...CHAPTER ONE 1.0 INTRODUCTION 1.1 BACKGROUND OF STUDY Breaking away from the shackles of ‘colonialism’ (British control) the oil rich Nigeria got her independence in 1960. Having being plagued by political instability, the negative impact of a prolonged military rule, corruption, unemployment, inadequate infrastructure and poor macroeconomic management for a long period of time, the nation currently undertakes certain reforms under a new reform minded administration. Prior to the present democratic rule, Nigeria's former military rulers failed to diversify the economy away from its overdependence on the capital-intensive oil sector, which provides 20% of GDP, 95% of foreign exchange earnings, and about 80% of budgetary revenues. The largely subsistence agricultural sector has failed to keep up with rapid population growth - Nigeria is Africa's most populous country - and the country, once a large net exporter of food, now must import food. Following the signing of an IMF stand-by agreement in August 2000, Nigeria received a debt-restructuring deal from the Paris Club and a $1 billion credit from the IMF, both contingent on economic reforms. Nigeria pulled out of its IMF program in April 2002, after failing to meet spending and exchange rate targets, making it ineligible for additional debt forgiveness from the Paris Club. In 2003, the government began deregulating fuel prices, announced the privatization of the country's four oil refineries, and instituted the National Economic...
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...DOES MONETARY POLICY INFLUENCE ECONOMIC GROWTH IN PAKISTAN? Haji Saif Ullah (Author) Email: hajisaif@live.com Muhammad Ashraf (coordinator) Department of Management Sciences University Of Gujrat, Gujrat ABSTRACT This study examines the impact of monetary policy on economic growth in Pakistan. The study uses time-series data covering the range of 1991 to 2011.The effects of stochastic shocks of each of the endogenous variables are explored using Error Correction Model (ECM). The study shows that Long run relationship exists among the variables. Also, the core finding of this study shows that inflation rate, exchange rate and external reserve are significant monetary policy instruments that drive growth in Pakistan. It is therefore recommended that the establishment of primary and secondary government bond markets that can also increase the efficiency of monetary policy and reduce the government’s need to rely on the central bank for direct financing. Keywords: Policy instruments, Economic Growth, GDP, Money supply, monetary policy INTRODUCTION The aim of this study is to examine the impact of monetary policy on economic growth. Economic growth is an important macroeconomic objective for any country. Monetary policy has direct relation with economic growth. Folawewo and Osinubi (2006) stated monetary policy as the arrangements which are planned to control supply of money in a country. In many countries the basic aims of the monetary policy are to stabilize prices...
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...2 countries – Nigeria and United States by: * Evaluating how their business environment is influenced by government economic policy which may be identified through the application of economic theory. * Critically evaluating the local economic business environment measured against the choice of a comparative international economic and business system. (Pictorial techniques may be used which are appropriate to illustrate and justify the evaluation, e.g. Graphs, charts, economic curve diagrams, etc.) (700 – 1,000 words) Question 2 * Critical evaluation of measures used by governments and central banks to manage the economies of their countries. * By critically evaluating, using convincing arguments in support of the measures used to reduce, minimise or alleviate economic difficulties many countries face. (Examples should be used in the submission to illustrate the justified view) (1,100 – 1,500 words) 1. BUSINESS includes all doings linked with production, trade, banking, coverage, finance, energy, advertising, packaging etc. ENVIRONMENT refers to all external forces, which have comportment on the functioning of business. The environment includes factors outside the firm which can lead to opportunities for or threats to the firm. There is close relationship between business and its economic environment. Business obtains all its needed inputs from the economic environment and it absorbs the output of business units. ECONOMIC POLICY is the term used...
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...THE ROLE OF COMMERCIAL BANK FINANCING ON THE GROWTH OF THE MANUFACTURING SECTOR IN NIGERIA A RESEARCH PROJECT SUBMITTED BY ETIM KATHRINE ETOK: 08/BAF-5/140 DEPARTMENT OF BANKING AND FINANCE: FACULTY OF MANAGEMENT SCIENCES UNIVERSITY OF CALABAR: TO DEPARTMENT OF BANKING AND FINANCE FACULTY OF MANAGEMENT SCIENCE UNIVERSITY OF CALABAR IN PARTIAL FULFILMENT OF THE COURSE REQUIREMENT FOR THE AWARD OF A BACHELOR OF SCIENCE DEGREE IN BANKING AND FINANCE JUNE, 2014. ACKNOWLEDGMENT My profound gratitude goes to God Almighty, for his guidance, protection, love and strength etc. that has seen me throughout these five years of study. Special thanks also go to my parents, Elder and Mrs. NyongEtok for allowing themselves to be used by God as a foundational stone to my academic pursuit. I am also grateful to my siblings Master, EkpenyongEtokEtim, Miss, AritEtokEtim, Miss Victoria EtokEtim and little Daddy boy, and my friend EgbeAsikong. Special thanks to my supervisor Hon. BasseyIbor, who took pains to go through my work and provided required guidance and insightful comments. Finally I thank all those whose names are not mentioned here but who contributed in one way or the other in making this work successful. May God bless you all. ABSTRACT This examined the role of commercial bank financing on the growth of the manufacturing sector in Nigeria. Time series data covering the period 1990 – 2012 was used. Four research questions guided the study and...
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...Inflation – Impacts On The Economic Growth Of Nigeria By DoubleGist | Published: June 5, 2013 Inflation – Impacts On The Economic Growth Of Nigeria Inflation – Impacts On The Economic Growth Of Nigeria A macroeconomics problem facing Nigeria, and the most disturbing, is the problem of inflation. As a result of its growing rate, Nigerian government is concerned about its impacts on her economic growth. To place an order for the Complete Project Material, pay N5,000 to GTBank (Guaranty Trust Bank) Account Name – Chudi-Oji Chukwuka Account No – 0044157183 Then text the name of the Project topic, email address and your names to 08060565721. Many authors have written on Impacts of inflation on Nigerian economy, but the authors have different views because inflation analysis, nevertheless, one thing common is that all the authors agree that inflation has Impact on Nigerian economic growth. Samuelson (1973), defines inflation as “a general rising prices for breeds, cars, haircut, rising wages, rent etc. Onwukwe (2003), on his side defines inflation as “a significant and sustained rise in the general price level or a declining value of the monetary units. The problem created by the rising prices of goods and services has become two difficult for government to solve. During inflationary period, fixed amounts of money buy less quantity of goods and services. The real value of money is drastically reduced i.e the purchasing power of consumers are reduced. The Impact of rapid...
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...2012 The Monetary Transmission Mechanism in Nigeria: A Sectoral Output Analysis Philip Ifeakachukwu, NWOSA (Correspondence author) Department of Economics, Accounting and Finance Bells University of Technology, Ota, Ogun State, Nigeria Tel: 234-082-470-7555 E-mail: nwosaphilip@yahoo.com Muibi Olufemi, SAIBU Dept of Economics, Obafemi Awolowo University Ile-Ife, Osun State, Nigeria Tel: 234-085-338-1914 Received: May 31, 2011 doi:10.5539/ijef.v4n1p204 Abstract E-mail: omosaibu@yahoo.com Published: January 1, 2012 Accepted: July 5, 2011 URL: http://dx.doi.org/10.5539/ijef.v4n1p204 The study investigated the transmission channels of monetary policy impulses on sectoral output growth in Nigeria for the period 1986 to 2009. Secondary quarterly data were used for the study while granger causality and Vector Auto-regressive Method of analysis were utilized. The results showed that interest rate channel was most effective in transmitting monetary policy to Agriculture and Manufacturing sectors while exchange rate channel was most effective for transmitting monetary policy to Building/Construction, Mining, Service and Wholesale/Retail sectors. The study concluded that interest rate and exchange rate policies were the most effective monetary policy measures in stimulating sectoral output growth in Nigeria. Keywords: Sectoral output, Monetary transmission channels, Granger causality, VAR model 1. Introduction The channels through which monetary policy impulse is being...
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...The Monetary & Fiscal Policies in Support of Economic Transformation and Inclusive Growth in Nigeria Abubakar M. G 1. Department of Economics, Umaru Musa Yar’adua University, Katsina 2. Central Bank of Nigeria, Katsina. Phone: 08032838408 and 08023563415 Central BanEmail: gazayks@yahoo.com and magarzali@cenbank.org 1.1 Abstract There is a plethora of literature on Monetary/Fiscal Policies - economic development nexus. This has prompted renewed interest in inclusive Growth. This probably explains why governments and policy makers are now tinkering with ways to situate and develop a permanent solution to the widened gap in broad range of financial services which of course are necessary for inclusive growth. Financial inclusion otherwise known as “inclusive growth” can be seen as the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society. Due to incessant desire to incorporate disadvantaged segment of the society into financial net, both monetary and fiscal authorities have embarked upon a robust strategy toward addressing the gap. The former (monetary authority) had set out a visible road map necessary for direct effect on savings, investment, rate of interest, pension and general form of financial services. While the later (fiscal authority) have been making a remarkable effort toward achieving sustained economic growth especially in rural areas, this would translate accelerated and friendly society necessary...
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...The Nigerian tax system has undergone several reforms geared at enhancing tax collection and administration with minimal enforcement cost. The recent reforms include the introduction of TIN, (unique Taxpayer’s Identification Number which became effective since February 2008), automated tax system that facilitates tracking of tax positions and issues by individual taxpayers, e-payment system which enhances smooth payment procedure and reduces the incidence of tax touts, enforcement scheme (Special Purpose Tax officers), these are special tax officers in collaboration with other security agencies to ensure strict compliance in payment of taxes. The tax authority now has autonomy to assess, collect and record tax. This enabling environment which came into being on the basis of (Section 8(q) of FIRS Establishment Act 2007) has led to an improvement in tax administration in the country. The Nigerian tax system has undergone significant changes in recent times. The tax laws are consistently being reviewed with the aim of repealing obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of government, i.e. federal, state, and local governments, with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. Despite this improvement, there are still a number of contentious issues that require urgent attention and among them is the issue of the appropriate tax authority to administer...
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...SKYE BANK PLC 2013 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT BY TOLULOPE TCRUZZY SANNI. Skye Bank is a commercial Bank with international banking licence from the CBN. Its primary business focus is in Corporate, Commercial and Retail business segments. The Bank maintains an asset size of over NGN1 trillion, led by a management team with a clear strategic focus and a well diversified banking experience. The Bank has a nation wide distribution platform. It operates in over 240 business offices across Nigeria with 2,555 employees, 597 ATMs and 7212 PoS Skye Bank is an independent banking institution with a broadly diversified shareholding Base, the bank has close to 500,000 shareholders, none owning more than 5% of total Capital. PERFORMANCE ANALYSIS Financial Performance Skye bank’s gross earnings fell from 127.730bn in 2012 to 127,340bn in 2013 representing a decrease of 0.3%.Although net operating income grew from 69.845bn to 81.257bn representing a 16% increase. Net interest income grew 39% from 44.502bn to 61.698bn, while non-interest income (net fees,commission and other income) fell 18% from 26.698bn to 22.026bn. The bank’s profit before tax grew by 4% from 16.510bn to 17.136bn. The profit after tax was 16.023bn in 2013 to 12.644bn in 2012. To arrive at this result, the bank grew its total assets by 4% from N1.073.828 Thrillion in 2012 to N1.116.636 Thrillion 2013. Performance Ratios Skye bank’s interest margin reveal a stable focus on traditional activities...
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...that a sustained exchange rate misalignment in terms of over-valuation or under-valuation is a major source of macro economics disequilibrium which spells danger for investment. A stable exchange rate encourages, foreign and local investor into such an economy. This is because, an over-valued exchange rate discourage export and negatively affect the foreign private investment Salako (2004). Further state that there is a long run equilibrium relationship between investment inflow to Nigeria and variables such as nominal effective exchange rate. A high foreign exchange rate increase the prices of goods and services and discourage exportation while at the sometime encourages importation of goods which are cheaper. This has negative effect on the investment and with such factors investors withdraw their money from such an economy (Solomon, 2012). It is therefore imperative to state that foreign exchange rate is a significant factor that determines investment in any economy with Nigeria inclusive. In recent years, exchange rate has fluctuated considerably. The official and parallel exchange rate depreciated annually at an average of 34% and 18%, respectively, between 1986 and 2006 (CBN, 2007). The effects of such fluctuations are evident. Inflation experience during the same period has gone through episodes of creeping to moderate and from...
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...Until about four years ago, precisely January 2012, Nigeria was essentially a cash based economy. Then, the banks had to contend with high volume of transactions, which resulted in long queues at banking halls. The queues alone made banking difficult, to the extent that many Nigerians decided to remain unbanked. However, with the introduction of cashless policy, which signaled the adoption of electronic banking, through Automated Teller Machine (ATM), Point of sale (POS) and others, the Central Bank of Nigeria (CBN) intended to bring banking hall and banking services close to the people, even in the comfort of their homes. With the cashless policy, there were expectations of improved security, as it was intended to discourage movement of cash, and reduce traffic at the banking halls. The policy has however not met these expectations, as queues refused to disappear. Some customers complained that the policy has limited their cash transactions, no matter the type of electronic transaction they use. But competition in Nigerian banking sector has become intense, partly due to regulatory imperatives of universal banking and also due to customers’ awareness of their rights. Bank customers have become increasingly demanding; they require high quality, low priced, immediate service delivery and improved value from their chosen banks. And in the face of all these complaints, some continue to shy away from all forms of electronic banking, like ATM, that are devoid of queue. Findings show...
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...entrepreneurship is usually an active interest to satisfy a yearning need and it involves people who are knowledgeable about a specific problem and spurred by this knowledge to solve the problem. It involves turning a passion into business, hence, it could be said, that most entrepreneurs ventured into business essentially to fill up an existing gap or service area, out of their individual drive or passion. In the process, they may finally end up building business empires, which they were not set out to do originally. From the foregoing, we can add that monetary gains though important are not in most cases paramount, but the overriding interest to fill a gap and create sustainable solutions influences entrepreneurship ventures. In Nigeria, being an entrepreneur conjures different perceptions; to most, he is a hustler, a get- rich- quick skimmer. To a certain degree one may not entirely fault holders of these warped views because most entrepreneurs in Nigeria venture into entrepreneurship for the wrong reasons and through the wrong approach. The high rate of unemployment in the country has in no small measures contributed to this incidence of gate crashing. The irresistible lure for quick money is another...
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...Department of Banking and Finance, Abia State University, Uturu E-mail godgozie@yahoo.com Abstract This paper is set out to determine the factors impacting most on the performance of the banking system in Nigeria. To do this, factor analysis technique was used on the factors identified by the collaborative study of the CBN/NDIC. The result revealed that factors such as undue interference from board members, political crises, undercapitalization and fraudulent practices are the most critical factors inhibiting the efficient performance of the Nigerian financial institutions. The author therefore contends that the just concluded N25billion recapitalization exercise of the central bank was a necessary but not a sufficient measure in the right direction. The sufficient measure must be one that controls all the identified critical factors at the same time. 1.0. Introduction Banks in most economies are the principal depositories of the public's financial savings, the nerve centre of the payment system, the vessel endowed with the ability of money creation and allocation of financial resources and conduit through which monetary and credit policies are implemented. The success of monetary policy, to a large extent, depends on the health of the banking institutions through which the policies are implemented. As a result of this central role of banks in the economy, their activities have to be kept under surveillance to ensure that they operate within the law in line with safe and sound banking...
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...international company because it has operations in more than one country. Multinational companies usually have increase profits and sales than their domestic counterpart. International companies encounter different kinds of international environmental forces that impact their business. Most of the international environmental forces are; Cultural, Physical, Political, Intellectual, Legal, International Monetary system and Financial forces. These force are very important for a company to consider carefully before it ventures into any country for business. International companies that did not manage these international environmental forces properly have gone out of business. Most Multinationals in recent times have dedicated departments that handle these forces. This capstone project will discuss the impact of international environmental forces on Shell Petroleum Development Company. Shell is a Royal Dutch company that has many locations globally, and is one of the major oil companies in the world. Most of its international environmental forces issues will mainly focus on Nigeria, where the company has been operating since 1937 and also the United States. One ethical issue the company has face in the international business environment will also be analyzed. Finally, there will be conclusion that will restate the major points of the paper and the various points mentioned. INTERNATIONAL ENVIRONMENTAL FORCES The seven International environmental forces are Cultural, Physical, Political...
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...The debt crisis of Nigeria and Greece Introduction National debt is a problem that can inflict any country including the developed countries. Almost all countries go into budget deficit one way or the other and end up borrowing money. The most direct effect of the government debt is to place a burden on future generations of taxpayers. When these debts and accumulated interest come due, future taxpayers will face a difficult choice. Inheriting such a large debt cannot help but lower the living standard of future generations. In the 1960s and 1970 some developing countries were encouraged to borrow money to service old debts and also to finance development projects in their country like infrastructure. This has been necessitated by the availability of huge oil earnings deposited by OPEC member countries and were eager to lend at very low rates. Moreover, it is misleading to view the effects of government debt in isolation. Government debt can be divided into two categories namely domestic debt and international debt. The International debt is facilitated by the formation of such institutions like the International Monetary Funds (IMF) the International Bank for Construction and Development (World Bank). Governments borrow money from the private sector and foreign governments if they can't pay for all their spending with taxes and government revenues. A government will issue bonds at bond auctions every so often and market participants will come in and bid for them. Market participants...
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