Green Financing and the Nigerian Agricultural Sector Growth

Purpose: Activities in the agricultural sector involves processes that are maintained and supported over time. As such, natural and physical resources should not be depleted all in the bid to cultivate and keep animals for human consumption. Thus, agricultural sustainability is pursued by every economy, including Nigeria. Howbeit, green financing is one of the ways through which agricultural sustainability can be ensured but over the past few years of the introduction of green financing in Nigeria, the contribution of the agricultural sector to the overall development of the Nigerian economy has not witnessed any significant change. Therefore, the study examined the effect of green financing on agricultural output in Nigeria. Design/Methodology/Approach: Unlike other studies, time series data that ranged between 2017 and 2021 was collected and analyzed using the linear regression technique. Data such as government green bonds, corporate green bonds, sectoral distribution of credits to the agricultural sector, and agricultural sector output are sourced from the Central Bank of Nigeria (CBN) statistical bulletin. Findings: It was gathered from the result of the study that corporate green bonds and government green bonds had positive but not significant effect on agricultural sector output while agricultural sectoral credits were found to influence agricultural output negatively and insignificantly. The study concluded that green financing was a potential solution to the achievement of a sustainable circular economy, especially in the agricultural sector. Thus, it was recommended that focus should be placed on ensuring that green financing was sufficiently available for investors in the agricultural sector so that the sector could contribute more to economic development. Research Limitation/Implication: Data limitation is encountered in this study. Practical Implication: This study has provided sufficient evidence to indicate that green finance sustainability practice will boost agricultural sustainability in Nigeria. Social Implication: In this study, agricultural sector sustainability practice is encouraged. It is believed that this practice will secure the future of the generations to come, especially in the rearing of animals and cultivation of crops, including value chain. Originality/Value: This paper majors on increasing green finance to the agricultural sector.