IMPACT OF CREDIT AVAILABILITY ON AGRICULTURAL PRODUCTIVITY IN NIGERIA

Agriculture remains central to Nigeria’s economy, yet productivity growth has been constrained by high borrowing costs, unstable exchange rate and limited access to credit. Therefore, the need to correct low productivity in Nigeria’s agricultural sector is compelling. This study evaluates the impact of Credit availability on Agricultural productivity in Nigeria, focusing on Central Bank of Nigeria credit policies such as; monetary policy rate, broad money supply, exchange rate and Agricultural Credit Guarantee Scheme. An ex-post facto research design was adopted for this study, relying on annual secondary data spanning the period from 1994 to 2024. The study used Autoregressive Distributed Lag (ARDL) model, utilizing E-view 10.0 version to analyze the data. The results showed that broad money supply and Agricultural Credit Guarantee Scheme (ACGS) have a significant positive impact on agricultural productivity in Nigeria while monetary policy rate and exchange rate exert a negative significant impact on agricultural productivity in Nigeria. The positive impact of broad money supply and ACGS on agricultural productivity suggests that policies that enhance liquidity and financial inclusion in the economy are vital for the sector productivity. Conversely, the negative impact of monetary policy rate and exchange rate suggests that high monetary policy rate and depreciation in exchange rate decrease investment in agricultural sector, thereby reducing productivity. The implications are that the Nigerian agricultural sector cannot be productive without favorable CBN policies. The study recommends that CBN should reduce interest rate; enhance money supply via targeted credit facilities; stabilize exchange rate by promoting non-exports and increase ACGSF funding.