Macro economic policy plays a
significant role in an economy. We intend to ascertain the relationship
between macro economic policy and rural sector development in order to
achieve macro economic objectives of full employment, price stability,
balance of payment equilibrium, increases Gross Domestic Product and the
Macro economic policy can be said to be
the instrument of fiscal and monetary policy use in solving, reducing or
controlling economic problems such as poverty, unemployment, low
productivity, inflation and deflation. In Nigeria, several macro
economic policies has been adopted over the years in trying to control,
solve or reduce some of these macro economic problems. Thus, the overall
objective of this research work is to cheek the effect of macro
economic policy on rural sector development. We shall consider the
period of 1990-2006 with these control variables, Gross Domestic Product
(GOP), Government Expenditure on Social and Community development,
Composite consumer prices Index (CCPI) and unemployment Rate (UR).
TABLE OF CONTENTS
1.2 Statement of Problem
1.3 Aim and Objectives of Study
1.4 Research Questions
1.5 Significance Hypothesis
1.6 Methodology of the Study
1.7 Sources of Data
1.8 Scope of the Study
1.9 Significant of the Study
1.10 Organization of Study
2.1 The rural Sector and Macro Economic Policy
2.2 Problems of Macro Economic Policy in rural sector
2.3 Impact of Macro Economic Policy on rural sector
3.0 Structure of Macro Economic Policy in Nigeria
3.1 The rural sector of Nigeria Economy
3.2 Appraisal of impact of macro economic policy on rural sector in Nigeria
3.3 Constraints to achievement of policy objectives
3.4 Challenges of macro economic Policy in rural sector of Nigeria Economy
4.2 Analysis of technique
4.3 Model Specification
4.3.1 Econometric Model Specifications
4.3.2 A prior Expectation
4.3.3 Specification bias
4.4 Specification of data
4.5 Empirical results and interpretation of the regression results
Data for Regression
5.0 Summary, Conclusion and Recommendations
Macro-economic policy are policies used
in achieving macro-economic objectives of price stability, equitable
distribution of income, full employment, economic growth and balance of
payment equilibrium. In of her words, it the instruments of fiscal and
monetary policy used in solving, reducing or controlling economic
problems such as poverty, employment, inflation and deflation.
In Nigeria, several macro economic
policies has been adopted over the years in trying to control, solve or
reduce some of these macro economic problems. In alleviating poverty,
and reducing unemployment, National Accelerated Food production
programmes and the Nigeria Agricultural and cooperative Bank was
established to fund agriculture in 1972. This was followed by Operation
Feed the Nation in 1976. In 1979, the Green Revolution Programme was
also launched. Infact, various programmes, directorate and policies
aimed at solving unemployment and poverty problem were launched &
established such as Better life for rural women aimed at reducing
poverty level in the rural areas; National Poverty eradication Programme
(NAI'EP) project aimed at reducing unemployment and poverty, Bank
recapitalization policy in 2005 aimed at consolidating and strengthening
Nigerian Bank so as to achieve and ensure a diversified, strong; and
reliable banking sector and also encourage the emergence of regional and
unit/ specialized banks.
Most recently is the National Economic Empowerment and Development
Strategy (NEEDS) which focuses on four key strategies: reorienting
values, reducing; poverty, creating wealth and generating employment.
The rural sector has from time experienced no or low impact of most of
these macro economic policies. The rural sector which the primary
occupation of its population includes fishing farming, forest product
gathering and craft, albeit, at subsistence level. In other words, the
rural sector is basically agrarian in nature. This research will show
the impact of various macro economic polices so far adopted in Nigerian
on the rural sector and the impact of the recent policy of NEEDS on the
rural sector of the Nigerian economy.
1.2 STATEMENT OF PROBLEM
The major problem facing macro economic policy in Nigeria is the
problem of usually conflicts that exist among the objectives of macro
economic policy. This problem is not limited to Nigerian alone, it also
exist all over the world. These conflicts occur when the attainment of
one goal may mean the non-attainment of another. For instance, in using;
the instrument of monetary policy, the essay and policy conflict to
A necessary conflict occurs when the attainment of one goal prevent
the attainment of the other while the policy conflict arises when there
is no necessary conflict between two goals but when monetary authority
has difficulty in pursing both goals simultaneously.
An example of a necessary conflict is the Philip's curve, which
depicts the trade off between the rate of inflation and unemployment.
In this example, the focus of emphasis may be price stability.
Pursuing price stability may conflict with objective of full employment
or economic growth.
Another example is full employment and balance of payment objectives.
The policy designed to promote domestic and rural employment can weaken
balance of payment position. As the level of domestic and rural
employment rises, income will increase. The increase in come will cause
importation to rise too, even at a faster rate. This will have an
adverse effect or worsening the balance of payment position.
At time when the objectives of macro economic are mutually
conflicting, the policy makers has to make choice. In choice making, it
must be ensured that an optional different objective, which in the
prevailing condition would be in the nation, be adopted.
1.3 AIM AND OBJECTIVES OF STUDY
This study aimed at undertaking an in -depth analysis of policy
makers like the Central Bank of Nigeria in relation to macro economics
policies such as Structural adjustment Programme (SAP), Better Life for
Rural Women and the recent National Economic Empowerment and Development
The objectives are;
i. To show the impact of macro economic policy in reducing unemployment in rural sector.
ii. To analyse the impact of macroeconomic policy on rural development.
iii. To analyse the impact macroeconomic policy so far in promoting rural development reduction of rural poverty level.
1.4 RESEARCH QUESTIONS
In order to achieve the aim and
objective of this research study within the specified scope of study,
series of important questions will be needed during; the study. While
attempts will also be made to find answers to the questions which
- Can macro economic policy be used to increase productivity and growth in Nigeria?
- Can macro economic policy be used to encourage full employment in rural sector of Nigeria?
- Can macro economic policy be used to reduce poverty in rural area of Nigeria
1.5 STATEMENT OF HYPOTHESIS
Hypothesis 1: That effective macro economic policy can be used to increase productivity & growth of Nigeria.
Hypothesis 2: That effective macro economic policy can be used to encourage full employment in rural sector of Nigeria.
Hypothesis 3: That effective macro-economic policy can be used to reduce poverty in rural sector of Nigeria.
The methodology that will be used is
called regression analysis and the type of regression that will be used
is called multiple regression analysis.
The normal procedure is to develop a
mathematical model, apply statistical method to the available data to
obtain estimates of the model parameters, and decides whether or not the
hypothesis should be accepted or rejected.
1.7 SOURCES OF DATA
This study will require a lot of information from the Central Bank of Nigeria (CBN); and the federal office of statistics (FOS).
This research work will be limited to
date availa.ble from the annual budget report, Journals and other
materials that will be useful in carrying out an effective research. The
date will be analysed and interpreted with the used of theoretical
1.8 SCOPE OF THE STUDY
This study will be restricted to the
impact of macro economic policy on rural sector of Nigeria. Some of the
areas which are intended to cover are the trend of the objectives of
macro economic policy on rural sector of Nigeria, the techniques of
macro economic policy in rural sector of Nigeria. The coverage of this
study will be limited to ten years.
But the scope of macroeconomics policy
is severely limited to its impact on viral sector in creating wealth,
full employment, enhancing growth, and reducing poverty.
1.9 SIGNIFICANCE OF THE STUDY
The reason why I decide to base my
research on this area of study is that despite all the available
instruments put in place in achieving macro economic objectives, the
rural sector of Nigeria is still faced with the following problem.
1. Low productivity, which has created the problem of food shortage, and low output.
2. Unemployment situation, which
cart be in form of functional unemployment, cyclical unemployment,
voluntary unemployment and seasonal unemployment.
3. High level of poverty, which has led to high crime rate.
4. High living standard in the
country, which can be viewed from Rev. Thomas. Malthus perspective,
which states that population is growing at a geometrical rate, while
food production is growing at an arithmetical rate.
1.10. ORGANISATION OF STUDY
This research work will be divided into
five chapters. Chapter one, will be introductory part, which contain
that objective, significant of the study and the hypothesis that will be
tested. Chapter two will be the literature review which gives the
opinions of author, in journals and articles about the role of
macroeconomic policy. Chapter three will give the Structural background
of macroeconomic policy in Nigeria. Chapter four will accesses the
impact of macro economic policy using the analysis of data by
regression. Chapter five will give the summary recommendation and