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Agricultural Financing and Unemployment Rate in Nigeria: A Cointegration Approach
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Agricultural Financing and Unemployment Rate in Nigeria: A Cointegration Approach

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  • Adegboyega Raymond Rahaj

    (Faculty of Social and Management Sciences, Olabisi Onabanjo University, Ago-Iwoye, PMB 2002, Ogun State, Nigeria)

Abstract

In Nigeria, the level of agricultural productivity and farmers’ income have been affected by inadequate financing, which invariably discourages job creation and increases unemployment rate. Therefore, the study examines the impact of agricultural financing on unemployment rate in Nigeria, using time series data collected from the Central Bank of Nigeria (CBN) and the World Bank database from 1981 to 2018. Using Johansen’s cointegration, Error Correction Method (ECM), and Granger causality analytical techniques, our findings show that AGRIC_GDP, AGRICL_TL, GR, LR, and RUTP have a long-run relationship with UNEMPR and are statistically significant. Also, the ECM of about 57%, which is statistically significant, provides an indication of a satisfactory speed of adjustment and translates that about 57 percent of the errors are corrected in each period. The study recommends among others that government policy on agricultural credit should place more emphasis on strengthening banks’ commitment.

Suggested Citation

  • Adegboyega Raymond Rahaj, 2020. "Agricultural Financing and Unemployment Rate in Nigeria: A Cointegration Approach," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 8(1), pages 53-67, October.
    • Handle: RePEc:vrs:auseab:v:8:y:2020:i:1:p:53-67:n:1
    DOI: 10.2478/auseb-2020-0004
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    More about this item

    Keywords

    agricultural financing; agricultural production; financial markets; growth rate; unemployment rate;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G00 - Financial Economics - - General - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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