Impact of Agricultural Financing on Agricultural Productivity in Nigeria: Moderating Effect of Corruption
Year: 2025
Type: article
Abstract: Over the years, the Nigerian government has introduced several initiatives to enhance agricultural financing, including the Agricultural Promotion Policy (APP), Anchor Borrowers Programme (ABP), Commercial Agriculture Credit Scheme (CACS), and NIRSA. However, agricultural output has not grown proportionately, largely due to corruption. Once a global exporter of cocoa, palm oil, and groundnuts, Nigeria now depends heavily on imports of staples such as rice and wheat. While agricultural financing is known to boost productivity, the moderating role of corruption remains less explored. This study investigates the impact of agricultural financing on agricultural productivity in Nigeria, with corruption as a moderating factor. Annual time series data from 1996–2022 were sourced from the Central Bank of Nigeria (CBN), World Development Indicators (WDI), and Transparency International (TI). The Autoregressive Distributed Lag (ARDL) model was employed to capture both short- and long-run dynamics, with structural breaks incorporated through dummy variables. Results show that government agricultural expenditure has a positive but statistically insignificant effect on productivity, while the interaction between expenditure and corruption exerts a negative and significant effect in both the short and long run. This indicates that corruption undermines the effectiveness of agricultural financing. The study recommends strengthening transparency and monitoring of agricultural spending, reinforcing anti-corruption mechanisms, and ensuring policy consistency to maximize the benefits of agricultural financing.
Source: NAU Eco Journals
Language: English
Domain: Life Sciences
Open Access status: diamond
OpenAlex ID: W7220069286