An Assessment of the Impact of Interest Rate Deregulation in Enhancing Agricultural Productivity in Nigeria

Abstract

The study examines an assessment of the impacts of interest rate deregulation in enhancing agricultural productivity in Nigeria by employing robust statistical analysis, using ordinary least square method. Data from Central Bank Statistical Bulletin covering the period 1986 to 2010 were also examined and the findings from the study showed that interest rate deregulation has significant and positive impact on agricultural productivity in Nigeria within the period under review. Based on the findings, this study recommends a market determined interest rate as a stimulant in enhancing agricultural productivity. It further suggest that interest rate plays a significant role in enhancing economic activities and as such, monetary authorities should ensure appropriate determination of interest rate level that will break the double edge effect of interest rate on savers and local investors.

Keywords: Deregulation, agricultural productivity, Financial intermediary, Interest rate, Government intervention.