Effect of Financial Inclusion on Crop Production in Selected West African Countries: 2009 – 2022

This study examined the effect of financial inclusion on crop production in selected West African countries. Agricultural production has been the bedrock of the typical African society. Across West Africa, there is a tug-of-war between the need to provide seamless financial transactions for agricultural products and the need to increase agricultural output rapidly to meet increasing demand for food. Financial inclusion and agricultural productivity has been studied by many researchers but empirical findings have varying results. This study specifically examined the effect of value of loans accessed by farmers, bank density, bank deposit to GDP ratio, and mobile banking penetration rate controlled by gross fixed capital formation, human capital index, total labour force, and prime lending rate on crop production in Nigeria, Ghana, Cote D’Ivoire, Senegal, Burkina Faso, Benin, Sierra Leone and Togo. The theoretical foundation of this study is the financial inclusion theory which is hypothesized to be a vital aspect of growth in the agricultural sector. The study applied the Panel Ordinary Least Square (POLS) technique to estimate the model and covered a period of fourteen years from 2009 to 2022 using data that were obtained from the World Bank. The findings revealed that value of loans accessed by farmers, bank density, bank deposit to GDP ratio, mobile banking penetration rate have no significant effect on crop production of selected West African countries: Nigeria, Ghana, Cote D’Ivoire, Senegal, Burkina Faso, Benin, Sierra Leone and Togo. The study concludes that financial inclusion has yet to have the desired effect on crop production. The study recommends that Governments and financial institution in the selected West African countries should provide low interest agricultural loan with flexible repayment terms linked to harvest cycles.