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.