IMPACT OF AGRICULTURAL FINANCING ON ECONOMIC GROWTH IN NIGERIA

This study looks into how agricultural funding affects Nigeria's economic expansion. The study's variables include the overall amount of credit given to agriculture by deposit money banks, the lending rates given by these institutions to agriculture, the loans given by rural deposit money bank branches, and Nigeria's actual gross domestic product. The Central Bank of Nigeria's Statistics Bulletin 2021, which covered the 32-year period from 1990 to 2021, provided the statistics for these variables. The Breusch-Pagan Heteroskedasticity Test, Pearson correlation, Shapiro-Wilk Normality, and Ordinary Least Squares Regression Analysis were utilized to examine the data and test the hypotheses. The results showed that Nigeria's real gross domestic product benefited significantly throughout the period under review from the total credit given by deposit money banks to agriculture and the loans given by their rural branches. However, the results showed that the rates at which deposit money banks lent to the agricultural sector during the period under review had a negative effect on Nigeria's real gross domestic product. Among other recommendations made by the research is that deposit money institutions should keep providing more loans to the agricultural industry. This can be achieved through various means such as flexible repayment terms, and tailored financial products designed specifically for the agricultural industry. The government can also provide incentives to banks to promote lending to the agriculture sector. The report also suggests that the interest rates that deposit money banks charge the agricultural sector be supervised and regulated by the Central Bank of Nigeria, with the rate being set marginally above the rate of current inflation. This strategic move would enable farmers to more easily obtain credit facilities, ultimately stimulating growth within the Nigerian agricultural sector.

1 29 Mar, 2024

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