Project Topic:

EFFICIENCY OF MONETARY POLICY IN CONTROLLING INFLATION IN NIGERIA

Project Information:

 Format: MS WORD ::   Chapters: 1 - 5  ::   Pages: 53 ::   Attributes: Questionnaire, Data Analysis  ::   2,453 people found this useful

Project Department:

ACCOUNTING UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

ABSTRACT

This researcher work was embarked upon to study the efficiency of monetary policy in controlling inflation in Nigeria.

The need for this study was informed by the trend of inflationary growth over the years, the impact of inflation on the achievement of the four basic goals of monetary policy: economic growth, price stability, inflationary rate or favourable balance of payment.

May research work have been carried out on this issue previously but despite all good policies of government and its agencies, these goals have remained elusive over the years.

There is therefore the need for study on this sensitive issue, to research, articulate and review the current approach and review the current approach to monetary policy which its success hinges crucially on the extent to which the budgetary programme of the federal government can be harmonized with the goal of monetary policy.

 

CHAPTER ONE

1.0     INTRODUCTION

 In Nigeria, the central bank is at the apex of the banking pyramids, applies a variety of policy measure and techniques to control and regulate money and credit in order to attain the desired economic goals or objectives. It is therefore necessary and important to use the package of monetary policy measures as basis for discussing the efficiency or otherwise of general economic management strategies.

Government policy statements clearly reveal that inflation became a problem in Nigeria about the early 1970’s. This contention can be substantiated from the fact that the economy began to experience double digit rate of inflation from early part of the decade. The problem of the inflation is not peculiar to Nigeria, but it is a global problem confronting the majority; if not all countries of the world. The attempt by the Nigeria government to attain a higher level of an economic development at this period, generally led to spiral inflation in the country. But whether inflation in Nigeria is due to monetary mismanagement on the part of the authorities concerned or came by inherent structural deficiencies, still remains uncertain. Many factors have been identified to be responsible for inflationary pressure in the country. In the process of formulating monetary policies, it is paramount important to specify objectives and also impossible to evaluate performance.

Government policies are to achieve certain objective which include price stability, high rate of economic growth and balance of payment equilibrium. Monetary policy can be employed in encouraging investment and controlling inflation while fiscal policy can be effective in reducing consumption of luxury and ostentatious goods. But the major concern of this project is to explore the effectiveness of monetary policy in controlling inflationary pressure in an economy like Nigeria.

It is generally believed by some economists that inflationary effects are quite harmful to some business establishments. This could be so because vendors often loss in the sense that the value of their money falls short of its original purchasing power.

The extent of the effect of inflation in Nigeria has forced Nigeria to adopt several monetary policy measures within. However these policy measures have not solved the problem of inflation as could be seen for the associated increase in the cost of production during the period under consideration

It is therefore in view of the above that it becomes necessary to example some of the mixed policy instruments used and hence their efficiency as regards inflationary control.

The problems of inflation in reflection to economic growth and development have been extensively discussed. The problem is.

1.1     STATEMENT OF PROBLEM

The problem this study attempts to address is to evaluate the efficiency of monetary policy in controlling inflation in Nigeria.  Also without this study it will be impossible to determine whether monetary policy is efficient in controlling and bringing down inflation to the nearest minimum and to achieve its original objectives.

This piece also do expand and enrich available literature and could provide opportunity for general statement monetary the performance of effective monetary policy in Nigeria.

Studies on the performance of monetary policy in Nigeria and monetary policy programme in general are emerging from the favoured countries. Steven’s (1992) asserts that abundant evidence is available to support that inflation is a big problem affecting Nigeria economic development. However, according to him some empirical evidence are not entirely clear in the support of the assertion, evidence from less favoured economic environment like Nigeria are either non existence or very scanty and untested. Hence, the precise performance of monetary policy can hardly be presently generated.

Not peculiar to Nigerian but has assumed a global phenomenon.

These problems are how: -

  1. To identify the policy instruments use in controlling inflation in Nigeria.
  2. To find out who is responsible for introducing and enforcing the policies.
  3. To appraise their efficiencies since inflation started.
  4. To find out which method that will help stop monetary mismanagement as it affects inflation.

These problems listed out are major problems that should be looked into

1.2     OBJECTIVES OF THE RESEARCH

It is necessary to state the primary objective of this research having identified the ruling monetary policy instruments in Nigeria and the economic objective that these are expected to influence.

These are as follows: -

  1. This work is set out to investigate the cause of inflation in Nigeria
  2. To investigate if Nigerian momentary policy is efficient or not, in the achievement of certain objective of the economy and inflationary control in particular.
  3. To see it the non-realization of the economic objective is due to choice of wrong instrument or inappropriate application of the instruments.
  4. To recommend policy solutions based on the research findings the policy recommendations based on such findings will then serve as a guide to the further application of monetary policies.

1.3     RESEARCH QUESTIONS

The following questions are relevant to the research;

  1. What are the causes of inflation?
  2. What are consequences of inflation?
  3. Does inflation have any effect on income?
  4. Does the level of money stock influence inflationary rate?
  5. Can economic growth be constant during inflationary periods?
  6. Does inflation hamper economic growth?
  7. Can monetary policy measure control inflation?
  8. How can inflation be controlled if not estimated?

1.4     HYPOTHESIS

Based on the problem, statement and purpose of study, the following hypotheses were formulated:

H0:    There is a significant relationship between the money supply and inflationary rate in the economy

H0:    There is a significant relationship between economic growth and inflationary rate in the economy. 

Hi:     There is no significant relationship between the money supply and inflationary rate in the economy. 

Hi:     There is no significant relationship between economic growth.

1.5 SCOPE OF THE STUDY

The study is centered on efficiency of monetary policy in controlling inflation in Nigeria.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection.

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1.6 SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

  1. The results from this study will recommend policy solutions based on the research findings the policy recommendations based on such findings will then serve as a guide to the further application of monetary policies. They will also understand through this study the effects of efficiency of monetary policy in controlling inflation in Nigeria.
  2. This research will be a contribution to the body of literature in the area of the analysis of the study is centered on efficiency of monetary policy in controlling inflation in Nigeria, thereby constituting the empirical literature for future research in the subject area.

1.5     DEFINITION OF TERMS

The operational terms are defined to help the reader have a better understanding of the subject matter of the researcher.

Monetary Policy:

This consists of government action in achieving a certain set of economic objective.

Policy:

A statement including objectives to be attained; It may include proportion in the use of the means to obtain these objectives.

Fiscal Policy:

It is a government policy that concerns revenue and taxation.

Inflation:

It is the period of general rise in price level of all goods and or service. It can simply be understood as when few goods are in existence more than money or more money chasing few goods. 

Cost-Push Inflation:

It is condition of general rise in price caused by production cost.

Demand-Pull Inflation:

It is a condition of general rise in price caused by increase in aggregate demand.

Hyper Inflation:

It is a situation in which prices are rising, with little or no increase in output.

Stagflation:

It is a high rate of inflation associated with industrial inactivity and high rate unemployment. 

Discount Window Operation:

A policy instruments to signal he desired direction of interest rates by CBN and in accordance with its role as tender of last resort.

Gross Domestic Product (GDP)

It is the aggregate value of goods and services produced within a nation or area.

Monetary Supply (MS)

Monetary supply known as (M1) is used for the purpose of this research and is defined as the currency with the non-bank public plus private sector demand deposits. The other definition of money supply (M2) is that which incorporates both precautionary demand and store of value in M1.

General Price Level

The overall prices of goods and services usually measures with consumer price index (CPI). The CP1 measure the rise or fall in the general price level.

Central Bank of Nigeria

This is the highest monetary authority in Nigeria charged with responsibility for the production and issuance of legal tender currency in Nigeria, maintenance of external reserves in order to safeguard the international value of the currency. The promotion of monetary stability and sound financial structures, bankers and financial adviser to the federal government; and banker to other bankers in Nigeria.

Balance of Payment:

This is a double entry statement of account which reveals the direction to various transactions in goods, services and capital flows between residents of one country and those of the rest of the world.

Efficiency:

This is the ability of Nigerian monetary policy to achieve the desire macro economic objectives in general and to control inflation in particular. 

Full employment, equilibrium in balance of payment, economic growth and price stability are the four primary goals of any economy of which Nigeria is not an exception. The findings and recommendation of this project will go a long way in addressing the problems of inflation in this country. The important of this study to policy maker can not therefore be over emphasized considering the alarming rate of rise in inflation over the years especially in 90s

The result of this study based on the examination of the types of inflation, causes and ways of controlling its impact on economic development will be of immense help to policy makers; government and its agencies, minister of finance, investors both foreign and indigenous; and the entire Nigeria public.

 

 

Get the complete project »


Instant Share On Social Media:


Can't find what you are looking for?
Call (+234) 07030248044.

OTHER SIMILAR ACCOUNTING PROJECTS AND MATERIALS

AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS (A CASE STUDY OF ACCESS BANK)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Secondary data, Data Analysis,Abstract  ::   21740 engagements

CHAPTER TWO REVIEW OF RELATED LITERATURE Electronic banking in Nigeria has overtime been viewed by many especially economists as having a lot of implications on the economy of Nigeria and especially...Continue reading »

A CRITICAL ANALYSIS OF THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 75 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   20147 engagements

ABSTRACT The study was carried out to analyse how an organization performs making use of the financial statements with First Bank of Nigeria Plc serving as the case study. the study disclosed that th...Continue reading »

AN EVALUATION OF THE PERFORMANCE OF NIGERIAN STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIA ( A CASE STUDY OF NIGERIAN STOCK EXCHANGE)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 78 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   9783 engagements

HISTORICAL BACKGROUND OF THE NIGERIA STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIAN. The nigeria stock excahnge denoted by NSE is a government establishment where stocks are traded on a daill...Continue reading »

APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF APOSTOLIC CHURCH, DELTA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   13411 engagements

2.1 CONCEPTUAL FRAMEWORK A budget is can be defined by accountants as “a planned outcome to be generated and for the expenditure to ensure during that period and the capital to be employed to a...Continue reading »

ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN CALABAR LOCAL GOVERNMENT AREA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 69 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   12038 engagements

ABSTRACT The economy of Nigeria cannot function properly or thrive without the micro, small and medium scale enterprises (SMEs). These small scale enterprises cannot function properly if they are not ...Continue reading »

ASSESSMENT OF ADEQUATE RISK RECOGNITION AND MANAGEMENT IN NIGERIAN INSURANCE COMPANIES (A CASE STUDY OF UNION ASSURANCE COMPANY, UYO)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 86 ::   Attributes: Questionnaire, Data Analysis  ::   7879 engagements

THE CONCEPT OF RISK Risk has been the subject of study by different scholars over the years with several meaning and definitions. But the most accepted definitions are that of J.E Banister and P.A Baw...Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Abiola Adesanya from University Of Lagos Nigeria said "The best portal for undergraduate research projects and free project topics in Nigeria. Kudos to you guys! Project Clue".
    Rating: Very Good
  • 2. Dabung Timothy from University of Jos said "The effect of job stress on employees performance".
    Rating: Excellent
  • 3. Elkanah Umma from Ahmadu Bello University Zaria said "I had wonderful working experience from you guys. Your side is perfect for research! Keep helping the customers.".
    Rating: Very Good
  • 4. Mamudu Jalloh from University of Makeni said "I actually love it because of it quality ".
    Rating: Excellent
  • 5. Nasra Mohammed Hersi from Simad university said "Thanks for your sharing ".
    Rating: Excellent
  • 6. Ahmed Abdi Mohamud from Abaarso Tech University said "I have a wonderful experience using ProjectClue,".
    Rating: Excellent