THE IMPACT OF AGRICULTURAL FINANCING ON EMPLOYMENT GENERATION IN NIGERIA: A TIME SERIES ANALYSIS (2019-2024)
This study examines the relationship between agricultural financing and employment generation in Nigeria from 2019 to 2024 using time-series data from the Central Bank of Nigeria and World Bank. Employing Autoregressive Distributed Lag (ARDL) cointegration techniques, we analyze how government funding, commercial bank loans, and microfinance institution disbursements impact agricultural output and unemployment rates. Results indicate a significant long-term inverse relationship between agricultural financing and unemployment, with a 1% increase in financing associated with a 0.18% unemployment reduction. Agricultural output similarly showed a strong negative relationship with unemployment (-0.32%). The study identifies persistent barriers including digital infrastructure gaps, climate vulnerabilities, and data limitations. Recommendations include implementing digital value chain finance solutions, expanding credit guarantee schemes, and integrating climate resilience into agricultural finance policies to unlock the sector’s employment potential.
Keywords: Agricultural finance, employment generation, Nigeria, ARDL, digital finance, smallholder farmers
