Impact of Agricultural Financing on Agricultural Output, Economic Growth and Poverty Alleviation in Nigeria

Abstract

This study examined the impact of agricultural financing on agricultural output, economic growth and poverty alleviation in Nigeria.. In an attempt to do this, ordinary least square regression technique was employed in which T-test, R-Square, Standard Error Test and Durbin Watson test ADF/PP unit root and co-integration test were used in the data analysis. The research findings revealed that Commercial Bank Credit to Agricultural sector (CBCA) and Agricultural Credit Guarantee Scheme Fund Loan to Nigeria’s Agricultural sector (ACGSF) were significant to Agricultural sector output percentage to gross domestic product (ASOGDP) the dependent variable, thereby alleviated the poverty rate and induced to economic growth in Nigeria, that there exist a long-run relationship among the variables in Nigeria under the study period. In the light of the research findings, the researcher recommended that there is the need for the Central Bank of Nigeria to reduce the cash-reserve ratio. However, funds that accrue from such policies must be added to the agricultural credit portfolios. There is the need to review the land use decree to enable Nigerians have free access to land. This will consequently increase the farmers that could eventually serve as collateral for credit facilities from the banking system. Finally, agricultural commercialization has been found in the study to be of high significance. To this extent, there is need for government to put in place policies to stimulate agricultural commercialization through cooperative system, agricultural subsidies and zero-tariff for importation of agricultural inputs.

Keywords: Agricultural Financing, Agricultural Output, Economic Growth, Poverty Alleviation.