COMMERCIAL BANK CREDIT AND AGRICULTURAL OUTPUT IN NIGERIA: (1982-2012)

ABSTRACT

This research work examined the impact of commercial Bank credit on Agricultural output in Nigeria using Macroeconomic variables commercial bank credit and agricultural output. The broad objective of the study is to investigate the extent to which commercial bank credit had supported agricultural output Nigeria. The specific objectives are: i to determine the impact of commercial banks credit on agricultural output in Nigeria, and i to determine the impact of agricultural output on economic growth in Nigeria. The methodology adopted for the study was ordinary least square OLs involving the students Ttest, to test the significance of the individual parameter estimate, the Ftest, to test the significance of the entire regression plane, the R² and Adjusted R², to test the joint influence of the explanatory variables on the dependent variable. Finally, DurbinWatsons statistics DW was used to check the presence or absence of serial correlation on the data. After the regression, the result shows that: firstly, agricultural output as well as commercial bank credit to agriculture and real interest rate contributed a lot to economic growth in Nigeria. Secondly there is a general agreement that Nigeria agricultural sector is grossly underfunded. Finally, the share of actual expenditure that went to the agricultural sector compared unfavorable with the shares that went to other sectors. Based on the findings above, the researcher made the flowing suggestions:

There is the need for improvement of public expenditure tracking system in agricultural sector.

There is also the need for clarification of the roles of the three tiers of government in agricultural services delivery.

There is the need for applied research targeted at priority issues

TABLE OF CONTENTS

TITLE PAGE..i

APPROVAL PAGEii

DEDICATION.iii

ACKNOWLEDGEMENTiv

ABSTRACT..vi

TABLE OF CONTENTviii

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY.1

1.2 STATEMENT OF PROBLEM....6

1.3 OBJECTIVE OF THE STUDY...9

1.4 HYPOTHESIS OF THE STUDY9

1.5 SIGNIFICANCE OF THE STUDY...10

1.6 SCOPE AND LIMITATION OF HE STUDY..10

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 THEORITICAL L ITERATURE..12

2.1.1 THE PREREQUISITE THESIS VERSUS

THE CONCURRENCE THESIS.14

2.2 FINANCING AGRICULTURE IN NIGERIA 18

2.1.1 SOURCES OF AGRICULTURAL FINANCING .20

2.3 COMMERCIAL BANK CREDIT AND AGRICULTURAL OUTPUT... 23

2.4 EMPIRICAL LITERATURE..28

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 MODEL SPECIFICATION ..34

3.2 ESTIMATION PROCEDURE..36

3.3 EVALUATION TECHNIQUES....37

3.4 DATA REQUIRED AND SOURCES..41

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 UNIT ROOT TEST43

4.2 CO INTEGRATION TEST44

4.3 PRESENTATION AND INTERPRESTATION OF RESULT..46

4.3:1INTERPRESTATION OF REGRSSION RESULT....47

4.4 EVALUATION OF EMPIRICAL RESULT..48

4.4:1 ECONOMIC CRITERIA A PRIORI EXPECTATION....48

4.4:2 STATISTICAL CRITERIA..50

4.4:3 COEFFICIENT OF DETERMINATION R².51

4.4.4 THE TSTAISTICS..51

4.4.5 THE FTEST.52

4.5. ECONOMIC CRITERIA SECOND ORDER TEST53

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 SUMMARY.... 59

5.2 CONCLUSION ..62

5.3 RECOMMENDATION...63

BIBLIOGRAPHY.67

APPENDIX