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Rivers State University, Port Harcourt.
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| Title: | Foreign Direct Investment, Bank Credit, Interest Rate and The Agricultural Sector in Nigeria |
| Author(s): | Momodu A.A., D. B. Ewubare, J. I. Onyema & L .J. Adiele |
| Abstract: | The study examines the impact of foreign direct investment on agricultural growth in Nigeria during the periods 1989-2019. Specifically, the study determined the effect of foreign direct investment, bank credit and interest rate to the growth of the agricultural sector. Secondary data was collected from central bank of Nigeria (CBN) statistica bulletin (various Issues), and the econometric methods of OLS, ADF unit root test and co integration / VEC methods were used to analyze data. The result of the study shows that there is positive and significant relationship between foreign direct investment and GDP from agriculture. Similarly there is positive and significant relationship between bank credit and GDP from agriculture. However there is a negative relationship between interest rate and GDP from Agriculture. R2 of 87% shows that the total variation in the dependent variable (GDP) from agriculture is caused by the independent variables (Foreign direct investment bank credit to agric and interest rate) also the entire model is statistically significant given the calculated F ratio of 61.81 and F stat probability of 0.000. Further more, the Augmented Dickey fuller (ADF) test shows that all the co integration test shows that there is a long-run equilibrium relationship among the variable. The vector error correction (VEC) result shows that, bank credit to agric (BCA) is negatively signed with GDP while foreign direct investment (FDI) and interest rate have positive impact on GDP. Based on the findings and the conclusion reached , the following recommendation were made : the government should put up good infrastructure and a favourable environment to attract more foreign Investment , furthermore , government should set up mechanism to monitor financial allocations and foreign inflows to the agricultural sector to avoid diversion of funds . Also interest rate to agriculture should be reduced to single digit |
| Keywords: | foreign, direct, bank, credit, interest |
| Journal: | Journal of Contemporary Research in Economics and Development Studies (JCREDS) |
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