Abstract:
Since Nigeria gained independence,
agriculture has been neglected, despite the country’s
70.8 million hectares of agricultural land, out of
which only 34 million hectares have currently been
cultivated, leaving vast fertile lands unused, because
of this it created food insecurity. Hence, the paper
investigated the impact of agricultural sector on
sustainable financial sector output in Nigeria
between 2000 and 2022. The paper adopted the
Dynamic Ordinary Least Squares (DOLS) technique,
to regress on gross domestic product of the financial
sector, with insurance inclusive as the dependent
variable while the independent variables include
agricultural productivity measured by the output of
the agricultural sector (AGPROD), gross credits
granted to the agriculture sector (GCA), gross
amount distributed to the agricultural credit
guaranty scheme (ACGS) and maximum lending
rate (MLR). The result reveals that there is a
statistical and positive effect of agriculture on
sustainable financial sector output in agricultural
productivity measured by the output of the
agricultural sector (AGPROD). More so, the
coefficient of the gross credit granted to agricultural
sector (GCA) is positively related to sustainable
financial sector output in Nigeria. By implication, a
rise in gross credit granted to the agricultural sector
(GCA) exerts a positive impact on the output of the
financial sector performance in Nigeria. However,
the coefficient of the agricultural credit guaranty
scheme (ACGS) is positively related to sustainable
financial sector output in Nigeria but statistically
insignificant. Noticeably, the coefficient of the
maximum lending interest rate is negatively and
significantly related to sustainable financial sector
output in Nigeria. Therefore, the paper concluded
that agriculture positively promoted the
sustainability of the output in the financial sector in
Nigeria. It recommended that the Federal Ministry
of Agriculture and CBN should be given top priority
in the sector in terms of funds and other resource
allocation to stimulate the financial sector’s
sustainable output in Nigeria.
