Relationship between Money Supply & Financial Bailout of Small Scale Agribusiness Firms in Nigeria

Abstract

The study was carried out to determine the macro-economic correlates of public capital supply for agribusiness financial bailout and its implications for agricultural development in Nigeria. Secondary data was obtained from Central Bank of Nigeria (CBN) statistical bulletin,(2018) and it covered from 1992-2018. Simple regression, correlation matrix and descriptive statistics were used to analyze the collected data. The descriptive statistics indicates that the mean capital injection into the agribusiness firms amounted to 39.3 million. The simple regression shows that money supply has a positive and significant relationship with the financial bailout of agribusiness firms. Correlation matrix shows that money supply has a close relationship with reserve requirement, interest rate, discount rate and exchange rate. The study concludes that the mean capital injection into agricultural sector is low, money supply have a positive and significant relationship with the financial bailout of agribusiness firms and the relevant macro-economic variables significantly have a close relationship with money supply. The study therefore recommends that Policy makers should develop policies that will stabilize the injection of capital into the agribusiness sector, and the stabilization of the relevant macro economic variables. This will further lead to the overall development of agricultural value chain in the Nigerian economy.