Increasing Agricultural Investments through Cost of Capital Deregulation in Nigeria
Journal: INTERNATIONAL JOURNAL OF AGRICULTURE AND BIOLOGICAL SCIENCES (Vol.3, No. 03)Publication Date: 2019-06-30
Authors : Ettah Otu I. Agbachom Emmanuel E;
Page : 110-117
Keywords : interest rate; deregulation; agriculture; co-integration; credit volume;
Abstract
The study was conducted to examine increasing agricultural investments through the cost of capital deregulation in Nigeria, with the following specific objectives: ascertain the factors that determine aggregate credit volume of agricultural investment within the cost of regulated and deregulated periods and estimate the level of growth rate in agricultural financing in Nigeria before and after a deregulated period. Co-integration and Real Credit Growth Rate Model were used to realize the objectives respectively. The result showed that interest rate deregulation had a significant and positive impact on agricultural growth in Nigeria, co-integration relationship existed among the variables and average interest lending rate and government budget allocation were the significant variables that had a long-run effect on the aggregate credit volume. Result also showed that 92 % of the disequilibrium caused by previous year's shocks converges back to the long-run equilibrium in the current year. Credit volume of agriculture increases with a decrease in average interest lending rate, also agricultural credit growth rate increased in real terms at 8.91% under the period of study, more so, agricultural GDP contribution to Nigerian economy had a positive relationship with credit volume to agriculture. Finally, ACGSF and CBL were major determinants of the government finance interventions on the agricultural sector and its contribution to the GDP of the Nigerian economy. The following recommendations were proffered: interest rate should be reduced to at least 5% or any other single digit to stimulate investment in the agricultural sector and there should be proper implementation, coordination, and evaluation of financial policies in the agricultural sector
Other Latest Articles
- Morpho-Physiological and Growth Parameter Changes Associated with Improved Sprouting of Sugarcane bud Chips Treated with Growth Regulator and Nutrient Solutions
- Potential of Aqueous Extract of Jatropha curcas on the Control of Post-harvest Rot of Sweet Orange (Citrus sinensis L.) Fruits in Wukari
- Population Density and Frequency of Occurrence of Commercial Sea Cucumbers Species in Danao, Panglao, Bohol
- A Review of Soil Contamination and Remediation on Basis of Case Studies
- Finding Hibiscus sabdariffa L. crop coefficients Kc under irrigation in Tropical Savannah
Last modified: 2021-03-29 19:16:05