AGRICULTURAL CREDIT GUARANTEE SCHEME FUND: A VERITABLE TOOL FOR ECONOMIC GROWTH IN NIGERIA
At Nigeria’s independence, not until the mid-seventies, agriculture was the mainstay of the economy. It was the primary foreign exchange earner for the country and also provides employment, food and raw materials for industries. However, the sector had been limited with inadequate capital to improve its productivity. To this regard the federal government introduced the Agricultural Credit Guarantee Scheme Fund (ACGSF) in 1977 to improve agricultural productivity by ensuring availability of credit for agriculture. This study therefore evaluates the long-run impact of the ACGSF on agricultural productivity and its contribution to economic development of Nigeria from 1981 to 2012. In doing this, Johasen Cointegration and Granger Causality test was employed, using secondary data obtained from the Statistical Bulletin of the Central Bank of Nigeria. The study found, inter alia, that there is long-run relationship between the variables studied over the period and that the relationship between ACGSF and Loan granted to agriculture by banks is positively significant, implying that the ACGSF is a veritable tool for increasing agricultural productivity and enhancing economic development in Nigeria. Consequently, the study recommends that the government should incorporate sound control mechanism to monitor loans granted to farmers discourage cash disbursement to certain extent (except for working capital) and also improve agricultural extension in Nigeria.
