Ekine And Onukwuru

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Ekine and Onukwuru

Greener Journal of Agricultural Sciences Vol. 8 (3), pp. 065-073, March 2018.

ISSN: 2276-7770  

Research Article

Manuscript Number: 031218042

 

(DOI: http://doi.org/10.15580/GJAS.2018.3.031218042)

 

Deposit Money Banks’
Credit and Agricultural Sector Performance in Nigeria

 

 

EKINE Data I. and ONUKWURU Fyneface
Manunyewho

 

 

Department of Agricultural
and Applied Economics and Extension, Faculty of Agriculture, Rivers State
University, Nkpolu- Oroworukwo, Port Harcourt

Abstract

 

The study empirically examines the effect of deposit
money banks credit on agricultural sector performance in Nigeria from 1986 to
2016. The data for the empirical analysis was sourced from secondary data
sources various issues of the CBN statistical bulletin. The study used
agricultural sector output (ASP) to proxy agricultural sector performance as
the dependent variable whereas Deposit Money Banks’ Credit to Agricultural
Sector (BCA) was the major explanatory variable while Interest Rate (INR) and
Government Expenditure on Agriculture (GEA) are the check regressors as to
enhance the explanatory power of the model. The study employed descriptive
statistic, Ordinary Least Squares (OLS), unit root test, co-integration and ECM
methods of analysis as the analytical tools. The results revealed
that there is no co-integrating (or long run) relationship between deposit
money banks’ credit to agricultural sector and the performance of agricultural
sector in Nigeria during the period of study; Deposit money banks’ credit
to agricultural sector (BCA) had a        
 positive and a significant impact on Agricultural Sector performance
(ASP); Interest Rate (INR) had a negative insignificant relationship with
Agricultural Sector performance (ASP). Also, the study revealed that government
expenditure on agricultural sector (GEA) had a positive insignificant
relationship on Agricultural Sector performance (ASP). Consequent upon the
above, it is recommended that efforts should be made by the government and
private individuals to encourage or increase investment in the agricultural
sector.   The lending rate on loans to the agricultural sector should
be reviewed and fixed at a rate that would encourage farmers to acquire loans
from deposit money banks.

 

Keywords: Deposit Money Banks,
Interest Rate, Banks Credit, Government Expenditure, Agricultural Sector.

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