DOES AGRICULTURAL CREDIT GUARANTEE SCHEME FUND GUARANTEES SUSTAINABLE AGRICULTURAL OUTPUT IN NIGERIA?

Abstract

This study analysed the impact of agricultural credit guarantee scheme fund on agricultural output in Nigeria from 2000-2020. The impact of Agricultural Credit Guarantee Scheme Fund on agricultural output is largely unexplored and as such the study specifically set to determine the impact of Agricultural Credit Guarantee Scheme Fund on agricultural output and their causal relationship using secondary data collected from Central Bank of Nigeria statistics and National Bureau of Statistics reports. Data collected were analyzed using Augmented Dick-fuller, Philip-Perron test, ordinary least square regression analysis, and granger causality test. Regression result showed that 79% of the variations in the agricultural output were accounted for by the explanatory variables included in the model. Specifically, agricultural credit guarantee scheme fund to agriculture (0.03864) was significant and positively related to agricultural output in Nigeria. The tested hypothesis showed that agricultural credit guarantee scheme fund had positive and significant impact on agricultural output in Nigeria and that there was causality between Agricultural Credit Guarantee Scheme Fund and agricultural output. It was concluded that agricultural credit guarantee scheme fund to agriculture had positively impacted on agricultural output in Nigeria within the period of this study. Therefore, the study advocated for reduction in the requirements of the stringent measures on credit scheme for agricultural lending in order to achieve better contribution to agricultural output in Nigeria. From the coefficient of agricultural credit guarantee scheme fund, a 4% increase in agricultural credit would lead to a more than proportionate increase in agricultural output [1,2].