Abstract
This study examines the causality between financial inclusion and Nigeria’s agricultural sector output (AOG). Ex-post facto research design was used and the annual time series data for various years were obtained from the Central Bank of Nigeria’s (CBN) Statistical Bulletin. The Unit Root Test, Engle –Granger Co- integration Test, Error correction Model (ECM) Test and Granger Causality Tests were used to analyse the data. Financial inclusion was proxied by the prime lending rate, the deposit rate, the agricultural credit guarantee scheme fund, the demand for deposits from rural areas and the deposits of bank loans to small scale enterprises as a percentage of total loan. The results revealed that financial inclusion explains 41% of the changes in the Nigerian agricultural sector output. Prob. (F-statistics) co-efficient of 0.070531 proved that the explanatory variables have an insignificant effect on the dependent variable and Granger Causality Test showed more support for the non-existence of a causal relationship between the variables of explanatory variables and the dependent variables. Hence, the study recommends that the agricultural and financial sectors operators be sensitized on the benefits of their services to each other through symposiums, lectures, seminars and workshops. The two sectors should be encouraged to depend on each other with the agricultural sector relying more on the services of conventional financial institutions than on unorganized or traditional financial bodies. Financial institutions should also concentrate more on rendering services to the agricultural sector.