AN IN-DEPTH INVESTIGATION OF THE IMPLICATIONS OF ECONOMIC STAGNATION ON THE LIVELIHOOD OF RURAL DWELLERS

CHAPTER ONE

INTRODUCTION

Background of the Study

Rural areas are of utmost importance in Nigeria due to their coverage of over 90 percent of the African continent and their hosting of around half of its people and economic activity. According to Oyelude (2022) rural areas have a lower income per inhabitant, which is 25-30% less than in other places and they have a distinct social structure. Apparently, agriculture serves as the primary means of livelihood for rural dwellers in Nigeria, supporting around 75% of the population's livelihoods thus when there are changes in the economy, there is bound to be decline in theoir income and vitality for example when a nation currently face a challenging predicament like recession A recession in economics refers to a period of negative economic growth that lasts for two consecutive quarters. A recession can be defined as a time of overall economic deceleration, simplified for those without specialised knowledge. It is a period of economic downturn known as a business cycle contraction, characterised by a widespread deceleration in economic activity. Amidst the current economic recession in Nigeria, there has been a notable reduction in the sales of goods and services, a surge in inflation rates, a rise in unemployment, an increase in crime rates, a budget deficit in government expenditure, and a decline in the stock market. 

According to the National Bureau of Statistics (2017), Nigeria's Gross Domestic Product (GDP) at constant basic prices had a contraction of 2.06% in the second quarter of 2016, following a decrease of 0.36% in the first quarter. RTC (2016), further assert that the Nigerian economy had two consecutive quarters of economic recession. In the First Quarter of 2016, the GDP growth rate was negative (-0.36%), and the recently available data for the Second Quarter of 2016 shows a bigger contraction (-2.06%). The economic downturn/stagnation is extensive and encompasses both the oil and non-oil sectors. However, the oil industry experienced a decline of 17.48%, while the non-oil industries saw a decrease of 0.38%. For example, the  significant decline in oil prices by 56.39% from the peak in 2014, dropping from $100 per barrel to $50. There was also a sharp decrease in oil production by 26.3%. Furthermore, poor leadership, fiscal leakages, and corruption contributed to the economic stagnation (Nwachukwu & Ohai,2016). According to a report by the Nigeria Vanguard newspaper (2017), Nigeria has the highest number of children who are not attending school. The Human Development Index of the United Nations Development Programme (UNDP) ranks Nigeria 152nd out of 188 countries, making it the lowest among OPEC countries. Additionally, the life expectancy at birth in Nigeria is only 52.8 years. Likewise, the World Economic Forum ranks Nigeria 127th out of 138 countries on the global competitiveness index. 

Howbeit, the repercussions of this economic stagnation are already being experienced by a wide range of individuals, resulting in unpaid wages, the inability to afford rent, the inability to cover school fees for children, and even the inability to provide food (Noko, 2016). It is against this, a survey will be conducted in order to investigate the implications of economic stagnation on the livelihood of rural dwellers.

Statement of the Problem

Rural economies tend to have limited diversification and rely heavily on primary sectors such as agriculture, forestry, and mining. However, these sectors can be significantly affected by economic stagnation due to decreased investment, falling commodity prices, and restricted loan availability. In times of economic stagnation, rural farmers frequently experience a decrease in agricultural output and income. This is attributed to various factors such as decreasing government assistance, rising input costs, and unfavourable weather conditions worsened by climate change (Barrett et al., 2021). This scenario results in a recurring pattern of poverty and lack of access to food, which in turn makes rural households more susceptible to economic disruptions.

Furthermore, the ramifications of economic stagnation on rural livelihoods transcend the agriculture sector. Small-scale enterprises and local companies play a crucial role in the economy of numerous rural areas, as they supply vital goods and services and generate job prospects.  Similarly, the lack of economic growth frequently results in a decrease in consumer expenditure, which subsequently impacts the sustainability of these small enterprises.

According to a study conducted by the Food and Agriculture Organisation (FAO), economic stagnation results in a reduction of job prospects in non-farm sectors in rural areas, which in turn leads to increased unemployment rates and a subsequent increase in poverty levels (FAO, 2017). Moreover, economic stagnation worsens the already present deficiencies in infrastructure in rural areas. As rural areas often face the common difficulty of limited access to high-quality healthcare, education, and social services (Ifabiyi et al., 2014).  Beyond that, economic stagnation frequently lead to reductions in budgets and decreased public expenditure, exacerbating the demand on already insufficient services (World Bank, 2008). For instance, healthcare facilities in rural areas may have scarcities of vital medications and equipment, while schools may confront a dearth of resources and teachers, which can have a negative impact on the general quality of life and future chances for development in rural dwellers in the country. Eeconomic stagnation in rural communities has a big impact on migration. Due to diminishing economic prospects, a significant number of individuals residing in rural areas relocate to metropolitan regions in pursuit of improved means of living. Nevertheless, this migration give rise to other socio-economic challenges. According to Edo and Ikelegbe (2024) the depletion of the working-age population result in a scarcity of labour in rural communities, which in turn hinders agricultural and economic output in Nigeria. Furthermore, the migration of people from rural areas to urban areas frequently results in the expansion of informal settlements and heightened strain on urban infrastructure and services (Tacoli, 2022).

Despite this fact, there has been a lack of extensive research in Nigeria regarding the effects of economic recessions on the elderly population in rural areas of the country. Hence, it is in the light of these that the study seeks to investigate the implications of economic stagnation on the livelihood of rural dwellers.

 1.3 Objectives of the Study

The main purpose of this study is to investigate the implications of economic stagnation on the livelihood of rural dwellers.  Specifically, the study will;

To assess the impact of economic stagnation on agricultural productivity among rural dwellers.

To determine the level of availability of infrastructures in rural areas in Nigeria.

To analyze the effects of economic stagnation on the livelihood of rural dwellers.

To proffer coping strategies to rural households to mitigate the effects of economic stagnation.

1.4  Research Questions

The following questions have been prepared for the study:

What is the impact of economic stagnation on agricultural productivity among rural dwellers?

What is the level of availability of infrastructure in rural areas in Nigeria?

What are the effects of economic stagnation on the livelihood of rural dwellers?

1.5 Research Hypotheses

H0: Economic stagnation has no significant implications on the livelihood of rural dwellers.

Ha1: Economic stagnation has significant implications on the livelihood of rural dwellers.

1.6 Significance of the Study

The study findings will assist the government in addressing the underlying causes of economic stagnation and work towards creating a more inclusive and prosperous economy. NGOs and social activists will be able to advocate for policies that protect vulnerable populations from the adverse effects of inflation. Nevertheless, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the implications of economic stagnation on the livelihood of rural dwellers.

1.7 Scope of the study   

The scope of this study is boarded on the implications of economic stagnation on the livelihood of rural dwellers. Geographically, the study will be delimited to residents of Kaduna state.

1.8 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Economic stagnation: refers to a prolonged period of slow or negligible growth in an economy.

Rural areas: refer to the countryside with sparsely populated, agricultural community with large concentration of aged with low income.

Economic:  relates to the economy, which is the system of production, distribution, and consumption of goods and services in a particular country or region.