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Agricultural Financing for the Diversification of the Nigerian Economy: The Needful

By Dr. Adofu Ilemona

Summary

The study “agricultural financing for the diversification of the Nigerian economy: the needful” shows by a way of robust statistical analysis, the influence of finance in increasing agricultural output in Nigeria. Using data from 1981 to 2015, cointegrating regression (fully modified OLS) was applied to the time series data. The unit root test show that annual rainfall data is stationary at level (I(0)) while data for agricultural credit guaranteed scheme fund, commercial banks’ loan to agricultural sector and agricultural output are I(1)). We found that commercial banks loan to agricultural sector and annual rainfall are positively and significantly related to agricultural productivity in Nigeria for the period concerned in this study. Agricultural Scheme Fund is negative but significant in its relation with agricultural output. This might not be unconnected with political ills that impede policy measures in implementing funds allocated for use of the sector which might drive away real targets of such funds. The study therefore recommends that political ills that negatively affect policies should be done away with for policies to have it desired effect.
Agricultural Financing for the Diversification of the Nigerian Economy: The Needful
 
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Abstract

The study “agricultural financing for the diversification of the Nigerian economy: the needful” shows by a way of robust statistical analysis, the influence of finance in increasing agricultural output in Nigeria. Using data from 1981 to 2015, cointegrating regression (fully modified OLS) was applied to the time series data. The unit root test show that annual rainfall data is stationary at level (I(0)) while data for agricultural credit guaranteed scheme fund, commercial banks’ loan to agricultural sector and agricultural output are I(1)). We found that commercial banks loan to agricultural sector and annual rainfall are positively and significantly related to agricultural productivity in Nigeria for the period concerned in this study. Agricultural Scheme Fund is negative but significant in its relation with agricultural output.  This might not be unconnected with political ills that impede policy measures in implementing funds allocated for use of the sector which might drive away real targets of such funds. The study therefore recommends that political ills that negatively affect policies should be done away with for policies to have it desired effect.

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Dr. Adofu Ilemona

Dr. Adofu Ilemona

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