IMPACT OF MONETARY POLICY ON AGRIC FINANCE IN NIGERIA ECONOMY.
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IMPACT OF MONETARY POLICY ON AGRIC FINANCE IN NIGERIA ECONOMY.
Chapter one
1.1 Introduction
One of the biggest problems that most emerging countries face is their failure to effectively manage their resources, regardless of whether the country is rich or poor, large or tiny. As a result, regardless of whether the country has limited resources, it lacks inventiveness in managing what it does have.
On the other hand, where the country is fortunate to have ample resources, everyone involved in the management of what is available or its activities is so overwhelmed that they are unable to determine their priorities.
Nigeria is largely an agricultural country, with abundant agricultural resources (Eubuomwa, G.O. 1997). It is unnecessary to emphasise the importance of agriculture in this country’s economic life.
Agriculture played a significant role in Nigeria’s economic development from the early 1950s to the 1960s, as it offered the essential resources for export and earned the much-needed foreign exchange at the time.
According to Anyanwu, J.C. (1997), despite urbanisation and the oil boom of the 1970s, agriculture continues to be the primary source of income in Nigeria. Furthermore, the agricultural sector contributes a larger portion of the country’s foreign exchange through the export of cash crops and other agricultural products.
This sector also supplies the majority of jobs, income, and food to the population, as well as raw materials for agro-based companies and a market for industrial goods.
The majority of Nigerian agriculture is based on small-scale family farms that employ family members and, on occasion, paid labour during the planting, weeding, and harvesting seasons.
The average farmer relied on both his own capital and non-financial institution sources for operating cash, such as borrowing from friends, local money lenders, and traders. Loans from these sources are typically made directly to borrowers by the lenders.
This technique of borrowing is widespread in communities where people know and trust one another. This type of funding helps to reduce the administrative delays associated with bank-financed agricultural projects. This nature of non-financial entities has made them extremely popular among peasant farmers.
Dwivedi, D.N. (2002) defines monetary policy as an essential programme of action carried out by monetary authorities, generally the Central Bank of Nigeria (CBN), to control and regulate the supply of money in the public and the flow of credit in order to achieve predetermined macroeconomic goals.
Currency and exchange rate modifications are among the reforms, however they are not the only ones. They also include others, such as better balancing of public sector accounts, increased use of cheques and efficiency in the progressive monetization of the economy, initiation of specialised banking institutions
encouragement of certain public organisations to patronise the domestic capital market, genuine decentralisation of the Central Bank of Nigeria operational structure, permeation of legitimate banking into rural and urban areas, and changes in the legal foundation.
1.2 Statement of Research Problems.
The following problems are relevant to the subject under consideration.
1. Problem in determining the influence of interest rates on agricultural funding.
2. Identifying the influence of price stability on agricultural development in Nigeria.
3. To assess the impact of monetary policy on the agriculture industry and funding in Nigeria.
4. There is an adequate supply of fertilisers notwithstanding the government’s massive spending on subsidies, currency rate policy reversal, trade reform failings, and interest rate policy distortions.
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