Money Supply and Agricultural Output Nexus: The Nigerian Experience
Abstract
This study examined the nexus between the money supply and agricultural sector output in Nigeria from 1990 to 2023. The study's specific objectives were to investigate the influence of the money supply on agricultural sector output and to determine the direction of the relationship between them, using an autoregressive lag model and a Granger causality test. The study's result showed a long-term link between money supply and agricultural output. It also showed that the broad money supply had a direct and significant long-term impact on the agrarian sector's production within the study period. Researchers using the Granger causality test found a one-directional relationship between the broad money supply and agricultural sector output. The study recommended that policymakers and the government should provide concessional credit instruments to farmers to increase access to these credit facilities and enhance agrarian output.
Keywords
Full Text:
PDFReferences
1. Martin, N. T., Ondra, N. V., & Dominik, N. K. (2022). The Role of Fiscal vs Monetary Policy in Modern Economics. Fusion of Multidisciplinary Research, an International Journal, 3(2), 329–341. doi: 10.63995/hlci7139
2. Asaleye, A. J., Maimako, R. F., Lawal, A. I., Inegbedion, H., & Popoola, O. (2021). Monetary Policy Channels and Agricultural Performance: Evidence from Nigeria. Asian Economic and Financial Review, 11(3), 205–218. doi: 10.18488/journal.aefr.2021.113.205.218
3. Amao, O. D., Antwi, M. A., Oduniyi, O. S., Oni, T. O., & Rubhara, T. T. (2021). Performance of Agricultural Export Products on Economic Growth in Nigeria. Asian Journal of Agriculture and Rural Development, 11(1), 47–52. doi: 10.18488/journal.ajard.2021.111.47.52
4. Shuaibu, M., & Nchake, M. (2021). Impact of Credit Market Conditions on Agricultural Productivity in Sub-Saharan Africa. Agricultural Finance Review, 81(4), 520–534. doi: 10.1108/afr-05-2020-0063
5. Olawale, H., & Emmanuel, E. (2024). Monetary Policy and Agricultural Output in Nigeria. International Journal of Law, Politics and Humanities Research, 3(6), 15-29
6. Oladejo, T. I., Onakoya, A. B., Oseni, E., Ajibola, J. O., & Akintoye, I. R. (2025). Monetary policy, inflation and economic growth in Nigeria. Open Journal of Business and Management, 13(02), 813–836. doi: 10.4236/ojbm.2025.132043
7. Kulu, E., & Bondzie, E. A. (2024). Mobile Money, Credit to Deposit Ratio and Monetary Policy: Empirics from Ghana. Transnational Corporation Review, 16(3), 200060. doi: 10.1016/j.tncr.2024.200060
8. Owoh. J. J. (2024). Impact of Inflation on Agricultural Output in Nigeria. Research Invention Journal of Current Research in Humanities and Social Sciences, 3(2), 13-18
9. Ngong, C. A., Onyejiaku, C., Fonchamnyo, D. C., & Onwumere, J. U. J. (2022). Has Bank Credit Really Impacted Agricultural Productivity in the Central African Economic and Monetary Community? Asian Journal of Economics and Banking, 7(3), 435–453. doi: 10.1108/ajeb-12-2021-0133
10. Obioma, F., J. C Ihemeje, J. C., Ogbonna, C. I., Amadi, O. F., & Hanson, U. E. (2021). The Effect of Agricultural Financing on the Performance of the Agricultural Sector in Nigeria. Journal La Bisecoman, 2(2), 1–13. doi: 10.37899/journallabisecoman.v2i2.360
11. Daemane, N. T., & Muroyiwa, N. B. (2022). Factors influencing credit access for rural small-scale farmers in Lesotho: Evidence from maise farmers in Masianokeng. World Journal of Advanced Research and Reviews, 15(1), 757–768. doi: 10.30574/wjarr.2022.15.1.0765
12. Lelisho, A. E., & Lelisho, M. E. (2024). Impact of credit use on crop productivity and gross income of smallholder farmers: a propensity score matching approach. Discover Agriculture, 2(1). doi: 10.1007/s44279-024-00058-7
13. Khan, F. U., Nouman, M., Negrut, L., Abban, J., Cismas, L. M., & Siddiqi, M. F. (2024). Constraints to agricultural finance in underdeveloped and developing countries: a systematic literature review. International Journal of Agricultural Sustainability, 22(1). doi: 10.1080/14735903.2024.2329388
14. Misra, M. (2019). Commercial Micro-Credit, Neo-Liberal agriculture and smallholder indebtedness: Three Bangladesh villages. Journal of Contemporary Asia, 51(2), 330–350. doi: 10.1080/00472336.2019.1696386
15. Akpaeti, A., Offor, O., & Archibong, M. (2023). Effect of Naira Depreciation on Nigerian Agricultural Export Volume and Farmers' Income in Nigeria. International Journal of Agriculture and Rural Development, 26, 6660-6669.
16. Schwartz, A. J. (2009). Origins of the Financial Market Crisis of 2008. Cato Journal 29(1), 19-23
17. Afolabi, B., & Wapji, H. N. (2024). Monetary Policy and Economic Growth in Nigeria: Matters Arising. Fuoye Journal of Accounting and Management, 7(1), 1-22
18. Sheng, Y., Jackson, T., Zhao, S., & Zhang, D. (2016). Measuring output, input and total factor productivity in Australian agriculture: an Industry‐Level analysis. Review of Income and Wealth, 63(1). doi: 10.1111/roiw.12250
19. Fisher, I., & Brown, H. G. (1911). The Purchasing Power of Money: Its Determination and Relation to Credit, Interest and Crises. Macmillan
20. Friedman, M. (1970). The Role of Monetary Policy. American Economic Review, 58(1), 1-17.
21. Keynes, J. M. (2016). The General Theory of Employment, Interest and Money. Atlantic Publishers & Dist.
22. Shaw, E. S. (1973). Financial deepening in economic development. Oxford University Press.
23. Canavese, A. J. (1982). The structuralist explanation in the theory of inflation. World Development, 10(7), 523–529. doi: 10.1016/0305-750x(82)90053-5
24. Taylor, L. (1983). Structuralist Macroeconomics: Applicable Models for the Third World. New York: Basic Books.
25. Adeagbo, M. O., Emiola, T. O., & Aderinto, E. R. (2025). Financial Inclusion and Agricultural Productivity in Nigeria. IIARD International Journal Of Economics And Business Management 11(2), 33-44
26. Osabohien, R., Mordi, A., & Ogundipe, A. (2020). Access to credit and agricultural sector performance in Nigeria. African Journal of Science Technology Innovation and Development, 14(1), 247–255. doi: 10.1080/20421338.2020.1799537
27. Umejiaku, C. (2025). Monetary Policy Dynamics and Output Growth in Nigeria, 1980 to 2023. IIARD International Journal Of Economics And Business Management, 11(6)
28. Ugwuanyi, C. U. (2018). Money Supply, Inflation, and Economic Growth in Nigeria: Error Correction Model (ECM) Approach. Lafia Journal of Economics and Management Sciences, 3(1)
29. Idisi, P. O., Folorunsho, M. A., & Safugha, G. (2023). Review of the effect of monetary policy on smallholder farmers in Nigeria. International Journal of Research and Innovation in Social Science, 7(10), 801–811. doi: 10.47772/ijriss.2023.701063
30. Hezekiah, O., & Enaberue, E. (2024). Monetary Policy and Agricultural Output in Nigeria. International Journal of Law, Politics & Humanities Research Published by Cambridge Research and Publication, 3(6).
31. Okafoforcha, C. M., Anumudu, C. N., Uwazie, I. U., & Sule, M. (2024). The Monetary Policy's Effect on Nigeria's Agricultural Sector Growth, 1980-2020. African Journal of Social Sciences and Humanities Research, 7(4), 1–16. doi: 10.52589/ajsshr-evjftyqo
32. Ehiwele, P. I., & Ewododhe, A. (2023). Effect of Monetary Policy on Agricultural Production for Sustainable Economic Growth in Nigeria: Empirical Evidence (1997-2022). African Banking and Finance Review Journal, 4(4), 64–76.
33. Osabohien, R., Osuagwu, E., Osabuohien, E., Ekhator-Mobayode, U. E., Matthew, O., & Gershon, O. (2020). Household access to agricultural credit and agricultural production in Nigeria: A propensity score matching model. South African Journal of Economic and Management Sciences, 23(1). doi: 10.4102/sajems.v23i1.2688
34. Olajide, O. T., Akinlabi, B. H., & Tijani, A. A. (n.d.). Agriculture Resource and Economic Growth in Nigeria. European Scientific Journal, 8(22).
35. Granger, C. W. J. (1986). Developments in the Study of Cointegrated Economic Variables. Oxford Bulletin of Economics and Statistics, 48(3), 213–228. doi: 10.1111/j.1468-0084.1986.mp48003002.x
Article Metrics
Metrics powered by PLOS ALM
Refbacks
- There are currently no refbacks.
Copyright (c) 2025 Paul Atanda Orebiyi, David Thompson Udoffia, Ubong Edem Effiong, Etim Essien Bassey
This work is licensed under a Creative Commons Attribution 4.0 International License.
Email the author