ABSTRACT

Flie study evaluated the extent of the inipact of monetary policy instruments on credit

and Agribusiness output in Nigeria from 1970 2005.This was t)O1ile Out of the fact that

(here has been a steady decliiic iii the output of the Agribusiness sub-sector, even as

credit has been ideiitihed as one of the major problems limiting Agribusiness

oulptil( VlI))clfll,20() 1 ),even 1S iiioiietary 1)01 1C adopted were characterized by increased

cre(lit al local ion to Agril)uSineSS. the Output has reina med l)oor. Ihe objective includes,

eva Itiat lug the relationsli ip between monetary policy variables and the quantity of credit

suppi ied by batiks to Agribusiness, analyzing the impact of credit on Agribusiness

output and evaluating the structure and trend of loan granted for specific Agribusiness

sub-sector. Secondary data was used and was analyzed by the use of descriptive

statistics and econometric approach. Time series data was collected on loan granted to

C0l) and fisheries sub-sectors of Agribusiness. The result showed that loan granted for

lie sub-sectors fluctuated, and also more credit was granted to crop sub-sector. This

fluctuation implies that less f'uncl was available to loan for investment. Econometric

model was used to analyze, the relationship between credit supply and monetary policy

and Agribusiness output and its determinants.The result revealed that monetary policy

instruments: prescribed sectoral credit allocation and interest rate of' lending to

:\grilnisiiicss have a positive efThei on credit supply while reserve requirement and the

rat it) 0 ii lerest rate to /\grmbusmncss to that of co iiniierce were negatively related to

credit, at all 1% probability level. The result of the analysis on aggregate agribusiness

()LI ll)t1I and its sub-seciora I output reveals that credit supply to Agribusi iless, exchange

rate, lending rate to Agribusiness, reserve requirements Government capital expenditure

on Agribusiness research and development, producers price, lagged output and weather

condition (rain fall) were all important determinants of' Agribusiness output; either at

I %, 5% 10% probability level. From the above findings, recommendations were macic

\\llicll include. nionetaly authorities should ensure strict compliance to monetary

directives. prescribed sectoral allocation to agribusiness sector should be increased to

ensure adequate credit supply to agribusiness sector. Lending rate condition should be

designed to suit the stat us of Agribusiness operators. This research work was segmented

into 5 chapters. Chapter 1, introduced and defined, the objective, statement of the

problem, and scope of the research. Chapter 2 tried to review related literature. In

chapter 3. the research methodology waS defined while the data were presented,

ana kzed and result discussed in chapter 4. 'l'lie summary of linuings. cone lusion and

reconiiiicmitlaliomi were mirade iii chapter 5.