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Economics ss1 term 3

Economics ss1 term 3

THE NATURE OF THE NIGERIAN ECONOMY

CONTENT

1. Meaning of Economy
2. General Overview of the Nigeria Economy

Economics ss1 term 3 Third term

Meaning of Economy

What does the word ‘Economy’ mean?

The word ‘economy’ refers to the mechanism through which labour, land, structures, vehicles, equipment and natural resources are organized to satisfy the desire of those who live in a society.

General Overview of the Nigerian Economy

Nigerian is a richly endowed nation in terms of her physical and human resources.

1. Nigeria’s Physical Endowments

(i) Land

Nigeria covers about 923,768 square kilometers. About 85% of the land area is suitable for agricultural production.  12.2% is covered by forest resources while 1.4% containswater bodieswhich are richly endowed for fishery.  Only about 42.3% have been put into cultivation as at 2010.

(ii) Natural Resources

Nigeria is also richly endowed with crude oil deposits. The crude oil reserve as at 2008 was 36.2 billion barrels, while crude oil production was 2.4 million barrel per day.

2. Human Resources

Nigeria is the most populous country in Africa and the seventh largest in the world.  Her current total population is put at over 150million.  The breakdown is shown in the table below.

	Description	Figures
	Estimated population in 2010 (millions)	158.4
	Population density (per square km) in 2010	171.5
	Population Growth rate (% per annum) (as at 2010)	2.5
	Population aged 0-14 years in 2008 (%)	43.4
	Working Population (Millions)	69.31
	Female in Workforce (%)	38.7
	Population aged  60+ years in 2008 (%)	9.8
	Rural Population (%)	51

Economics ss1 term 3 Third term

EVALUATION

1. Define economy.
2. Briefly describe the nature of Nigeria’s economy.

AGRICULTURE

CONTENT

1. Definition of Agriculture
2. Components of Agriculture
3. Systems of Agriculture
4. Importance of Agriculture to the Nigerian economy
5. Activities of the Marketing Boards in Nigeria

 

Definition of Agriculture

Agriculture may be defined as the cultivation, growing and harvesting of crops and the rearing of animals purposely for food production and use of man. This use we are talking about may be in the form of shelter, food, and clothing or even raw materials for industry. In other words, Agriculture is an art involving the production of plants and animals of the use of man. It is also the disposal of crops and animals including their by-products through marketing.

EVALUATION

1. Define agriculture
2. Mention two products of agriculture

 

Components of Agriculture

(i) Crop production

Components production involves cultivation, planting and growing of food and cash crops. When we talk of crop production, it can on small or large scale basis, for consumption and for commercial purposes. Crop production is divided into two (1) cash crops (2) food crops

Cash crops

These types of crops are produced mainly as raw materials for industries local and for export. Examples of cash crops includes cocoa, rubber, groundnut, palm kernels, cotton etc. Initially most of these crops were for export, but nowadays they are used as raw materials by local industries.

Food crops

These food crops are produced mainly for consumption and they include yam, cassava; cocoyam, maize, rice, vegetables, potatoes etc.

(ii) Livestock farming

This type of farming involves rearing of animals like goats, sheep, poultry etc. Livestock is produced largely to satisfy domestic consumption. Fulani are mostly cattle rears in Nigeria – they are situated in the northern states. Livestock is a source of food for many people.

(iii) Forestry

Forestry resources involve planting and management of resources from the forest such as trees for the use of man. Examples of forestry products include timbers, herbs and bush animals.

Timbers are used for manufacturing papers and for furniture. Examples of these timbers are Mahogany, Teak, Iroko etc.

(iv) Fishing

This type of farming involves breeding and catching of fishes from the rivers mainly for hu7man consumption. Fishes constitute main sources of protein. Nigerian imports fish because they are yet to be sufficient in production of fish.

EVALUATION

1. List the components of Agriculture
2. Explain Live Stock farming
3. Describe the type of crop production you know

Economics ss1 term 3 Third term

Systems of Agriculture

Systems of Agriculture include:

• Peasant or subsistence farming
• Mechanization or mechanized farming
• Plantation farming
• Cooperative farming
• Commercial farming

1. Peasant/Subsistence Farming

This type of farming referred to as the type of agriculture which is small scale farming involving the use of simple farm implements. It involves small farm holdings. Production is for both domestic consumption and for export. It is also for the consumption of the farmer and his household.

1. Mechanization or Mechanized Farming

This type of farming is also known as commercial farming. It involves in production of food, animals and cash crops in large quantities for commercial purposes. e.g. state farming. It also involves the use of machinery and other forms of capital such as irrigation, improved seedlings and fertilizers.

1. Plantation Farming

It is known as capital intensive system of farming. Capital in the form of machines, tools, improved seedlings and artificial plant nutrient is used.

A feature of plantation agriculture is that it is more common in the forest regions and it is mostly associated with tree crops.

1. Cooperative Farming

These type of farming are usually carried out on large scale. It is when a number of people come together and pool their resources together in order to derive the economies of large scale production. They can obtain loan from the banks receive aids from government, organize research activities and have access to expensive farm equipment.

1. Commercial Farming

Commercial farming is the large scale farming involving the use of machinery and other forms of capital such as irrigation method. The system requires a large acre of land and modern outlay and modern equipment are used. The aim is to sell in large quantity and maximize profit.

EVALUATION

1. List four systems of Agriculture
2. Explain what you understand by cooperative farming

Economics ss1 term 3 Third term

Importance of Agriculture to the Nigerian economy

The roles of Agriculture to the Nigerian economy includes the following:

1. Provision of Raw materials for industry: Agriculture provides raw materials for the use of the industries in West Africa. Some of these industries include textile industries which make use of cotton; tyre use of rubber, soap manufacturing industries which make use of palm oil and groundnut oil etc.
2. Provision of employment: Agriculture provides larger percentage of employment for people in West Africa. Many people depend on it for their livelihood. Large number of people engages in various agricultural activities like crop farming, fishing, forestry and livestock farming.
3. A source of food: Agriculture involved in the provision of food for the populace. It supplies food for those in the agricultural, industrial and other sectors of the economy. These food materials include: yam, rice, plantains, beans, beef, fish etc.
4. Source of foreign exchange: Agriculture generates a lot of foreign exchange from export of agricultural products like cotton, rubber etc. to overseas countries.
5. Capital formation: Revenue is derived from agriculture and it may be a major source of saving.

EVALUATION

1. List the importance of Agriculture to Nigerian economy.
2. Explain how Agriculture provides employment for people.

 

Activities of the Marketing Boards in Nigeria

Definition of Marketing Boards

Marketing Boards are known as the organization which was established by the government to help those farmers that were producing agricultural products in the grading, marketing, distribution and sales of their products. They usually buy materials from farmers and resell to others in order to prevent price instability.

Functions or Activities of Marketing Board

1. Marketing of farm produce: It is the responsibilities of the marketing board to market farm products in order to ensure ready-made market for the farmers. They are to promote the sale of any good in the world market.
2. Specialist services: They carry out research projects to benefit the farmers in their farming activities. This will be of help to improve the quality of farm products.
3. Research services: They carry out research projects to benefit the farmers in their farming activities. This will be of help to improve the quality of farm products.
4. Encourages the formation of cooperatives: The board encourages the farmers to form cooperative societies among themselves to help them financially.
5. Fixing of Price: The board fixed prices for the products on behalf of the farmers to avoid and prevent fluctuation.
6. Controlling Production: The Board controls the level of products the farmer offer for sale. They give advice to farmers on the best way to control their outputs.
7. Generates revenue for development: Government also enjoy a lot of revenue being generated by the marketing board. This is used for development purposes.

 

EVALUATION

1. Explain the meaning of marketing boards.
2. List five activities of marketing boards.

Components of the Nigerian Mining Industry

CONTENT

1. Meaning of Mining
2. Classification of Mineral Resources
3. Importance of Mineral Resources in Nigeria
4. Location and Uses of Some Mineral Resources Found in Nigeria

Economics ss1 term 3 Third term

Meaning of Mining

Mineral resources are substances that are formed naturally in the earth. They can be referred to as free gift of nature because they are not brought into existence or produced by any human intervention.

Mining is the process by which minerals are extracted or removed from the earth. Nigeria is richly endowed with 34 different minerals which include coal, gold, columbite, lead barites, cassiterite, gemstone, talc, feldspar, bitumen, iron ore and so on. At the moment, Nigeria economy depends heavily on crude oil and natural gas. However, seven other minerals deposits have been prioritized by the Ministry of Solid Mineral Development for reforms in the mining sector. These include coal, bitumen, limestone, iron ore, barites, gold and lead or zinc.

Classification of Mineral Resources

Mineral resources can be classified into solid and non-solid minerals based on forms. Solid minerals are hard and firm with a definite shape e.g. coal, gold, bauxite, bitumen, iron, ore, while the non-solid minerals are without form or shape e.g., gases and crude oil.

Although organized mining of solid mineral started in Nigeria as far back as 1903, the industry only accounts for about1% of the nation’s GDP until the discovery of vast deposit of oil resources in 1956. This however, shifted attention away from solid mineral to oil resources. The civil war of 1960s also affected the industry as many mining expatriates had to leave the country.  These had altogether led to the dead state of the industry until recently (starting with the creation of the Ministry of Solid Minerals Development).

Meanwhile, the oil and gas mining industry remain vibrant and accounts for about one-fifth of Nigeria’s total work force.

Importance of Mineral Resources in Nigeria

1. Mineral resources generate revenue for the government
2. They generate employment opportunities for people in the area of mining and marketing.
3. Royalties from mineral resources are used for infrastructural development
4. They serve as sources of foreign exchange for government.
5. They improve the term of trade of Nigeria
6. Some minerals like coal, crude oil serve as sources of energy for both domestic and industrial use.
7. They help in the establishment of subsidiary companies
8. They increase the national output thereby improve the standard of living of people.

Economics ss1 term 3 Third term

Economics ss1 term 3 Third term

EVALUATION

1. Mention two classes of mineral resources.
2. List five importance of mineral resources in Nigeria.

 

Location and Uses of Some Mineral Resources Found in Nigeria

	Mineral resources	Location (where they are found)	Uses
	Coal	Enugu, Ogbete	Power generation
	Gold	Maru, Ankpa, Malele, Tsohon, Birnin, Gwari-Kwaga, Bin Yauri, Okolom-Dogondaji and Ipinrindo In Osun state.	Jewelries and ornamental manufacturing
	Bitumen	Lagos, Ogun, Ondo and Edo State	Road construction
	Iron Ore	Itakpe in Kogi State	Steel and aluminum manufacturing
	Columbite and Tantalite	Nassarawa State	Electronics manufacturing

 

EVALUATION

1. Iron ore can be found in ——————

FINANCIAL INSTITUTIONS

CONTENT

1. Meaning of Financial Institution
2. Types of Financial Institutions
3. Definition and Types of Banks
4. Meaning and Segments of Financial Systems

 

Meaning of Financial Institution

Financial institution refers to all business organisations which hold money for individuals and institutions and may borrow money from them in order to give loans or make other investments.

Types of Financial Institutions

Financial institutions may be divided into two major groups- banking and non-banking financial institutions. The major difference between the banking and the non-banking financial institutions is that the liabilities of the banking institutions are counted as part of the total supply of money while those of the non-banking institutions are excluded from the money supply.

Economics ss1 term 3 Third term

Banking Financial Institutions

Banking financial institutions include:

1. Central bank
2. Commercial banks
3. Merchant banks
4. Development banks
5. Saving banks
6. Mortgage bank

Non-banking Financial Institutions

Non-banking financial institutions include:

1. Traditional financial institution
2. Insurance companies
3. Hire purchase companies
4. Building societies

 

Definition of a Bank

A bank is a commercial institution which performs various financial activities, e.g. accepting and handling of deposits of its customers. Bank is also a place where money and other valuables like will, jewellery, etc. are kept

Types of Banks

1. Commercial banks
2. Central bank
3. Merchant banks
4. Development banks
5. Savings bank

 

Meaning and Segments of Financial Systems

Meaning of Financial System

A financial system or market is where money and near money instruments exchange hand between lenders and borrowers. That is, the market deals in money.

Financial market provides opportunities for financial institutions to make facilities available for borrowers and lenders. Therefore, financial institutions trade in money and money worth.

Segments/Types of Financial Markets

Financial markets are broadly divided into two categories and they are as follows:

• Money market
• Capital market

The Money Market

Money market may be defined as a financial market for the lending and borrowing of short-term loans. This type of market aids all forms of business transactions.  A lot of financial institutions are involved in this type of market, purchase and sale of funds on short-term bases and it is controlled by the Central Bank.

Uses/Importance/Functions of the Money Market

1. Provision of short-term capital to investors in both the private and publics sectors
2. Provision of short-term investment opportunities from which income may be earned
3. Mobilization of saving for investment.
4. Provision of investment, technical and managerial advice.
5. Provision of opportunity for the public to participate in the management of the economy.

Economics ss1 term 3 Third term

Institutions Involved in the Money Markets

1. The Central Bank: It makes money available to money market and capital market as a lender of the last resort.
2. Commercial Banks: They offer short term loans to individuals, organizations, governments, etc.
3. Discount Houses: These are institutions that offer discount, by buying and selling bills of exchange and treasury bills.
4. Acceptance Houses
5. Financial Companies
6. Hire purchase companies

The money market uses certain financial instruments to transfer money from lenders to borrowers. These are treasury bills, treasury certificates, bills of exchange and money at call.

EVALUATION

1. What is money market?
2. Enumerate five functions of the money market

 

The Capital Market

The market is made up of financial institutions which deal in long term financing. The capital market provides medium and long term loans for investment. They therefore bring long term lenders and borrowers together. Loans given are usually for more than two years. Institutions that operate in this market include:

1. Insurance Companies
2. Issuing Houses
3. Development Banks
4. Investment Banks
5. Investment Trusts
6. Building Society or Mortgage Bank
7. Finance Corporations
8. Savings Banks
9. The Stock Exchange

Financial instruments used in the capital market to finance long term investments are stocks and shares, company bonds and government bonds.

The capital market can be divided into the primary market and secondary market. The primary market deals with the buying and selling of new securities. It is dominated by merchant banks. The secondary market is the market that deals with the buying and selling of old (second hand) securities. It is dominated by Stock Exchange.

Importance/Functions/Benefits of the Capital Market

1. Provision of long term capital to investors both in the public and private sector.
2. Provision of long term investment opportunities from which income may be earned.
3. Mobilization of savings for investment.
4. Encourages the growth of merchant banking.
5. Provision of investment advice.
6. Provision of opportunity to the public to participate in running of the economy.

 

EVALUATION

1. What is capital market?
2. List five institutions that operate in capital market

MONEY

CONTENT

1. Definition and Meaning of Money
2. Trade by Barter
3. Historical Development of Money
4. Functions of Money
5. Types of Money
6. Characteristics of Money

 

Economics ss1 term 3

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