THE EFFECTS OF BANKING INDUSTRY RECAPITALIZATION ON AGRICULTURE SECTOR PERFORMANCE IN NIGERIA
I. OWO BERNADETTE *
Department of Banking and Finance, Faculty of Management Sciences, Ebonyi State University, PMB 053, Ebonyi State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This study sought to investigate the effect of Banking Industry Capitalization on the Agricultural sector performance in Nigeria. The study adopted the ex-post facto quantitative research design. Annual time series data for 36 years were collected from Central Bank of Nigeria Statistical Bulletins, International Monetary Fund statistics and data files and OPEC data base for the period 1980-2015. An Error Correction Regression model (ECM) is employed in the study. The result of the co-integration test indicates long-run relationship between dependent and independent variables. The result revealed that the total banking industry capitalization has a positive and significant effect on agriculture sector performance in Nigeria. The implication of this finding is that the higher the total capital base of banks, the greater the contribution of the agriculture sector to the nation’s Gross Domestic Production. We therefore recommend that government and regulatory bodies should create policies that will encourage banks to maintain and improve on their total capital base, and at the same time enlighten farmers on how to access funding from the banks.
Keywords: Banking industry capitalization, asset base, agriculture sector performance, agriculture financing