Agricultural Credit Guarantee Scheme Fund, Government Expenditure on Agriculture and Agricultural Output in Nigeria 1990 – 2020

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue V, May 2022 | ISSN 2454–6186

Agricultural Credit Guarantee Scheme Fund, Government Expenditure on Agriculture and Agricultural Output in Nigeria 1990 – 2020

Dr Christopher Mmaduabuchukwu Okpala¹, Dr Felix Nwaolisa Echekoba² and Amalachukwu Chijindu Ananwude²*
¹Department of Banking and Finance, Federal Polytechnic, Oko, Anambra State, Nigeria
²Department of Banking and Finance, Nnamdi Azikiwe University, Anambra State, PMB 5025, Awka, Nigeria
* Corresponding author

Abstract: The effect of agricultural credit guarantee scheme fund and government total expenditure on agriculture on agricultural sector’s contribution to real gross domestic product was evaluated in this study. The Central Bank of Nigeria (CBN) statistical bulletin serves as the data bank for the time series data from 1990 to 2020. The Ordinary Least Square (OLS) technique was employed in estimating the models. The OLS result revealed that agricultural credit guarantee scheme fund has a positive significant effect on agricultural sector’s contribution to real gross domestic product. On the other hand, the effect of government expenditure on agriculture on agricultural sector’s contribution to real gross domestic product is positive but not significant. There is the need for the government to inject more funds into agricultural financing schemes, especially the agricultural credit guarantee scheme fund and also ensure that the funds are effectively disbursed for agricultural activities. Government expenditure on agriculture should be increased to reflect the importance of this sector to the economic development and growth of the country. The budgetary allocation of the government on agricultural sector should not only be increased but measures should be taken to ensure that the budget is released and implemented as at when due.
Keywords: Agricultural credit guarantee scheme fund; government agricultural expenditure
I.INTRODUCTION
It is obvious that no aspect of Nigerian economy will grow well without proper financing with a good financing policies from the financial system of the economy. Agricultural sector cannot be left behind because of its contribution to the growth of economy. The Nigeria government have attempt to overcome the problem of financing agriculture by subsidizing credit, setting up credit guarantee fund schemes, establishing programmes and stimulating institutional innovations that can help to develop agricultural sector contribution to Gross Domestic Product (GDP). This is because, many banks perceived agricultural credit as risky and seek to channel credit to other sectors like general commerce, oil and gas. Agricultural financing policies such as schemes, programmes and institutions have not really fulfilled the expectations on them. It is expected that with these policies aimed at adequate financial provision/funding for agricultural development, the problem of inadequate loan

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