THE IMPACT OF AGRICULTURAL DEVELOPMENT ON NIGERIA ECONOMIC GROWTH (1980-2010)

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ABSTRACT In recent decades, the main and potential contribution of agriculture to economic growth has been a subject of much controversy among development economists. As some contend that agricultural development is a pre-condition for industrialization, others strongly object it and argue for a different path. Taking advantage of ordinary least square method (OLS), the research carried out by means of secondary data and using the independent variables. Agricultural Development (AGD), Capital Formation (CFN) Inflation Rate (INF), and Interest Rate (INT) to re-examine the question of whether agriculture could serve as an engine of Economic growth in Nigeria. The result gotten from the empirical analysis shows that the productivity in agricultural sector has appreciably impacted positively on the economic growth in Nigeria.
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TABLE OF CONTENTS PAGE Title Page ………………………………………….. i Certification ……………………………………….. ii Dedication……………………………………………. iii Acknowledgements…………………………………… iv Abstract………………………………………………… vi Table of Contents…………………………………….. vii CHAPTER ONE: INTRODUCTION 1 1.1 Background of the Study…………………….. 1 1.2 Statement of the Problem……………………… 6 1.3 Objectives of the Study………………………… 11 1.4 Statement of Hypothesis………………………. 11 1.5 Significance of the Study………………… ….. 11 1.6 Scope and Limitation………………………….. 13 CHAPTER TWO: LITERATURE REVIEW 2.1 Theoretical Literature………………………….. 14 2.1.1 Agricultural Linkages and Economic Growth and Development…………………….. 18 2.1.2 Problems Associated with Agricultural Development……………………… 19 2.1.3 Impact of Food Importation………………….. 22 2.2. Empirical Literature……………………………. 24 2.2.1 Agriculture and Poverty Reduction……… 25
8
2.2.2 Agriculture and Nutrition…………………… 26 2.2.3 Limitation of Previous Studies…………….. 31 CHAPTER THREE: RESEARCH AND METHODOLOGY 3.1 Area of Study and Coverage……………….. 33 3.2 Model Specification ………………………….. 34 3.3 Data Sources …………………………………. 36 3.4 Method of Evaluation ………………………… 36 CHAPTER FOUR: PRESENTATION AND ANALYSIS OF RESULTS 4.1 Presentation of Result ……………………… 40 4.1.1 Analysis of Results Based on Economic criteria …………………………… 41 4.1.2 Summary of the Aprior Signs…………….. 42 4.2 Analysis Based on Statistical Criteria (1st Order Test) ……………………… 42 4.2.1 Coefficient of multiple determinations (R2) 42 4.2.2 Test of Significance of the Parameter (t-test) 43 4.2.3 The f-statistics test…………………………….. 45 4.3 Econometrics Test or (2nd Order Test)…….. 46 4.3.1 Test for Autocorrelation ……………..……… 46
4.3.2 Heteroskedasticity Test…………………… 47
9
4.3.3 Normality Test……………………………… 48 4.3.4 Multi-Collinearity Test …………………… 49 CHAPTER FIVE: SUMMARY RECOMMENDATION AND CONCLUSION 5.1 Summary …………………………………. 50 5.2 Policy Recommendation………………… 50 5.3 Conclusion ……………………………… 53 Bibliography……………………………… 54 Appendix

CHAPTER ONE INTRODUCTION 1.1 Background of the Study Agriculture is the foundation and bedrock upon which the development of stable human community has depended on throughout the whole universe such as rural and urban communities. It is concerned with the husbandry of crops and animals for food and other purpose. The study of the history of economics provides us with ample evidence that can agricultural revolution is a fundamental pre-condition for economic development. The agricultural sector has the potentials to be the industrial and economic springboard from which a country’s development can take off. Indeed, more often than not, agricultural activities are usually concentrated in the less developed rural areas where there is a need for rural transformation, redistribution, poverty alleviation and socio-economic development.
12
The agricultural sector has the potentials to shape the landscape, provide environmental benefits such as conservation, guarantee sustainable management of renewable natural resources, preserve biodiversity and contribute to the viability of rural areas development. Through its spheres of activities at both the macro and micro levels, the agricultural sector is strategically positioned to have a high multiplies and linkage effect on any nation’s quest for socio-economic and industrial development. The growth of the agricultural sector in Nigeria was not smooth. Anyanwu (1967) held that during the colonial period between 1861 to 1960, attention was given to agricultural research and extension services. Among the activities that were done was the establishment of a research station in Lagos by Sir Claude Mc.Donald in 1893: Landmark of 10.4 km was acquired by the British Cotton Growing Association (BCGA) in 1899 for experimental purpose strictly for cotton and was named “Moor Plantation” in Ibadan. In 1912, the Department of
13
Agriculture was established in each of the then southern and Northern Nigeria, but the activities of the department were virtually suspended between 1912 and 1921 as a result of the First World War and its aftermath. The period between 1929 and 1945 was a difficult one for the agricultural sector of Nigeria. This was the period of great depression when the world princes on commodities fluctuated. This affected the agricultural sector negatively because the volume of agricultural product increased but the value did not increase proportionally.
The period 1945 to 1945 marked the period of expert boom, because counties were just recovering from the Second World War and these countries needed to develop. They depended on primary production for the beginning stage of industrialization. They needed to revitalize their industrial sector by demanding primary goods. Prices of primary products rose higher again because there were speculations that there would be a third world war due to the outbreak of the Korean War. However, after this
14
period, there came another period of price instability. This made the reliance on agriculture and its products to fall, leading to the establishment of a market board. This board bought these products from the local farmers and sold them overseas.
In spite of all the period, Nigeria made great revenue from agriculture. In the pre-independence era, the agricultural sector contributed most to the GDP of Nigeria. Helleiner (1966) said that in 1929, export production amounted to 57% of Nigeria’s revenue of which agriculture contributed about 80% of the export. On attainment of political independence in 1960, the trend was still very much the same, the Nigeria economy could reasonably be described as an agricultural economy, because agriculture served as the engine of growth of the overall economy (Ogen 2003). According to Alkali (1997) Nigeria was the world’s second largest producer of cocoa, largest exporter of palm oil during the period. And was also a leading exporter of other major commodities such as cotton,
15
groundnut, rubber and hides and skins. Between 1964 and 1965, agricultural output accounted for 55% of GDP and employed 70% of the adult workforce (Matton, 1981). In 1970, agricultural export crops like cocoa, groundnut, cotton, rubber, palm oil, palm kernel, etc. accounted for an average of between 65% and 75% of Nigerian foreign exchange earnings and provided the most important source of revenue for the federal as well as state government through expert products and sale taxes (Ekund are 1973). Despite the reliance of Nigerian peasant farmers on traditional tools and indigenous farming methods, these farmers produced 705 of Nigerian’s exports and 95% of its food needs (Lawal, 1997).
However, the 1967 to 1970 civil war in Nigeria coincided with the oil boom era, which resulted in extensive exploration and exportation of petroleum and its strong agriculture in favour of an unhealthy dependence on oil (United States Department of state, 2005). Ever since then, Nigeria has been witnessing extreme poverty
16
and insufficiency of basic food items. The agricultural sector contributions now accounts for less then 5% of Nigeria’s GDP (Olagbaju and Fashola, 1996). It is against this backdrop that we set out to research on the impact of agricultural development on Nigeria economic growth. As noted earlier, the neglect of the agricultural sector and the dependence of Nigeria on a mono-cultural crude oil based economy had not augured well for the well-being of the Nigerian economy. It becomes therefore imperative to study the impact of agricultural development on the Nigeria economic growth. 1.2 Statement of Problem The agricultural sector has suffered from years of poor management, inconsistent and poorly implemented government policies, government neglect and lack of basic infrastructure. Agriculture accounted for 30% of the GDP in 2010 (World Factbook, January 9, 2012).
Nigeria is no longer a major exporter of cocoa, groundnut, rubber and palm products. Coca production

A CRITICAL EVALUATION OF MONETARY POLICY ON THE NIGERIAN ECONOMY

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ABSTRACT

 

 

This study aimed at analyzing through econometric methodology the effects of monetary policy in Nigeria economy. To meet the above objective, output growth was chosen as the dependent variable while real exchange rate, real interest rate and inflation was chosen as the independent variable. The ordinary least square was used in the regression estimation. From the empirical result, we realized that the entire explanatory variables are insignificant in the t-test, but in f-test we rejected the null hypothesis and conclude that the slope coefficient are not simultaneously equal to zero. We realizes from the battery test that there is a co integration between the explanatory band the dependent variables since its level of stationarity are the same.

The policy implication of the result is that if monetary and banking policies are effectively applied, it will be consistent with determining the level of output growth in the economy

CHAPTER ONE

 

1.0       INTRODUCTION

One of the ways taken by all economy to make the banking sector effective is the use of the monetary policy introduced by the federal government and carried out by the apex bank of the country. Apparently, the existence of  an effective banking industry is vital to every economy and it encourages economic growth and development via its role in financial interdiction of funds supplies to deficit economic units .This stimulates international trade, investment economic growth as well employment growth as well as employment.

Monetary policy is one of the steps taken by every economy to make the banking sector effective. Monetary and banking policies are the sole responsibilities of monetary authority, which comprises of The CBN for the initiation, implementation and articulation of monetary system. The CBN carried out these duties on behalf of the federal government according to CBN decree 21 of 1991 and the banks and other financial institution BOFIA A4, of 1991 as amended. The banks proposal on monetary policy is subjective to the federal government.

The policies to be pursued is usually out in form of ‘’Audience’’ to all banks and other financial institutions. The guideline are general in operation within a fiscal year but could be amended on the course of the year. The CBN is equally empowered to direct the activities of the financial institutions in other to carry out certain duties in pursuit of approved monetary policy of which penalties are prescribed for non-compliance with specific provision of the guidelines.

1.1       BACKGROUND OF THE STUDY

Monetary policy affects financial and economic activities over the year. In other to appreciate the effects of monetary policy on the banking industry, it would be wise to move a review of changing views of monetary influence. Usually when the quantity of money changes in relation to financial activities as viewed by FISHER (1932). Fisher, take other neoclassical writer who held the view that in short run, money influences real cash balances. According to him, when the money stock increases, example;

An increase commodity prices since output and velocity were fixes initially. He assumed that a rise in commodity prices would exceed the increase in interest rate which was regarded as a component of a firms operating cost. In the whole analysis, rise in commodity prices will lead to an increase in a firms profit, demand, money stock and deposit which will eventually lead to a further rise in investment and commodity price. The excess reserved for lending will decline with interest rate, which was stocky earlier.

In the analysis of long-term transmission of monetary influence, Fisher replaced ‘’Interest-Investment’’ channel with ‘’Real Cash Balance’’. He noted that when wealth rises due to rise in money stock, people tend to reduce their cash balances by purchasing goods and service. Since the velocity (v) and output (y) in Fishers equation of exchange (MVPT) is fixed, the risen money stock (M) cannot lead to increased holding of goods and services but will lead to decline in prices level (P). Keynes (1936) accepted the change in money supply relative has both substitution and effect and considered investment to be quite responsive to interest rates.

Keynes recommended price induce wealth effects, (i.e. change in wealth due to change in yields). There are ranging accounts by his interpreters about the extent he integrate them in his general theory. Hence subsequent write to Keynes (i.e. Keynesian or post Keynesian regards the cost of capital (interest rate) as the main process by which changes in money stock influence the economy. Thus the change in volume of money alters the rate of interest. Usually approximated by the long-term government bound rate, which affects investment and consumption. Thus the link between wealth of private sector and real sectors and consumption was analyzed by Piguo (1974) and Patikin (1951) in form of ‘’real cash balance effect’’ According to them changes in quantities of money would affect aggregate demand even if they did not alter interest rate. On the other hand, credit rationing channel of monetary influence explained  how financial interdiction, would be controlled by the market forces so as to ration the supply of credit by non-price mechanism.

Thus an expansionary monetary policy would raise the force of equity (i.e. reduce the yield on equities). The margin between the market evaluation and cost of reproducing the existing capital goods will stimulate new investment over those goods.  The non-monetarist argued that monetary policy is as effective as fiscal policy as to determine total spending in the economy in spite of their differences. It holds the following views:

1. Movement in quantity of money is the most reliable measure of monetary value.
2. Monetary authority can detect the movement in the stock of money over time and business cycle.
3. Changes in stock of money are the primary determination of total spending as emphasized on owen’s economic stabilization program.
4. Monetary impulse are transmitted to real economy through an active price process or profit adjustment process which affect many financial and real antes.

 

1.2       STATEMENT OF PROBLEM 

             Despite the establishment of Central Bank of Nigeria (CBN) in 1958, banking industry remained both poor, inadequate in terms of number, quality and variety of service rendered. The establishment of CBN paved way for adoption of monetary management by the banking industry. Just incase any analyst is waiting in the wings to strike CBN for its poor monetary policy performance. Ogwuma (1994:362) offers a defense which says “A less than objective appraisal of the CBN role in the Nigerian economy could interpret the adverse macro-economic

 COMMERCIAL BANK CREDIT AND AGRICULTURAL OUTPUT IN NIGERIA: (1982-2007)

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ABSTRACT

This research work examined the impact of commercial Bank credit on Agricultural output in Nigeria using Macroeconomic variables (commercial bank credit and agricultural output). The broad objective of the study is to investigate the extent to which commercial bank credit had supported agricultural output Nigeria. The specific objectives are: (i) to determine the impact of commercial banks credit on agricultural output in Nigeria, and (i) to determine the impact of agricultural output on economic growth in Nigeria. The methodology adopted  for the study was ordinary least square (OLs) involving the student’s T-test, to test  the significance  of the individual parameter estimate, the F-test, to test the significance of the entire regression plane, the R² and Adjusted R², to test the joint influence of the explanatory variables on the dependent variable. Finally, Durbin-Watson’s statistics (DW) was used to check the presence or absence of serial correlation on the data.  After the regression, the result shows that: firstly, agricultural output as well as commercial bank credit to agriculture and real interest rate contributed a lot to economic growth in Nigeria. Secondly there is a general agreement that Nigeria agricultural sector is grossly underfunded.  Finally, the share of actual expenditure that went to the agricultural sector compared unfavorable with the shares that went to other sectors. Based on the findings above, the researcher made the flowing suggestions:

There is the need for improvement of public expenditure tracking system in agricultural sector.

There is also the need for clarification of the roles of the three tiers of government in agricultural services delivery.

There is the need for applied research targeted at priority issues

 CHAPTER ONE

INTRODUCTION

• BACKGROUND TO THE STUDY……………………………………….1
• STATEMENT OF PROBLEM…………………..………………………..6
• OBJECTIVE OF THE STUDY…………………………….…………..…9
• HYPOTHESIS OF THE STUDY…………………………………………9
• SIGNIFICANCE OF THE STUDY…………………….………………..10
• SCOPE AND LIMITATION OF HE STUDY…………………………..10

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1    THEORITICAL L ITERATURE……………………………….……….12

2.1.1 THE PRE-REQUISITE THESIS VERSUS

THE CONCURRENCE THESIS……………………………………….14

2.2    FINANCING AGRICULTURE IN NIGERIA …………………………18

2.1.1           SOURCES OF AGRICULTURAL FINANCING …………………….20

2.3    COMMERCIAL BANK CREDIT AND AGRICULTURAL OUTPUT………………………………………………………………… 23

2.4    EMPIRICAL LITERATURE……………………………………………..28

CHAPTER THREE

RESEARCH METHODOLOGY

3.1    MODEL SPECIFICATION …………………………………….……….34

3.2    ESTIMATION PROCEDURE………………..…………………………36

3.3    EVALUATION TECHNIQUES………..………………………………..37

3.4    DATA REQUIRED AND SOURCES…………………………………..41

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1    UNIT ROOT TEST………………………………………………………43

4.2    CO INTEGRATION TEST………………………………………………44

4.3    PRESENTATION AND INTERPRESTATION OF RESULT………..46

4.3:1 INTERPRESTATION OF REGRSSION RESULT…………..………..47

4.4    EVALUATION OF EMPIRICAL RESULT……………………………..48

4.4:1 ECONOMIC CRITERIA (A PRIORI EXPECTATION)……………….48

4.4:2 STATISTICAL CRITERIA……………………………………………..50

4.4:3 COEFFICIENT OF DETERMINATION (R²)………………………….51

4.4.4 THE T-STAISTICS……………………………………………………..51

4.4.5 THE F-TEST…………………………………………………………….52

4.5. ECONOMIC CRITERIA (SECOND ORDER TEST)…………………53

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1    SUMMARY……………………………………………..……………..… 59

5.2    CONCLUSION …………………………………………………………..62

5.3    RECOMMENDATION………………………………………..………….63

BIBLIOGRAPHY……………………………………………….…………67

APPENDIX

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

1.1    BACKGROUND TO THE STUDY

          As confirmed by Ugochukwu (1999:02), agriculture is the first and most thriven occupation of mankind. From its early form of wild fruits, leaf, root, snail and insect gathering, fishing and hunting, to its present mechanized and almost automated form, it has undergone a lot of development

Okah (2007:04) conceived agriculture as the cultivation of land, raising animals for the purpose of production of food for man, feed for animals, and raw materials for our industries. It also consist of croup production, forestry, livestock and fishing. It is also essential for expansion of employment opportunity, reduction of poverty and improvement of income distribution, speeding up industrialization and easing the pressure of balance of payments disequilibrium.

The role of agriculture in transforming both the social and economic frame work of an economy cannot be over emphasized. Anyanwu (1997:213) posits that “agriculture has been the main source of gainful employment from which Nigeria nation can feed its feeding population, providing the nations industries with local raw materials and as a reliable source of government revenue. Corroborating the above is Reynolds(1975.35) who asserts that agricultural development can promote the economic development by increasing the supply of food available for domestic consumption and releasing the labour needed for industrial employment.

The major agricultural export commodities in Nigeria include cocoa, coffee, cotton, groundnut, groundnut oil, palm kernel, soya beans, ginger rubber, benign –seed and chili pepper (CBN,2003).there are other commodities that are being demanded in the world market such as cassava and cassava products, banana, plantain and so on. The Nigerian economy until today is still dependent on primary products both as foreign exchange earner and contribute to gross domestic product.(GAP). Olurosunsola (1996:131) attributes this to the fact that the main interest of the colonial masters was and still is the exportation of products needed for their home industries.

The continuous production and exports of the agricultural product played a dominant role in attracting foreign exchange to boost economic activities from independence to the early 1970s. Obadan (2000:68), observes that the production and palm oil accounted for 96.4% of total exports earnings while non- oil export product accounted for 97.3% for total export then. He observed further that from the 1970^s, the Nigerian economy became mono-cultural, having been transformed from one dependent on fairly diversified portfolio of agricultural products to an economy heavily dependent on crude oil for growth and sustenance. Oyo (1994:23) observed that the advent of crude petroleum production and related activities especially in the early 1970’^s changed radically the structure of Nigeria economy. The huge foreign exchange earnings from crude oil export encouraged importation of finished foods to the detriment of domestic manufactured ones, while the agricultural sector was rendered less competitive over time through over-valued currency, inappropriate pricing policies and scarcity of farm labour caused mainly by the migration of youth to urban areas in search of wage employment.

Nigeria agriculture is divided into two types, the subsistence agriculture and commercial agriculture-: the subsistence agriculture is the type of farming which involves only the farmer and his family i.e the farmer produces for himself and his family with little or none to sell in the market it is practiced in small scale system. It involves only a little amount of money to practice unlike commercial farming that involves huge amount of money to practice. It does not involve the machine to carry out, since the land is very small and fragmented (Amechi 2004).

The second type is commercial agriculture, and this is where a farmer produces his crops and sells them in the market. It is carried out in large scale with enough land and machines. These machines are used in cultivating crops. It involves a lot of capital and time, and also increase the farmers income. Commercial farming helps farmers to engage in the cultivation of different varieties of crops, since the money, land and equipment could easily be used.

In agriculture, fund is needed to enable the farmer purchase more land, buy his inputs at the appropriate time and to pay for hired labour or farm machinery. Unfortunately, credits are not easily available for most of the farmers because of collateral and other things that are usually required by the commercial banks and other credit institutions. This makes it possible for most of the farmers in Nigeria to lack the required capital for investment in large scale agriculture, hence the reason for the recent low agricultural productivity.

With the recent move by the leading economies of the world to diversify their economy Nigeria in a bid to join the rest of the developed economies is conscious of the danger signals observed both within and outside the country that underscores the need to move away from total reliance on petroleum related revenues. These signals according to soludo (2009:28) include the on-going global economic crisis that is threatening the growth and development agenda of the present administration, the crisis in the Niger delta which has interrupted petroleum operations in the past few year’s, and the frightening revelation that the united states of America, the highest buyer of Nigeria crude oil, Brazil and several other countries are seriously engaged in research for an alternative source of energy.

Hence, the need to diversify Nigerian economy, especially Agricultural sector that has for long, been neglected.

1.2    STATEMENT OF  THE PROBLEM

          Several research have shown that Nigeria Is endowed with Huge expance of fertile Agriculture land rivers, streams, lakes, forest and grassland, as well as a large active population that can sustain a high productive and profitable agricultural sector. Adubi(2000:103) admits that this enormous resource baser if well managed could support a vibrant agricultural sector capable of ensuring self- sufficiency in food and raw materials for the industrial sector as well as, providing gainful employment for the teeming population and generating foreign exchange through exports.

IMPACT OF COMMERCIAL BANK IN NIGERIA ECONOMY

A CASE STUDY OF UNITED BANK OF AFRICAN (UBA)

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Note: our case study can be change to suit your desire location . we are here for your success.

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Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
 Account Number:  0117780667. 
Swift Code: GTBINGLA 
Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANKER SECURITY GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.

form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 2 HOURS

How to transfer from your bank account to All  Nigeriabanks

1. Access Bank:
—-*901#

2. EcoBank:
—-*326#

3. Fidelity Bank:
—-*770#

4. FCMB:
—-*389*214#

5. First Bank
—-*894#

6. GTB:
—-*737#

7. Heritage Bank:
—-*322*030#

8. Keystone Bank:
—-*322*082#

9. Sky Bank:
—-*389*076*1#

10. Stanbic IBTC:
—-*909#

11. Sterling Bank:
—-*822#

12. UBA:
—-*389*033*1#

13. Unity Bank:
—-*322*215#

14. Zenith Bank:
—-*966#

15. Diamond Bank
—-*710*555#

To know your BVN, dial
—-*565*0#.

E.g for First bank…   *894 *Amount *Acct. No. #

Please dail d code from d number u used to register d account from the bank

CALL OKEKE CHIDI C ON :  08074466939,08063386834.

AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO

08074466939 or 08063386834, YOUR PROJECT TITLE  YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.

WE HAVE SECURITY IN OUR BUSINESS.   

MONEY BACK GUARANTEE

 

 

 

CHAPTER ONE 1.1 INTRODUCTION BACKGROUND OF THE STUDY The economy of any country consist of sectors these sectors include industrial transport, agricultural, mineral production, manufacturing sector etc. All sectors of the economy work in an inter-related and inter-dependent whole, therefore any malfunction of one or more sectors of the economy automatically affect the economy as a whole. However, different sectors have different roles in the same economy. This truth also applied to banking sector in the Nigeria economy. Banking sector are more regulated in the Nigeria economy than other institution because of the rate at financial intermediaries. It is vary difficult to see any economy move forward without a sound financial sector capable of playing its significant role in resources mobilization and allocation. As financial intermediaries, banks sectors mobilize funds, from the surplus spending unit at a cost for an- leading such funds to the direct spending unit at a price. Commercial banks are financial institutions that deal with money and credit and also receive deposits from public and organisations. Some of which are repayable on demand by cheque. Commercial banks are public limited companies owned by shareholders. They operate in commercial basis, that is, they are out to maximize profit by trading in money. They differ from other banking financial institution because they honour cheques drawn by their customers on their demand deposit. The role of commercial bank in transforming the economic framework of Nigeria cannot be over-emphasized. In effect, they give out loans advances, thereby providing shorter and medium term capital for investors. The loan and advances may be in the form of direct loans, overdrafts by the discounting at bills. With the amount borrowed, investors could finance various project in the areas of industry, agriculture and commerce. This therefore, helps to speed up economic development. Finally, commercial banks constitute the heart of any barking system. They are involved in general banking services to their customers and also play various roles in ensuring economic development in Nigeria economy. Consequently, in-depth investigations were conducted in the following: a. Volume of loans given by commercial banks to economic sector in Nigeria b. In-depth analysis of the problem of economic development in Nigeria economy. c. Suggestions on how to alleviate some of the problems in order to achieve the derived objectives. Before and immediately after Nigerian independence in 1960, agriculture played a crucial rate in Nigeria economic development as a nation. It provided employment to millions of Nigerians and over 75 percent of the labour force mostly from rural areas, were into the sector. During this period, these sectors accounted for about 70% of Gross domestic product (GDP) this was a period when we were not virtually self sufficient in the production raw materials for industrial and major cash crops for experts. Indeed, agriculture provided the main stimulus to our national economy growth these contributions of agriculture to the over shadowed all other economic sector in the early 1960s. However, the reverse was the ease of agriculture in the societies when it place to the GDP element to only 304 by 1974 due to partly to the persistent neglect of the agricultural sector it self. In terms of the sector. It can therefore be said that the Nigeria economy has undergone structural changes in the three and half decades from predominantly agricultural economy in the 1960s to an economy mainly reliant on oil from the mind 1970s. The increased earning that is associated with the demand of Nigeria oil was not fully internalized into the economics system. The result was that, the consumption pattern because largely impart – oriented inability to rationalize imports when the ail boom gave way to oil glut which led to the emergence of trade areas. A growing debt burden also surfaced in he early 1980s as a result of jumbo loan contracted from the international capital market. More so, the pursuit of an own valued exchange rate policy, the subsequent relegation of agricultural sector to the back ground heavy public sector spending and the huge debt over-hang all combined to create distortions consumption and payment pattern. The sleep declined in oil earning in the 1980s necessitated a policy redirection aimed at realignment the domestic production with the local resources base. To this end, central bank of Nigeria consequently called for bidden for purpose of selling their banks, this was done after the option of merging their banks through intensive management board had failed to yield positive results. It should be noted that the potential investor must posses adequate financial and managerial knowledge to allow reoccurrence of part mistakes. However, the financial position of these banks deteriorated to the extent that the expected ….. were s.. of putting their hard earned resources into these banks. This prompted the withdrawal of licenses of 26 (13 commercial banks and merchant banks) by the CBN on January 16th 1998. With the collapse of such number of banks and the security and depositors, the central banks of Nigeria made it mandatory for banks of Nigeria made it mandatory for banks to raise their capital base to N25 billion on a before the end of December 2005. This created room fro mergers and acquisition amongst as this was a good option to sanitize the banking industries and restore confidential and depositor. Banks that failed to recapitalize were stated for liquidation. The choice of united bank for Africa (UBA) plc was not an accident; the bank is one of the Nigeria top three commercial banks Ltd. Established in 1961 by the constitution of five international banks to take over the banking business carried on in Nigeria since 1949 by British and French banks ltd. United Bank for African (UBA) Ltd. United bank for Africa (UBA) merged with standard trust Nigeria to meet the 25 billion and 429 branches, strategically spread all over Nigeria. The bank has recorded an impressure growth rate. UBA plc is active in all aspects of commercial banking and provides international banking, trusteeship, share registration, corporate financing and computer services through specialized division and subsidiaries. And aggressive business promotion strategy couple with a willingness to innovate has earned the bank an enviable position in the banking industry. UBA is strongly committed to its social responsibilities and identifies with the commerce in which is represented. 1.2 STATEMENT OF THE PROBLEMS Commercial banks in Nigeria undergo some problems which serve as hindrance to their rates in ensuring economic development to the economy of Nigeria. Some of these problems were indentified in the course of study. 1. The tedious procedures usually associated with opening of bank account and granting of bank facilities 2. The problems of low capital base on Nigerian commercial banks 3. The problem of easy access to bank loans. If the above stated problems are properly tackled, commercial banks would be able to play major roles in ensuring economic development in Nigeria. Beside, several studies have been undertaken to investigate the role of impact of commercial banks to economic development in Nigeria, but only few have studied commercial bank loans, interest rate and gross fixed capital formation as micro economic development in Nigeria.

THE IMPACT OF MONETARY POLICY MEASURES AS AN INSTRUMENT OF ECONOMIC STABILIZATION IN NIGERIA (1980 – 2010)

 

Click here to download our android mobile app to your phone  for more materials and others

COMPLETE PROJECT  MATERIAL COST 5000 NAIRA OR $10 , 

. A FRESH TOPIC NOT LISTED ON OUR WEBSITE COST 50,000 NAIRA ( UNDERGRADUATE) OR 100,000 FOR SECOND DEGREE STUDENTS. $500. PLUS  FREE SUPPORT UNTIL YOU FINISH YOUR PROJECT WORK. CONTACT US TODAY, WE MAKE A DIFFERENT. DESIGN AND WRITING IS OUR SKILLED.  DESIGN AND WRITING IS OUR SKILLED.

Note: our case study can be change to suit your desire location . we are here for your success.

                                   ORDER NOW

Foreign Transaction For Dollars Payment :
Bank Name: GTBank
Branch Location: Enugu State,Nigeria.
Account Name: Chi E-Concept Int’l
 Account Number:  0117780667. 
Swift Code: GTBINGLA 
Dollar conversion rate for Naira is 175 per dollar. 

ATM CARD:  YOU CAN ALSO MAKE PAYMENT USING YOUR ATM CARD OR ONLINE TRANSFER. PLEASE CONTACT YOUR BANKER SECURITY GUIDE ON HOW TO TRANSFER MONEY TO OTHER BANKS USING YOUR ATM CARD. ATM CARD OR ONLINE BANK TRANSFER IS FASTER FOR QUICK DELIVERY TO YOUR EMAIL . OUR MARKETER WILL RESPOND TO YOU ANY TIME OF THE DAY. WE SUPPORT CBN CASHLESS SOCIETY. 

OR
PAY ONLINE USING YOUR ATM CARD. IT IS SECURED AND RELIABLE.

form>DELIVERY PERIOD FOR BANK PAYMENT IS  LESS THAN 2 HOURS

How to transfer from your bank account to All  Nigeriabanks

1. Access Bank:
—-*901#

2. EcoBank:
—-*326#

3. Fidelity Bank:
—-*770#

4. FCMB:
—-*389*214#

5. First Bank
—-*894#

6. GTB:
—-*737#

7. Heritage Bank:
—-*322*030#

8. Keystone Bank:
—-*322*082#

9. Sky Bank:
—-*389*076*1#

10. Stanbic IBTC:
—-*909#

11. Sterling Bank:
—-*822#

12. UBA:
—-*389*033*1#

13. Unity Bank:
—-*322*215#

14. Zenith Bank:
—-*966#

15. Diamond Bank
—-*710*555#

To know your BVN, dial
—-*565*0#.

E.g for First bank…   *894 *Amount *Acct. No. #

Please dail d code from d number u used to register d account from the bank

CALL OKEKE CHIDI C ON :  08074466939,08063386834.

AFTER PAYMENT SEND YOUR PAYMENT DETAILS TO

08074466939 or 08063386834, YOUR PROJECT TITLE  YOU WANT US TO SEND TO YOU, AMOUNT PAID, DEPOSITOR NAME, UR EMAIL ADDRESS,PAYMENT DATE. YOU WILL RECEIVE YOUR MATERIAL IN LESS THAN 2 HOURS ONCE WILL CONFIRM YOUR PAYMENT.

WE HAVE SECURITY IN OUR BUSINESS.   

MONEY BACK GUARANTEE

 

 

 

ABSTRACT
The study examined the impact of monetary policy in stabilizing the Nigeria economy. In the model specified inflation is the regress while cash research requirement, liquidity ratio, money supply, minimum rediscount rate, interest rate are the regressors. The government employs a deliberate manipulation of cost and availability of credit and money to achieve this economic objective. The CBN being the sole regulatory body combines measures designed to regulate the value, supply and cost of money into economic activities. This is what we call monetary policy (CBN Brief 1996/03). It is against this background that the research is carried out to ascertain the effect in the use of monetary policies such as money supply, interest rate, liquidity ratio, minimum rediscount rate, inflation rate and cash reserve requirement to stabilize the Nigeria economy. Also to determine the relationship that exists between the independent variables and dependent variable from the secondary data for the period under study (1980 – 2010). The statistical technique that will be used for this analysis is the ordinary least square technique, with the aid of PC five 8.00 software package. It has been identified that the major problem militating against the poor performance of monetary policy instruments in stabilizing the economic in Nigeria is time – lags which involves policy employed to take many months to achieve its full effects. This research recommends that there should be a reduction in the cost of production and increase the exportation in order to achieve the objectives of naira devaluation in Nigeria and also, central banks should be independent and should be able to achieve its inflation targets and the stabilization of growth rate in money supply.

TABLE OF CONTENTS
Title page – – – – – – – – – – i
Certification page – – – – – – – – ii
Dedication – – – – – – – – – – iii
Acknowledgement – – – – – – – – iv
Abstract – – – – – – – – – – v
Table of contents – – – – – – – – – vi
CHAPTER ONE
1.1 Background of the study – – – – – – 1
1.2 Statement of problem – – – – – – 3
1.3 Statement of objectives – – – – – – 3
1.4 Statement of hypothesis – – – – – – 4
1.5 Significance of the study – – – – – – 5
1.6 Scope and limitation of the study – – – – – 5
1.7 Definition of terms – – – – – – – 6
7
CHAPTER TWO
2.0 Literature Review – – – – – – – 7
2.1.0 Theoretical literature – – – – – – – 7
2.1.1 The Keynesian view on monetary policy – – – – 9
2.1.2 The classical view on monetary – – – – – 14
2.1.3 The monetarist view of monetary policy – – – – 16
2.2.0 Meaning, instruments and objectives of monetary policy – – 21
2.2.1 Instruments of monetary policy – – – – – 25
2.2.2 Open market operation (OMO) – – – – – 25
2.2.3 Reserve requirement ration – – – – – – 26
2.2.4 Discount rate – – – – – – – – 27
2.2.5 Selective credit controls – – – – – – 28
2.2.6 Moral suasion – – – – – – – – 28
2.3.0 Objectives of monetary policy – – – – – – 29
2.4.0 Monetary policy indicators – – – – – – 30
2.5.0 Monetary policy targets and implication to the Nigerian Economy- 31
2.6.0 Factors that have militated against the impact of monetary policy
in Nigeria – – – – – – – – -32
8
2.6.1 Instability of the financial sector – – – – – 32
2.6.2 Poor state of Economic infrastructure – – – – 33
2.6.3 Non-Harmonization of monetary and fiscal policy – – – 33
2.6.4 Increase in government expenditure – – – – 33
2.6.5 Equate rate bank – – – – – – – 34
2.7.0 The impact of monetary policy during the depression Era
of structural adjustment programme (SAP) – – – 34
2.8.0 Debt management as an integrated part of monetary policy – 36
2.9.0 The impact of monetary policy on the economy – – – 38
2.10.0 Economic stabilization – – – – – – 38
2.11.0 Empirical literature review – – – – – – 40
CHAPTER THREE
3.0 Methodology – – – – – – – – 46
3.1 Theoretical framework – – – – – – – 47
3.2 Estimation procedure – – – – – – – 48
3.3 Model specification – – – – – – – 49
3.4 Method of evaluation – – – – – – – 51
9
3.5 Data required and sources – – – – – – 53
3.6 Decision rule – – – – – – – – 53
CHAPTER FOUR
4.0 Presentation of analysis of result – – – – – 55
4.1 Presentation of regression result – – – – – 55
4.2 Result interpretation – – – – – – – 56
4.2.1 Evaluation based on Economic criteria – – – – 56
4.2.2 Statistical test (first order test) – – – – – 57
4.2.3 Econometrics test (second order test) – – – – – 61
CHAPTER FIVE
5.0 Summary, Recommendations and Conclusion – – – 68
5.1 Summary of findings – – – – – – – 68
5.2 Recommendations – – – – – – – 69
5.3 Conclusion – – – – – – – – 70
BILBIOGRAPHY – – – – – – – – 72
APPENDIX
10
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Monetary policy is the process by which monetary authority of a country controls the supply of the money that is monetary stock often targeting a rate of interest for the purpose of promoting economic growth and stability.
Monetary policy measures are monetary management put in place by the government through the central bank. These measures rely on the control of monetary stocks, that is supply of money in order to influence board macro- economic objectives which includes price stability, high level of em*loyment sustainable economic growth and balance of payment equilibrium. These board objectives are achieved through the use of appropriate instrument depending on which objective the policy formulated want to achieved and also on the level of development on the economy.
11
In the application of monetary policy measures as instrument of stabilization, instrument of monetary policy are determined by the nature of the problems to be solved and by this environment in which these problems exist. They are broadly two categories of these instruments VIZ- indirect and direct instruments. INDIRECT INSTRUMENT are usually used in the market based on economic where the quality of money stock can affected through the relationship between supply and resume money as well as the ability of the monetary authority to influence the creation of reserved.
The reserved and hence money supply can be affected through the following ways.
1. Deposit ratio/change in reserve.
2. Change in discount rate.
3. Interest rate change.
4. Engaging in an open market operation.
In an underdeveloped financial institution the instrument of monetary management is largely limited to direct measure which set monetary and credit target at desired levels. The major DIRECT control measure is direct investment
12
regulation however quantitative ceiling on overall credit operation is also used. These instruments of monetary policy are applied in the achievement of varied objectives.
1.2 STATEMENT OF THE PROBLEMS
The Nigeria economy has encountered the problem of disequilibrium, inability to mobilize domestic savings and unsatisfactory expansion of domestic output. These problems have consistently and presently done severe damage to Nigeria economy; but most strikingly these problems have continued to play the economy unabated that is, the economy is becoming less strong. It is against the background that the problem of this study has been identified and they are as follows.
1. Are monetary policy measures effective as instrument of economic stabilization?