Project Abstract

It is commonly said that money is the life wire of any business, agriculture by every standard, qualifies as a business ventures. One can summit that agricultural credit are financial resources made available to farmers against which they may draw for farming together with repayment arrangement.

This is particularly true when it is called to mind that until the mid1970s agriculture accounted for more than 60% of the national income and 70 percent of total employment.

Striking future of the Nigeria economy is the general poverty of the people. In the face of this, it becomes obvious that deliberate Government integration is inevitable. Thus, the government has demonstrated over the years through the employing of both fiscal and monetary machineries.

It is therefore, the intention of this study to view the nature and the relationship between monetary policy and agricultural output, effectiveness of implementation of the policies, problems encountered which are also responsible for low agricultural output and therefore, suggest solutions.    

Project Overview

1. 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 the 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,

1. inadequate record keeping
2. Reluctance of bank officials which prolonged time of interview
3. Financial constraint

1.2 AIMS AND OBJECTIVES OF STUDY    

1. Appraising: Agricultural contribution to GDP at factor cost

2. Appraising compliance with the current policy guide lines in credit allocation by financial institution and government.

3. Assessing the state and credit flow to the agricultural sector in Nigeria

4. Highlighting the effects of finance on the development and growth of agriculture