COMMERCIAL BANK CREDIT AND DOMESTIC FOOD PRODUCTION IN NIGERIA

Abstract

This study examined the impact of commercial bank credit to the agricultural sector on domestic food production in Nigeria spanning 1991-2021. The study used the auto regressive distributed lag (ARDL) model to carry out its empirical analysis. Findings from the study revealed that, both in the short-run and in the long-run, commercial bank credit to the agricultural sector has positive impact on domestic food production in the country. However, in terms of the sizes of the estimated coefficients, the impact of commercial bank credit to the agricultural sector on domestic food production is low, increasing food production by about 0.05 and 0.08 per cents in the short and long respectively. The study found that the high cost of borrowing from commercial banks is limiting the nation's ability to produce food. Based on these findings, more credit facilities should be made accessible to farmers at affordable single-digit interest rates by commercial banks in order to boost domestic food production.