1.0 Introduction
Prior to the establishment of the central bank of Nigeria, the government Held its accounts with expatriate commercial banks. Currency issue functions were performed by then back of British West Africa on behalf of the West African currency Board, whose notes & coins continued in Nigeria until 30th June, 1959. However, the pressing needs for the creation of a central bank was a principal priority in government plan then. This culminated into the setting-up of the LOYNES commission of 1957 to study the feasibility of setting up the central bank of Nigeria.
The commission came out with favorable report which led to the enactment of the central bank of Nigeria. The central bank of Nigeria then swing into operation though not immediately, but in July 1, 1959. Government among the function of the central bank of Nigeria are:
- Issuing of legal tender, it is the central bank that has sole right of issuing currency (notes & coins), throughout the federation.
- Banker and financial adviser to the government, central bank serves as banker to government & responsible for government financial transaction
- Promotion of monetary stability & sound financial structure.
1.1 Statement of Problem
Agricultural being our major source of employment and food supply to Nigeria cannot be gain said. Yet it's rather rate of growth and output levels is a thing of wrong. This became more aggravated when one imagines its available potentials in the nations. Thus, with the ever renew efforts at encouraging its growth by government through its main arm of monetary policy implementation.
The central bank of Nigeria. The project is poised to look at the affects of central bank lending guided or the lending institution on the development of farming activities. A lot of problems were meant in studying the cause of the exercise, among which are,
- Inadequate record keeping
- Reluctance of bank officials which prolonged time of interview
- Financial constraint
1.2 Aims and Objectives of Study
- Appraising:Agricultural contribution to GDP at factor cost
- Appraising compliance with the current policy guide lines in credit allocation by financial institution and government.
- Assessing the state and credit flow to the agricultural sector in Nigeria
- Highlighting the effects of finance on the development and growth of agriculture
1.3 Research Question
- What are the possible causes of low output in farming
- Do low farm output have relationship with bank loans for Farming activities
- Does the rate at which individual farming output depend on the equipment used.
- How can low yield in farming be treated
- What are the possible means to present low yield in farming
- Can the removed of crude implement and replaced with modern implement have effect on farming activities
- Educated farmers on obtaining soft loans from financial equipment have effect on agricultural output
- Under which condition is the loan granted to farmers for farming activities.
1.4 The Statement of Hypothesis
Research hypothesis that will guide the study are as follows:
Null and the alternative hypothesis respectively.
- Ho:There is no significant linear relationship btw the central guide lines and agricultural output.
- Hi:There is significant linear relationship between the central bank guide line and agricultural output.
- Ho:There is no linear significant relationship between agricultural loans & farming activities.
- Hi:There is significant relationship between agricultural loans and farming activities.
1.5 The Significance of the Study
The need to boost agricultural production through finance is a matter that does not need any emphasis with population of 140million & annual growth rate of about 3.2. percent according to 2006 population census figures, in the face of winding agricultural output, any increment in production would not be an act of accident but that of design so, the significance of the project would show itself in the following:
- Improvement of guidelines on agricultural development.
- Improvement on the means of ensuring proper and actual utilization of agricultural loan obtained by farmers.
- Increased supply of quality and reliable quality of agricultural raw materials to agro-based firm hence, achieving a good sense the principle of backward integration.
- Improved earning increased agricultural export or decrease import of agricultural product.
1.6 The Scope of Study
The focus of this study shall be on agricultural loan granting institution namely:the central bank of Nigeria (CBN) the Nigeria agricultural and co-operative bank (NACB) and other commercial banks. The review of impact of the leading policy on agricultural development shall span between 1986-1997.
Data collected for this study are secondary data, from all the sources. (central bank of Nigeria, Niger agricultural and co-operatives banks etc) various were obtained, though not without problems, common among them is the restriction to some information while others are termed as classified documents.
1.7 Definition of Terms
Legal Tender:
Legal tender is any form of money which government declares good for payment of taxes and both public and private debts.
Monetary Stability:
The term monetary stability refers to the values of money, at 0% change in the overall price level.
Open Market Operation:
There is bound trade by central bank:a central bank trade in government securities, done to influence the reserves of commercial banks or to control money supply.
Bank Rate:
The rate at which banks give out loans at interest rate
GDP:
The gross domestic product (GDP) is the, most important economic indicator; it represents a broad measure of overall aggregate economic.
Backward Integration:
A form of vertical integration that involves the purchase of suppliers in order to reduce spending
ADP:
Agriculture Development project is a body established to see that and agricultural project meets the criteria established through loans or investment agreement with the company and authorize the disbursement of funds to the company.
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