The Effects of Financial Sector Development on Agricultural Growth in CEMAC region

The objective of this study was to investigate whether variations in financial sector development affect agricultural sector growth for both crops and livestock productions in CEMAC Region. Panel data for 25years spanning from 1996 to 2020 was used, employing Panel Corrected Standard Errors (PCSE) and Driscoll-Kraay standard errors estimation techniques. Findings revealed that financial institutions development positively and significantly determine crop and livestock productions. Financial market development positively and significantly affects crop productions, however positive but insignificant for livestock production. In conclusion, financial sector development is an important economic indicator that can be fine-tuned to foster agricultural sector growth of CEMAC region. The authors recommend that policy makers should prioritise deepening financial intermediation targeted at agriculture by expanding rural banking infrastructure and strengthening bank agricultural credit schemes. This implies policies should focus on bank credit accessibility, reducing collateral requirements, and designing sector-specific loan products for agriculture in CEMAC member states.

Agricultural Finance, Crop Production, Livestock Production, Financial Sector Development, Agribusiness, CEMAC

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