An Empirical Investigation on Impact of Interest Rates on Agricultural Investment in Nigeria

The main thrust of this study is to examine the impact of interest rate on agricultural investment in Nigeria for the period 1980–2015. In a bid to finding the nexus between interest rate and agricultural investment in Nigeria, the study relied on agricultural investment, lending interest rate, deposit interest rate and agricultural output as variables. The study employed the ARMA Least Square technique to determine the impact of interest rate on agricultural investment in Nigeria. The empirical findings showed that deposit interest rate and agricultural output have a positive impact on agricultural investment, growth, and development while lending interest rate impacts negatively on agricultural investment in Nigeria. Based on the findings, the study recommends that government and various stakeholders in the agricultural sector should improve on the macroeconomic policies such as interest rates, inflation, the income level that could impact on the level of investment that would contribute positively to agricultural development in Nigeria.