Effects of commercial banks' credit on agricultural output growth in Nigeria (1980-2022)

The study investigates the influence of commercial bank loans on the growth of Nigeria's agricultural output from 1980 to 2020, utilizing annual time series data obtained from the Central Bank of Nigeria (CBN) and FAO Statistics (FAOSTAT). The data analysis involved descriptive statistics including average growth rates, means, standard deviation, coefficients of variation, and percentages. To assess the stationarity of the time series data, the Augmented Dickey-Fuller statistics were applied, while Johansen's method helped confirm co-integration among variables. The study employed the vector auto regression (VAR) method to explore the relationship between bank loans and agricultural output. Throughout the period, both agricultural output and commercial bank credit exhibited fluctuations, largely influenced by public spending trends. The VAR analysis revealed that public spending positively impacts agricultural output, while the interest rate on agricultural loans and bank lending to the agriculture sector show a one-year lag effect. Collectively, the findings suggest that enhancing budgetary allocations and increasing commercial banks' lending to agriculture can significantly promote agricultural productivity in Nigeria.