Format: MS WORD | Chapter: 1-5 | Pages: 65-80
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ANALYSIS OF SAVINGS AND INVESTMENT STRATEGIES AMONG CASSAVA PROCESSORS IN YEWA NORTH LOCAL GOVERNMENT AREA OF OGUN STATE
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
In Nigeria, agriculture has remained the largest sector of the economy. It generates employment for about 70% of the population and contributes about 40% to the Gross Domestic Product (GDP) with crop accounting for 80%, livestock 13%, forestry 3% and fishery 4%. Agriculture accounts for over 70% of the non-oil export and provides over 80% of the food needs of the country (Adegboye,2004). Nigeria has a total land area of 98.3milion hectares, but at present, only about 34 million hectares or 48% are under cultivation. Agriculture in Nigeria is practiced at subsistent level and is characterized by numerous farmers operating several scattered small and fragmented plots of land using traditional methods such as land rotation, bush burning with the use of crude implements like hoes and cutlasses. According to Olawepo (2010), the majority of the rural populace in Nigeria either depends entirely on farming and farming activities for survival and generation of income, or depends on other non-farming activities to supplement their main source of income. Over 90% of the country’s local food production comes from small-scale farms. About 60% of the population earnstheir living from these small farms which are usually of the size of about 0.10-5.99 hectares (Olawepo,2010). It could then be seen that most farmers have limited resources, a factor that limits their productivity, income, savings and investment. In the midst of all these, farmers have resulted to a number of means to enhance their production and also to improve their well-being socio-economically.
They provide several benefits for households. Directly, saving could be used for investment. Indirectly, saving indicates repayment ability, also increase credit rating and as collateral in the credit market (Brata,2015). Savings is both a risk management strategy and determinant of magnitude of investment but its determinants and mobilization strategy are controversial issues in literature (Mkpado and Arene,2010). Ayanwale and Bamire (2010) claimed that saving behaviours of farmers in developing countries is less dependent on the absolute level of aggregate income, but more dependent on other factors on the relationship between current and expected income, the nature of business, household size, wealth and demographic factors like age. Adeyemo and Akala(2012),for instance, showed that there is a high degree of responsiveness of savings to change among fishermen in the riverine areas of Nigeria.
1.2. STATEMENT OF THE PROBLEM
There are several problems that affect the level of savings and investment strategies of agro-processors. While acknowledging that socio-economic characteristics of the agro-processors may vary from one occupation to another, recent studies like Adeyemo and Bamire (2015) suggest that socio-economic characteristics such as age, sex, farming experience, household size…etc, affect the level of savings and investment strategies among agro-processors. One of the problems confronting the development of the agricultural sector in Nigeria could be attributed to inadequate savings and investment by the small scale farmers (and agro-processors). Despite this problem, policy makers have not really drawn up adequate and comprehensive rural savings scheme that will ginger the farmers to invest their capital productively (Ogwanighie,2017).
1.3. OBJECTIVES OF THE STUDY
The broad objective of this study is to determine the analysis or assess the savings and investment strategies of cassava processors using Yewa North Local Government Area as a study case. The specific objectives are to; · describe the socio-economic characteristics of the cassava processors in the study area. · describe the investment pattern of the cassava processors. · estimate the income level of the cassava processors. · determine the savings rate among the respondents. · estimate the determinants of savings and investment strategies among the respondents.
1.4. JUSTIFICATION OF THE STUDY
The justification of this study is centered on the importance of savings and investment and also the essence of savings and investment strategies as it concerns the cassava processors’ businesses. In developing countries, especially Nigeria, investments in agricultural production and its related activities have not been given expected priority, even among the farmers who come together as a group to assist each other, either through cooperatives or other informal means; and this can be attributed to some factors. Information from this research study on the analysis of savings and investment strategies among cassava processors could help policy makers and credit agencies for effective and efficient credit services delivery of loan schemes that could increase the production of agricultural produce and value-added finished goods as well as the general well-being of the cassava processors.
1.5. PLAN OF THE STUDY
This research study was divided into five chapters, with each chapter for a definite purpose. Chapter One consisted of the introduction which includes the background of the study, problem statement and research questions, objectives of the study, justification of the study and plan of the study respectively. Chapter Two covered the literature review and theoretical background. Chapter Three entailed the methodology and procedures that was involved in carrying out the research study. Chapter Four involved the empirical findings and the results of the findings. Chapter Five featured the summary of the findings, conclusion and recommendation.
