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Private Sector Credit and Agricultural Sector Performance in Nigeria

Naworio, Oyefiebogo. Flourish, Branch, Ezoneb, Prof. Andabai, Priye, Werigbelegha, Ph.D

Abstract

The study examines the impact of private sector credit on agricultural sector performance in Nigeria; for the period (1998-2025). Secondary data were used and collected from the Central Bank of Nigeria Statistical Bulletin, 2025. The study used agricultural sector credit, private sector credit, and bank lending rate as the explanatory variables to measure private sector credit; whereas, agricultural sector output was proxy for agricultural sector performance and employed as dependent variable. Hypotheses were formulated and tested using Ordinary Least Square . The result shows that agricultural sector credit has a significant impact on agricultural sector output in Nigeria. Private sector credit has a significant impact on agricultural sector output in Nigeria. Bank lending rate has a significant impact on agricultural sector output in Nigeria. The coefficient of determination indicates that about 74% of the variations in private sector performance can be explain by changes in capital market variables (AGSO, PSC, BLDR) in Nigeria. The study concludes that private sector has a positive significant impact on agricultural sector performance in Nigeria. Therefore, the study recommended that monetary authorities should ensure that credit to the private sector be properly supervised to ensure its proper utilisation for productive manufacturing sector ventures. Despite the bank consolidation exercise well concluded in Nigeria, bank size is still a problem to agricultural sector performance. Higher bank capital based should be imposed on banks to further consolidate bank operations to enable them lend without fear of failure. The policy makers ensure that lending rate be reasonable so as not to deter investors from borrowing in order to embark on viable investment projects in the sector.

References

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