Agricultural Financing and Economic Growth in Nigeria: A Threshold Autoregressive (TAR) Analyses
Abstract
Jacob Sesugh Angaha*, Tessy Ajiji Atong
This study evaluates agricultural financing and economic growth in Nigeria using threshold autoregressive (TAR) model. Examining the efficacy of agricultural financing on economic growth in Nigeria is the objective of the study. This evaluation covered but short and long run analyses. Diagnostic tests are adopted using Augmented Dickey Fuller Unit Root Test, Co-integration, and Error Correction Model. Threshold Autoregressive model (TAR) was utilized to test agricultural finance sustainability in Nigeria from 1990- 2017. Findings showed that Nigeria has not reach a healthy threshold as revealed in all the regimes of GDP, the study concludes that Nigeria’s agricultural financing is not healthy enough to yield greater benefits for the battled economy. This is because it has not achieved healthy threshold of significant positive impact in agriculture. The paper recommends among others that, there is great need to improve significantly government budget allocation to agriculture. Policy makers are encouraged to develop better frameworks that enhance more funds appropriated to the agricultural sector and financial institutions are expected to assist government on this struggle. Special Funds should be channeled to farmers and its relations to help boost production in the sector. This will lead to achievement of food security and high foreign exchange earnings.
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