Agricultural Credit and Economic Growth in Nigeria

Abstract

The Agricultural sector is highly indispensable to growth of any nation. It has been the source of feeding of the populace, raw material for industries and income generation for other developmental activities. Various governments have been made efforts to improve economic growth and agricultural productivity through agricultural credit but rarely one can see any improvement in the sector. It is in line with these fundamental role that this study makes a giant stride to examine the impact of agricultural credit on Nigeria's economic growth. The study employs time series data from publications of Central Bank of Nigeria, Statistical Bulletin, National Bureau of Statistics and internet publication of policy issues on agriculture in Nigeria which spanned from 1985-2016. This study employs the three stage least square analysis as the estimation technique to investigate the variables. The findings shows that agricultural credit is an effective instrument for counter-cyclical agricultural output, non-oil export and GDP stabilization in the Nigerian economy although the value of GDP fell at the end of the period indicating that, such policies deteriorate with time. The study concludes that agricultural credit, interest rate exchange rates were all important in affecting aggregate output in Nigeria. The study recommends that agricultural credits should be extended for development of agricultural production because it has causality effect on economic growth.