Authors: Bodiseowei C. Obudah; Steve S. Tombofa
Addresses: Department of Economics, Niger Delta University, P.O. Box 1464, Wilberforce Island, Bayelsa State, Nigeria ' Department of Economics, Niger Delta University, P.O. Box 1464, Wilberforce Island, Bayelsa State, Nigeria
Abstract: This paper examined the effect of agricultural financing on agricultural output and macroeconomic output in the Nigerian economy. The error correction results from the analysis of time series data provided empirical evidence that there is a positive relationship between agricultural credit and agricultural output. Agricultural credit also had a positive effect on real GDP growth over the period of the study. However, credit default by borrowers is a serious menace which reduces the confidence of lenders. The Nigerian legal system should ensure a better credit enforcement mechanism and effective management of interest rates by monetary authorities. In addition, credit facilities and subsidies that would trickle down to individual farmers and farmers' cooperative groups will provide the needed funds to enhance agricultural output as well as economic output in Nigeria.
Keywords: agricultural financing; agricultural output; economic growth; agricultural credit; loan default; loans; agriculture; macroeconomic output; Nigeria; credit default; interest rates; farmers; farmer cooperatives.
African Journal of Economic and Sustainable Development, 2016 Vol.5 No.4, pp.287 - 301
Received: 20 Aug 2015
Accepted: 20 Aug 2015
Published online: 28 Sep 2016 *