THE IMPACT OF MONETARY AND FISCAL POLICIES ON THE INDUSTRIAL AND AGRICULTRUAL DEVELOPMENT IN NIGERIA
ABSTRACT
The research project is a very crucial study for the development of agriculture and industry in Nigeria. The study was motivated by the necessity to establish the extent of the effect of monetary and fiscal policies adopted by the government and monetary authorities in Nigeria on agricultural and industrial development. The need for industrialization and agricultural develo9pment have been of great concern since after Nigeria’s independence.
To solve the research problem both primary and secondary data were collected. The research instrument used in collecting the data were questionnaires and oral interview. The respondents comprised of the industrialists and agricultural.
In organizing and presenting data collected, tables and percentage were used, there various hypothesis were tested using the chi-square.
Data analysis and interpretation gave the pillowing findings: logs in monetary policy, poor implementation inadequate planning, look of proper supervision, and political instability.
Based on the findings, I recommend that, grassroots planning and review should be made before policy formulation, defaulting banks on credit extension guidelines should be punished, monetary and fiscal policies should be flexible.
The conclusion of the study is that monetary and fiscal polices has not been used in on efficient and effective manner, but it the application of these polices are improved, there will be appositive change and development in the agricultural and industrial sectors.
CHAPTER ONE
1.0 Introduction
- Background of the study
- Statement of problem
- Objectives of the study
- Statement of hypothesis
- Research questions
- Significance of the study
- Scope and limitation
- Definition of terms
CHAPTER TWO
- Literature review
2.1 Concept of monetary
2.2 concept of fiscal policy
- Stance of monetary policy
- Phases of monetary policy in Nigeria
- Instruments of monetary and fiscal policies
- Agricultural credit policies in Nigeria
- Impact of monetary policy on industrial an Agricultural development
- Internment problem of Nigerian monetary and fiscal polices
CHAPTER THREE
RESEARHCE DESIGN AND METHODOLOGY
3.0 Introductions
- Population of the study
- Sample of Design
- Source of Data
- Data collection techniques
CHAPTER FOUR
4.0 Data Analysis
- Data Analysis Design
- Test of Hypothesis
CHAPTER FIVE
- Summary
5.1 Conclusion
- Recommendation
Bibliography
CHAPTER ONE
1.0 INTRODUCTION
Monetary and other financial sector policies in a fiscal programme perform specific role including helping to stabilize the economy, enhancing the efficiency of resources use and supporting output and employment growth. It is however, difficult to achieve some economies objectives of the government without employing monetary and fiscal policies. It come is not taken, however, in the formulation and implementation of these polices, a conflict may arise between monetary and fiscal polices to the extent that one renders the other impotent.
Monetary policy is a rule made by the government and monetary authorities aimed at controlling such economic variables as prices, output ad growth, through a deliberate manipulation of the availability and cost of money and credit. Fiscal policy on the other hand, deals with the manipulation of the economy by the government through its revenue and expenditure programme.
- BACKGROUND F THE STUDY
Various opinions have been expressed on the manager in which these police could be used to achieve the desired economic objective. Some believe that the present system of control has been highly unsuccessful, and that the role of government and the monetary authorities in the process of economic development in Nigeria has not been adequately defined. However, it is often necessary for government to intervene using monetary and fiscal polices in free market economies for a variety of reasons including the fact that, on their own, market forces may fail to achieve the set objectives of economic policy.
By mid 1986, the economy was on the brink of total collapse. It vbecome obvious that the measlures taken since 1982 were mere palliatives as their effectiveness was constrained by many factors, including distortion and rigidities introduced into the economy by over-regulation. In other words, the progressive reinforcement of controls in the effort to solve the problems only aggravated them ad created new ones. This was the scenario in which the Nigeria economy was when the federal Government adopted the structural Adjustment Programme in July 1986 to improve the functioning of the economy. This date is very important in the history of economic stabilization in Nigeria, as it market the end of a highly regulated regime and opened up a new chapter that reflects government efforts at deregulating the economy with emphasis and market forces.
The structural Adjustment programme was specifically aimed at achieving fiscal balance by altering and restructuring the production and consumption patterns of the economy eliminating price distortions, reducing the heavy dependence on crude oil exports and consumer good imports, enhancing the non-oil export sector and achieving sustainable growth. The main strategies of the programme was the deregulation of the economy.
Overtimes, government has intervened in the working of the press market economy, because the uncontrolled market economy may not allocate resources efficiently nor can they distribute national income equitably. These inadequacies of the free market system makes government to employ monetary and fiscal policies to restructure the economy
The question then is, why have Nigeria’s monetary and fiscal polices failed to realize the economic and political objectives of the country?
1.3 OBJECTIVES OF THE STUDY
Based on the problems stated, the study will address the following objective.
- To identify the factor that tends to hamper the full achievement of monetary ad fiscal policies objectives.
- To evaluate the influence of both policies on the economy of Nigeria.
- To appraise whether monetary and fiscal policies have contributed to the set-back on industrialization and agricultural development.
- To appraise the various instruments employed by monetary and fiscal policies.
- To determine the extent to which monetary and fiscal policies have influenced the industrial and agricultural development.
- To make recommendations as to how to make effective monetary and fiscal polices and their efficient and effective implementation
1.4 STATEMENT OF HYPOTHESIS
In order to determine the validity and reliability of the information so gathered, the following hypothesis were formulated.
- Ho: Monetary and fiscal polices do not influence industrialization ad agricultural development in Nigeria.
Hi: Monetary and fiscal polices influence the industrial and agricultural development in Nigeria
- Poor implementation does not after achievement of monetary and fiscal polices objectives.
Hi: Poor implementation affects the achievement of monetary and fiscal polices objectives.
- RESEARCHE QUESTIONS
The following questions were posed to guide in my search for the solution to the research problem.
- Has monetary and fiscal policies speeded up industrial and agricultural development in Nigeria?
- Has both policies reduced the piece in industrial and agricultural development in Niger?
- What factors have affected monetary and fiscal polices implementation?
- What is the attitude of farmer and industrialist towards monetary and fiscal policies?
- SIGNIFICANCE OF THE STUDY
The research work is very timely, especially today that all hands are on deck to enhance the development and growth of Nigeria’s economy. This research work will be of immense benefit to the government and monetary authorities to determine the extent of their polices effectiveness.
In addition, the study will determine the factors or problems limiting monetary and fiscal policies effectiveness of the government. It is expected that the findings will help to bridge any gap that may exist and to make government monetary and fiscal polices and their execution effective and efficient.
Through its study, financial institutions will understand their role and sourt comings in enhancing industrial and agricultural development and will subsequently adopt measures aimed at improving industrialization and agriculture.
The study will be of great importance to farmers, industrialists, researchers, students, analysts and banks as it will aid in problems solving as it
- SCOPE AND LIMITATIONS
The scope of this works is limited to the monetary development in Nigeria but must especially carried out in Enugu and Abia State.
In carrying out the study, the following problems or limitations were encountered.
- Financial constraint
- Lack of full o-operation by questionnaire respondents.
- Lack of sufficient time
- DEFINITION OF TERMS
- POLICY: This is a plan or courses of action in policy is the instrument that inform and guide, individuals, employees so that their whole actions are consistent with the object of goal of the organisation, government or business.
- OBJECTIVE: Objective is the purpose of a plan. It is that which the government or an organisation wants to achieve for making polices.
- INFLATION: A situation of rising price: when purchasing power or value of money in real terms is falling.
- MONETARY POLICY: This is a measure which deals with the discretionary control of money supplied, by the monetary authorities with a view to achieving stated macroeconomic objective.
- MONETARY THEORY: Refers to propositions made by various schools of though as to the impact of money and its supply on the economy.
- FISCAL POLICY: This is the policy pursued by the government to influence economic activities by varying its expenditure, taxation and public debt.
REFERENCES
Okereke Onuoha E. “Inherent problems of Nigeria Monetary and Fiscal Policies” The financier Vol.12 No 7, 1990 P9.
Onyido Borji C. “The Role of the Central Bank in the Management of the Nigerian Economy, with Emphasis on monetary Policy” The Bullion April/June 1993 vol.17 No2 P.20
Oyo M.O. “A Review and Appraisal of the Monetary and other financial sector policy measures in the Federal Government Budget for 1999” The Bullion January/March 1999 Vol. 24 No.1 P.40
Uduebo M.A. “The Role Monetary and Fiscal Policies in Industrial and Agricultural Development in Nigeria” Central Bank of Nigeria Economic and Financial Review March, 1985 Vol.23 No. 1 P.5
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