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Difficulty: EasyAgriculture Sector: Roles, Problems, and Development Policies

Prior to the crude oil boom of the 1970s, agriculture was the mainstay of the Nigerian economy. Which of the following was a major role played by the agricultural sector during this period?

  1. A
    Achieving domestic market protection primarily through import substitution industrialization strategies
  2. Serving as the chief source of foreign exchange earnings through cash crop exportsAnswer
  3. C
    Ensuring that national GDP expansion automatically translated into equitable economic development
  4. D
    Transferring state plantation equity directly to foreign investors through privatization policy

Answer

Serving as the chief source of foreign exchange earnings through cash crop exports
Prior to the crude oil boom of the 1970s, agriculture served as the engine of the Nigerian economy by providing employment, domestic food supply, industrial raw materials, and over 70% of total foreign exchange earnings through exports such as cocoa, groundnuts, rubber, and palm oil.

Step-by-Step Solution

1
Identify the historical role of the agricultural sector in the Nigerian economy prior to the 1970s oil boom.
The economy relied predominantly on cash crop production such as cocoa, palm oil, groundnuts, and rubber.
Understanding pre-petroleum revenue sources clarifies the primary economic contribution of agriculture.
2
Determine how agricultural produce contributed to external trade and government revenue.
Exports of agricultural cash crops generated the vast majority of Nigeria's foreign exchange earnings required to import capital goods and fund national infrastructure.
Foreign exchange generation was crucial for macroeconomic stability and development financing during that era.

Key Concept

Roles of the Agricultural Sector in Nigeria
Estimated Time:1m 0s
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Topics

Agriculture Sector: Roles, Problems, and Development Policies