AGRICULTURAL CREDIT, EXCHANGE RATE INSTABILITY AND AGRICULTURAL SECTOR PERFORMANCE
Abstract
This study investigated the impact of agricultural credit, exchange rate instability, and commercial bank loans on the performance of the agricultural sector in Nigeria from 1981 to 2021. The research objectives included assessing the relationship between the Agricultural Credit Guarantee Scheme Fund (ACGSF) and agricultural sector performance, examining the influence of exchange rate fluctuations, and evaluating the effect of commercial bank credit on the agricultural sector. The study adopted an ex post facto research design, employing the Solow's neoclassical growth theory as the underlying framework. Multiple regression analysis was conducted using Ordinary Least Squares (OLS). The major findings revealed a negative impact of exchange rate instability and ACGSF on agricultural output, while commercial bank credit positively influenced agricultural performance. The study recommended that the monetary authority ensures exchange rate stability, introduces a moratorium on ACGSF administration, and encourages commercial banks to enhance credit provision to the agricultural sector. These measures aimed to mitigate the adverse effects of exchange rate fluctuations and corruption in ACGSF administration while fostering the positive impact of commercial bank credit on agricultural sector growth in Nigeria.
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