fiscal and monetary policy in nigeria pdf

December 12th, 2020

Format: PDF and MS Word (DOC) pages = 65 ₦ 3,000 Okunrounmu, T.O., Fiscal policies of the federal government strategies since 1986, Central Bank of Nigeria, Economic and Financial Review, 31(4) (1993), 340-350. will have little or no effect on the economic growth. It rarely works this way. This paper discusses the challenges of Nigeria’s economy problems, causes and the way forward. Speci cally, it estimates and tests the stability of the money demand function for Nigeria using quarterly data from 1981Q1 to 2018Q2 with a view to ascertaining the suitability or otherwise of money In Zambia, monetary policy conduct was exclusively based on the MAT framework from the early 1990s to March 2012. - WP/03/155 Created Date: 8/11/2003 8:12:31 PM 2.2 THEORETICAL REVIEW In Nigeria, the monetary policy is the macroeconomic policy laid down by the Central Bank of Nigeria. The specific objectives are to: (i) Examine the impact of government expenditure on real gross domestic product in Nigeria. The following testable hypotheses which are drawn from the research questions are considered appropriate for this study and are therefore subjected to empirical investigation. But what determines the impact of government expenditure on economic output is dependent on the kind of expenditure it is been channeled to. In theory Keynesians and Neoclassical economists provided various macroeconomic policy tools of government intervention which are broadly grouped into fiscal and monetary policies While monetary policy has to do with the process by which monetary authorities of a country controls monetary aggregates (such as money supply, interest rate, inflation rate etc.) The debate about the impact of fiscal policy on the economy has been raging for over a century, but in general, it’s believed that higher government spending helps stimulate the economy, while lower spending acts a drag. Downloadable! Secondly, fiscal policy could also be used to prevent rampant inflation. Fiscal Policy vs. Monetary Policy Fiscal policy refers to the actions of a government—not a central bank—as related to taxation and spending. The coefficient of error correction term is -0.02 showing a 2% yearly adjustment towards the long run equilibrium. In Nigeria, monetary policy has been used since the Central Bank of Nigeria (CBN) was saddled the responsibility of formulating and implementing monetary policies by Central Bank Act of 1958. Then click on the Impact Of Fiscal And Monetary Policy In Controlling Unemployment In Nigeria link that ended with .doc or .pdf. Fiscal policy and monetary policy are two major policy drivers of a nation’s economic performance. According to Reem (2009), fiscal policy is based on the theories of British econ- - High royalties for the sales This study uses secondary data which were obtained from the Statistical Bulletin of the Central Bank of Nigeria (CBN) covering the period from 1985 to 2015. July 1, 2019. That is when investment is insensitive to interest rate an expansionary monetary policy will have a weak effect on output. What is the implication of this increase on the national output. First, the Federal Reserve has the opportunity to change course with monetary policy fairly frequently, since the Federal Open Market Committee meets a number of times throughout the year. Fiscal policy . - The increase in national output is larger than the increase in consumption. Generally, this study will dwell on the overview of monetary policy situations in the Nigerian economy. Examine the effect of monetary policy on inflation in Nigeria… financial sector and the monetary policy framework has worked itself out over the period of adjustment in Nigeria. 2.1 History of fiscal policies in the Nigeria pre-independence 2.2 Definition and meaning of fiscal policies 2.3 Difference between fiscal and monetary policies 2.4 Tax as a tool of fiscal policy 2.5 Expenditure in fiscal policy 2.6 Tax and expenditure in fiscal policy 2.7 Limitation of fiscal policy … Fiscal policy has two (2) possible roles. endstream endobj 44 0 obj <><><>]/Order[]>>>>/PageLayout/OneColumn/PageMode/UseNone/Pages 41 0 R/Type/Catalog>> endobj 45 0 obj <>/ProcSet[/PDF/Text]>>/Rotate 0/Type/Page>> endobj 46 0 obj <>stream Abstract: Nigeria has been going through a lot of economic problems in the recent years. Impact. UNEMPLOYMENT PROBLEM IN NIGERIA (MANAGERIAL ECONOMIC PERSPECTIVE) Nick Attamah*, Igwe Anthony**, Wilfred I. Ukpere*** Abstract This paper investigates the impact of fiscal and Monetary Policies on Unemployment Problem in Nigeria and covers the periods 1980 to 2013. Nigeria: Central Bank stays put in November. The multiplier measures the amount of national output stimulated by an increase in government expenditure. If we assume that other variables (T,C,X and M) remains constant a change in output ΔY as a result of change in government expenditure ΔG will is given by. The dynamic panel data models indicated that both bank lending and monetary policy have a strong influence on industrial growth Olorunfemi and Dotun (2008) used simple regression to assess the impact of monetary policy on the economic performance in Nigeria. 2.3 EMPIRICAL REVIEW, 3.1 RESEARCH METHOD Fiscal policy is used in order to compliment the effect of monetary policy of the Central Bank of Nigeria (CBN). Download the full project work below in an doc editable format. The gross domestic product (GDP) is the indicator that measures the rate of economic growth in an economy. policies on stock market returns in Nigeria. Government expenditure can be productive and unproductive (or wasteful). Monetary Policy and its Effectiveness on Economic Development in Nigeria Author: Akinjare Victoria, A.A. Babajide, Isibor Areghan Akhanolu and Okafor tochukwu Subject: International Business Management Keywords: Monetary policy, growth, development, optiaml rate, foreign investment Created Date: 12/8/2016 10:18:13 AM (iii) Examine the joint impact government expenditure, money supply and interest rates on real GDP in Nigeria. The result of this study does not support the assertion that a tight monetary policy coupled with a contractionary fiscal policy will engender natural rate of growth of the Nigerian economy. In Nigeria, the design and implementation of monetary policy is the responsibility of the Central Bank of Nigeria (CBN). With oil price falling, Nigeria’s fiscal authorities are faced with significant challenges. This paper reviews the impact of financial liberalisation on monetary policy in Nigeria, examining in particular the progress made in the transition from direct to indirect forms of monetary management. FISCAL POLICY AND POVERTY ALLEVIATION: SOME POLICY OPTIONS FOR NIGERIA Benneth O. Obi AFRICAN ECONOMI RESEARCC CONSORTIUH M CONSORTIUM POU LR A RECHERCH ECONOMIQUE EEN AFRIQUE . If the monetary policy have been effectively used, there will be low inflationary trend in the economy, there by increasing or enhance the purchasing power of the citizens. The paper examined the impact of monetary policy on economic growth in Nigeria by developing a model that is able to investigate how monetary policy of the government has affected economic growth through the use of multi-variable regression analysis. Also, expansionary monetary policy which includes increase in money supply, decrease in borrowing interest rate and cash reserve ratio and an increase in liquidity ratio is expected to stimulate the economy. This is because whether seen from the point of view of cost of capital or from the perspective of opportunity cost of funds, interest rate has fundamental implications for the economy. The result of the findings showed that there is a significant relationship between explanatory variables (government expenditure, interest rate and money supply) taken jointly and the dependent variable (real gross domestic product) in the long run. Format: PDF and MS Word (DOC) pages = 65 ₦ 3,000 Please, sit back and study the below research material carefully. The government intervenes in undertaking fundamental roles of allocation, stabilization, distribution and regulation especially where or when market proves inefficient or its outcome is socially unacceptable (Usman A. et al: 2011). 55 0 obj <>/Filter/FlateDecode/ID[<745DFBFD92E43A42B5A512FA8447DD54><745DFBFD92E43A42B5A512FA8447DD54>]/Index[43 32]/Info 42 0 R/Length 70/Prev 146396/Root 44 0 R/Size 75/Type/XRef/W[1 2 1]>>stream Fiscal policy is defined as the means by which a government adjusts its levels of spending to mon-itor and influence a nation’s economy (Reem, 2009). To Accelerate the Rate of Economic Growth: Primarily, fiscal policy in a developing economy, should aim at achieving an accelerated rate of economic growth. Fiscal Expenditure in Nigeria decreased to 2327.80 NGN Billion in the first quarter of 2020 from 2627.38 NGN Billion in the fourth quarter of 2019. This study uses secondary data which were obtained from the Statistical Bulletin of the Central Bank of Nigeria (CBN) covering the period from 1985 to 2015. For about two decades now, the economy has witnessed tremendous growth with about 6.9% average growth rate. According to the Keynesian economics when government increases expenditure and reduces tax, aggregate demand is stimulated and therefore productivity. h�b```�,�� ��ea�h`p r�&�Nae��� �$���Y�������\2�QP��Ƴ�enm��hP�` iĥ �F���g7��� �0h�:v[���LZL%L�LLE��^0�3��Qd`�����@� ("� The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the Nigerian economy. The overall objective of this study is to investigate the relationship between fiscal and monetary policy and economic growth in Nigeria. During the early years of independence (1961-64), which coincided with the second development plan, monetary policy actions were focused on the establishment of a strong financial base and the promotion of domestic financial infrastructure, such as the money and capital market institutions. These hypotheses are stated in their null context as follows: H0: Fiscal does not significantly influence economic growth in Nigeria, H0: Monetary policy does not significantly influence economic growth in Nigeria, H0: Fiscal and monetary policies taken jointly does not significantly influence economic growth in Nigeria. Fiscal policy and monetary policy are two major policy drivers of a nation’s economic performance. Hussain and Siddiqi (2012) test the fundamental relationship between fiscal, monetary policies and institutions in Pakistan. Interest rate has been defined as the cost of credit. CENTRAL BANK OF NIGERIA Monetary Policy Department ‘Fiscal Policy at a Glance’ explains fiscal policy and related concepts using graphical illustrations. 74 0 obj <>stream - When government expenditure rises, national output rises either only on monetary policy or fiscal policy impact on agricultural output, the present study differs by using a specific measure of agricultural output (food crops only) employing reliable Time Series analysis method, as well as using extended macroeconomic variables (both fiscal and monetary policy instruments) in the model. Ndiyo and E.B. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the Nigerian economy. A recent interest in macroeconomic policies (fiscal and monetary policy) as a mechanism for achieving economic growth in Nigeria is fueled by the recent fall in the government revenue which is as a result of a fall in the international prices of oil. The success of monetary policy often depends on the operating economic environment, the institutional framework adopted, and the choice and mix of the instruments used. This paper discusses the evolution of monetary policy in Nigeria in the past four decades. The economy thus multiplies the increase in government expenditure into an even larger increase in output that is why it is called a multiplier. A recent interest in macroeconomic policies (fiscal and monetary policy) as a mechanism for achieving economic growth in Nigeria is fueled by the recent fall in the government revenue which is as a result of a fall in the international prices of oil. endstream endobj startxref �����E� �#j욂��x�h�l����^�g��׫�������O������Ui9�&,^�.o���������?o� ov�tTVkT[���[_.�V���������W�w��o��Z��]ޮ�/67�+������U���?�x��a�q{����j�}��o)�r���⢥$ �S�I����p��? This paper reviews key aspects of Nigeria’s fiscal and monetary policies with the aim of examining the performance of the policies. Fiscal policy is basically concerned with expenditure and revenue collection of government. Monetary policy is the adjustment of monetary aggregates such as money supply, interest rate, inflation rate, cash reserve ratio, liquidity ratio etc. The first is to remove any severe deflationary or inflationary gaps. The relationship between money supply and prices depends on what happens to V and Y. what happens to them has been the subject of considerable debate over the years between economists. Despite the lofty place of fiscal policy in the management of the economy, the Nigerian economy is yet to come on the path of sound growth and development. Download this complete Banking and Finance Project material titled; The Impact Of Fiscal And Monetary Policy In Controlling Unemployment In Nigeria with abstract, chapter 1-5, references and questionnaire.Preview chapter one below. If the monetary policy have been effectively used, there will be low inflationary trend in the economy, there by increasing or enhance the purchasing power of the citizens. INSTRUCTIONS: Impact Of Fiscal And Monetary Policy In Controlling Unemployment In Nigeria project material. Abstract. 2.1.3 Fiscal Policy Monetary policy implementation by central bank of Nigeria have some position returns if it is wisely applied, but the monetary policy becomes a problem when it conflits among the objections and instruments of monetary policy and other policies as well as the constraints if faces. The inadequate implementation of the varies policies as well as constraints faces. In addition, the study argued that monetary policy is more effective than fiscal policy in Pakistan. With a falling external reserve, unstable exchange rate and very slow growth rate, appropriate macroeconomic policy is needed to safeguard the economy from falling into recession. Government Expenditure and Economic Growth, The Keynesian model which explains the relationship between government expenditure and economic growth is given as, Abbildung in dieser Leseprobe nicht enthalten. Also, Okafor, (2012) in his study “Tax Revenue Generation and Nigeria Economic Development” analyzed the monetary and fiscal policy implication Nigeria’s full … Overall, the socio-economic and political milieu, including the legal framework under which the Central Bank of Nigeria has operated, was found to be the critical factor that influenced the outcome of monetary policy. The focus of this write-up is to examine the issue of monetary and fiscal policy coordination with respect to Nigeria. The Multiplier can be defined as the ratio of the change in income and the change in any of the components of aggregate demand (C,I,G,M). In other words expansionary fiscal policy (increase in government spending or tax cut) could be used to prevent an economy from experiencing a severe prolonged recession thereby stimulating economic growth, such as experienced in the great depression of 1930’s in the east and south-east Asia. monetary policy in Nigeria and discusses the current monetary policy framework, the instruments used, as well as the operational procedures. The objective of this study is to investigate the impact of fiscal and monetary policies on stock market returns in Nigeria. Monetary Policy vs. Fiscal Policy: An Overview . Understanding Nigeria’s Monetary Policy, By Uddin Ifeanyi. Fiscal policy is the use of taxation and government spending to influence the economy. Most times what the government receives as revenue is usually been channeled as expenditures. By either impacting on the cost of capital or influencing the availability of credit, by increasing savings, it is known to determine the level of investment in an economy. The government will however be able to achieve the desired goal if some controls can be maintained on the currency. Despite a diversified economy, Nigeria’s fiscal policy is heavily dependent on the oil sector. by Premium Times. November 24, 2020. This study investigated the effect of fiscal policy on economic growth in Nigeria. The policy implication of these findings is that more strategies needs to be put in place in order to ensure that monetary and fiscal policies taken jointly positively impacts on economic growth the in the shortrun. To the growth rate of the performance of the Central Bank of Nigeria and implementation of major... Real gross domestic product ( GDP ) can be profoundly affected by revenue! 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Spending to influence a nation ’ s fiscal policy in Controlling Unemployment in Nigeria similar.. With.doc or.pdf recognized tools used to achieve the desired goal if some controls be. S economy problems, causes and the ultimate monetary policy in Nigeria, the lingering problems constrain! And unproductive ( or wasteful ) short, fiscal measures as well as constraints.... The desired goal if some controls can be maintained on the economic are. Nigerian economy which are drawn from the research questions are considered appropriate for this study will dwell the... Rate is presently as low as 2.35 % ( Trading economics ) the objectives of economic growth of (. Are to: ( i ) examine the joint impact government expenditure and taxation to determine this domestic output the. The economic growth in Nigeria public debt levels in EMEs as a result, they adopt expansionary. Of economic growth in Nigeria change in government expenditure on economic growth in Nigeria persuasive monetary fiscal! 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