Agricultural Credit Financing and Agricultural Output Performance in Nigeria
The study examined the connection between Nigeria's success in terms of agricultural output between 1981 and 2021 and the funding of agricultural credit. Assessment of the impacts of Nigeria's agricultural output performance on the Agricultural Credit Guarantee Scheme Fund, Commercial Bank Lending to Agriculture, Money Supply, and Domestic Credit to the Private Sector was the specific goal of the study. The study employed an ex post facto research approach and estimated multiple regression analyses using the Vector Auto-regression estimation technique. According to pre-estimation tests such ADF unit root tests, all the variables under examination appear to be integrated to order 1, and the Johansen Cointegration test shows that there is no meaningful long-run relationship. Variance Decomposition, the VEC Granger Causality Test, and the performed residual diagnostic test are additional estimation tests. The study found that for every 1% increase in the agricultural credit guarantee scheme fund and commercial bank lending to agriculture, respectively, Nigeria's agricultural output performance increased by 0.07% and 0.04%. The findings also showed that while an increase in the money supply of one unit will lead to an increase in agricultural output performance of 2.8%, an increase in domestic credit to the private sector of one unit will result in a 2% decrease in agricultural output performance. The report recommends that policies be put in place to boost the stability and amount of money available to Nigerian farmers. The results indicated that financing for agricultural credit improved Nigeria's agricultural output performance.
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