CHAPTER FOUR

Table 1: Number of commercial Banks in Nigeria and Abroad

Period Number of Banks Urban Rural Abroad Total

2000 54 1466 722 5 2193
2001 90 1466 722 5 2193
2002 90 2283 722 5 3010
2003 90 2520 722 5 3247
2004 89 2765 722 5 3492

Table 2

Data Presentation

Total credit, liquidity Ratio, Lending rate, Cash reserve ratio, Gross Domestic product of Deposit
Money Banks

Years Loans to Liquidity Total credit Landin Cash Gross M2(Mon Inflatio
Deposit ratio in (N’Billions) g rate Reserv Domestic ey n
Ratio in (%) (%) e Ratio Product supply) %
% (%) (N’
Billions)
2000 - - 508.3 17.98 - 6897.48 48.07 6.93
2001 65.6 52.9 796.2 18.29 - 8134.14 27 18.87
2002 62.8 52.5 954.6 24.85 - 11332.25 21.55 12.88
2003 61.9 50.9 1210.0 20.71 - 13301.56 24.11 14.03
2004 68.6 50.5 1519.2 19.18 - 17321.30 14.02 15.00
2005 70.8 50.2 1976.7 17.95 - 22269.98 24.35 17.86
2006 63.6 55.7 2524.3 17.26 - 28662.47 43.09 8.24
2007 70.8 48.8 4813.5 16.94 - 32995.38 44.8 5.38
2008 80.9 44.3 7799.4 15.14 3.0 39157.88 57.88 11.58
2009 85.7 30.7 8912.1 18.99 1.3 44285.56 17.07 11.54
2010 74.2 30.4 7706.4 17.59 1.0 54612.26 6.91 13.72
2011 44.8 42.0 7312.7 16.02 8.0 62980.40 15.43 10.84
2012 42.3 49.7 8150.0 16.79 12.0 71713.94 16.39 12.22
2013 38.0 63.2 10005.6 16.72 12.0 80092.56 1.2 8.48
2014 64.2 38.3 12889.4 16.55 20.0 89043.62 0.56 8.06
2015 69.6 42.3 13222.65 16.85 20.0 94144.96 18.87 9.01
2016 75.95 41.25 15829.30 16.87 22.5 101498.49 25.92 15.68
2017 78.18 49.05 15775.45 17.58 22.5 113711.63 22.19 16.52
Source: CBN Statistical Bulletin (December, 2017)

Table 3

GDPE Current Basic Prices, Consumer Price Index, Implicit Price, Deflator ACGSF (value
of loans Guaranteed and Sectoral utilization of foreign exchange US $ from year 2000 to
2017

GDPE Curr. Consumer Price ACG SF. Value Sectoral

Basic Prices (N’ of Loan Utilization of
Billions) Foreign Price
Year Index base 100 Guaranteed of Exchange US $
loan Millions
2000 1508.41 34.04 361449.00 194.2
2001 2015.42 40.95 728545.40 185
2002 4251.52 46.62 1,050,982.30 178.3
2003 4585.93 51.82 1,151,015.00 106.8
2004 4935.26 58.66 2083744.70 121.3
2005 6032.33 72.90 9366392.90 116.2
2006 7513.30 76.24 4195099.68 169.8
2007 8551.98 77.35 4087447.94 209.4
2008 10100.33 84.13 6497958.93 364.0
2009 11625.44 96.53 8328565.78 271.1
2010 13048.89 113.84 7840496.63 314.2
2011 14037.83 125.60 10,028,988.81 353.2
2012 15816.00 136.87 9332484.23 241.80
 2013 16816.55 148.94 9256676.80 297.8
2014 18018.65 162.41 12456250.87 513.6
2015 19636.97 174.24 10857380.83 270.5
2016 21523.51 206.68 8104810.63 254.6
2017 21986.14 214.03 9116724.05 281.90

Table 4

Weighted Average Deposit and Lending Rates of Commercial Bank (Percent)

Period Savings Prime Maximum

2000 5.29 17.98 21.55
2001 5.49 18.29 21.34
2002 4.15 24.85 30.19
2003 4.11 20.71 22.88
2004 4.19 19.18 20.82
2005 3.83 17.95 19.49
2006 3.14 17.26 18.70
2007 3.55 16.94 18.36
2008 2.84 15.14 18.70
2009 2.68 18.99 22.62
2010 2.21 17.59 22.51
2011 1.41 16.02 22.42
2012 1.70 17.79 23.79
2013 2.17 16.72 24.69
2014 3.38 16.55 25.74
2015 3.50 16.93 26.96
2016 4.18 17.08 28.26
2017 3.92 18.23 30.22
Data analysis and Presentation of Results
Having tested the Null hypothesis (H 0) that financial intermediation variables have no significant
relationship on agricultural performance in Nigeria. We represent the result gotten. The study
employed secondary data gotten from the Central Bank of Nigeria, statistical bulletin December,
2017.

4:1 Unit Root Test Analysis

Table 4:0

Variable ADP Level Critical Critical Critical Probability Order of

Values 1% Values 5% Values Integration
10%

Log AGDP 3.796786 -3.7497 -2.9969 -2.6381 0.000000 1 (2)

Log MS -5.110769 -3.7343 -2.9907 -2.6348 0.000000 1 (1)

Log INT -5.026041 -3.7343 -2.9907 -2.6398 0.000000 1 (1)

Log INF -4.996898 -3.7343 -2.9907 -2.6348 0.000129 1 (1)

Log MPR -5.324177 -3.7343 -2.9907 -2.6348 0.000005 1 (1)

Another Computation E views 3.1 output

In other to avert the occurrence of spurious results, there is need to test for the presence of unit
root in order to ensure that the parameters are estimated using stationary time series data. The
essence of the ADF test is the NULL hypothesis of nonstationary it shows that money supply,
interest ratio, inflation rate and monetary policy rate were stationary at first difference 1%, 5%
and 10% critical value is their T statistics value at first differencing is greater than the critical
value at 1%, 5% and 10%. However, Agricultural GDP, achieved stationary at second
differencing.

4.2 Co-integration test

Table 4:1 Co-integration Test

Sample: 2000-2017

Test assumption: Linear deterministic trend in the data

Series LOGAGDP, LOGMS, LOGINT, LOGINF, LOGMPR

Eigen Value Likelihood 5% (percent) 1 percent Hypothesized

ratio critical value critical value no of C.E (s)

0.919284 110.5908 68.52 79.07 None**

0.533451 47.67041 47.21 54.46 At most 1*

0.452537 28.61063 29.68 35.65 At most 2

0.269178 13.54912 15.41 20.045 At most 3

0.204178 5.709500 3.76 6.65 At most 4

* (**) denotes rejection of the hypothesis at 5 (1%) significance level. Last Regression test
indicates 2 comtegrating equation(s) at 5% significance level. The Johansen cointegration
testwas used to determine if there exists longrun equilibrium relationship among the variables
under study. The result above showed three cointegration variables at 5% critical value as the
likelihood ratio value of these variables in the table was greater than their 5 percent critical
value. That is 110.5908,47.67041 and 5.709500 is greater than 68.52, 47.21 and 3.76. we
therefore, reject the null hypothesis and conclude that there exists longrun equilibrium
relationship between the dependent and independent variables.

4.3 Granger causality test

Table 4.2

Pair wise Granger Causality Test

Sample 2000-2017
Null Hypothesis Obs f-stat Probability

Log Ms does not Granger cause Log AGDP 17 0.29625 0.74681

Log AGDP does not Granger cause Log MS 3.08521 0.06795

Log INT does not Granger cause Log AGDP 17 5.98375 0.00919

Log AGDP does not Granger cause Log INT 2.58525 0.10032

Log INF does not Granger cause Log AGDP 17 0.43897 0.65076

Log AGDP does not Granger cause Log INF 3.81500 0.03949

Log MPR does not Granger cause Log AGDP 17 1.40132 0.26943

Log AGDP does not Granger cause Log MPR 3.29384 0.05801

Log INT does not Granger cause Log MS 17 1.20331 0.32102

Log MS does not Granger cause Log INT 2.75299 0.08788

Log INF does not Granger cause Log MS 17 0.22838 0.79787

Log MS does not Granger cause Log INF 1.91116 0.17396

Log MPR does not Granger cause Log MS 17 0.76066 0.48041

Log MS does not Granger cause Log MPR 3.10722 0.06682

Log INF does not Granger cause Log INT 17 2.68852 0.09245

Log INT does not Granger cause Log INF 0.63805 0.53874

Log MPR does not Granger cause Log INT 17 0.81217 0.45801

Log INT does not Granger cause Log MPR 2.55950 0.10239

Log MPR does not Granger cause Log INF 17 4.09381 0.03234

Log INF does not Granger cause Log MPR 1.91953 0.17275
 The granger causality analysis presented in table 4:2 showed that at 5% significance
level, there was no case of bidirectional causality; however, a unidirectional causal relationship
was seen running INT to AGDP, AGDP to INF and MPR to INF.

4:4 Ordinary least square Regression estimate

Dependent Variable: AGDP

Method: Least Square

Sample 2000-2017

Included observation 18

Variable Coefficient Std. Error t-statistics Probability

Log C 4.344481 0.089224 48.69202 0.0000

Log MS 0.167726 0.011566 14.50198 0.0000

Log INT -0.032146 0.002627 -5.817150 0.0226

Log INF 0.007165 0.005323 -1.461405 0.0580

Log MPR -0.003581 0.002792 -1.282857 0.2129

R-Squared 0.935719 Mean dependent var 5.254778

Adjusted R-square -0.924032 S.D dependent var 0.159830

S.E of Regression 0.044053 Akaike info criterion -3.241275

Sum Squared Resid 0.042694 Schwarz criterion -3.201305

Log likelihood 48.75721 F-statistics 80.06204

 Durbin-watson stat. 1.502288 Prob. (F-Statistic) 0.000000

Source: Authors Competition Eview 3.1

Log AGDP= 4.34+0.168 log MS+0.0321 log INT -0.0072 log INF -0.0036 log MPR

T-start (48.69) (14.50) (-5.82) (-1.461) (-1.283)

T. Prob (0.000) (0.000) (0.226) (0.0580) (0.213)

R2=0.936, adjusted R2=0.924, f-statistic=80.06, Prob (f-stat) =0.000000

Durbin Watson=1.502288

The shortrun OLS test results areanalyzedin two parts. The global utility of the model and the
relative statistics of the estimated model.

Global Statistics Result Analysis

The econometric property of the estimated equation shown that the global utility or the overall
goodness of fit is high with an f-statistics of 80.06204 and probability value of 0.00000. From
OLS regression result, R2 is 0.935 or 93.5% and the adjusted R 2 is 92.4%. This implies that at
level series, about 93% of the total variations in the output level of goods and services (GDP) are
explained by the changes or adjustments in the bank financial intermediation function indicators
in the economy-MS, INT, INF and MPR. The log likelihood ratio, Akaike information criterion
and Schwaz Bayesian criterion statistic all showed that the model has good forecasting power.

Relative Statistics of the estimated model

The test of significance from our result showed that two variables (MS and INT) were
statistically significant for the period under review at 5% level of significance while at 10% level
of significance, INF was statistically significant. This is due to the fact that their T.Probability
values of 0.0000, 0.0000 and 0.0226 are all less than 0.05 (5% level of significance) while the T-
probability value of INF at 0.00580 is less than 0.10 (10% level of significance). We therefore
reject the Null hypothesis. The f-stat value also shows that the entire regression model was fit
and further confirms the value of the R 2, while the Durbin Watson value of 1.502288 tend
towards 2, hence we conclude that there exists no serial autocorrelation.

The coefficient of money supply (0.168), interest rate (-0.032) and monetary policy rate (-
0.0036) all appeared with the expected signs and conformed to expectations. This shows that at
1% increase in money supply, will lead to an increase in AGPD by 0.168% this is in the line with
the new quantity theory of money that increase.