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In many developing countries, the agricultural sector has been seen as a major
sector that should drive economic development and industrialization because of its
importance in the provision of food for the increasing population, the supply of raw material
to the growing industrial sector, generation of foreign exchange earnings, creation of
employment opportunities, and provision of market for the product of the industrial sector.
This study therefore investigates the causal linkage between agricultural financing and
agricultural output growth in Nigeria.
The data were mainly sourced from Central Bank of
Nigeria statistical bulletins and World Bank Economic Indicators and the study adopted the
Pairwise Granger Causality test.
The result showed that there was no causal linkage between agricultural financing
and agricultural output growth within the period under review.
With these findings it is therefore imperative for Nigeria to take
more careful look into why agricultural financing has not made significant impact on
agricultural output growth. There should exist massive education and enlightenment of
farmers to know the different sources of agricultural financing available. When such funds
are accessed, it should be properly monitored to ensure efficient utilization in order to
increase agricultural output.
The study adds to literature on agricultural financing in Nigeria and it
has serious implications for agricultural output growth and other areas of the economy. The
findings of this study is novel and it is a pointer to the government to more proactive in
ensuring that the agricultural sector is well financed and monitored in order to increase
agricultural productivity.