The operations of Nigeria's Agricultural Credit Guarantee Scheme Fund (ACGSF), after twenty-seven years, were subjected to macro econometric analysis, presumably the first quantitative approach to the scheme, with the objective of providing useful results, deducing policy implications, and perhaps, policy options. Specifically, the volume by number and value of loans guaranteed and repaid, with the addition of a credit-determining policy instrument, were modelled using vector autoregression (VAR) methodology to evaluate the economic information they contain and their relevance in terms of policy analysis. The value of loans guaranteed was identified to be positively related to the number of loans guaranteed and the number and value of loans repaid, and inversely related to the policy instrument. In this light, the managers of the scheme need to step up and encourage vigorous repayment of loans under the guarantee and develop capacity to process and approve guarantees and default claims on-line. Beyond these, the monetary policy regulating institution is urged to adopt forward looking rules, example, by encouraging participating banks to access the discount window at favourable terms, that do not directly or indirectly infringe on the expressed aims of the ACGSF, say, in its attempt at affecting the liquidity (interest rate) and/ or credit channels of monetary transmission.
The main objective of this study is to examine the effect of monetary aggregates of demand and supply on domestic cocoa absorption in the country. Data from 1970-2000 were obtained from official sources including the Central Bank of Nigeria (CBN) Annual Reports and Statistical Bulletins and the Statistical Database of the Food and Agriculture organization (FAO) of the United Nations, among others. While the semi-log functional form was used (as the lead equation) to estimate the aggregate demand and supply models, the exponential form was preferred for the agricultural domestic absorption model. Both models used the adaptive Nerlovian partial adjustment mechanism. Domestic price level was identified to affect cocoa absorption negatively and significantly while exchange rate depreciation had a significant and positive effect. Real income was found to affect money demand by 4.4 percent in the short run and 24 percent in the long run. On the strength of these findings, the study recommends policies towards a lowering of interest rate and the rate of inflation now and the streamlining of the existing extension service programmes to include provision of easy access to inputs for farmers so as to increase cocoa supply.
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