Agricultural Output Financing and Poverty Level in Nigeria
Abstract
The study explores the dynamic relationship among Agriculture Financing, Agriculture output and the level of Poverty in Nigeria. This was done in order to establish empirical evidence regarding the linkages among agriculture financing, agriculture output and poverty level. Secondary data on agriculture financing (government expenditure to agriculture sector), agriculture output and real consumption expenditure per capita used to proxy for poverty level were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics (NBS). Using the Vector Error Correction Mechanism (VECM) approach, the result revealed that a one percent innovation in both agriculture output and poverty reduction resulted in a neutral response by agriculture financing in the initial period but the response to agriculture output increased to about 0.2 per cent at the 10th period but declined over time to 0.14 per cent at the 10th period. The neutral response of agriculture financing to an innovation to poverty level became negative over time. Also, agricultural output and real consumption expenditure per capita responded negatively to an innovation in agriculture finance over time. Interestingly, poverty level responded positively as a result of an innovation in agricultural output and agricultural finance over time. Consequently, policy implications are discussed.
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