Financing Agricultural Sector, a Panacea for Food Security in Nigeria

Abstract

This study examined the impact of various sources of agricultural financing on food security in Nigeria using time series data that span a period from 1981 to 2020. To achieve the study, the Autoregressive Distributed Lag (ARDL) Model was employed to analyze the data. Food security in Nigeria was conceptualized as food availability proxied by agricultural output in Nigeria. As such, agricultural output was modelled by having commercial bank credit, agricultural credit guarantee scheme fund, and government expenditure on agriculture, inflation and interest rate as independent variables. The study employed time series data from 1981 to 2020. The estimated ARDL model suggested commercial bank credit to agriculture, agricultural credit guarantee scheme fund, government expenditure on agriculture and interest rate have a significant influence on food security measured by agricultural output. Consequently, to improve food security in Nigeria, this study recommended among others that commercial banks should be encouraged to channel their credit to agriculture, and the government should ensure more guarantees on loans to encourage farmers in accessing credit. Finally, to encourage access to food, effort should be made to improve the per capita income of the people in other to meet the demand for food.