IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 4 NO. 1 2019

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Impact of Agricultural Financing on Cassava Production in Nigeria

Ewubare, Dennis Brown & Ologhadien, Sonia Tobore

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Abstract

In this study, the impact of agricultural financing on cassava production in Nigeria during 1985-2015 was examined. The objectives were to determine the contributions of government capital expenditure on agriculture, recurrent expenditure on agriculture, agricultural credit guarantee scheme fund and deposit money banks’ credits to agriculture on cassava production. The data required for the empirical analysis were extracted from the Food and Agricultural Organization Statistics (FAOSTAT) and CBN Statistical Bulletin. The estimation techniques relied on the error correction mechanism. The parsimonious ECM reveals that cassava output in previous periods is positively related to output in current period. Similarly, public capital spending in agriculture has a positive and significant impact on cassava production. 1 percent increase in contemporaneous and first lag of capital spending increased cassava output by 0.061 percent and 0.075 percent respectively. On the contrary, recurrent spending in agriculture significantly reduced cassava production. The result also shows that agricultural credit guarantee scheme fund at lag 3 exerts significant positive impact on cassava production, but the impact of its second lag cassava output is negative. Again, the contemporaneous value of bank credits is positively related to cassava output, but lagged values significantly contracted cassava production. Drawing supports from the results, it is recommended that public capital expenditure on agriculture should prioritize mechanization of cassava production to increase its attractiveness for the youths and boost output and its associated value chain

keywords:

Agricultural Financing, Cassava Production

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