Effect Of Interest Rate Policy On Agricultural Productivity In Nigeria:- Elijah, Kingsley C

ABSTRACT

The study examined the effect ofinterest rate policy on agricultural productivity in Nigeria. The objectives ofthis study include to evaluate the impact ofderegulated interest rate policy on agricultural productivity in Nigeria and to determine the long-run relationship between deregulated interestrate policy and agriculturalproductivity in Nigeria. A Granger Causality test was carried out, it shows that there is no Causality relationship between the variables. Ordinary Least Square (OLS) ADFandPhilips Perron (PP) unitroot test, co-integration Rank test, Error Correction Model (ECM), Durbin Waston statistic test, T-test and F-test was used to test the stationarity and Long- run-relationship between the variables. The period covered wasthirty yearsrangingfrom 1986-2018 andthe data usedwas gottenfrom secondary sources particularly from Central Bank of Nigeria (CBN) Statistical Bulletins, Nigerian Stock Exchange (NSE)fact books, Security and Exchange Commission (SEC) Market Bulletins and relevant Journals. The research was based on the determinant ofagricultural with the use of interest rate policy in Nigeria. The study revealed that Interest rate and credit to the agricultural sector has a negative relationship with agricultural output growth in Nigeria. While Totalrainfall andExchange rate has apositive impact on agricultural output in Nigeria. The work concludes that there is no long run relationship between interest rate and agricultural output in Nigeria. Therefore, this study recommends that bank reforms must be carried out in such a way that they remove obstacles to the acquisition of loans by the agricultural sector so as to boost growth in this sector.