This research work focus on the appraisal of Macroeconomic Policy on
Inflation in Nigerian Economy, also to determine how it enhances the
growth of Nigerian Economy.
The aim of this research work is to look into challenges and numbers
of hypothesis were drawn. Information necessary to address the test of
hypothesis was gathered through secondary data, source from Central Bank
of Nigeria (CBN).
Economic analysis was used to formulate the three (3) models that
were stated in this research work. Multiple regressions were also used
to test the appraisal of Macroeconomic Policy on Inflation in Nigerian
Economy. The findings of this research show that macro-economic policy
as a tool for Economic Policy and Growth as a Positive Effect on the
Growth in Nigeria. Inconclusion, government should ensure that
operational problems are tackled prior to sale so that there would not
be any barrier hindering the high degree of efficiency that is
associated with the stability of the Nigerian economy.
Over the years, Nigeria has made conscious and determined efforts to
attain a high level of social and economic transformation of the economy
in order to attain the development goals and including monetary policy,
fiscal, policy, exchange control measures and income and price control.
The measures adopted were changed from time to time to reflect the
changing economic environment and circumstances.
This work focuses on two of the policies adopted (monetary and fiscal
policy) and examines their uses for economic growth and stability in
Nigeria. Since the main burden of aggregate economic policy must fall on
either monetary policy and fiscal policy or a combination of both.
The question arises as to whether to clear cut distinction can be
made between policies which are termed "MONETARY" are those which are to
be called “FISCAL”. The truth is that considerable ambiguity about
these terms exist and this often leads to useless debate and confusion.
However, monetary policy can be as a measure which deals with the
discretionary control of money supply by the monetary authorities with a
view of achieving stated economic' objectives. In other words, it
employs the use of variation in the money supply to achieve economic
Fiscal policy on the other hand may be defined as the policy pursued
by a government to influenced economics activities in economy by
changing the size and content of taxation, expenditure and public debt
with a view to achieving given objective. Although, there two policies
are independent tools of 1conomics stabilization, they are often
combined by most countries for a greater effect on the economy.
Monetary and Fiscal policies as adopted in Nigeria have four broad objectives. The objectives include:
· Maintenance of relative stability in domestic price
· Attainment of a high and sustainable rate of economic development
· Maintenance of balance of payment equilibrium growth and
stability are so closely related that the economic policy of the
government should include both of them.
Economic growth may be judges from the growth it total output of the
economy as measured by annual increases in net national rod, ct in
constant price. Such a measure tells us how much bigger the total
economy is becoming over a period of time, but it tells nothing about
changes in the standard of living of the people in the economy.
The more significant measures in the growth in real net national
product divided by the number of people in the population. There are
many targets of economic growth and development. They includes
· Income distribution Gross national product Sectoral development (such as agriculture industries etc)
· The pressure to attain economic stability or our economic is
so strong that measures to promote federal government fidget.
· To achieve the maximum practicable rate of growth, this is
necessary to have stability. This does not mean a perfectly smooth rate
of growth, but one that is not interrupted byI recessions and
· Stabilization policies that are usually released annually
concerns attempts to stabilize the level of national income by ensuring
that serious inflationary and deflationary gapsdo not persist so that
something close to full employment without rapid inflation can be
The government uses the instruments of monetary and fiscal policies
to influence economic growth and development. The instrument of monetary
policy available to the Nigeria monetary authorities include:
· Rediscount rate
· Interest rate structure
· Reserve requirement
· Direct credit control
· Exchange rate and
· Moral suasion
Some of the Fiscal policies relating to economy a growth and
stability in Nigeria include: tax incentives (capital allowance, income
tax relief, reconstruction tax exemption etc. relief fromimport duties,
tariffs measures and budgetary measures. The government uses the
instruments in achieving economic growth and stability.
1.2 STATEMENT OF PROBLEM
This study is basically aimed at
- Has there been effort to study the monetary and fiscal
policies used by the Central Bank of Nigeria (CBN) in achieving economic
growth and stability.
- The ability to access the effectiveness of monetary and fiscal policies.
- Has there been recommendation to correct observed mistake by
(CBN). If done, this will enable the monetary authorities to make
optimal use of various monetary and fiscal tools at their disposal for
rapid economic growth and stability.
1. 3 AIM AND OBJECTIVES OF THE STUDY
The general aim of this study is to examine the real problem of
macroeconomic policy in Nigeria and propose some stabilization policies.
While specific objectives are:
1. To study the monetary and fiscal policies; used by the
Central Bank of Nigeria (CBN) in achieving economic growth and
2. To asses the effectiveness of monetary and fiscal policies
3. To make recommendation to correct observed mistake by the
Central Bank of Nigeria (CBN) this will enable the monetary authorities
to make optimal use of the various monetary and fiscal tool at their
disposal for rapid economic growth and stability.
1.4 RESEARCH QUESTIONS
· Can monetary and fiscal policy be used as a tool to achieve economic growth?
· Could monetary and fiscal policy assess the effectiveness of monetary and credit policies?
· Does the policies of the Central Bank useful to achieve rapid economic growth and stability?
1.5 THE STATEMENT OF HYPOTHESIS
Ho: That monetary Policy does not achieve economic growth and stability.
HA: That monetary policy achieves economic growth and stability.
Ho: That effectiveness of monetary and credit policies could not be assess using the monetary policy.
HA: That effectiveness of monetary and credit policies could be assess using the monetary policy.
Ho: That the policies of the Central Bank could not be use to attain rapid economic growth and stability?
HA: That the policies of the Central Bank can be used to attain rapid economic growth and stability?
1.6 RESEARCH METHODOLOGY
The research work makes use of secondary data obtained from various
institution and publication. The data was obtained from Central Bank of
Nigeria (CBN) Federal Office of Statistics (FOS), various publications
from local and international journal. The search work will be tested
using regression analysis; ordinary least square method was used in
construction the model.
1.7 SIGNIFICANCE OF THE STUDY
It is hope that this research work will be practically and
theoretical significant to the household, firm and government and for
the improvement of the whole economy. There is no doubt at this study
will benefit quit a number of people especially units involved .
1. 8 THE SCOPE AND LIMITATION OF STUDY
This study macro economic tools measure under the period of
Structural Adjustment Programme (SAP) and mid seventy's (70's)
(978-2008) also in examining how effective and efficient
the macro economic tools measures have change in the economy since
1970's, only the activities of commercial, merchant, special banks and
central bank will be used.
This was done through looking into the financial indicators in the economy.
- The number of banks in operation
- Money stock in the economy
Growth of credit allocation Banks loan and advances Growth of bank loans and advances Average interest rate (%).
A detail of this is in the date analysis which should be treated in
further study. Most of the information and data used was collected
mostly from Central Bank of Nigeria (CBN) through their annual reports
bulleting and statement of account. This study shall be carried out
exclusively in relation to the Nigeria economy.
This study as comprehensive as possible except for some constraints
encountered during the course of study. There was a problem of time
limit for the completion of the work. The regroup and hectic academic
programmes which coincides with exams and period of the study or
research was impediment. Inadequacy of data was alsomajor constraint
other limitations of the study are time period under study and lack of
current year data.
1.9 ORGANISATION OF THE STUDY
The project is structured into five chapters:
Chapter One dealt with the introduction
which includes brief description of Nigerian Economy, Area of merger in
the economy, Relevant and Significance of the study, Definition of
terms, Scope and Limitations.
Chapter Two is mainly the Literature Review
and Theoretical Frame Work of the study, the meaning and definition of
Merger, motives of Merger and Acquisition, Merger game and the effect on
Chapter Three based on the research method
this include method of data collection, hypothesis to be tested and the
statistical tools that are to be used.
Chapter Four dealt with the research methodology, data preparation and analysis.
Chapter Five is the Summary, Recommendation and Conclusion of the research study.
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