ABSTRACT

The impact of the Central Bank of Nigeria (CBN) cooperative lending on the performance of agribusiness sector in Nigeria was investigated in this study, and was conducted between 1981-2020. The statistical tools used for the study were descriptive statistics, unit root test, Augmented-Dickey Fuller method, Johansen co-integration Vector Error Correction model, and Parson Correlation coefficient. The data were collected from CBN statistical bulletin and examined with descriptive statistics, unit root test was used to ascertain the stationarity of the time series data while Augmented-Dickey Fuller was used to validate the presence of constant means, Vector Error Correction model, Johansen co-integration were used to test for first and second degree co-integration. The result of the study indicated that, CBN Cooperative lending(CCL) has not benefited crop agribusiness enterprise in the short-run with a negative coefficient of (-0.033) significant at 10% of overall production.(-0.100) in the long-run for livestock agribusiness statistically significant at 10% while it positively impacted fisheries agribusiness in the long-run at a coefficient of (0.037), CCL had a positive coefficient of (2.573) on agribusiness sector in the long run and was statistically significant at 1% and (-0.03) in the short-run. However, inflation (INF) was statistically significant at 10% in the short-run with a positive coefficient of (0.073) and at a 10% negative coefficient of (-8.310) in the long-run thereby putting further strain on Nigeria agribusiness sector. Therefore, the federal government of Nigeria through the CCL should pay special attention to the livestock and the fisheries agribusiness enterprises by designing programs that will be all encompassing, unique and encouraging based on their peculiarities to provide sufficient funding. Single-digit interest and inflation rates should be the target of the CBN through her fiscal and monetary policies, the CBN must ensure that single-digit inflation and interest rates be maintained to boost the long-term performance of the agribusiness sector.

TABLE OF CONTENTS

Title Page                                                                                                                    i

Declaration                                                                                                                  ii

Certification                                                                                                                iii

Dedication                                                                                                                   iv

Acknowledgements                                                                                                    v

Table of contents                                                                                                         vi

List of Tables                                                                                                              ix

List of Figures                                                                                                             xi

Abstract                                                                                                                       xii

CHAPTER 1: INTRODUCTION                                                                          1

1.1       Background of the Study                                                                               1

1.2       Statement of the Problem                                                                               3

1.3       Research Questions                                                                                         4

1.4       Objectives of the Study                                                                                  5

1.5       Research Hypotheses                                                                                      5

1.6       Justification of the Study                                                                               6

1.7       Scope of the Study                                                                                         7

CHAPTER 2: REVIEW OF RELATED LITERATURE                                              8

2.1       Conceptual Review                                                                                         8

2.1.1    Credit                                                                                                              8

2.1.2    Nigeria Cooperative Credit Market                                                                9

2.1.3    Access to Financial Services by Agribusiness Enterprises                             11

2.1.4    Overview of Nigeria's Agribusiness Finance Policies                         13

2.1.5    Agricultural Finance Policy Schemes                                                             13

2.1.6    Agribusiness Finance Policies Programmes                                                    15

2.1.7    Institutions for Agricultural Finance Policies                                                 19

2.1.8    Nigerian Agricultural Cooperative and Rural Development

Bank (NACRDB                                                                                            22

2.1.9    Agricultural Credit Support Scheme (ACSS)                                                 23

2.1.10   Rural Finance Institution Building Programme (RUFIN)                             24

2.1.11    Credit guarantee programs in Nigerian Countries                                        25

2.1.12   Obstacles to agricultural finance policies                                                       29

2.1.13  The Agribusiness Sector and Nigeria's Development (2007),             31

2.1.14  The Plan to Guarantee Agricultural Credit                                                     34

2.1.15 The ACGSF'S structure, organization, and purpose                                        39

2.2       Theoretical Review                                                                                         40

2.2.1    Demand and supply of finance theory                                                           40

2.2.2    Financial growth theory                                                                                  41

2.2.3    Pecking order theory                                                                                       42

2.2.4    Contract theory                                                                                               44

2.2.5    Financial rationing and constraint theory                                                       45

2.3       An Empirical Review                                                                                      45

2.4       Analytical review                                                                                            48

2.4.1    Unit root test                                                                                                   48

2.4.2    Time series' stationary properties                                                                    50

2.4.3    Testing for serial correlation (autocorrelation)                                                52

CHAPTER 3: METHODOLOGY                                                                          53

3.1       Study Area                                                                                                      53

3.2       Sources of Data                                                                                              54

3.3       Method of Data Analysis                                                                               54

3.4       Model Specification                                                                                        55

3.4.1    Unit root test: augmented Dickey-Fuller (ADF) test (for the

            stationary test)                                                                                                55

CHAPTER 4: RESULTS AND DISCUSSION                                                    59

4.1       Descriptive Statistics of the Variables Included in the Model                       59

4.1.1    Unit root tests for the variables included in the model                                  61

4.2       Examine the Relationship between credits granted by CBN

through cooperative societies and the performance

of crop agribusiness enterprises in Nigeria                                                      61

4.3       The Relationship between Credits granted by CBN through cooperative                 societies to livestock agribusiness enterprise in Nigeria                                68

4.3.1    The relationship between credit granted by CBN through cooperative

            societies to fisheries Agribusiness enterprise in Nigeria                                 74

4.4       Examination of cooperative lending granted by CBN to Agribusiness

            sector in Nigeria                                                                                              81

4.5       Examination of the nature of the Relationship between

Cooperative lending and Agricultural protection in

Nigeria between 1981-2022                                                                            87

CHAPTER 5: SUMMARY, CONCLUSION AND RECOMMENDATIONS 88

5.1       Summary                                                                                                         88

5.2       Conclusion                                                                                                      90

5.3       Recommendation                                                                                            91

REFERENCES                                                                                              93

LIST OF TABLES

Table 4.1:        Descriptive statistics of the variables included in the model              59

Table 4.2         Unit root tests for the variables included in the model                      61

Table 4.3         Lag order selection criterion for examine the relationship                 

between credit granted by CBN through cooperative

societies and the performance of crop agribusiness enterprises

in Nigeria                                                                                            62

Table 4.4         VEC residual serial correlation lm tests for the relationship

between cooperative credit and crop agribusiness enterprises in

Nigeria                                                                                                63

Table 4.5         Unrestricted co-integration rank test (trace) for the relationship

credit granted by CBN through cooperative societies

and the performance of crop agribusiness enterprises in Nigeria .      64

Table 4.6         Vector error correction estimates showing long-run and

short-run relationship between cooperative credit and crop

agribusiness enterprises in Nigeria                                                      67

Table 4.7         Lag order selection criterion for the relationship between

credits granted by CBN through cooperative societies

to livestock agribusiness enterprise in Nigeria                                    69

Table 4.8         Vec residual serial correlation lm tests for the relationship

between credit granted by CBN through cooperative

societies to livestock agribusiness enterprises in Nigeria                    70

Table 4.9         Unrestricted co-integration rank test (trace) the relationship

between credit granted by CBN through cooperative

societies to livestock agribusiness enterprises in Nigeria                    70

Table 4.10       Vector error correction estimates showing long-run

and short-run relationship between cooperative credit

and livestock agribusiness enterprises in Nigeria                                72

Table 4.11       lag order selection criterion for the relationship between

credit granted by CBN through cooperative societies

to fisheries agribusiness enterprise in Nigeria                         75

Table 4.12       Vec residual serial correlation lm tests for the relationship

between cooperative credit and fishery agribusiness

enterprises in Nigeria                                                                          76

Table 4.13       Unrestricted co-integration rank test (trace) for the relationship

between credit granted by CBN through cooperative

societies to fisheries agribusiness enterprise in Nigeria                       77

Table 4.14       Vector error correction estimates showing long-run and

short-run relationship between cooperative credit

and fishery agribusiness enterprises in Nigeria                                   79

Table 4.15       Lag order selection criterion for the cooperative lending

granted by CBN to agribusiness sector of Nigeria                             81

Table 4.16       VEC residual serial correlation lm tests for the impact of

cooperative credit on agribusiness enterprises in Nigeria                   83

Table 4.17       Unrestricted co-integration rank test (trace) for cooperative

lending granted by CBN to agribusiness sector of Nigeria                83

Table 4.18       Vector error correction estimates showing long-run and short

run impact of cooperative credit on agribusiness enterprises

in Nigeria                                                                                            85

Table 4.19       The nature of relationship existing between cooperative

credit and agribusiness production                                                     87

LIST OF GRAPHS

Fig 4.1 Inverse roots of AR characteristics polynomial for the relationship

            between credits granted by CBN through cooperative societies

            and the performance of crop agribusiness enterprise in Nigeria                     63

Fig 4.2 Inverse roots of AR characteristics polynomial for relationship

            between credits granted by CBN through cooperative societies

            to livestock agribusiness enterprise in Nigeria                                                69

Fig 4.3 Inverse roots of AR characteristics polynomial for the relationship

            between credits granted by CBN through cooperative societies

            to fisheries agribusiness enterprise in Nigeria                                     76

Fig 4.4 Inverse roots of AR characteristics polynomial for cooperative lending

            granted by CBN agribusiness sector in Nigeria                                              82