nigeria has rising rate of unemployment. Nigeria’s former President, Olusegun Obasanjo, in a statement observed that Nigeria is sitting on a keg of gun powder and the situation is a time bomb ticking and waiting to explode. High youth unemployment leads to increase in crime rate, theft, militancy, armed robbery, terrorism, restiveness, etc. Part of what aggravates the situation in this issue is the absence of social benefits within the country, meaning that a hungry youth has no subvention or government intervention in any area of life. Such scenario raises the vulnerability of youths to get involved in juvenile crimes. Hundreds of thousands of young Nigerians gain admission into the higher institutions every year, just as similar numbers graduate annually. Given the foregoing scenario, it is highly imperative for Nigeria to diversify away from crude oil and aggressively grow her economy in order to have means to create jobs as could reasonably absorb the unemployed at the job market. Economic roles played in the West African sub-region and the African region: Nigeria is the foremost economy in Africa with a GDP of over $500 billion. Even before Nigeria’s rebasing of her GDP which reflected her as the biggest economy on the continent, it already was playing enormous economic roles at the sub-regional and regional levels in the African continent. Nigeria has been the major funding source to ECOWAS secretariat. Nigeria also lends economic support to some countries in Africa by donation interventions and assists to lead peace keeping missions within the region, including funding. Nigeria is the biggest market in the West African sub-region, and if her economy contracts, irrespective of the reasons, the economy of the sub-region will be negatively affected too. In this circumstance, Nigeria’s economy needs continuous growth in order to directly and indirectly support the economies of other countries in the West African sub-region. As a matter of fact, there is growing funding need in the African continent for security issues, economic growth and integration, international organizations, alleviation and/or eradication of poverty, development of education, infrastructural development, eradication of terminal/contagious diseases, etc. Nigeria cannot play big roles as a big economy in Africa if the economy is dependent on a volatile product resource like crude oil. The unpredictability of Nigeria’s accruable revenue from oil export: because of the volatility on global crude oil price, it is impossible to predict or project what revenue is accruable to Nigeria from crude oil export. Such a situation has far reaching negative implications for Nigeria. The unpredictability of crude oil price means that planning is impossible for Nigeria. Development requires serious level of planning at national level, and dependence on a product resource with continuous unstable price means facts can never be the same, adopting a patterned planning would remain hard and inference would always be difficult to draw. Nigeria’s case is further compounded by the spiraling[sic] insurgent activities in the Niger delta region of Nigeria, where the oil resources are concentrated. The militants in this region in quest for resource control and display of grievances over various political and security issues disrupt oil production outputs by blowing up pipelines and kidnapping expatriates. These kinds of activities disrupt oil production in Nigeria and shorten her international supply quotas thereby seriously decreasing her oil revenue. The volatility of crude oil price which reflects in unpredictability of earned revenue would undermine economic growth and development as it were in the case of Nigeria. Nigeria already missed the opportunity: One of the measures countries dependent on a basic resources could do in time of resource boom is to plough huge revenues from it into development of other sectors of economy. Doing so would help to mitigate any negative impact of price volatility or exhaustion of the basic resource. This same measure could be applied to development of relevant and critical infrastructures for national development and continuous economic vibrancy. Investments could be made in the educational sector, power sector, enhanced transport system, health sector and government social programmes that help in poverty alleviation, less privileged and low income families. In the case of Nigeria, all the opportunities for investing revenues from crude oil into development of other sectors for ensuring continued growth and development in challenging times have been missed. Nigeria did not save like Saudi Arabia that has over $900 billion in foreign reserve. Nigeria only has less than $25 billion dollars in foreign reserve, which is much lower than what the total budget estimates of year 2016. Nigeria has acute shortage of infrastructure, inefficient transport system, acutely short power supply, dilapidated and inadequate road network, unenhanced health sector. As it is, Nigeria had not made any investment in any other sector in a way that it could support budget funding or development efforts besides crude oil revenue. It is quite challenging for Nigeria that nothing can really be pointed to as national investment with potential to support Nigeria’s economy up to half of the revenue derived from crude oil exports. Corruption continues to plaque Nigeria: Just as stated earlier in the views of New Institutional Economists, countries with basic resource abundance were associated with slower growth, while those that have institutions that were “grabber friendly” failed to grow. This scenario has played out in Nigeria and continues to exist where several cases of corruption are being recorded in Nigeria both within various government Ministries and Agencies as well as among politicians and other categories of government workers. Former British Prime Minister, David Cameron was once quoted in the media sources in 2016 as referring to Nigeria and Afghanistan as being fantastically corrupt. Nigeria’s oil European Journal of Interdisciplinary Studies 33 industry has repeatedly been embroiled in corruption cases. Also, cases of corruption have been largely reported in the Military arms deals, pensions fund, national Assembly, the Judiciary, in some political parties and many other sectors of the Nigerian society. Nigeria’s speaker of the lower house of parliament recently decried the alarming rate of corruption with the revelation of stolen billions of Naira buried in a farmland. With the current situation of massive scale of corruption, Nigeria needs to diversify away from dependence on crude oil export (Itumo, 2016).

A study by Eko, et al (2013) on diversifying Nigeria’s economy focuses on a dual approach. They provide that tourism and Agriculture are viable means of getting the Nigerian economy from a mono-cultural direction to a diversified one. Citing them, diversification implies “movement into new fields and stimulation and expansion of existing traditional products.” Diversification does not discourage specialization, but requires that resources be channeled into the best alternative uses (see Ayeni, 1987; Iniodu, 1995). In macroeconomic planning, diversification promotes growth and development through the mobilization of savings from surplus sectors for use in the development of deficit sectors of the economy. Options for diversifying an economy abound, such as agriculture, entertainment, financial services, industrialization, information and communication technology, tourism, etc. However, it is worthy to note that country-specific circumstances ought to as a matter of necessity, be considered. This is cogent, since due to structural differences, a model that fits an economy perfectly well may prove irrelevant in another With a major objective of diversifying the productive base of the Nigerian economy with a view to reducing dependence on the oil sector, this study zero in on ‘agriculture’ and ‘tourism,’ as imperatives. The choice of this dual approach is informed by the huge successes recorded by some Asian countries–which are collectively referred to as ‘Asian Tigers’–in applying these imperatives, as well as the fact that these countries were basically at the same level of national development with Nigeria, at the time of their respective take-off and still share certain similarities with Nigeria (Eko et al, 2013).

2.2.5. Impact of Export on Exchange rate

Since export trade is characterized by two or more countries in business, there is either a positive or a negative effect on each country’s currency. In the case of Nigeria, exchange rate fluctuates due to the oil dependent nature of her economy in the light of dwindling oil price in the global market. This of course will have a negative effect on her currency.

According to the Central bank of Nigeria’s research department (2013), it is observed that developing economies estimates the external sector on the premise of small country assumption which makes it only possible to model the demand side at the expense of supply condition. Therefore, exchange rate regime, openness of the economy, institutional arrangements and the degree of capital mobility are vital to modeling the external sector (CBN, 2013).

Umaru, et al (2013) opine that export income is a function of export price and volume of goods, and the exchange rate of the local currency to the international currency. Production volume for export been fairly stable (Adubi & Okunmadewa, 1999; and Chukwu, 2007) suggest export drive as based on export price (itself fairly stable) and the fluctuations in the exchange rate. Fluctuations, positive or negative, influence export: increasing export when depreciation occurs and decreasing export when exchange rate appreciations occur. The traditionalist view on the impact of currency depreciation on trade indicates that it leads to an expansion in trade via lower export prices. The structuralist school, however, stresses some contractionary effects, Meade (1951). Hirschman (1949) points out that currency depreciation from an initial trade deficit reduces real national income and may lead to a fall in aggregate demand. Kandil and Mirzaie (2002) argued that currency depreciation gives with one hand, by lowering export prices and takes away with the other hand, by raising import prices. They observed that if trade is in balance and terms of trade remain unchanged, these price changes offset each other, especially when the famous Marshall-Lerner condition is not satisfied. If imports exceed exports, the end result is a reduction in real income within a country. See Krugman & Taylor (1978) and Edward (1988 and 1989) (cited in Umaru, et al, 2013).

Further citing Umaru, et al (2013), it is discovered that foreign exchange fluctuations whether positive or negative are not desirable to producers of export products as it has been found to increase risk and uncertainty in international transactions which discourages trade (Adubi and Okunmadewa, 1999). Findings by the IMF (1984) revealed that these fluctuations induce undesirable macroeconomic phenomena called inflation. Similarly, Caballero and Corbo (1989) observed positive effect of exchange rate fluctuations on export trade in European Union countries. Accordingly, Walsh and Yu (2010) noted that low exchange rate favour the importation of productions machinery, and production and export in periods of high foreign exchange rate. Lama and Medina (2010) opined that different open economies experience different episodes of exchange rate appreciation in response to different types of stocks, contending that an appreciation in exchange rate induces a contraction of the exporting manufacturing sector. Maintenance of export performance to them require the depreciation of the real exchange rate of a country’s currency, the achievable through monetary injections; noting that a policy of exchange rate depreciation can successfully prevent a contraction of export output, having an allocative effect in the economy (cited in Umaru, et al, 2013).

Moreover, Adubi and Okunmadewa (1999) posited that Nigeria, a developing nation, is expected to gain from export conversion price increase as a result of currency devaluation. Findings by Obadan (1994) and Osuntogun, et al (1993) on the effect of stable exchange on export performance showed that exchange rate affect a country’s export performance. In addition, instability in an exchange rate with its attendant risk affect exports earnings, performance and growth which turn out as positive to exporters when devalued. Poor results from the floating exchange regimes of the 1970’s necessitated a change in foreign exchange rate management. The structural adjustment program was introduced in 1986 with the cardinal objective of restructuring the production base of the economy with a positive bias for agricultural export production. This reform facilitated the continued devaluation of the Nigerian naira with the expected increase in domestic prices of agricultural export boasting domestic production.

Thus, Srour (2006) asserted that, diversification of countries export base is one reason given by developing nations for changing foreign exchange rates and regimes. In the same vein, the World Trade Organization (2010) wrote that, diversification increases local production, employment, income and economic growth. In different works, Chukwu (2007) and Adubi & Okunmadewa (1999) concluded that foreign exchange rate is a determinant of export trade and economic growth in Nigeria. Similarly, Lama & Medina (2010) observed a coincidence in exchange rate appreciation with a contraction of 3% in the country’s gross domestic product in the manufacturing sector; with a 2% average decline in manufacturing GDP over a 20 year period characterized foreign exchange rate appreciation. Although, carrying attendant risks, foreign exchange rate movement are monetary policy instruments to achieve export growth, economic growth and development of any nation (cited in Umaru, et al, 2013).

Citing Itumo (2016) naira loss of value: since the advent of the recent fall in crude oil price at the global level that began about mid-2014, the naira has lost value, moving from about 170 naira to $1 to the first quarter of 2016 when the naira pitched at 400 naira to $1 at the parallel market. At the central bank of Nigeria’s official price, the naira equally slipped downward. The government with the conviction that the naira should not be devalued continued to defend the currency on the official exchange rate of 197 to $1 for a long time. But in the second quarter of 2016, the government let go and allowed the exchange rate of the naira to be determined by market forces of demand and supply, especially the interbank rates in Nigeria. The loss of value of the naira is enormous. If drawing from the example above, naira moved from below N175 to $1 in 2014 to about N400 to $1 in first half of 2016. Implicitly, naira loss of value could be adjudged to be more than hundred percent. The impact of naira’s loss of value had been enormous. Businesses which borrowed money to invest would have to pay more in loan refunds. The loss of value of the naira also affected the Nigerian stock market which shed value of market capitalization over time as a result of the loss of value of various stocks. Early in 2015, market investors had thought that the stock at the year end of 2015 would be up, but in a disappointing turn of event, the market ended the year lower than it started. The public sector workers in Nigeria, under the umbrella of the Nigeria labour Congress have in 2016 asked for a pay raise as a result of the loss of value of naira and their sustained argument that the current minimum wage of the nation at below one hundred dollars ($100) does not represent a living wage with which workers would survive (Itumo, 2016).

In addition, taking into consideration the fluctuation of the Nigerian currency (Naira) from the time a new administration emerged in 2015, it is observed that the devaluation of the Naira is an intentional strategy by the Central bank of Nigeria in that it is believed to drive innovation leading to manufacturing which will finally result to a diversified export base. This strategy stifles importation in that it discourages importers in their multitude since the price paid on import duties are exorbitant and encourages exportation since the price for exporting is on the low. Thus, enjoying the advantage of balance of trade where the degree of exportation exceeds that of importation.

2.2.6. Government Strategies to Promote the Non-oil Sector

According to Onodugo, et al (2013), the non-oil sector comprises of those groups with economic activities differing from oil and gas sectors such as the manufacturing, tourism, agriculture, health, real estate, telecommunication, service and construction sector. A decade from independence was characterized by the exports of non-oil products especially agricultural commodities such as cocoa, groundnut, rubber, cotton, coffee, cattle, hides and skin which dominated trade until the 1970s that was characterized by a boom in the oil price which led to a neglect of the non-oil sector and tended towards the embrace of petroleum mono-cultural economy. Thus, while petroleum export was growing, non-oil export drastically declined (Onodugo, et al, 2013). This has informed the decision of the Nigerian government to adopt certain measures believed to ensure diversity in the export base of the Nigerian economy. Certain policies were implemented to address the issue of mono-culture. Such policies are mentioned below.

2.2.7. The Nigerian export promotion council

The Nigerian Export Promotion Council (NEPC) was established in 1976. According to Abebefe (1995) in Adenugba and Sotubo (2013), it is charged with the following responsibilities:

- To champion the promotion and development of exportation via the provision of a blueprint which entails plans that advances the course of trade exports in Nigeria.
- To serve as a consultant to FGN on matters that involve pointing out viable industries with the prospects for exportation.
- To provide assistance to FGN by creating the necessary infrastructures such as incentives that will aid exportation.

2.2.8. Decree no. 18 of 1986

This section of the constitution talks about export incentives and other provisions pertaining export led growth.

According to CBN (2010), this decree was declared on the 11th of July,1986 which further brought about the establishment of institutions and programmes that were solely aimed at promoting non-oil commodities for export. Adenuga and Sotubo (2013) holds that “the decree provided for the establishment of three funds; Export Development Fund, Export Expansion Grant Fund and Export Adjustment Scheme Fund” (Adenugba & Sotubo, 2013).

2.2.9. The NEXIM bank

The Nigerian export and Import bank known as the NEXIM bank for short was founded in 1991 for the sole aim of providing funds and charged with the responsibility of contributing to export growth and contribution to the diversification of the country’s economy and finally, to ensure a structural balance.

2.3. Export processing zones

The decree no. 34 of 1991 constitution under the regime of Babangida gave rise to the export processing zones. According to Afeikhana (1996) An Export Processing Zone (EPZ) is a special enclave outside a nation’s normal custom barriers where foreign and domestic firms may manufacture or assemble goods for export without being subjected to the normal customs duties on imported raw materials and finished products present in that economy; firms operating within the zone are normally exempted from industrial regulation applying within the domestic economy, especially with regards to foreign ownership of firms, repatriation of profits, employments of nationals, access of foreign exchange, etc (cited in Adenugba, 2013).

Adenugba (2013) holds that, the numerous institutions and promulgated policies which FGN has adopted in order to encourage the exportation of non-oil commodities have produced unsatisfactory results. According to Ogunkola, et al (2006), “the proportion of oil to total exports and concluded that since crude oil accounted for over 90.0% of total export, therefore all efforts directed at diversifying export from oil to non-oil products are yet to materialize.”

2.3.1. Challenges of Economic Diversification in Nigeria

According to Anyaehei and Areji (2015), there have been a whole lot of strategies provided by the Nigerian government to tackle the problem of mono-economy. Although, efforts have been channeled towards the diversification of the economy, but these efforts have been in futility in that governmental policies in this area have not been effective due to a number of challenges mentioned below.

2.3.2. Macroeconomic Orientation

Anyaehei and Areji (2015) are of the view that the Nigerian economy does not reflect productivity rather, it is characterized by sharing of wealth and who gets what. This orientation is rooted in the nation’s psyche by the easy revenues gotten from extraction of natural resources, especially petroleum. Investment of funds gotten from petroleum resources are not on long term productive ventures. Loans from both government and private sectors operate on high interest rate and can only be economically used for only short term projects. Hence, most of the loaned funds are used for trading (especially importation) which involves high turnover. Consequently, this discourages investments in the industrialization of the economy. A chunk of the country’s revenue goes to the hands of those in the political class who lavish it on ostentatious materials which are mostly imported. Also, resources are wasted on bogus white elephant projects that are often times incomplete and if completed, cannot be maintained resulting to dilapidation and rendering the product useless. They further note that main stream of the economy, the business and working class, are deprived of the necessary resources which can encourage skill acquisition, industrialization and productivity. Those who hold political offices are among the highest paid in the world while the common citizens and workers are among the least paid in the world. This is exactly the reason why many professionals and other elites abandon their areas of specialization and either juggle for political positions or leave the country for a better condition of service. There is urgent need for the nation to re-channel her resources towards productivity and not bureaucracy. Wealth gained from resources should be channeled towards creating productive jobs and industrialization. The importation of foreign goods should be restricted in order to ensure the survival of indigenous industries (Anyaehei and Areji, 2015).

According to Anetekhai (2013), “the key components of macroeconomic policies are fiscal, monetary and trade policies.”

He explains fiscal policies as focusing on budgetary, tax and debt management policy instruments. Budgetary policy influences economic stability and rate of inflation in the economy. These, in turn, influence the climate for the flow of investment, especially foreign private investment. Tax policies that focus on personal and corporate tax rates, tax reliefs, and other tax concessions are key incentives (or disincentives) factors affecting consumption and investment decisions. A favourable corporate tax policy regime enhances after-tax profits and, to that extent, may promote increased investment. A country’s external debt burden affects its international credit rating and its capacity to finance public investment. International credit rating affects the flow of foreign private investment while the level and quality of public investment directly affect the flow of both foreign and domestic private investment (Anetekhai, 2013).

While monetary policies refer to the combination of measures designed to regulate the value, supply and cost of money in the economy, in consonance with the expected level of economic activity. Liquidity, interest rates and foreign exchange rates are the channels through which monetary policy influences economic activities. Liquidity is affected by money supply. Money supply influences credit supply and interest rate (cost of capital). Interest rate, in turn, influences consumption, savings and investment decisions in the economy. Basically, the existence of interest and exchange rate differentials, resulting frommonetary policy measures, induces substitution between domestic and foreign assets (foreign currencies, bonds, securities real estate, etc) as well as domestic and foreign goods and services (CBN, 1997). Since 1986, the main instruments of market-based monetary policies have included the open market operations (OMO), changes in reserve requirements and discount policy. Open market operations involve the discretionary power of the CBN to purchase or sell securities in the financial markets in order to influence the volume of liquidity and levels of interest rates that ultimately affect money supply (Anetekhai, 2013).

Finally, he says that trade policies are a very important component of structural adjustment policies. The main focus of trade policies is on measures to regulate export and import trade through such measures as tariffs, export and import quotas and prohibitions. They influence the investment climate in many ways. For example, a liberal trade policy constitutes an incentive for foreign investors who may need to import raw materials and / or export products. But a protectionist trade policy may also serve as an incentive for investors in non-tradable products that are largely locally consumed, or investors in import -substitute products (Anetekhai, 2013).

2.3.3. Poor Infrastructure

This is another challenge militating against sustainable development and the diversification of the Nigerian economy. Development and diversification of Nigerian economy face the challenge of poor economic and social infrastructure. Bad road network, erratic power supply, scarce potable water, poor healthcare facilities, poor transportation and communication network, scarcity of investible fund, and poor and unstable educational system are among the main constraints to economic development and diversification of the economy. Nigeria needs to invest its resources wisely on technological development, skill acquisition and human development, and provision of economic and social infrastructure for her to be on the path of sustainable development. An improved infrastructure will create an avenue for innovation and productivity among her dense population which will in turn boost the production of goods and services for both domestic consumption and for export (Anyaehei and Areji, 2015).

2.3.4. Poor Corporate Governance and Institutions

It is apparent that the Nigerian government has the intention for economic diversification but lacks commitment. Anyaehei and Areji (2015) believe that to ensure a diversified economy, it is paramount for the government to be seriously committed to the course. The poor state of both corporate governance and institutions in the country is due to poor ethical standards in both public and private organizations which in turn frustrate the achievement of the goals of different economic and social policies. They further hold that, the Nigerian government has implemented numerous policies over the years to ensure economic development and diversification but most of these policies yielded marginal effect as they were truncated along the course due to weak institutions and political instability occasioned by personal and sectional interests (Anyaehei and Areji, 2015).

2.3.5. Endemic Corruption and Mismanagement of Resources

As Anyaehei and Areji (2015) rightly puts it, that “the endemic nature of corruption in Nigeria makes it very difficult to effectively manage the nation’s economy and sustain any policy that will transform the economy.” They hold that the policies implemented and the structure of the economy is designed to satisfy certain individual or sectional interests. It is no news that huge earnings from the country’s resources are shared between a few which robs the common citizens’ significant impact on their living standard. Nigeria is a place where there are millionaires and billionaires who cannot legitimately provide evidence on how they accrued their wealth. They enjoy nepotistic advantages since they are friends to the government. Thus, this endemic corruption denies the country of revenue to generate infrastructural and economic development (Anyaehei and Areji, 2015).

2.3.6. Poor and Unstable Educational System

Citing Anyaehei and Areji (2015) the Nigerian educational system is tailored to bureaucracy and not to productivity. Nigerian educational system produces educated graduates without skills. Certificate acquisition is treasured above skill and productivity. It is unfortunate that the nation is playing down skill acquisition and technological institutions for universities. This has led to massive pool of unemployed graduates which continue to strain the economy. The educational system needs to be restructured to produce the right graduates with requisite skills for the economy. Again, the educational system has to be well funded to create the enabling environment for academic exercise and put an end to incessant disruptions of academic activities (Anyaehei and Areji, 2015).

2.4. Theoretical Review

This aspect reviews certain key theories that can be used to explain economic diversification. However, only one will be picked to explain this work.

As provided by Abogan, et al (2014), development literature is centered on the linkage between oil, non-oil export and economic growth. The central point focuses on how some of the components of non-oil export affect economic growth in Nigeria. Recently, there have been a resurface of the application of the endogenous growth theory which is found in the works of Moosa (2002), Devarajan, et al (1996). Although, one of the pioneering authors in their original contribution are the works of Barro (1990) and later Futagam, et al (1993). In Barro’s work, he made use of the endogenous growth model to find a linkage between public revenues / spending and economic growth which Abogan, et al (2014) linked with the relationship that exist between non-oil export and economic growth in Nigeria in their research work. (Abogan, et al, 2014).

2.4.1. The Theory of absolute advantage

The theory of Absolute Advantage was propounded by Adam Smith in 1776 in his publication An Inquiry into the Nature and Causes of the Wealth of Nations. According to Adenugba and Sotubo (2013), “this theory uses a two by two by two model, i.e. there are two countries involved in the trading of two commodities and using only two factors of production; labour and capital. The theory says that a country should export products in which it is more productive or efficient than other countries it’ is in trade relations with” This means that “goods for which it can produce more output per unit of input than others can (i.e. in which it has an absolute advantage) while importing those goods where it is less productive than other countries” (Adenugba & Sotubo, 2013). “Absolute advantage means the ability of a country to produce a larger quantity of a good with the same amount of resources as another country.” The country’s absolute advantage may be due to the nature of its resources or to its production skills (Adenugba & Sotubo, 2013). According to Smith, “each nation benefits by specializing in the production of the good that it produces at a lower cost than the other nation, while importing the good that it produces at a higher cost. This will increase specialization, world output and the gains from trade” (Adenugba and Sotubo, 2013). “According to this theory, foreign trade is a positive-sum game, because both countries involved will benefit from the trade. Thus, a nation need not gain at the expense of other nation, as all nations could gain simultaneously” (Adenugba & Sotubo, 2013). “However, the question of whether or not to trade when one of the two countries trading has an absolute advantage in the production of the two commodities. Should trade still take place when one partner can produce both commodities more efficiently than the other partner? The theory failed to answer this question satisfactorily thus, giving rise to Ricardo’s theory of Comparative Advantage.” (Adenugba & Sotubo, 2013).

2.4.2. The Theory of comparative advantage

This theory is credited to David Ricardo who propounded it in 1817 after a thorough perusal of Adam Smith’s work. Ricardo was not satisfied with the vagueness of Adam Smith’s theory (Adenugba and Sotudo, 2013). Thus, filling the lacunar, Adenugba and Sotudo (2013) explains that according to Ricardo's theory of comparative advantage, even if a nation has an absolute cost disadvantage in the production of both goods, there still exists a basis for mutually beneficial trade. The less efficient nation should specialize in the production and exportation of the good in which it is relatively less inefficient (where its absolute disadvantage is least) while the more efficient nation should specialize in the production and exportation of the good in which it is relatively more efficient (where its absolute advantage is greatest). This theory proved to be better than Smith’s absolute advantage theory because it is possible for a nation not to have an absolute advantage in anything but it is not possible for one nation to have a comparative advantage in everything and the other nation to have a comparative advantage in nothing. That is, because comparative advantage depends on relative costs (Carbaugh, 2004 in Adenugba and Sotubo, 2013). Therefore, for the purpose of this work, the Ricardian theory of comparative advantage will be used in explaining a non-oil export commodity. The theory of comparative advantage is picked above the absolute advantage theory of Adam Smith because, it is evident that Nigeria has an absolute advantage of exporting crude oil to nations with an absolute disadvantage of crude oil but since crude oil price has the disadvantage of fluctuating in the global market and the economy of Nigeria is solely dependent on it, it is wise we look beyond oil exports which definitely will diversify the economy and save her from the pangs of mono-culture. In the process of looking beyond oil export for non-oil export commodities, the theory of comparative advantage comes in to play, in that those non-oil commodities of which Nigeria has a comparative advantage or those commodities in which Nigeria can produce efficiently or those commodities in which a low cost of production generates a massive output compared to other countries’ should be looked into and measures set in motion to set them on a course of exportation. Such product is the African Catfish which Nigeria is the leading producer of in the world according to (FAO Fishing Statistics, 2006).

The framework of analysis is based on the theory of Comparative Advantage which was propounded by David Ricardo in 1817 as a counter to Adam Smith's theory of Absolute advantage. Since this theory talks about the ability of a country to produce those products in which it has a low marginal cost or opportunity cost compared to other countries. This theory was preferred to the theory of Absolute advantage since a country could have more than one commodity in which it has an absolute advantage over other countries it is in trade relations with. Adam Smith's argument was based on one commodity in which a state has high efficiency in producing while Ricardo's theory of comparative advantage answers the question - 'what if that country has more than one commodity in which it has high efficiency in producing?' And since Nigeria potentially has the ability to efficiently produce African catfish amidst other commodities as against her African counterparts, this is solely the reason why this theory was picked in explaining this work (Maneschi, 1998). As old as this theory is, it is the most popular in International trade literature and despite scholarly critic as against its benefits, contemporary scholars like development economist Ha-Joon Chang supports and embraces the idea that every country benefits from free trade and in his work, Bad Samaritans,

According to Chang (2007) Ricardo's theory is absolutely right- within its narrow confines. His theory correctly says that, accepting their current levels of technology as given, it is better for countries to specialize in things that they are relatively better at. One cannot argue with that. His theory fails when a country wants to acquire more advanced technologies- that is, when it wants to develop its economy. It takes time and experience to absorb new technologies, so technologically backward producers need a period of protection from international competition during this period of learning. Such protection is costly, because the country is giving up the chance to import better and cheaper products. However, it is a price that has to be paid if it wants to develop advanced industries. Ricardo's theory is, thus seen, for those who accept the status quo but not for those who want to change it. (p. 30-31)

From a keen observation, it is noticed that David Ricardo’s theory of absolute advantage provides room for diversity in that if the price of one commodity collapses in the international market, other commodities with strong comparative advantages could serve as absorber for the country’s economy.

Also, it is important to note that since Nigeria leads in the production of African catfish, it has a strong comparative advantage to every other country in the world particularly country that demand this commodity.

2.5. The African Catfish Aquaculture Industry in Nigeria

Aquaculture can be defined as the rational rearing of fish in an enclosed and fairly shallow body of water where all its life processes can be controlled. It is an important sector for the nation’s economic development, at a time when government is seeking for ways to diversify the economy, from being purely oil based. It is a potential means of contributing to the food security of the nation, directly by producing fish for food and indirectly by generating employment for the teaming unemployed populace, save foreign exchange and generate foreign exchange through export of fish and fish product (Adewumi, 2015).

Adebayo and Daramola (2013) provides that- “the story of aquaculture in Nigeria is essentially the story of catfish culture and the hope of fish supply in Nigeria hangs on its development and culture.” Adebayo and Daramola’s quote suggests that the African catfish is the most engaged and popular species in Nigeria’s aquaculture industry.

Further citing Adebayo and Daramola (2013), Food and Agriculture Organization (2002), made a statement that fisheries products represented a major source of export revenue for developing countries, amounting to over US $ 20 billion per annum in late 1990s. This exceeded the values obtained from the exports of meat, dairy, cereals, vegetables, fruit, sugar, coffee, tobacco and oilseeds in 1997 from developing countries (International Trade Centre, 2002). However, F.A.O (2007), estimated that Nigeria imports about 560,000 tonnes of fish estimated at about $400 million annually while annual domestic fish supply in Nigeria stands at about 400,000 tonnes. This makes Nigeria one of the largest importers of fish in the developing world (Adebayo & Daramola, 2013).

The information above proves that the African catfish aquaculture has the potential of positively contributing to the growth of Nigeria’s economy. However, importation excesses needs to be drastically reduced and those monies used in importing what the country is capable of producing on a massive scale should be invested into this sector. This will further meet the demand of catfish domestically and of course if investment is maintained, there tends to be a spillover which will lead to sourcing market for this commodity outside the borders of the country.

Meanwhile, Anetekhai (2013) is cited as saying that catfish is the major fish cultured in Nigeria because it is found all over the Country, eaten by most tribes, resistant to harsh environmental conditions, commands good price, tasty and can be kept alive for days during marketing. Estimates put the current production output of Clarias gariepinus in the Country at over 253,898 metric tonnes per year (Anetekhai, 2013).

This citation gives credit to the information provided by Adebayo and Daramola (2013) on how lucrative the African catfish venture is by providing further information based on the reasons.

2.5.1. Origin of the African Catfish

It is paramount to note that the African Catfish in itself has over a hundred different species. There have been systematic researches based on morphological, anatomical and biographical studies in identifying these species. The earliest of these researches is that of David (1935) cited in (FAO, 2006) who identified 5 species namely:

- Clarias anguillarus
- Clarias senegalensis
- Clarias lazera
- Clarias mossambicus
- Clarias gariepinus

It is recorded in literature that the existence of the African catfish dates back many centuries but no actual date of its origin is recorded. Although, its first domestication trial was in the 1950’s with various experimentations over the years until the 1970’s which ushered in the African catfish as the most desirable aquaculture species particularly in Central and Western Africa (Inter African Bureau For Animal Resources, 2015).

40 African catfish gotten from the wild waters of Central African Republic served as the first brood stock that were introduced to Europe in 1976. In 1985, the commercial farming of this species commenced in the process known as the recirculation aquaculture systems (RAS) which simply means the transfer of an aquaculture commodity to an artificial habitat mostly enclosed like the aquaria.

Later on, brood stocks from Israel and South Africa were introduced to Europe. They were crossed to produce fingerlings which resulted in the present cultured “Dutch species” African catfish (Roosendaal, 2012).

It is apparent that African catfish as the name implies originated from Africa and was introduced to the world. This simply means that wherever catfish is found on earth, it has its origin from the African waters.

Anetekhai (2013) provides key information about broodstocks in Nigeria. According to him expensive good quality feed: There are no quality feeds developed for broodstocks. The hatcheries operators tend to feed their broodstock with feed meant for grow out. This affects the quality and quantity of eggs produced by the catfish i.e. reduction in ratio of eggs/gram body weight and hatchability. - Limited management knowledge: Hatchery operators use fish that are immature (less 1 year and less 1 kg in weight) resulting in low quality eggs which may hatch but die within a week. This has become a common occurrence in the hatchery business. There has equally being inbreeding with farmers selecting from the same cohort. - Water quality: Broodstock requires water with temperature in the range 27-30C, pH 6.5-8.5, with water depth of about 1-2 meters. This conditions are usually absent during the dry season and harmattan when temperature could drop below 25C in the night and as high as 33C in the afternoon. This affects the physiology of the catfish, feed conversion to egg efficiency, resulting in very low gonado-somatic index. In extreme situation, there will be complete egg reabsorption. This is one of the reasons why catfish are seasonal in carrying eggs when not properly managed. It is suggested that competent hands be identified by the public sector to handle broodstock production and management (Anetekhai, 2013).

2.5.2. Governmental Projects pertaining to Catfish Aquaculture

Deacon Omoboni, one of the interviewee stated that the Nigerian government took advantage of the catfish boom period by implementing policies of assistance to the catfish aquaculture industry (Deacon Omoboni, 2017). This information is corroborated with that of Anetekhai (2013) who states that:

“Catfish Farming was dominated by Government and its agencies (State and Federal) with direct involvement in Catfish production.” The government provided technical assistance in the construction of fish ponds and provided both fingerlings and feeds. Demonstration farms were established by the government between the period of 1971 and 1981. These farms were situated in the South-West and in the South-East. Ibadan and Akure enjoyed the benefit of hosting it in the South-West while Okigwe in Imo state, Itu in AkwaIbom and Opobo in Rivers state were privileged to host it in the South-East.

A four zonal seed production and training centers were also established by the government. These were in Oyo (South-West), Okigwe (South-East) Panyam (North- East) and Mando- Kaduna (North-West) between the period of 1978 and 1980.

The aforementioned projects were collaboratively sponsored by the Federal Department of Fisheries and the UNDP. According to Anetekhai (2013), The UNDP contribution was derived from the Freshwater Fish Farming Development and Demonstration Project- UNDP/FAO /79/059. In addition, the federal government with the help of FAO established the African Regional Aquaculture Centre (ARAC) at Aluu, Port Harcourt which was charged with the responsibility of providing research support and training for aquaculture development in Sub-Saharan Africa.

Also, the River Basin Development Authorities (RBDA) were established and charged with the responsibility of running commercial Catfish Farms and the function of proving the commercial value of aquaculture in Nigeria. These farms were successful at inception based on the fact that the expertise of expatriates was utilized and funding came from external sources. Anetekhai (2013) further reveals that the period from 1981 to 1991 sparked the interest of both private sector and state government to engage in the activities of aquaculture based on the immense dividend the sector yielded. However, the period between 1991 and 2001 experienced a drastic decline in the assistance of the Nigerian government in that the government started viewing aquaculture as a business concern. Animal husbandry, crop production and other sub-sectors of agriculture were also viewed in the same vein. Thus, this sector started yielding marginal success of Government Farms. This is reflected in the Agricultural Development Programs (ADP) championed in most of the States despite the huge support provided by the World Bank. In contemporary Nigeria today, the case is that while Government provides enabling environment such as signing treaties, the private sector is charged with commercial production (Anetekhai, 2013)

2.5.3. Consumption Styles

Citing Anetekhai (2013) major form of processing are smoking and drying. Refrigeration or freezing is scarce since the catfish can be alive over a week in a bow of water with regular changing of water. Smoking is done using fire wood or charcoal as source of energy. The catfish is usually smoked until the moisture content is reduced to about 20 -30% depending on number of hours spent in drying. Modern smoking kiln has been developed by NIOMER and are already in use. This smoking kiln is said to have capacity for smoking about 200 kg of catfish/day using charcoal as source of energy (Anetekhai, 2013).

There are various ways of consuming the African catfish. This depends on the consumers’ choice. Various consumption styles are discussed below.

2.5.4. Boiled and Cooked With Spices

This style is commonly called ‘pepper soup’ in Nigeria. The table size is usually used in preparing the African catfish in this way. Virtually every bar, hotels and exotic restaurants sell the African catfish in this style due to a very high demand from consumers.

2.5.5. Grilled

This style is new, although it is becoming widely accepted due to its unique taste and it is usually garnished with fried sweet potato and a chili sauce. The African catfish is wrapped in a foil paper after spreading the chili sauce around it then placed on the grill to heat up for a few minute.

2.5.6. Smoked

The smoked catfish is simply the process of either oven drying the African catfish or smoking to a level where there is no water in the fish anymore. This style is used in the exportation of African catfish so as to ensure preservation. It is obtained that a well prepared smoked catfish has a shelf life of at least 4-6 months (Oluwajimi, 2017).

2.5.7. African Catfish Cultivation

The African catfish cultivation involves the process from procreation or producing seed to stocking in a prepared pond and from feeding to the point of cropping or harvesting. Some catfish farms produce their products themselves while others buy from those who produce fingerlings. The first stage of the hatching result is known as the fry stage where brownish tiny particle-looking-like products are seen moving at the base of the hatchery can. The second stage of the product is referred to as the fingerling which takes about 3-4 weeks from the stage of the fry. From this stage, sales could be made. Some farmers prefer to buy fingerlings so they could feed them to their taste and to see if the products are good while other farmers prefer going for the third level known as juvenile. Most catfish business people go for juvenile simply because it is reasonably bigger than the fingerling and most believe that they will save more on feeding if they purchase the juvenile. According to Adewumi and Olaleye (2011), “In Nigeria, the minimum fish fingerling requirement is 4.3 billion while the total fingerling supply from all sources is 55.8 million” (Adewumi & Olaleye, 2011). This points at the inefficiency toward the aquaculture sector in Nigeria despite the huge potential.

2.5.8. African Catfish Feed

There are various types of African catfish feed. Most of these feeds are imported. That is, they are produced abroad. However, there have been various locally made feed companies springing forth particularly for the sole purpose of circumventing the hike in price of these foreign feeds based on the current unfavorable exchange rate. Although, the difference between the local feed and the foreign feed is glaring in that the local feed sinks into the pond while the foreign feed floats on the pond. This signifies a disadvantage and an advantage. The disadvantage is due to the fact that the local feed sinks. African catfish sometimes do not respond to feeding but when they do later, the feed that was initially served won’t be accessible due to sinking, unlike the foreign feed with the advantage of being able to float on water. It should be of note that the African catfish feed varies in size. The fingerling feeds on 0.5 mm while the juvenile feeds on 1-2 mm and the moderately medium sized catfish feeds on 3 mm and above. It is obtained that the 0.5 mm is the most nutritious feed making it the feed with the highest price tag.

Anetekhai (2013) provides information that corroborates the information already provided above about the African catfish feed. He is cited as saying that catfish feed is the most important and critical input to achieving success in catfish farming after stocking of good quality juveniles that will respond faster. It constitutes over 80% of cost of production. They are sourced mainly from foreign Countries like Holland, USA, Germany, India, and Brazil etc. The price ranges from N250-N350/kg and can be higher when there is scarcity. There are also local producers but the locally produced feeds are yet to be perfected and are equally expensive. The local feeds has low digestibility, poor feed conversion efficiency with majority of them sinking to the bottom. In addition, the pelleting is rough and irregular in shape (Anetekhai, 2013).

2.5.9. Economy of African Catfish

The African catfish aquaculture is a lucrative venture. From what was obtained from an African catfish farmer in the field, what you feed your fish is what you get. That is, the weight of the fish is determined by the amount of feed the farmer provides the catfish. For instance, if a catfish farmer feeds his catfish with a 100 kg of feed, it automatically converts to the weight of the catfish giving it an additional 100 kg. This simply implies that the African catfish aquaculture venture is a business of weight. Therefore pointing to the economics of the African catfish that is, what you put in is what you get back; ceteris paribus (provided everything works out as planned) plus the immense potential profit as explained under the viability of African catfish. Also, the fact that money could be made from the numerous platforms the African catfish provides. Such as from the fingerling platform which is currently sold at 5 Naira during the time of this study and the juvenile sold at 10-12 Naira. From the field work, it was observed that certain fish farmers are not interested in stocking ponds, feeding for some time and then cropping. These farmers are concerned with the production of catfish and the sales of fingerlings and juvenile. Also, there is what is known as brood stock. Brood stock refers to very matured male and female African catfish usually more than a year old, they could be a year old. These mature African catfish are used for the production of fingerlings. I was opportune to experience a hatching process. It was observed that the male brood stock usually is sacrificed during this process as what is called the “milt” is cut out and spread on the eggs gotten from the mature female. The process of squeezing out eggs from the mature female is known as “spawning”. As at the time of this research, a good brood stock will go for 8000 Naira- this is also a lucrative platform. Second the popular platform of stocking, feeding and selling on cropping. This platform provides two sub-platforms. The first one is the sale of smoke fish. This process involves feeding for 2-3 months then sales are made to those women who smoke them then sell (another platform). Then the final platform involves feeding the catfish for about 4-5 months for the sole purpose of selling as table size. The table size buyers are those who are known for making “pepper soup”. The African catfish provides various lucrative platforms and if exploited well, the returns will be alarming.

According to the Federal department of Fishery, a projection is made for the population and demand of this commodity, particularly the African catfish from 2010- 2025.

Table 1. Projected population and fish demand 2017 to 2025

Abbildung in dieser Leseprobe nicht enthalten

Source: FDF, 2007 in (Adewumi & Olaleye, 2011)

2.6. Cryopreservation

This is a counter technique to the popular sacrificial process involved in the production of seed or procreation of the African catfish. As provided above that the common process of producing catfish seed involves killing the male brood stock in the activity of cutting it to bring out the “milt” which is then spread over the eggs spawned from the female brood stock. It is observed that while the male brood stock is sacrificed, the female brood stock remains alive and could be used in procreation after few months of replenishing.

There is a counter technique to this process. The counter technique is known as the Cryopreservation method which involves preserving the life of the male brood stock. Information provided by Olanrewaju, et al (2015) states that:

The process of induced propagation of African catfish was still based on long standing technique of sacrificing male for fertilization with its attendant problems. Cryopreservation is now being explored globally to solve these challenges and promotes viable aquaculture production as obtained in livestock industry. But the level of adoption of this technology is relatively low in Nigeria hence the need for this awareness. A successful and sustainable cryopreservation method will require integrated practices for sample collection, refrigerated storage, freezing, thawing, rule for use and disposal, transfer agreements and database development. Some of these procedures have been standardized for catfish with room for improvement before commercial production commenced [sic] (Olanrewaju & Orisasona, 2015).

Citing Omitogun et al. (2006) in Omitogun et al. (2012) the production of fish in Nigeria is still very small and cannot sufficiently satisfy the increasing demand of its population of 140 million. To solve the populace’s high demand for fish, Nigerians resort to aquaculture which is currently faced with major constraints including lack of fish seed and quality of feed. The scarcity of good broodstock has necessitated the need to conserve the fish genetic resources which are wasted during natural and artificial induced spawning process of fish breeding. One way of expanding aquaculture in Nigeria is by devising a means of preserving genetic resources of our broodstock for all year round supply of fish seed through cryopreservation (Omitogun et al., 2006 in Omitogun et al., 2012).

In a country where the demand for catfish exceeds the supply, it is wise to devise ways and encourage this way such as the method of cryopreservation which entails the preservation of the male broodstock as opposing the popular method that involves sacrificing the male broodstock.

2.7. The Lucrative Benefits of African Cat Fish

In the words of Kofi Annan, aquaculture offers an increasingly attractive solution to meeting food needs. Aquaculture is already the fastest growing animal food producing sector, but the potential for further expansion is great. I do not ask you to change direction but I ask you to accelerate progress (Annan, 2012).

These words of Kofi Annan signify the importance of the aquaculture sector to the Nigerian economy and can by validated by the research of Fakoya, et al (2015) that resulted in the believe that aquaculture is the only viable option to guarantee food security and generate a chain of multipliers effects on the Nigerian economy and other countries in the Sub-Saharan Region (SSR). Adewumi and Olaleye (2010) provide that “the story of aquaculture in Nigeria is essentially the story of catfish culture and the hope of fish supply in Nigeria hangs on its development and culture” however; the potential of this sector has not been fully exploited. This therefore calls for the Nigerian government to look into this sector because of its lucrative tendencies in generating immense wealth and also contributing to the diversification of the mono-culture economy of Nigeria which can also address the challenge of unemployment. Since Nigeria has a population advantage and her high demand for fish positions her on the path of a strong market compared to other African countries (Miller and Atanda, 2011), this indeed proves the fact that she is the leading producer of fish in Africa which has a whole lot of untapped potentials which her economy could abundantly benefit from. To further prove the lucrative benefit of the aquaculture sector,

It is reported that 30 per cent of new investments in agriculture programs are in fish farming with bankers now more informed and willing to consider loans in this sub-sector. With high demand for fresh fish and consumer preference for fresh water catfish (Clarias gariepinus), the Nigerian private sector launched fish farming in earnest around 2000, with the rehabilitation of many abandoned fish farms and new investments in others. By 2003, a nation-wide inventory totalled 2,642 fish farms (Miller, 2003; AIFP, 2004; Brummett, 2007) with annual production estimated at some 30,000mt by the Federal Department of Fisheries (FDF, 2007). Increased market demand has dramatically impacted annual production which has now reached some 120,000mt annually, whereas tilapia production is less than 5,000mt per year (Miller and Atanda, 2011).

Based on the above citation, it can be deduced that the African Catfish has more market value than other species of fish due to its high demand. This next citation also proves this fact coupled with the pioneering innovations Nigeria has displayed in the past. Miller and Atanda (2011) further record that The Nigerian experience is a useful study, as it brings into focus several innovative ‘firsts’ in African aquaculture development. Responsibility for these innovations was primarily attributable to the awakening of a range of private sector agents, the strong consumer preference for catfish and the consequent market opportunity. Much pond infrastructure had already existed and was relatively easily put into production, moving from subsistence low-input tilapia culture to more intensive and commercialized catfish farming (Miller and Atanda, 2011).

Again, the economic advantage of Catfish over tilapia is reflected in the above citation.

The essentiality of fish has informed its lucrativeness in that it serves as a vital source of food, income, employment, and even as recreation for people around the world. It also serves as a good source for protein for both man and animals in developed and developing economies. Studies have shown that in Nigeria, the current demand for fish is about four times the level of local production thus, reflecting the underperformance of this sector. Research also finds out that Humans consume approximately 80 percent of fish as food while the remaining 20 percent goes into the manufacturing of products such as fish oil, fertilizers, and animal food. Fisheries and aquaculture are an integral part of agriculture which have been found to have positive effect on the country’s GDP and has the potential to solve unemployment woes provided it is optimally managed (Ozigbo, et al, 2014).

Graaf and Janssen (1996) cited in Okechi (2004) talk about the possibility of a year round supply of African catfish. That is, due to artificial reproduction, there is the tendency of it always readily available. Okechi also lists certain benefits of this aquatic species.

In the culture of this species artificial reproduction ensures a year-round supply of fish seed. The African catfish is relatively insensitive to disease and does not have high water quality requirements. It tolerates high concentrations in the water of ammonia (NH3) and nitrite (NO2). Low oxygen concentrations are tolerated because the fish utilizes atmospheric as well as dissolved oxygen, (well-developed air breathing organs). It grows fast and feeds on a large variety of agriculture by products (cited in Okechi, 2004).

Based on these benefits, the African catfish is on a higher demand compared to other aquatic species. These facts have contributed to its lucrativeness. A study by FAO (2003) on the UK market for West African smoked catfish from Nigeria and other traditional exporting fishery countries shows that majority of smoked fish is sold to consumers through Afro-Caribbean grocery shops and Afro-Caribbean restaurants in London. It was also found that some of these importers have their own grocery shops. FAO further records that retailers of the smoked fish are concentrated in certain areas of London such as Brixton, Peckham, Dalston in the south and Finsbury Park in the north. It was observed that six retailers own groceries in Brixton Market alone, four run by Nigerians, one by Ghanaians and one by Sierra Leoneans (FAO, 2003). These pieces of information about the aquaculture, particularly the African catfish suggests the potential benefits which if can be exploited by the Nigerian government will benefit the economy and deliver it from the pangs of mono-culture. Also, it is observed that most exporters of African catfish are in the private sector. The government should endeavor to put measures in place by providing incentives such as funds in order to increase the scale of exportation. As in the words of Adewumi (2015), “It is an important sector for the nation’s economic development, at a time when government is seeking for ways to diversify the economy, from being purely oil based”.

2.8. Concluding Remarks on Nigeria’s Aquaculture Sector

According to Bada and Rahji, 2010, aquaculture is about a century old in Africa. The yield from this sub sector in Africa has remained low over the years despite the vast potentials in the continent. (Jamu and Ayinla, 2003; Machena and Moehl, 2001). Nigeria is the largest culture fish producer in Africa with production ranging from 17,700 to 25,000 metric tonnes. (Machena and Moehl, 2001; Ridler and Hishamunda 2001) (Bada & Rahji, 2010).

Remarking the above content, it is deduced that viability, profitability and a high degree of economic development potentials are embedded in the sector of Nigeria’s aquaculture. Oyeleye (2007) in Fakoya, et al (2009) attributes the lack of a consistent framework in this industry based on the fact that “there is a growing concern on the possibility of a glut in farmed catfishes in Nigeria’s domestic market despite increasing demand for fish and fishery products.” And further states that “Many small –scale farmers are actively engaged in virtually all facets of catfish farming ranging from seed or fingerling production, tablesize or growers production to feedmilling” (Oyeleye 2007) in (Fakoya, Sokefun, Owodeinde, Akintola, & Adewolu, 2009).

Finally, as recorded by Gordon, et al (2013), Sub-Saharan African aquaculture is currently dominated by Nigeria and Uganda, the region has experienced very rapid growth in output, albeit from a very low base. Other countries are also likely to expand output, particularly where producers have good access to urban markets, and where key inputs of feed and seed can be provided at suitable price and quality levels (Gordon & Cambria Finegold, 2013).

Thus, the production base of the aquaculture needs to be expanded and support garnered from the government.

2.9. Summary of Identified Gaps in Literature

It is discovered from the reviewed literature that there is no clear contribution to the attainment of economic diversification of the Nigerian economy but rather, a generality of non-oil export is recommended. This study stands out in that it offers a specific contribution to the economic diversification of the Nigerian economy. Since Nigeria is the world leading producer of African catfish and since European countries yearn for this commodity, it is wise for policy makers to put measures in place that will attend to and exploit the lucrative benefits of this commodity. Also, in contributing to the growing body of academic knowledge, this study observes that the nature of the Nigerian economy is not really mono-cultured as generally implied in literature. This study finds out that the nature of the Nigerian economy is worse than that. Since in the actual sense, Nigeria’s major export is primarily crude oil and it imports fractional products from this exported crude oil. Then it should be seen as a semi-mono-cultural economy since it has no capability to exploit the one singular commodity her economy heavily depends upon to generate more wealth. Thus, countries that depend heavily upon one singular finished product for export should be regarded as a mono-cultured economy.

3. Research Methodology

3.1. Introduction

McGrath (1995) provides that methods refer to those tools, that is, instruments, procedure and techniques engaged by a researcher in gathering information and analysing data. This aspect of the dissertation explains the methods adopted in carrying out the research. Such methods as: data collection, instrument of data collection, population of the study, sampling technique and the technique of data analysis. An outline of the process involved in gathering and collecting data and information for the study is provided.

3.2. Method of Data Collection

This research adopted two methods in sourcing for data. Both the Primary and Secondary methods were utilized. McGrath (1995) holds that no method of collecting data is in itself perfect, that every method has its flaws and strength. Although, when more than one method is used in conducting a research, the flaws are offset by strengthening each method’s weaknesses. Therefore, this research engaged both primary and secondary methods in that information gathered from the field (primary source) corroborated those from secondary sources.

3.3. Primary Source

Within a qualitative research design, the strategy of collecting data commonly entails the action of collecting a large amount of data on a rather small, purposive sample via techniques such as in-depth interviews, participant observation, or focus groups (Hox & Boeije, 2005). Thus, for this research, the primary methods engaged in sourcing for data were in-depth interview and participant observation methods by which interviewees were given the chance to express themselves by reflecting their experiences, views and knowledge. A period of two weeks was engaged in participating in the purposively selected five African catfish farms for the sake of observations. Three African Catfish business persons were interviewed based on their experience on the international trade (exportation) of African catfish. Also, an additional interviewee provided a piece of information as regards the “shelf life” of the dried African catfish making the total number of interviewees four. The primary method of collecting data via indepth-interview was based on the perception that it has a high degree of reliability in social science (Olorunfemi, 2004 cited in Folarin, 2010).

3.4. Secondary Sources

According to Hox and Boeije (2005), the main sources of secondary information are official data archives which are available as files on various platforms such as on CD-ROM and internet. This research relied on a chunk of secondary data derived from online materials such as reports, journals and newspapers which provided useful data that corroborated the experience from the field and information provided by the interviewees.

3.5. Instrument of Data Collection

This study engaged the in-depth interview method in order to get first-hand information from the selected informant practitioners of the African catfish aquaculture industry (farmers and exporters). The in-depth interview method of collecting data is perceived as the best for this study because it helps fulfil the objectives of the research.

3.6. Study Area and Target Population

The study was conducted in Ondo West local government, Ondo State, Nigeria. Ondo West is a Local Government Area in Ondo State, Nigeria. It has an area of 970 km² and a population of 288,868 going by the 2006 census. The predominant activity in this area is aquaculture. Majority of the ponds in this area are stocked with the African Catfish due to its lucrativeness based on high demands from consumers (Ministry of economic planning and budget, 2010). The population of the study comprise of the 22 functioning African catfish ponds in the area of study.

3.7. Sampling Technique

Purposive sampling technique was used in carrying out this study. This study selected 5 ponds out of the 22 ponds based on their consistent productivity and experience in the exportation of African Catfish.

3.8. Technique of Data analysis

The data analysis technique employed for this research is textual analysis and a case study data analysis technique by which a case study provided from secondary source (documentary evidence) was used to analyse qualitative data and information retrieved from the primary source. According to Fawole, et al (2006), “textual analysis involves analysing, evaluating and interpreting written materials” while the case study technique involves analysing data gathered from a small group through observation, interview and documentary evidence (Fawole, et al, 2006). Yin (2014) holds that the case study data analysis technique helps “to improve our social science methods and practices over those of previous generations of scholars”

4. African Catfish Export, a Contribution to Economy Diversification in Nigeria

At independence in 1960, agricultural commodities accounted for up to 83% of export revenue. But, since 1974, agricultural commodities have declined to below 5% of export revenue. The decline did not come from desirable structural transformation of the export sector. Rather, it reflects the decline in the international competitiveness of agricultural exports brought about by the neglect, consequent to the dramatic earnings from crude oil (Eboh, 2015).

This section of the research work attempts to do justice to the raised research questions in chapter one by analyzing qualitatively data garnered from the field work via a case study technique and triangulating these information with contents from secondary sources mostly article journals and reports via a content analyzing technique.

4.1. Economic Implications of a Mono-cultural economy

A mono-cultural economy is one characterized by generating a large chunk of revenue from just one source of export. An epitome of such case is Nigeria that got infested by the Dutch disease from 1973 where she gradually abandoned other sectors of her economy and tended towards a mono-product economy where a huge part of her revenue is generated from only one source at the expense of other potentially valuable sources.

Export trade in Nigeria is majorly characterized by one commodity (crude oil) which is responsible for about 90% of the revenue generated by the FGN. This puts the economy of the country in a potential state of quagmire in that, what if crude oil prices collapse in the global market? And what if Nigeria’s major customers of crude oil desist from purchasing from her? This of course will put the economy of the country in an ailing state bringing about negative implications discussed below.

4.1.1. Recession

A recession simply refers to the event that has an adverse impact on individual’s economic well-being (Lee & Shields, 2011).

Recession is imminent in a mono-cultural economy in that when the commodity heavily dependent on fails or its price crashes, there are no alternative commodities to play the redeemer role, therefore bringing about an economic crunch. From the definition of Lee & Shields (2011), it is observed that everyone citizen of the country practicing a mono-cultural economy stands to be affected. This is the exact reason why everyone in Nigeria complains and blames the government for running a mono-cultural economy.

Dode 2012 records that-the poor show of Nigeria’s economy during the 2007 - 2009 recession was largely caused by the nature of its economic base which has virtually depended on the export of crude oil for more than forty years now. The Nigerian political elite have to a large extent shown lack of foresight and incompetence in preparing for and managing an economy during a recession (Dode, 2012).

4.1.2. Salary Debts

In the case of Nigeria, since the 3 tiers of government are heavily dependent on revenue generated from the mono-product, in the case where the product fails or the price collapses, there will not be enough funds to pay government workers. This fact is corroborated by the statement of the Director-General, Lagos Chambers of Commerce and Industry, Muda Yusuf that majority of the states in Nigeria are over 70 per cent dependent on statutory allocations which makes the impact of declining oil price very profound, adding that this is even more so when the culture of big and profligate spending has been entrenched (Shosanya, 2014).

4.1.3. Exchange Rate Fluctuation

Since exchange rate is dependent on demand and supply of exports, and Nigeria’s major export is the crude oil, all indications point to the fact that a decline in the price of this commodity will affect FOREX. Thus, the rate of Naira to Dollar will slump, depreciate or plunge.

4.1.4. Unemployment

The case of unemployment is in two folds. The first fold points at the fact that since the country tilts toward an industry and abandons other sectors of the economy, while some are opportune to work in oil companies, others either manage in the private sector or are unemployed and secondly, in a case of oil price collapse, foreign oil companies in the country fold up, thereby leading to a massive loss of job.

According to Tunde Sanni, an interviewee, he stated categorically that the mono-cultural nature of the economy can only be tackled by an economy diversification. And that the African Catfish aquaculture is a lucrative venture that can contribute to diversifying the mono-cultural Nigerian economy (Sanni, 2017). This information provided by Tunde Sanni can be triangulated by the statement made by Punam Chuhan-Pole, a World bank Lead economist that “export will be affected unless efforts are made to improve production in other sectors” (Vanguard, 2013). Thus, improving production in the African Catfish aquaculture sector is a good idea since this sector of the economy is lucrative and has potentials of bringing about economic growth and development. And has believed by African catfish farmers, this industry can save the ailing economy of the country.

4.2. Influence of Non-oil Export on Economic Growth and Sustainable Development

Abogan and Akinola (2014) provides that prior to the oil boom period of 1973/1974, agricultural products dominated Nigeria’s economy where over 66% of total export were accounted for by these products namely: groundnuts, palm kernel, palm oil, cocoa, rubber, cotton, coffee, copra, beniseed and others. However, the decline of the non-oil sector was as a result of neglect and lack of competitiveness in the international market which has made this sectors total export output lower than 5% where Nigeria now imports products they were chief at exporting.

It is imperative to note that “exports of commodities are possible when domestic demand for such are satisfied and surpluses exist in commercial quantities” (Abogan & Akinola, 2014)

The African catfish is a non-oil commodity with the potential of positively influencing an economic growth and sustainable development based on observations made from cropping (harvesting) from 5 African catfish farms in Ondo west local government, Ondo State, it is apparent that domestic demand of this commodity is high as consumers and retailers were present to purchase in large number. The first farm sold product weighing 3500 kg, the second farm sold product weighing 7000 kg, the third 4700 kg, the fourth 2007 kg and the fifth pond sold 9800 kg. All sold at the same price of 650 Naira. The number of the buyers amazed me and made me wonder other farms experiences around the country. The demand of this product is on the increase. This has informed the decision of fish farmers to stock more African catfish than other species. This experience can be triangulated by the statement according to the fish site (2012) that “catfish farming in Nigeria is an untapped goldmine based on the fact that there is an ever increasing need for it as the best alternative to meet the protein need of the people” (FishSite, 2012).

Based on the imperative that export is possible only when a commodity has met the domestic need and spillovers are expected to be exchanged for foreign currencies, with the activity experienced at the 5 African catfish farms and the corroborative statement by Fish site, it is deduced that if the African catfish aquaculture sector is given the due attention, it will pass for export excellently since the demand is high and definitely will lead to spill over if enough investment is pumped into this sector. Also, from the information gathered from the informant interview conducted, Tunde Sanni categorically stated the countries that demand for his products. These countries are: U.S.A, Europe(Continent), and the Gulf States comprising of Bahrain, Iraq, Kuwait, Oman, Qatar , Saudi Arabia and the United Arab Emirate (UAE) (Sanni, 2017) If there can be more exporters of this products, provided that there is consistency, it is definite that economic growth and sustainable development will be achieved.

4.3. Challenges to Effective African Catfish Export in Nigeria

Information gathered from the three interviews made was complementary. They all pointed to similar challenges. Deacon Omoboni provided that the present economic crisis has affected prices generally in that the fish feed he used to get for 5000 Naira has sky rocketed to 7000 Naira (for 4 mm) depending on the size. He said this has discouraged production which has affected the ability to export (Deacon Omoboni, 2017).

Madam Pat., who is virtually involved in every platform of the African catfish business, also complained of the exchange rate. In her words, she said “I cannot export at the moment based on customer relationship integrity” she continued by saying she has been selling a kilo of smoked dried catfish for $3.5 USD for about 2 years but cannot export at the same rate based on the loss she will incur. She maintained that changing the price suddenly will bridge trust and she prefers to study the market for some time before deciding on what to do (Madam Pat., 2017).

In the case of Tunde Sanni, lack of trust between buyers and sellers is one challenge while the discouraging policy of the exchange rate is another. In his words, “Foreign sales are made formally as a result of which informal export thrive” that is, African catfish export could be either formal or informal. He is involved in the formal export which does not provide a flexible means of sudden price changes while the informal on the other hand has room for flexibility in price tags (Sanni, 2017).

From the information provided by the three interviewees, it can be inferred that the major challenge is the mono-cultural economy style the country is running. In that oil price slump as affected the exchange rate which has indirectly affected exportation of this product in that the price for every material to set the commodity in motion for exportation has sky rocketed. From the price of fingerlings which used to be 7-10 Naira, now 20 Naira to the price of feed that used to be 5000 Naira , but now 7000 Naira (4mm). Prices vary based on different sizes of feed. This has discouraged export for some while it has slowed export for others.

In addition, considering the information retrieved from a periodical that says “40 percent of smoked fish exported from Africa is detained, returned or destroyed at the U.S. and European ports, due to improper packaging and labeling” (Olumide, 2016). It is clear that this challenge is on the part of the exporter but it is worthy to note this fact.

4.4. Demand for African Catfish

The experience and data gathered from the field indicates a high demand for this product. This fact is corroborated in journal articles such as FishSite (2012) that says “Fish farming in Nigeria is currently a very lucrative business and it is mainly boosted by the continuous rise in the demand for catfish” (FishSite, 2012). Adewumi (2015) also provides that with Nigeria being highly populated, her citizens as at the end of 2012 had a projected fish demand of 2.66 million tonnes of Catfish (Adewumi, 2015).

Although, an interviewee, Tunde Sanni attests to the fact that there is a high demand for African catfish, but domestic production has not been able to meet this demand. This information is corroborated by a statement made by the national president of Catfish Farmers Association of Nigeria (CAFAN), Mr Tayo Akingbolagun that the aquaculture potential in Nigeria is estimated at four million metric tonnes annually as against the expected 2.66 million tonnes (Osehobo, 2015). Tunde Sanni further provided information based on the quantity his farm exports annually. As of the time of the interview, he said he had exported a sum of 60kg smoked catfish in the last 4 weeks. He further said that the quantity exports at the moment is unstable. Although, in the past years, the total quantity of African catfish export he made ranged between 10.4 metric tonnes to 13 metric tonnes. This simply implies that on an average, he sells about 225 kg on a weekly basis.

Deacon Omoboni who has stopped exportation based on the hike in prices of materials needed to set exportation in motion, ranging from the fish feed, to acquiring fingerlings or juveniles, and also the transportation cost provides an estimate of his past annual exports which ranged from 7 metric tonnes to 7.6 metric tonnes. This implies that he sells an average of about 140 kg per week.

Madam Pat., the all-round catfish business woman who is involved in the production of seeds, production of local catfish feed, breeding of catfish, smoking and export provides that on an average, she exports about 8.5-9 metric tonnes per year. This indicates that she exports about 168 kg on weekly basis before halting export to study the market based on foreign exchange fluctuation.

From the above information, all indication point to the fact that the African catfish has a high demand not just domestically, but internationally. Corroborating this fact with information accessed in an article in a periodical that the huge trade in smoked fish is a consequence of the growing demand by the increasing number of Africans living in the Diaspora. The U.S. and Europe remain the major destinations for Africans, who venture abroad (Olumide, 2016).

Also, as provided by Foundations for Partnership Initiatives in the Niger Delta (2011), aquaculture in Nigeria is expanding rapidly, from 16,119 metric ton in 1995 to 25,720 metric tons in year 2000 and 85,087 metric tons in 2007. It further increased to 152, 796 metric tons in 2009. Aquaculture has great potential for growth and for employment in the Niger Delta region. Catfish is the major product from aquaculture and accounts for over 90% of fish cultivation…. The demand for fish is increasing at an annual rate of 3% and current demand nation- wide is about 2 million tons while present supply is about 1.5 million tons. (Foundation for Partnership Initiatives in the Niger Delta, 2011).

Taking the area of study above as a case study for Nigeria, it can be analysed that there is a high demand of African catfish and the content provided above reflects the potential of the African catfish sector in that it is the major produce in the aquaculture accounting for more than 90% and the fact that it has the tendency of tackling unemployment in the country. This sector is indeed a lucrative one and can most definitely contribute to the diversification of the Nigerian economy.

4.4.1. Viability of African catfish

The Cambridge dictionary defines viability as “the ability to work as intended or to succeed” (Cambridge Advance Learner's dictionary, 2017). Therefore, the ability for the African catfish to succeed under harsh conditions unlike other aquatic species makes it preferable for cultivation by the farmers in that it is a rugged aquatic species. Information retrieved from the area of study provides that the African catfish can also serve as a police fish in that it is used to control other aquaculture species. For instance, in a pond that has numerous tilapia fish, the population of this tilapia can be controlled by introducing African catfish into the pond. It is obtained that the African catfish feeds on the tilapia. Thus drastically reducing its population in the pond. One of the African catfish pond under study had a pond that cultivated strictly tilapia but due to the drop in demand for tilapia, they switched to the cultivation of African catfish based on high demand but before the pond could be used to cultivate African catfish (fingerlings), Big African cat fish were introduced to feed on the remaining tilapia in this pond. This process saved money for de-mudding the pond and at the same time, it provided food for this big African catfish. Although, it is obtained that there are certain chemicals one could apply to kill the unwanted tilapia but the process of applying big African catfish as predators reflects a striking characteristic of this aquatic species. Also, viability refers to the commercial success of this venture. As of the time of study, the local price of the smoke size catfish is 650 Naira per kilogram while the price of the table size catfish is 1,000 Naira. In the international market, that is when exported, the smoked catfish is $3.5 USD per kilogram. When converted to Naira as of the rate in the study period, a kilogram of catfish in the international market is 1,225 Naira as against the local price of 650 Naira. This calculation proves the viability of African catfish when exported. Also, taking into consideration the profitability in the local market, an African catfish farmer buys fingerlings for 5 Naira, let’s assume he buys 5000 kg at 25,000 Naira and spends 100,000 on feeding until the time of cropping. All things being equal, he sells the 5000 kg at 650 Naira per Kg and makes 3,250,000 Naira. If we deduct the 100,000 Naira spent on feeding until the time of cropping (harvesting), the farmer is left with 3,150,000 Naira (all things being equal) as against the 25,000 Naira initial capital. This is just a rough estimate but it reflects the viability and the profitability of the African catfish venture in Nigeria.

4.4.2. Exportation of African Catfish

A major tenet of export trade is spillover. That is, the overflowing of certain produced commodity efficiently utilized in order to avoid wastage and over supply of that product. Therefore, the spillovers are exported which definitely have a positive effect on the economy of the producing commodity. There might have not been a spill over in the production of African catfish industry in Nigeria but there is a strong potential. Even if foreigners do not demand for African catfish, it is believed that there are Nigerians all over the world even in the only debt free sovereign state in the world, Brunei. The Nigerian government can work on how a global exportation of African catfish can be achieved. Although, there are people in the private sector who are involved in the exportation of African catfish commodity. One of such is Mr Tunde Sanni, The CEO of Tee Ess Farms who majorly will do justice to the next section of this research work based on the interview conducted with him. Mr Sanni’s farm has been approved by the United States of America’s FDA to produce and export smoked cat fish for the US market. This of course was achievable by meeting the smoking or drying standards of the FDA. This implies that there are certain standards that need to be met before the smoked African catfish could be exported. According to Agbaji (2016), he is cited as saying:

The huge trade in smoked-dried fish is a consequence of the growing demand by the increasing number of Africans living in the diaspora. The US and Europe remain the major destinations for Africans who venture abroad. As a result of this transcontinental migration, and a growing appreciation for African flavours and food, the demand for dried and smoked fish appears to be growing by day (Agbaji, 2016).

This corroborates the initial view raised about Nigerians in the diaspora that if foreigners are not interested in this commodity, Nigerians in diaspora hunger for it. But with the information provided by Agbaji (2016), it is apparent that foreigners have suddenly developed interests in the African flavoured delicacy such as the smoked African catfish.

In addition, Atanda (2007) states that Nigeria is a country where the fish demand-supply gap is about one million tonnes per annum, due to dependence on fish for 40 percent of her animal protein requirement. The country is benefiting from an emerging commercial catfish farming industry, which is transforming the long-dormant aquaculture sector. More than 80 percent of cultured fish in Nigeria is catfish (Atanda, 2007).

Apparently, the demand-supply gap stated above is not impressive compared to the population of the country and the benefit the country is enjoying from the growth of commercial catfish industry is attributed to the private sector.

According to an export guide prepared by Nzeka (2012), Nigeria is the largest market in sub-Saharan Africa with a population of more than 160 million people, and a population growth rate estimated at three percent annually. Petroleum exports account for about 20 percent of GDP, 95 percent of total export earnings and close to 85 percent of federal government revenue. Gross domestic product (GDP) growth fell to 3% in 2009, compared with 6% in 2008. This mainly resulted from the effects of global financial crises as well as reform programs in the country’s financial sector in 2009. Driven by a recovery in oil prices, GDP was [sic] rose to 6.8% in 2011 and 7.4% in 2012. GDP growth rate is projected to reach 8.5% in 2012 (Nzeka, 2012).

This information provided in 2012 is still relevant today as the economy situation is in a state of quagmire due to the inability of the government to finds ways of diversifying the mono-petrol economy. We had to wait until oil prices collapse again before remembering to put on our thinking caps.

Nzeka (2012) further provides that Nigeria is a long standing member of the WTO and is an active participant in CODEX and WTO committees. However, the country’s powerful agricultural and industry interests have continued to hamper GON’s attempts at total trade liberalization. Hence, the country continues to pursue trade protection regime but remains under pressure to liberalize trade in conformity to its WTO commitments…. Major agricultural commodities produced in the country are cocoa, peanuts, palm oil, corn, rice, sorghum, millet, cassava (tapioca), yams, rubber, cattle, fish and timber. Nigeria’s agricultural exports to the United States increased to nearly $110 million in 2011, up from about $69 million the same time last year. This is nearly double compared to export figure in 2010. This increase was mainly due to larger cocoa and rubber exports. The principal export destinations for Nigerian agricultural exports are Britain, the United States, Canada, France, and Germany….Nigeria is a huge net importer of agricultural products, with total imports of more than $4.0 billion and exports to all countries at about $650 million in 2011…. Nigeria has no existing laws governing agricultural biotechnology but the country’s National Assembly (NASS) passed a bio-safety bill into law on June 1, 2011 but the law requires the President’s assent before it becomes operational. Reportedly, Nigeria’s Presidency recently stated that the bill has become void as the bill was passed by the 6th session of Nigeria’s National Assembly (NASS) whereas the current NASS is the 7th session. This implies that the bill will have to be re-processed entirely again in order for it to reach the stage it would require the President’s assent (Nzeka, 2012).

By simply analyzing the content above, it is observed that Nigeria imports more than it exports. It is so alarming that a country that was once agrarian and led in agriculture export in the world now heavily imports commodities it can produce. The balance of trade is nothing to write home about in that import drastically exceeds import.

4.5. Preferred Form of Export

The preferred form of exporting African catfish is the smoking or oven drying method. This simply is for the purpose of preservation as provided by the interviewees. One Adedapo Oluwajimi, a worker in one of the grilling companies where the catfish is dried and packaged for export provides that a properly dried African Catfish has a shelf life of about 4-6 months. As provided by the Foundation for Partnership Initiatives in the Niger Delta (2011), smoking the African catfish adds value to the fish and also provides a means of preservation as earlier stated. Even locally, the demand for smoked African catfish equally competes with the demand for the fresh form. Although, the export rate of the smoked catfish supersedes the fresh form. As Tunde Sanni noted, that there are standards for formal exports. He said that before he could be licensed by the FDA to export fish to the U.S.A, certain tests were conducted. Information gathered from Olumide (2016) corroborates Tunde Sanni’s claim in that the African catfish intended for export has to be smoked well using the right technique to avoid high levels of what is known as Polycyclic Aromatic Hydrocarbons (PAH). PAH is a poisonous substance considered by the EU and the U.S.A to be hazardous to human health as it causes cancer (Olumide, 2016).

4.6. Destination of Export

The three major interviewees provided same destinations except for an additional destination provided by Tunde Sanni. The two common destinations provided by the interviewees are the United States of America and Europe. This is corroborated in African catfish articles such as in Olumide (2016) who provides that the U.S. and Europe are the major destinations for this commodity since majority of Africans in diaspora are found in these regions. Tunde Sanni’s additional destinations are the Gulf States that comprise of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). Using the UK as a case study destination of export, information gathered from a research sponsored by FAO (2003) provides three main ways by which the smoked African catfish and smoked fish in general are exported into the UK. These ways are: by airfreight, by accompanied baggage and by overland from mainland Europe (FAO, 2003).

It is also important to take into consideration certain key collecting points for catfish exportation in Nigeria and the destinations. As provided by Anetekhai (2013), the major collection points for smoked catfish export and their destination are: Cross River, Lagos, Ogun and Anambra. The particular point in Cross River is Nsidung, in Lagos is Badagry, in Ogun state is Idiroko and in Anambra, Onitsha. Their export destinations are: from Cross River to Cameroon, from Lagos to Ghana, from Ogun to Ghana and from Anambra to Niger, Tunisia, Libya and Egypt (Anetekhai, 2013).

4.6.1. Airfreight

As provided by a study sponsored by FAO (2003), there are about 30 key importers of smoked fish in the UK, they are all based in London. Some of these importers include: CA Foods, Fovitor International, BIMS African Food Store. They are a regular importer of smoked fish and also deal majorly in a list of traditional African delicacies such garri, fufu, vegetables and palm oil. A large number of small-scale importers who bring in smoked fish via airfreight on an ad hoc basis also exist. They are not as regular as CA Foods and the like. A list of Airlines that carry smoked fish as airfreight are: British Airways, Swiss Air, Sabena, Alitalia, KLM and Ghana Airways. These imported smoked fish arrive packaged in cardboard or polystyrene boxes. Each of these boxes contain between 12 – 25 kg of smoked fish. A arrival at the airport, these boxes are scrutinized by customs and the Port Health Authority (PHA) who inspect the consignments. These consignments are either cleared within 24 hours of arrival in the UK by agents through the Customs and PHA or by the importers themselves, unless Customs or Port Health identify any misappropriation. In a case where misappropriations are identified, the consignments are instantly detained. Air Marine Ltd is responsible as the agent who clears smoked fish arriving Heathrow while Kingscoat is the agent responsible for clearing at Gatwick. Fao (2003) further provides that “once these consignments are cleared by an environmental health officer from Port Health, they can be shipped to any other EU country without undergoing another port health inspection.” Those consignments that are not detained are released to importers who collect them from the airport and hands over to retailers as required. It should also be of note that some importers re-export these consignments to mainland Europe like France and Belgium (FAO, 2003).

4.6.2. Accompanied Baggage

This method of exporting the African catfish is informal in the sense that they go into the UK via baggage of passengers. These passengers are mainly from West Africa, Nigeria. Compared to the airfreight method of exportation, this method as limited inspection and extra charges are not paid. African catfish exported through this means are often sold to London traders and most of the time, are meant for personal consumption. It is worthy of note that the amount of African catfish that comes in through this means is alarming in that it surpasses those that go into the UK formally, that is, through airfreights (FAO, 2003).

4.6.3. Overland from Europe

An importer interviewed for a study sponsored by FAO (2003) provides that the airfreight method is quite expensive for him, so he subscribed to buying smoked fish from the Chateaux Rouge Market in Paris, France from the proceeds he makes from selling palm oil and then imports it to London where he sells from his shop and also to retailers. It is gathered that Smoked fish is imported into France from African countries such as Côte d’Ivoire, Togo and Senegal (FAO, 2003).

4.7. Quantity Exported Annually

Although, the average quantity of African catfish annual exports by the three interviewees have been discussed under the demand for African catfish. It is expedient to have a sort of case study on a wider range. Using the United Kingdom as a case study again, the same study sponsored by FAO in 2003 estimates that a total of 500 tonnes enters the United Kingdom from West Africa on an annual basis with retail value of £5.8 to £9.35 million. It is approximated that 120 tonnes arrives by airfreight, while a significant proportion of the remainder goes in through accompanied baggage and overland from mainland Europe. It is provided that Nigeria currently exports approximately 5 tonnes of smoked fish per month as airfreight which with calculations gives 60 tonnes per annum. Majority of the consignments go through Gatwick Airport. Other Nigeria’s smoked catfish export counterparts includes Ghana, the Ivory Coast and Cameroon (FAO, 2003).

4.8. Challenges of Export

Corroborating the information provided by FAO (2003) with Agbaji (2016), Nigeria singularly exports about five tonnes of smoked fish on a monthly basis via airfreight into the UK. However, strict regulations on food imported into the US and Europe as posed a great deal of challenge to many African catfish exporters who find it difficult to exploit the million-dollar foreign market for smoked and dried fish. But the United States Food and Drug Administration (FDA), in partnership with the Nigerian Export Promotion Council (NEPC), has made things quite easy for Nigerian export and as a result, have received samples of fish from the processing plants of the farmers for laboratory testing and have certified the product fit for export to the US with FDA Food Facility Registration number (Agbaji, 2016). An interviewee, Tunde Sanni is privileged to be part of those licensed to export African catfish to the United States. Although he provides that his major challenges as of late are lack of trust between sellers and buyers, discouraging policy of the exchange rate which affects formal export while informal export thrives. The other two interviewees’ responses are synonymous in that the current inflation poses as a major challenge in exporting African catfish.

Also, there is a challenge of meeting the increasing demand of African catfish consumers. As provided earlier that the ratio of the amount produced is minimal compared to the ratio of the demand.

It was gathered that certain companies’ exported products are confiscated based on the inability to meet up with standard. This also is a challenge, although a self-inflicted one based on the incompetence of the exporting company. Some companies do not give due attention to the packaging of their products and on reaching the destination, products with poor packages are seized. Also, some exported products fail hygiene tests which also lead to confiscating these products.

The interviewees also mentioned that the support from FGN is lacking. In that they are not aware of the lucrative potential of this sector and prefer to fall into the temptations of a mono-product economy based on the huge revenue petroleum products used to accrue but now that oil prices have plunged drastically in the global market, the African catfish aquaculture sector should be considered as a viable contribution to the diversification of Nigeria’s mono-cultural economy.

5. Conclusions and Recommendations

The African catfish aquaculture is recommended as a contribution to diversifying the economy due to its lucrative potentials and viability. The research finds that the increasing demand for this commodity surpasses the supply of the commodity.

It also finds that the private sector is the major player in this aquaculture industry as at the time of the research. Although, the boom period of the African catfish aquaculture industry was controlled by the government before the economy of the country tended towards a mono-cultural direction.

It is recommended that FGN should trace its steps back to when it was fully involved in this industry. The private sector needs the corroborative support of the FGN in ensuring the promulgation of effective policies that would help guide the African catfish aquaculture industry to the desired success of meeting the increasing demand thereby leading to spill overs that can be conveniently exported to earn foreign exchange.

This industry also has the potential of tackling and solving the problem of unemployment as it can provide employment for a teeming population of unemployed in the country. The following are the recommendations made to ensure a vast exploration of the potentials of this lucrative venture:

5.1. Recommendations

5.1.1. Hatcheries and Seed

The inability to meet up with the required demand of this product is rooted in the limited number of hatcheries around the country. The FGN needs to step into this case so as to ensure a multiplicity of hatcheries for the production of seeds which are nurtured to maturation and for the sake of meeting the demand of consumption. It should also help resuscitate abandoned hatcheries.

To ensure a high quality of seeds, the brood stock should not be inferior, they should be of high quality because like begets like. It was observed that fingerlings that are products of inferior brood stocks tend to have a shortened life span but those otherwise are referred to as shooters with the tendency of maturing to a point of becoming brood stocks based on the high mortality rate. Good seeds should be produced based on quality of the source (brood stock) which will ensure an increase in profit and cub losses which is often the order in most private farms.

5.1.2. Feeds

It was gathered that most African catfish farmers suffer loss based on the inability to feed their stock. Also, stunted growth of the stock is experienced based on underfeeding which also contributes to losses since the business of the African catfish is solely dependent on weight for profits. This challenge should be tackled by the government by putting measures in place that will ensure the production and availability of numerous feeds. It is recommended that the FGN invest in the arm of the aquaculture industry charged with the responsibilities of producing feed. Since majority of the feeds used are imported and expensive, the FGN should invest in already established feed mills so as to encourage those involved, expand it, provide more jobs and more feed to tackle the challenges of loss and under-feeding of the stock. Also, research institutes should be sponsored to engage researches for the produce of feeds for seeds. It was gathered that these feeds are very expensive and only few producers of seeds can afford them. Therefore, in tackling this challenge, these feeds ought to be produced locally for the sake of affordability and meeting the teeming demand of this product.

5.1.3. Land

Most African catfish farmers who are out of business complain of the unavailable infrastructure for cultivation such infrastructure as land which is the major resource of this sector. The federal government should provide lands for farmers with experience in this field and ensure an effective supervision over these farmers in order to monitor progress and efficiency.

5.1.4. Loans

Loans should be granted to catfish farmers who have been kicked out of business due to unavailability of funds. It is recommended that these loans should be cheap so as to ensure easy pay backs.

5.1.5. Institutions

There have been established bodies charged with the responsibilities of controlling activities and ensuring a high efficiency in this sector. The FGN needs to retrace its steps back to when it was fully involved in this sector before falling into the temptations of an economy characterized by a mono-product. A lot can be learnt from the initial involvement and corrections can be made in terms of mistakes made during that period. It is recalled that FGN launched projects pertaining to the African catfish aquaculture such projects as the establishment of demonstration ponds in the South-West and in the South-East where government provided full assistance by providing fingerlings, feeds and constructing ponds. This way, the government focused on the potentials of this sector before losing focus and tending towards a mono-cultural economy where virtually all the sectors of the economy were abandoned except the oil sector due to the oil boom period. The FGN needs to refocus on this sector in order to tap its benefits and high tendency of contributing to the diversification of its mono-product economy and earning foreign exchange.

5.1.6. Attract support

Once the FGN shows interest back in this sector by setting policies in motion coupled with actions in actualizing these policies, this would in one way or another attract the attention of multi-lateral organizations such as the arm of the UN, FAO who had in one occasion supported the FGN during the commencement of the African catfish aquaculture. Also, financial organization will be readily available to provide financial support due to the fact that this sector is a lucrative one and has huge potentials. Therefore, the money provided for assistance will not be wasted on a white elephant project. But on a project that is tenable.

5.1.7. Global market Strategy

This strategy reflects the theoretical framework of this research in that practices reflecting the comparative advantage theory are engaged in by the government. These practices involve sourcing for a global market where trade based on comparative advantage is carried out. In the case of Nigeria, findings point to the fact that she is the world leader when it comes to the production of African catfish. The FGN should tap into this lucrative potential by investing measures that will improve the efficiency of this sector. There by making Nigeria the most efficient in the production of this commodity which in turn carries the power of diversifying her economy in that it will create a huge platform for export trade of this commodity with both African countries and non- African countries who will prefer buying African catfish from Nigeria due to the cheap production in Nigeria.

A global market can be achieved by encouraging Nigerian migrants not just only in Europe and America but in every part of the world to be involved in the diversification process of the economy since there is a consensus in development literature that a collective effort is needed in setting the country on the path of desired development. Therefore, it will take the collective effort of Nigerian migrants to support this product worldwide in other to harness the lucrativeness of this sector and a diversified economy. This support will be reflected in the world wide availability of this commodity.

5.1.8. Firm negotiations and Conformity

Prior to the Uruguay Row of Negotiations (URN) which led to the establishment of the World Trade Organization (WTO) in 1995, the participation of Nigeria was perceived as passive in that her trade negotiations was weak and she was heavily dependent on special and differential treatment. However, with the commencement of the WTO, an effective participation is required. To ensure an effective partnership, there needs to be a complete overhaul of Nigeria’s trading system to conform to WTO’s obligations. This includes sanitizing the Nigerian Export Promotion Council (NEPC). Nigeria needs to realign her trading policies and laws with the requirement of WTO (Ogunkola and Bankole, 2005).´

The research finds out that many African catfish farmers prefer the domestic market due to high export cost, competitiveness in the international market such as meeting standards. Therefore, it is recommended for the FGN to negotiate favourable conditions for the export of this commodity. This will encourage more private sector players to engage in the exportation of this commodity by looking beyond the domestic environment.

5.1.9. Consistency

After all measures are put in place and the African catfish export is set in motion, it is recommended that the FGN create a committee responsible for check mating lapses, revisiting and revising policies in order to ensure consistency and continuity in exporting this commodity.

In addition to the recommendations, it was discovered from secondary sources that there exists an association known as the Catfish export Development Association in Nigeria but not yet certified as at the time of the research. Based on the motive of improving exportation of catfish and making it easy for stakeholders in the catfish aquaculture industry to export their products, it is recommended that the FGN certifies this association and also promote it for the sake of the economy, that is, to tackle the mono-culture nature of Nigeria’s economy by contributing to its diversification which has huge benefits such as providing wealth and reducing the poverty rate in the country (Anetekhai, 2013).

Also, in a country where the demand for catfish exceeds the supply, it is wise to devise ways and encourage this way such as the method of cryopreservation which entails the preservation of the male broodstock as opposing the popular method that involves sacrificing the male broodstock.

By encouraging this method, male broodstocks will be saved in multitude which will portray conservation and also aid productivity which will reflect in the supply as against the increasing demands of catfish.

5.2. Conclusion

The African catfish in itself provides room for diversification in that it involves various lucrative platforms such as: the production of fingerlings and juveniles which serve as means of making money for the farmers, the activity of stocking ponds for sale, the activity of nurturing fingerlings to maturation (brood stock) for further reproduction, the process of smoking for both domestic consumption and exportation.

Anetekhai (2013) provides that the African catfish in itself has a huge potential of diversification in the sense that by-products of the catfish could also serve as needed commodities. Anetekhai says that the catfish oil is a by-product which is used in cooking and also for greasing catfish. The pharmaceutical industry also makes use of this oil in drugs and also the cosmetic industry (Anetekhai, 2013).

The research finds that Nigeria is a global leader in the produce of catfish but still has not met with the increasing demand of this produce. If the afore mentioned recommendations could be strictly adhered to, the potentials of this industry will materialize into a gigantic exporting empire which will lead to further diversifying the economy based on inspiring the numerous unexplored and abandoned sectors of the economy to also contribute to redeeming this mono-cultural economy of Nigeria.

In addition to the recommendations made, an awareness program can be launched. This program should be charged with the responsibility of creating awareness about the importance of protein and that the African catfish is a cheap source of protein. Also, the health benefits of this product should be communicated. This will encourage and inform the teeming population thereby sparking up interest in this commodity. The Federal government should also organize training programs which will serve as an update to the prior knowledge of the technicalities involved in this aquaculture sector. This will provide an up to date technical know-how of this sector and curb ignorance.

Transfer of technology should be sourced for so as to enhance the quantity and quality of produce of this commodity in order to win competition.

Proper packaging and labeling is also paramount since there is a standard to be met. The FGN needs to play the role of effectively cross-checking packaged smoked African catfish ready for exportation so as to meet up with required standards and avoid the consignments from being confiscated at the destination airports. The FGN should also provide a subsidy on tariffs involved on airfreight so as to encourage smoked African catfish exporters to use this means of exportation and not the illegal means of smuggling the products into designated locations.

Concluding by quoting Osehobo (2015), historical evidence shows that no country ever achieved industrial progress without initial significant technological learning and productivity improvements in agriculture. It was also revealed that Nigeria spent N100 billion annually in the importation of 1.44 million metric tons of fish, a development fish farmers believe is a huge loss of revenue and jobs for Nigerians in the fishing business Nigeria’s catfish production jumped from 83,000 tons in 2006 to 900,000 just eight years later, according to the statistics presented by the Catfish Farmers Association of Nigeria, CAFAN (Osehobo, 2015).

It is on this note that the African catfish is recommended as a valuable commodity amongst others for the diversification of Nigeria’s mono-product economy.

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Newspaper

Agbaji, C. (2016, September 2). Smoked Fish Export Business Opportunities. Leadership newspaper, pp. 1-2.

Shosanya, M. (2014, October 21). Oil Price Shocks and Nigeria's Mono-cultural Economy. Daily Trust Newspaper, p. 4.

Vanguard. (2013, October 7). Mono-product Economy will Remain Vulnerable. p. 4.

Unpublished Theses and Dissertations

Folarin, S.F. (2010) “National Role Conceptions and Nigeria’s African Policy,1985-2007,” Doctoral Thesis, Department of Political Science and International Relations, Covenant University, Ota, Nigeria.

Okechi, J.K. (2004). Profitability Assessment of African catfish (Clarias Gariepinus) Farming in the lake Victoria Basin, Kenya. Dissertation from the University of Iceland.

Journal Articles

Abogan, O. P., and Akinola, B. O. (2014). Non-oil Export and Economic Growth in Nigeria (1980-2011). Journal of Research in Economics and International Finance, 1-11.

Abogan, O.P., Akinola, E.B and Baruwa, O.I (2014) Non-Oil export and economic growth in Nigeria (1980-2011). Journal of Research in Economics and International Finance vol. 3(1) pp. 1-11.

Adebayo, O.O. and Daramola, O.A. (2013) Economic analysis of catfish (Clarias gariepinus ) production in Ibadan metropolis. Discourse Journal of Agriculture and Food Sciences Vol. 1(7): 128-134.

Adefolaju, T. (2014) Socio-Economic Impact Assessment of a Mono-Culture Economy: The Case of Nigeria. Journal of Social Welfare and Human Rights. Vol. 2, No. 1, pp. 161-175.

Adeleye, J.O., Adetoye, O.S., and Adewuyi, M.O. (2015) “Impact of International Trade on Economic Growth in Nigeria (1988-2012).” International Journal of Financial Research.

Adenugba, A.A. and Sotubo, O.D. (2013). “Non-oil Exports in the Economic Growth of Nigeria: A study of Agriculture and Mineral Resources.” Journal of Educational and Social Research. Vol. 3 (2).

Adewumi, A. (2015). Aquaculture in Nigeria: Sustainability Issues and Challenges. Direct Research Journal of Agriculture and Food Science, 223-231.

Adewumi, A. (2015). Aquaculture in Nigeria: Sustainability issues and challenges. Direct Research Journal of Agriculture and Food Science, 223-231.

Adewumi, A., & Olaleye, V. (2011). catfish Culture in Nigeria: Progress, Prospects and Problems. African Journal of Agricultural Research., 1281-1285.

Ammani, A. A. (2011). Nigeria's oil boom period (1973-1983): Was Agriculture really neglected? International Journal of Statistics and Applications, 6-9.

Anyaehei, M.C., Areji, A.C. (2015). “Economic Diversification for Sustainable Development in Nigeria.” Open Journal of Political Science.

Anyaehie, M.C. and Areji, A.C. (2015) "Economic Diversification for Sustainable Development in Nigeria."Open Journal of Political Science. pp. 87-94.

Azeez, B.A., Dada, S.O. & Aluko, O.A. (2014) Effect of International Trade on Nigerian Economic Growth: The 21st Century Experience. International Journal of Economics, Commerce and Management Vol. II.

Bada, T., & Rahji, M. (2010). Market Delineation Study of the Fish Market in Nigeria: An Application of Cointegration Analysis. Journal of Agricultural Science, 158-159

Bassey, C.O. (2012). “Resources Diversification for sustainable Economic Development in Nigeria.” British Journal of Humanities and Social sciences. Vol.5(1).

Chinago, A.B. , Clinton, A. and Ameh, E.F. (2015) "Geographical Survey of Nigerian Mineral Resources: A Step toward Planned development. Journal of Culture, Society and Development. Vol. 6. ISSN2422-8400.

Dode, R.O. (2012) Nigeria, Mono-Product Economy & The Global Economic Recession: Problems & Prospects. Global Journal of Human Social Science Sociology, Economics & Political Science.

Dollar, D and Kraay, A. (2011) “Trade, Growth and Poverty” The Economic Journal.

Eko, S.A., Utting, C.A. & Onun, E.U. (2013) Beyond Oil: Dual-Imperatives for Diversifying the Nigerian Economy. Journal of Management and Strategy Vol. 4, No. 3.

Esekumemu (2016) "The Politics of Oil in Nigeria: Transparency and Accountability for Sustainable Development in the Niger Delta."American International Journal of Contemporary Research. Vol. 6, No. 4

Fakoya, K.A., Sokefun O.B., Owodeinde, F.G., Akintola, S.L. and Adewolu, M.A. (2009) “Emerging Research Priorities for the Aquaculture Sector in Sub-Saharan Africa- A case study of Nigeria. Aquaculture, Aquarium, Conservation and Legislation.” International Journal of the Bio flux Society.

Itumo, V.N. (2016) “Nigeria’s Mono-Cultural Economy: Impact Assessment and Prospects.” European Journal of Interdisciplinary Studies. Vol. 8

Lee, K., & Shields, K. (2011). Decision-Making in Hard Times: What is a Recession, Why Do We Care and How Do We Know When We Are in One. The North American Journal of Economics and Finance, 1-2.

Miller, J.W and Atanda, T (2011). “The Rise of Peri-Uban Aquaculture in Nigeria.” International Journal of Agriculture Sustainability.

Ogbeidi, M.M. (2012) "Political Leadership and Corruption in Nigeria Since 1960: A socio-economic Analysis."Journal of Nigerian Studies. Vol. 1, No. 2.

Ogochukwu, O.N (2016). The Oil Price Fall and the Impact on the Nigerian Economy: A Call for Diversification. Journal of Law, Policy and Globalization Vol.48.

Ogujiuba, kanayo (2014) "Poverty Indices and Reduction Strategies in Nigeria: Challenges of Meeting 2015 MDG Target. Journal of Economics, 5(2) : pp. 201-217.

Olaleye, S.O., Edun. F. and Taiwo, S.B. (2013) "Economic Diversification and Economic Growth in Nigeria: An Empirical Test of Relationship using a Granger Casualty Test. Journal of Emerging Trends in Economics and Management Sciences, 5(1): pp. 70-79.

Olanrewaju, A., & Orisasona, O. K. (2015). Cryopreservation: A Viable Tool for Sustainable Catfish Aquaculture Industry in Nigeria. Journal of Fishries & Livestock Production, 1-2.

Omitogun, O.G., Ilori, O., Olaniyan, O., Amupitan, P., Oresanya, T., Aladele, S., and Odofin, W. (2012). Cryopreservation of the Sperm of the African Catfish for the Thriving Aquaculture Industry in Nigeria. Current Frontiers in Cryopreservation.

Omotor, D.G. (2011). “Nigeria and the Global Economic Crisis.” EKON MISAO PRAKSA DEK GOD XX.BRI. (59-80).

Onodugo, I.C., Amujiri, B.A and Nwuba, B.N. (2015) “Diversification of the economy: A panacea for Nigerian economic development .” International Journal of Multidisciplinary Research and Development.

Onodugo, V.A., Ikpe, M. and Anowor, O.F. (2013) “Non-Oil Export and Economic Growth in Nigeria: A Time Series Econometric Model.” International Journal of Business Management and Research. Vol.3 .

Ozigbo, E., Anyadike, C., Adegbite, O. and Kolawole, P. (2014). “Review of Aquaculture Production and Management in Nigeria.” American Journal of Experimental Agriculture 4(10): 1137-1151.

Umaru, A., Bello, M.S., and Salihu, M. (2013). “An Empirical Analysis of Exchange Rate Volatility on Export Trade in Developing Economy.” Journal of Emerging Trends in Economics and Management Sciences (JETEMS) 4(1): 42-53.

Primary sources

Interviewees

Deacon Omoboni, O (2017) African catfish farmer and exporter, interviewed on his farm in Ondo, Ondo state on April 22, 2017.

Madam Pat. (2017) African catfish farmer and exporter, interviewed on her farm in Ondo, Ondo state on April 22, 2017.

Oluwajimi, A (2017) Worker at Double Joy Farms, Ondo West, Ondo, Nigeria, interviewed on April 22, 2017

Sanni, T (2017) African catfish farmer and exporter, CEO of Tee Ess Farms, interviewed online on April 22, 2017.

List of farms visited

1. Double Joy Farms, Ondo Housing Estate, Ondo, Ondo State
2. Fadoma pond, Oka, Ondo, Ondo State
3. Koya Pond, Ajilo, Ondo, Ondo State
4. Mr Bee Pond, Arigbabola, Ondo, Ondo State
5. Pat’s Aquaculture, Orimolade, Ondo, Ondo State

7. Appendix

7.1. Appendix A

Interview Questions

1. What is the nature of the demand of African Catfish?
2. In what form is the African Catfish exported?
3. How often do you export African Catfish?
4. What quantity do you export on an annual basis?
5. Are there challenges involved in the exportation of African Catfish?
6. What continent/country is the major market for African Catfish export?
7. Does the government support the aqua sector in exporting African Catfish?

7.2. Appendix B

Interview Excerpts

Mr. O., African catfish farmer and exporter

Q: What is the nature of the demand of African Catfish?

The demand of the African catfish is high and that is why most ponds in the area are stocked with them. Although there is a high demand for tilapia but the degree of its demand is no way near the African catfish.

Q: In what form is the African Catfish exported?

Since it is going to be exported, it is always smoked to preserve it from contamination.

Q: How often do you export African Catfish?

It depends on the demand and on the state of the economy. Presently, I am not exporting because of the state of things in the country. There is hike in prices on virtually every facet of every catfish aquaculture ingredients that enables for exportation. Although on an average, I used to export two to three times every month. But the oftenest of export largely depends on the call for supply.

Q: What quantity do you export on an annual basis?

Like I said earlier, the quantity exported is solely based on the demand of foreign customers. Roughly, I used to export 7-7.6 metric tons on an annual basis.

Q: Are there challenges involved in the exportation of African Catfish?

Every business has its own challenges. The exportation of the African catfish is no exception. The major challenge is economic in nature in that the fish feed I used to get for 5000 Naira has sky-rocketed to 7,000 Naira which poses a great challenge for me and this is why I have stopped production for the main time.

Q: What continent/country is the major market for African Catfish export?

For me, I have customers majorly in the United States and the United Kingdom. This is largely due to the high population of Nigerians there.

Q: Does the government support the aqua sector in exporting African Catfish?

It’s so disappointing that the Nigerian government is blind to see that this industry as viable and can help bring out the country from the economic problems it is faced with today.

Madam P., African catfish farmer and exporter

Q: What is the nature of the demand of African Catfish?

The nature of the demand is high and this is why most fish farmers opt for it.

Q: In what form is the African Catfish exported?

In order to avoid it from getting spoilt, it is smoked. Smoking or drying the African catfish preserves it for a long period of time.

Q: How often do you export African Catfish?

I export every month but due to the present economic situation, I have taken a break. I am concerned with maintaining an integrity relationship with my customers. I cannot just suddenly change the price and I cannot sell at the price I used to sell because I will incur a huge loss. I used to sell a kilo for $3.5 USD but I am studying the market in the main time to know the next step to take.

Q: What quantity do you export on an annual basis?

Annually, I export an average of 8.5- 9 metric tons.

Q: Are there challenges involved in the exportation of African Catfish?

Yes there are challenges involved. Like I just said, I cannot suddenly change the price and I cannot sell at the price I used to sell based on trust and the fact that I do not want to lose my customers. This is a challenge to me as business of exporting has been placed on an alt.

Q: What continent/country is the major market for African Catfish export?

The major destinations of my products are the UK and U.S.A.

Q: Does the government support the aqua sector in exporting African Catfish?

No, the government does not. They prefer oil. We need people like you to help us tell them to support us. I believe this sector has the ability of turning the economy of the country around for the better.

Mr. A., Worker at Double Joy Farms, Ondo West, Ondo, Nigeria

Q: What is the shelf life of the African catfish?

A properly dried African catfish has a shelf life of about 4-6 months.

Mr. S., African catfish farmer and exporter, CEO of Tee Ess Farms

Q: What is the nature of the demand of African Catfish?

The demand is high, very high but it is unfortunate that the supply has not yet met the demand. This is more reason why we need the support of the government to join hands with us, the private sector to explore the advantages of this viable industry.

Q: In what form is the African Catfish exported?

In a dried form. There are standards for formal exports. Before the Food and Drug Administration could certify me to export my products to America, the process involved in drying the fish was strictly scrutinized.

Q: How often do you export African Catfish?

In the last four weeks, I have exported 60kg worth of African catfish. Sometimes I export more than this. The export varies according to orders placed by foreign customers.

Q: What quantity do you export on an annual basis?

Like I said, it varies but on a rough scale, I export about 10.4-13 metric tons yearly.

Q: Are there challenges involved in the exportation of African Catfish?

Of course, there are challenges. The one I am experiencing now is the new policy of exchange rate which is so discouraging in that foreign sales are made formally as a result of which informal export thrives. I am involved in the formal export that creates no room for flexibility when it comes to price. Lack of trust between buyers and sellers is also a huge challenge.

Q: What continent/country is the major market for African Catfish export?

U.S.A, U.K and Gulf the states are the major market for my products.

Q: Does the government support the aqua sector in exporting African Catfish?

No, the government does not support us. I think it is because they look down on the potential of the aquaculture industry. The African catfish aquaculture industry is viable, I have been in this industry since I retired in 2006. I have a vast experience and I know the returns it generates. The government needs to lend support to this industry in order to meet the high demands of this commodity both home and abroad.