Banking Innovations and Agricultural Sector Performance in Nigeria

Abstract

The study investigated banking innovations and agricultural sector performance in Nigeria. An Ex-Post Facto research design was adopted, utilizing monthly time-series data from 1980 to 2024, sourced from the Central Bank of Nigeria and the Nigerian Bureau of Statistics. The data were analyzed using descriptive statistics and the Autoregressive Distributed Lag (ARDL) model to capture both short-run and long-run dynamics. The study's diagnostic tests confirmed the stability and reliability of the models. The study's ARDL long-run analysis revealed that ATM transactions had a significant positive impact on agricultural GDP with a coefficient of 0.004691 (p = 0.0000), while EFT transactions had a significant negative effect with a coefficient of -0.015411 (p = 0.0008). Mobile banking and POS transactions had no significant long-run impact. In the short run, negative lag effects of ATM and mobile banking were observed, while EFT showed positive short-run contributions. The error correction term indicated that 39.4% of disequilibrium was corrected each period. The model also passed diagnostic tests for serial correlation, heteroskedasticity, and model specification, confirming its reliability. The study concluded that while ATM transactions support agricultural growth, mobile banking, POS, and EFT have mixed or negative impacts on agricultural productivity. It recommended that policies should focus on improving the integration of digital banking tools with the agricultural sector and address structural constraints such as low digital literacy and weak rural infrastructure.