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Research Article Open access CC BY 4.0

Agricultural Financing and Economic Performance in Nigeria

Kelani Fatai Adeshina, Olunlade Yetunde Tomiwa, Olubanwo Mosunmola Eniola

Asian Journal of Agricultural Extension, Economics & Sociology · pp. 61–74 · Published 21 Jul 2020

10.9734/ajaees/2020/v38i730376

Abstract

The Agricultural sector which used to be the mainstay of the Nigerian economy in the 1950s, 60s and early 70s is now conceived as a risky and unprofitable venture by financial institutions and government. This is because the financial institutions prefer to give funds to other sectors where payback period is short and return rate is high and also because the agricultural sector is inadequately funded by the government due to low budgetary allocation to the Agricultural sector over the years. The study examined the impact of Agricultural Financing on Economic Performance in Nigeria within the sampled period of 1978-2017. The study specifically attempted to assess the impact of Agricultural Financing on Economic Performance in Nigeria. The study which utilizes data through secondary sources from the Central Bank of Nigeria statistical bulletin were analyzed using the Unit root test, Bound Cointegration test and error correction modelling to empirically estimate the coefficient of parameter estimates. The statistical decision of the analysis is based on 5% (0.005) level of significance. From the result, it was deduced that in the long-run, Agricultural Credit Guarantee Scheme Fund (ACGSF) is the most influential agricultural financing variable (as compared to government expenditure on agriculture and commercial bank credit to agriculture) that contributed to economic performance, as it revealed that (ACGSF) had strong positive impact on the growth rate of the Nigerian economy. The study concluded and strongly maintained that Agricultural Financing contributed poorly to the economic performance of Nigeria within the sampled period basically because of inadequate funding.

Agriculture agricultural financing economic performance GDP growth rate.

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