The Impact of the Commercial Agriculture Credit Scheme (CACS) on the Agricultural Economy of Nigeria and its Total Output (2015-2019)

Abstract

This study analyzed the impact of the Commercial Agriculture Credit Scheme (CACS) on the agricultural economy of Nigeria and its total output from 2015 to 2019, using quarterly data. Secondary data were obtained from the Central Bank of Nigeria (CBN) Annual Reports, the Federal Ministry of Agriculture and Rural Development (FMA & RD), and the National Bureau of Statistics (NBS). The study applied the Ordinary Least Square Multiple Regression Model for statistical analysis and used the National Gross Domestic Product (NGDP) and Agricultural Output (AGO) as dependent variables, while Commercial Agriculture Credit Facility Loan to Agriculture (CAL), Money Supply (M2), Unemployment rate (U) and Government Expenditure (G) were used as independent variables. Empirical findings show that there is no statistically significant relationship between CAL, M2, unemployment rate, government expenditure, and NGDP. Similarly, we did not establish a statistically significant relationship between CAL, M2, unemployment rate, government expenditure, and AGO. Overall, the evidence indicates that the desired impact of the Commercial Agriculture Credit Scheme in Nigeria is not being achieved. Arising from the above, we recommend that policymakers and the monetary authorities should investigate why there is a disconnect between the laudable CACS scheme and the ineffective outcome observed. In addition, structural challenges hindering productivity in the agricultural sector such as insecurity, poor road networks, and inadequate power supply should be addressed.