Impact of Exchange Rate, Inflation, And Bank Credit on Agricultural Sector Growth in Nigeria
Abstract
This study empirically investigates the impact of exchange rate, inflation, and bank credit on agricultural sector growth in Nigeria from 1986 to 2024. Motivated by the sector's persistent underperformance despite various policy interventions, the research employs the Autoregressive Distributed Lag (ARDL) approach to analyze both short-run dynamics and long-run relationships. The findings reveal a significant long-run cointegrating relationship among the variables. Counter to some expectations, the real exchange rate exhibits a positive and significant long-run effect on agricultural GDP, suggesting that depreciation may ultimately enhance competitiveness and stimulate domestic production. Conversely, inflation demonstrates a strong negative impact, eroding purchasing power and increasing production costs. Surprisingly, bank credit to agriculture also shows a significant negative long-run relationship with output, indicating potential structural inefficiencies in credit allocation and utilization. The study concludes that while exchange rate management can be supportive, achieving sustainable agricultural growth in Nigeria necessitates a comprehensive policy approach. This approach must prioritize aggressive inflation control and implement fundamental reforms to the agricultural credit system to ensure that financial interventions effectively translate into tangible productivity gains.
Keywords
Agricultural Growth, Exchange Rate, Inflation, Bank Credit
Citations
IRE Journals:
Aham Ikwumezie, Ogu, Callistus, Rev. Fr. Casmir Ibe, CMF., Akamike Okechukwu Joseph, Opara Peterdamian "Impact of Exchange Rate, Inflation, And Bank Credit on Agricultural Sector Growth in Nigeria" Iconic Research And Engineering Journals Volume 9 Issue 7 2026 Page 377-388
IEEE:
Aham Ikwumezie, Ogu, Callistus, Rev. Fr. Casmir Ibe, CMF., Akamike Okechukwu Joseph, Opara Peterdamian
"Impact of Exchange Rate, Inflation, And Bank Credit on Agricultural Sector Growth in Nigeria" Iconic Research And Engineering Journals, 9(7)
About IRE Journals
IRE Journals is an open access online journals established with an aim to publish high quality of research work in various diciplines. We have more than 6 years in publications. Over 2500+ papers already published.
Important Links
For Authors
Volume 8:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12Volume 7:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12Volume 6:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12Volume 5:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12Volume 4:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12Volume 3:
Issue 1, Issue 2, Issue 3, Issue 4, Issue 5, Issue 6, Issue 7, Issue 8, Issue 9, Issue 10, Issue 11, Issue 12