Role of International Financial Institutions in Promoting Agriculture Value Added in Nigeria

Ewubare Dennis Brown and Oriji Esther Chimekwa
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Ewubare Dennis Brown: Department of Economics, Rivers State University, Port Harcourt, Nigeria.
Oriji Esther Chimekwa: Department of Economics, Rivers State University, Port Harcourt, Nigeria.

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Abstract: This study investigated how international financial institutions contributed to agriculture value added in Nigeria. The specific objectives were to examine how funding from International Finance Corporation, International Fund for Agriculture Development (IFAD) and African Development Bank affected agriculture value added. Time series data obtained from the World Development Indicators and World Bank Database were used for the analysis. The dynamic least squares (DOLS), unit root and cointegration tests were the empirical tools used for the analysis. The results of the unit root test showed that all the variables are integrated of order one. It was also found that the variables are cointegrated at percent level which implies that agriculture value added has a long run relation with the independent variables. The results revealed that funding from the International Finance Corporation contributed positively and significantly to agriculture value added to GDP in the long run. This finding highlights the significant contribution of the World Bank Group to economic development in Nigeria. At the same time, IFAD has a significant positive effect on agriculture value added to GDP. This finding attests to the strategic position of the IFAD, as a specialized agency of the United Nations in promoting agriculture development for poverty reduction. In addition, evidence of a significant positive contribution of AfDB funding to agriculture value added to GDP was established from the results. Given the findings, it was recommended that policymakers should ensure that funds available from International Financial Institutions for agriculture sector development are properly utilized to boost the contribution of agriculture sector to GDP growth.

Date: 2022-03-17
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Published in Asian Journal of Economics, Finance and Management , 2022, 4 (1), pp.207-214

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05148379

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