IMPACT OF FINANCIAL ACCESSIBILITY ON AGRICULTURAL OUTPUT IN WEST AFRICA

This study investigates the critical relationship between financial accessibility and agricultural output in 15 developing countries in West Africa over the period from 2010 to 2020. The study applies the Generalized Method of Moments (GMM) and panel causality tests to analyze the dynamics among the relevant variables. Specifically, the focus is on how financial accessibility-measured through domestic credit provided by the private sector (CPS) and the domestic credit extended by the banking sector-affects agricultural output in the region. The findings of this study underscore that financial accessibility has a significant positive influence on agricultural output. This relationship suggests that when farmers and agricultural businesses can access credit and financial services, they are more likely to invest in better technologies, improve productivity, and ultimately increase their yields. Moreover, the study's results reveal a unidirectional causal relationship running from financial accessibility to agricultural output. By improving access to credit, farmers can invest in essential resources such as seeds, fertilizers, and equipment, thereby boosting productivity. This approach would not only enhance financial accessibility but also create more employment opportunities, thereby contributing to poverty alleviation in the region. The implications of this research are significant. Policymakers should recognize the vital role of financial services in supporting agricultural development. By fostering an environment that encourages the growth of financial institutions, particularly in underserved rural areas, there is potential for transformative changes in agricultural productivity.