ABSTRACT
The study has been carried out to examine the importance of monetary policy on Agric financing and development in Nigeria (A case study of First Bank of Nigeria Plc).
It is a well established fact that monetary policy plays a vital role in the economic development and the achievement of macro-economic goals of any nation. The research sheds light on the importance of monetary policies to the agricultural sector and the financial institutions.
In this research, the method of collecting data was through secondary data.
The research brings to light the crucial role agriculture plays in the development of the Nigerian economy, the contributions of financial institutions like First Bank, non-governmental organization and state government for the development of the agricultural sector and the position of some experts in identifying problems of agriculture and agricultural financing.
The researcher also conclude that the resources in the country in terms of both human and capital resources, it is logical that the solution to the problems of our economy lies in the proper use of these resources, improvements in the country's economy.
CHAPTER ONE
1.1 INTRODUCTION
A major problem of most developing countries of which, one, is their inability to manage their resources effectively, it does not matter whether the country is rich or poor, big or small. Thus, whether the country has limited resources, it tends not to display enough imagination in the management of what IS available. On the other hand, where the country is lucky to have abundant resources, everyone concerned, with the management of what is available or it's affairs is so overwhelmed that they are unable to sort out their priorities. Nigeria is primarily an agricultural country and it is richly endowed with agricultural resources (Eubuomwa, G.O. 1997). There is hardly any need to stress the importance of agriculture in the economic life of this country. From the early 1950 to the 1960, agriculture played a very big role in the economic development of Nigeria as a nation, as it provided the necessary resources for export to earn the much needed foreign exchange as at that time.
According to Anyanwu, J.C. (1997), inspite of urbanization and the oil boom in the 70's, agriculture still serve as the sustainer of the Nigerian economy. Furthermore, a greater percentage of the country's foreign exchange is contributed by the agricultural sector due to the exportation of cash crops and other agricultural products.
This sector also provides the bulk of employment, income and food for the population and also provides the raw materials for agro-based industries as well as market for industrial goods. Most of Nigeria's agriculture is centred around small scale family holding, using the family labour force and occasionally using hired labour during planting, weeding and harvesting seasons. The average farmer relied on his own capital as well as non-financial institution's source for working capital e.g. borrowing from friends, local money lenders and traders. Loans from such sources are usually made directly to the borrowers by the lenders. This method of borrowing is common in areas where individuals are familiar with and share confidence in one another. This form of financing helps to reduce administrative delays associated with the banks form of financing agricultural projects. This quality of the nonfinancial institutions is made very popular among peasant farmers.
Dwivedi, D.N. (2002), describes monetary policy as an essential programme of action undertaken by the monetary authorities generally the Central Bank of Nigeria (CBN), to control and regulate the supply of money within the public an the flow of credit with a view to achieving predetermined macro economic goals. The reforms include, but are not limited to currency and exchange rate adjustments. They include others as well e.g. better balancing of public sector accounts, increased use of cheques and efficiency in the progressive monetization of the economy, initiation of specialized banking institutions, encouragement of certain public organizations to patronize the domestic capital market, genuine decentralization of the Central Bank of Nigeria operative structure, permeation of legitimate banking into the rural and urban areas and changes in the legal foundations monetary organization, aimed at redirecting the flow of inevitable funds in accord with policy goals.
1.2 STATEMENT OF RESEARCH PROBLEMS
The following problems, which are pertinent to the issue under investigation, are:
1. Problem to evaluation the impact of interest rate on agric financing.
2. Problem to identify the effect price stability on development of agriculture in Nigeria.
3. To evaluate the role of monetary policy in agricultural sector and financing in Nigeria.
4. In adequate supply of fertilizers despite the huge amount spent by the government on subsidy, exchange rate policy reversal, trade reform lapses and interest rate policy distortions.
1.3 THE AIM AND OBJECTIVES OF THE STUDY
This research work aim at achieving the following objectives.
i. To evaluate the impact of interest rate on agric financing.
ii. To identify the effect of price stability on the development of agric sector.
iii. To evaluate the role of exchange rate on Agricultural financial in Nigeria.
1.4 RESEARCH QUESTIONS
i. How does monetary policy influence agricultural financing?
ii. What measures are available to the agricultural product to ensure that the operation is effectively carried out?
iii. What impact/effect does monetary policy have on· banking industry?
iv. How does the money policy ensure that agricultural product in Nigeria are well organized and arranged.
v. To evaluate the agricultural product so as to yield good result for the economy.
1.5 THE STATEMENT OF RESEARCH HYPOTHESES
1. Ho: That there is no strong relationship between interest rate an Agric
financing.
HA: That there is strong relationship between interest rate and Agric financing.
2. Ho: That there is no strong relationship between sustainable price level and
development of agric sector.
HA: That there is strong relationship between sustainable price level and development of agric sector.
3. Ho: That there is no strong relationship between Exchange rate and
development of agric sector
H1: That there is strong relationship between Exchange rate and development of agric sector.
1.6 RESEARCH METHODOLOGY
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