An analysis of interest rate deregulation as a policy instrument for stimulating agricultural finance and growth in Nigeria

L.O. Oniyishi, C.J. Arene and C.M. Ifiorah

Nigerian Journal of Agricultural Economics, 2015, vol. 05, issue 01

Abstract: The study examined interest rate deregulation as a policy instrument for stimulating agricultural finance and growth in Nigeria. The study specifically ascertained the factors that determine the aggregate credit volume to agriculture within the periods of regulation and deregulation in the Nigerian economy, determined the effects of government finance interventions on agricultural sector performance in the Nigerian economy, determined the periodic effects of macroeconomic financial indicators on Agriculture’s gross domestic product (GDP) contribution to Nigerian economy and estimated the level of real credit growth of agricultural finance in Nigeria. Descriptive statistics, Ordinary Least Squares (OLS) regression technique and chow test were used for data analysis. The chow test showed that there was a significant differential effect on the aggregate credit volume to agricultural sector between the regulated and deregulated regimes. Interest rate was an important determinant of aggregate credit volume to the agricultural sector in Nigeria, especially during the deregulated period but monetary authorities should ensure appropriate determination of interest rate level that will break the double-edge effect of interest rates on savers and investors.

Keywords: Agricultural and Food Policy; Agricultural Finance (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:naaenj:267818

DOI: 10.22004/ag.econ.267818

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