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Agricultural Credit and Economic Growth Nexus. Evidence from Nigeria

Author

Listed:
  • I. Omosebi Ayeomoni

    ()

  • Saheed A. Aladejana

    ()

Abstract

The significant role of agricultural sector cannot be underestimated in any nation. It has been the source of feeding of the populace and income generation for other developmental activities. As a result, various governments have been making concerted 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 its fundamental role that this study makes a giant stride to examine the relationship between agricultural credit and economic growth in Nigeria. The study employed time series data from Central Bank of Nigeria, Statistical Bulletin and National Bureau of Statistics which spanned from 1986-2014. This study carried out Auto-Regressive Distributed Lag (ARDL) approach to investigate the variables. The findings showed that short and long run relationship existed between agricultural credit and economic growth in both short and long run respectively. Moreover, real exchange rate and private domestic investment as control variables had direct effect on economic growth whereas inflation rate revealed an inverse relationship in the model. The study concluded that economic growth is influenced by dynamic variables such as credit to agricultural sector, real exchange rate, real interest rate, private domestic investment and inflation rate in Nigeria. The study therefore suggested that concerted efforts should be made by policy makers to increase the level of productivity of agricultural sector in Nigeria through adequate credit to the sector so as to boost the growth of the economy.

Suggested Citation

  • I. Omosebi Ayeomoni & Saheed A. Aladejana, 2016. "Agricultural Credit and Economic Growth Nexus. Evidence from Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 6(2), pages 146-158, April.
  • Handle: RePEc:hur:ijaraf:v:6:y:2016:i:2:p:146-158
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    References listed on IDEAS

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