The Relationship between Bank Lending to Agricultural Sector and Agricultural Earnings in Nigeria
This study examined the relationship between bank lending to agricultural sector and agricultural earnings in Nigeria using secondary data obtained from various editions of the Central Bank of Nigeria Statistical Bulletins. Secondary data collected for the selected study variables covered ten years period from 2009 to 2018. The study adopted bank loans and advances to agriculture, interest rate, and inflation as independent variables, while agricultural earnings representing gross national agricultural output was used as dependent variable. The study employed descriptive statistics and multiple regression analysis based on the OLS technique assisted by the E-view 10 computer software as the statistical tools for data analysis. The results revealed that all the independent variables had positive relationship with agricultural earnings. Specifically, bank loans and advances to agriculture had statistically significant effect on agricultural earnings. The regression results also showed that the coefficient of determination (R-squared) value of 0.86 indicates that 86% of changes in the dependent variable (AGE) were explained by the combined effect of changes in the independent variables. The study concluded that bank lending to the agricultural sector has a significant positive relationship with agricultural earnings in Nigeria. The study recommended among others that the CBN should step-up policy making, execution and monitoring of bank lending to agriculture; and that the Federal Government through the Federal Ministry of Agriculture should declare a state of emergency on agriculture and make the sector more attractive and viable for investment.