Role of Banking Sector in the Development of Agricultural Exports in Nigeria

TABLE OF CONTENTS

 

Title page                                                                                                                    i           

Certification                                                                                                               ii

Dedication                                                                                                                  iii

Acknowledgement                                                                                                      iv

Table of Contents                                                                                                       vi

List of Tables                                                                                                              x

Abstract                                                                                                                      xii

CHAPTER ONE: INTRODUCTION

1.1       Background to the Study                                                                                1                       

1.2       Statement of the Problem                                                                               5           

1.3       Research Questions                                                                                        6

1.4       Objective of the Study                                                                                    6           

1.5       Hypotheses of the Study                                                                                 7           

1.6       Justification of the Study                                                                                7           

1.7       Scope of the Study                                                                                          8

1.8       Organization of the Study                                                                             8

CHAPTER TWO: LITERATURE REVIEW

2.0       Introduction                                                                                                    10

2.1       Conceptual Review                                                                                         10

2.1.1    Concept of Agricultural Exports                                                                    10

2.1.2    Concept of Agricultural Credit                                                                       13

2.1.3    Sources of Agricultural Financing                                                                 19

2.1.3.1 Bank of Agriculture                                                                                       20

2.1.3.2 Commercial Banks                                                                                         22

2.1.3.3 Central Bank of Nigeria                                                                                 22

2.1.4    Agricultural Credit Guarantee Scheme fund establishment                          23

2.2       Theoretical Framework                                                                                  25

2.2.1    Absolute Advantage Theory                                                                           25

2.2.2    Comparative Advantage Theory                                                                    27

2.3       Empirical Review                                                                                           29

2.4       Research Gap                                                                                                  38

CHAPTER THREE: RESEARCH METHODOLOGY

3.0       Introduction                                                                                                    40

3.1       Model Specification                                                                                       40

3.2       Research Design                                                                                             41

3.3       Population of the Study                                                                                  42

3.4       Sample Size and Sampling Technique                                                           42

3.5       Sources of Data                                                                                              42

3.6       Method of Data Analysis                                                                               43

CHAPTER FOUR: RESULTS AND DISCUSSIONS

4.0       Introduction                                                                                                    44

4.1       Data Description                                                                                            44

4.2       Data Analysis and Results                                                                              45

4.2.1    Descriptive Statistics                                                                                      45

4.2.2    Testing of Research Hypotheses                                                                    48

4.2.3    Model Summary                                                                                             51

4.2.4    Analysis of Variance                                                                                      52

4.2.5    Interpretation of Regression Coefficient                                                        53

4.3       Discussion of Findings                                                                                   54

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1       Summary                                                                                                        58

5.2       Conclusion                                                                                                      59

5.3       Recommendation                                                                                           59

REFERENCES                                                                                                           62

 

 

LIST OF TABLES

Table 4.1:        Data Description                                                                                            44

Table 4.2:        Descriptive Statistics                                                                                      46

Table 4.3:        Correlation Analysis                                                                                       49

Table 4.4:        Model Summary                                                                                             51

Table 4.5:        ANOVA Table                                                                                               52

Table 4.6:        Regression Results                                                                                         53

 

LIST OF FIGURE

Figure 4.1:      Mean Agricultural Exports                                                                 47

 

ABSTRACT

Agricultural exports sector has been declining due to poor access to credit facilitiesat pre-shipment and post shipment stages as opposed to what is happening in other countries of the world.  This may be attributed to the banking sector not clearly identifying their major functions in boosting agricultural sector.Against this background, this study examined the role of banking sector in the development of agricultural export in Nigeria. The specific objectives were to: (i)to examine the contribution of banking sector to the development of agricultural exports in Nigeria; (ii) assess the impact of increased cost arising from exchange rate fluctuation on agricultural exports in Nigeria; (iii) evaluate the impact of interest rate on loans granted to the Agricultural sector in Nigeria. Ex-post facto research design was used and data of banking sector GDP, exchange rate, interest rate and agricultural exports from period of 2005-2015 were used. The study used descriptive statistics, pairwise correlation and generalised least square technique to analyse the secondary data extracted from NBS, Nigeria statistical bulletin among others for the period of 2005 to 2015. The study revealed that (i)banks does not provide adequate fund to the farmers needed for the production of Agricultural goods, (ii) fluctuation in the exchange rate allows the agriculturists to export agricultural products. (iii) interest rate has  significant influence on agricultural exports in Nigeria. The study therefore recommended that government should provide incentives and enabling environment that aid the activities of agricultural exporters, intervene in the level of interest rate given to agriculturists or investors from banks, government should ensure pre and post shipment finance in local currency through rediscounting facility and exchange rate should be stabilised.