Abstract
The study performed an in-depth examination of the impact of guaranteed agricultural finance to oil palm, cocoa, groundnuts, fishery, poultry, cattle, roots, and tubers on the real gross domestic product of the country. Time series data was sourced from the Central Bank of Nigeria statistical bulletin of various issues. The data sets covered thirty-seven (37) years spanning from 1981 to 2017. The study used Autoregressive Distributed Lag (ARDL) model for its analysis. However, prior estimation and due to several exogenous variables, Phillip Perron stationarity test was used to determine the order of integration because of its robustness to serial correlation and heteroskedasticity. The study also specified the lag criterion based on LR, FPE, AIC, SC, and HQ using Newey-West covariance matrix estimator. Findings from both short-run and long-run models as confirmed by the Wald test, which shows that none of the guaranteed agricultural finance is statistically significant to real gross domestic product. The study, therefore, recommends increased funding and deliberate efforts at determining which of the nominated agricultural spending has the most contributory impact on growth.
Highlights
The agricultural sector has the potential to stimulate and/ or expedite economic growth which could lead to economic development in the long run
This led to an increased financing of the oil sector and a decreased financing on the agricultural sector thereby, leading to a drastic reduction in our agricultural produce and export which nosedived to the demise of our manufacturing sectors due to lack of raw materials the high unemployment rate leading to various crimes experienced in the country
As a result of the significant contribution of the Micro, Small, and Medium Enterprise (MSME) to the growth of the Nigerian economy, two hundred and twenty billion naira (₦ 220,000,000,000) share capital was launched by the Central Bank of Nigeria (CBN) on August 15th, 2013 to help in financing MSMEs that are linked with the agricultural and manufacturing sectors
Summary
The agricultural sector has the potential to stimulate and/ or expedite economic growth which could lead to economic development in the long run. Intervention funds should be deployed to finance the agricultural sector in other to regain our export dominance of various agricultural products such as; cotton, cocoa, groundnut, and palm oil e.tc which would support the need for raw materials by our industrial and or manufacturing sector. The economy of scale witnessed in the early beginnings of our nations’ post-independence (i.e. after 1960), which was anchored on agricultural production has not been re-examined in spite of the continuously guaranteed finances made available (Okunlola, 2013, 2014, Okunlola and Oke 2018). Okunlola et al Agricultural finance and economic growth: evidence from Nigeria methodology, findings, and discussion, conclusion, recommendations, acknowledgment and references
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