MONETARY POLICY AND THE NIGERIA ECONOMY-STATISTICAL ANALYSIS (1990 -2012)
ABSTRACT
Monetary policy is the process by which the government Central Bank on monetary authorities manages money supply to achieve specific goals such as constraining inflation, maintaining a stable exchange rate, achieving full employment and economic growth
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1    Background of the Study
1.2    Statement of Research Problem
1.3    Research Questions
1.4    Objective of the Study
1.5    Justification for the Study
1.6    Research Hypothesis
1.7    Scope of the Study
CHAPTER TWO: LITERATURE REVIEW
2.1    Historical Perspective of Monetary Policy in Nigeria
2.2    The Monetary Transmission Mechanism
2.3    Instrument of Monetary Policy
2.4    Selective Credit Controls
2.5    Monetary Policy Performance in Nigeria (2008 – 2011)  
CHAPTER THREE: RESEARCH METHODOLOGY
3.1    Introduction
3.2    Model Specification
3.3    Technique of Analysis
3.4    Source of Data
CHAPTER FOUR: PRESENTATION AND ANALYSIS OF    DATA
4.1    Introductions
4.2    Statistical Analysis
4.3     Econometric Analysis
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS
5.1     Summary of Findings                        
5.2     Recommendations                    
5.3     Conclusion                                
    Bibliography                            
    Appendix                                 
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND OF THE STUDY
    Monetary policy a major economic stability weapon which involves measures designed to regulate and control the volume, cost, availability and directions of money and credit in an economy to achieve some specified microeconomic policy objectives (Anyanwu 1993).  It is a technique of economic management to bring about sustainable economic growth, and development which has been the pursuit of nations and formal articulation of how money affects economic aggregates dates back to the time of Adam Smith and later championed by the monetary economists. Since the expositions of the role of monetary policy in influencing micro economy objectives like economic growth, price stability, equilibrium in balance of payments and host of their objectives, monetary authorities are saddled the responsibility of using monetary policy to grow their economies.
    In Nigeria, monetary policy has been used since the Central Bank of Nigeria was saddled the responsibility of formulating and implementing monetary policy by central bank act of 1958. This role has facilitated the emergence of active monetary market where treasury bills, a financial instrument used for open operations and raising debt for government has grown in volume and value becoming a prominent earning asset for investors and source of balancing liquidity in the market. However, in recent years, the federal government has made conscious and determined efforts to set and attain standard of macroeconomic variable in order to highlight the impact of monetary policy on economic growth in Nigeria but due to present challenging conceptual and technical problems, this effort have not shown their full weight on the position of the economy. There have been various regimes of monetary policy in Nigeria, some times it is tight and at other times it is loose but evidently, the reported growth has not been a sustainable one as there is evidence of growing poverty among the populace.
    In the process of monetary management, policy formulation is of utmost importance to specify the focus of the policy, otherwise it will be impossible to evaluate performance.
    In Nigeria, the CBN welded the primary responsibility of initiating, implanting, articulating and appraising a monetary policy. The level of macroeconomic stability in Nigeria is as a result of the sustained pursuit of expansionary fiscal and monetary policies coupled with inadequate response of output.
1.2    STATEMENT OF THE PROBLEM
    Monetary policy includes actions of the central bank, such actions are to ensure that the expansion of money and credit will be adequate for the long run needs of the economy at stable prices. Monetary policy is not the only macro-economic instrument or tool, it’s effectiveness has impact depends crucially on the stance of fiscal policy in Nigeria, as exchange rate also exert an important influence  on the economy, particularly from the support side. According to Anyanwu (1993), monetary policy seeks to maintain a relative stability in domestic prices. The problem therefore lies on administering the appropriate policy that will solve the economic problems like, low level of investment, low income generation and how level of demand and supply.
    Another problem is the power response of the financial system to monetary policies control measures which has do with lack of transparency in the operation of financial intermediaries.
    Another problem is how to restructure the production and consumption pattern of the economic through the elimination of price distortion.
    This study therefore seek the administer the appropriate policy that will solve the economic problem of low investment, low income and low demand etc.
1.3    RESEARCH QUESTIONS
    The questions this study would attempt to answer are as follows:
Could the period of growth in the Nigeria economic be attributed to appropriate monetary policy.
Could the periods of economic down turn be blamed on factors other than monetary policy ineffectiveness.
What measures are to be considered if monetary policy would be effective in bringing about sustainable economic growth and development.
1.4    OBJECTIVES OF THE STUDY
    The main objective of the study is to access the effectiveness of the monetary policy in the growth of Nigeria economy. However the following specific objective would also be achieved.
To statistically investigate the impact of the monetary policy on economic growth in Nigeria.
To examine the trend and structure of monetary policy in Nigeria.
Evaluate the performance of monetary policy in Nigeria over the years under study (1990-2012).
1.5    JUSTIFICATION FOR THE STUDY
    The CBN usually review the prevailing economic conditions and the prospect for the year ahead and then outline which policy should be emphasized and pursued in the immediate year ahead while the government takes final decision as to which advice to accept or reject of its budget. This decision is than rolled out to the commercial and merchant banks and other financial institutions banks and other financial institutions by the CBN in its monetary policy circular as directives for compliance. During the course of the fiscal year, the bank continuously appraises and reviews monetary and credit developments and makes amendments to the existing policy measures.
    The study is therefore justified with in the basic framework because that has a good predictive power in the quest for a desirable policy mix as regards monetary policy in achieving the macro-economic goals or objectives which will be useful to the student in his quest for knowledge, the researcher, in carrying out further research, the government, in his decision on the night policy and the general public who will benefit immensely from a good economy.
    The study will also state the importance of monetary policy, which are as follows.
To ensure efficient and effective control of monetary in the economy.
To ensure that achievement of desired national objectives.
It influences the direction of economic progress in the country.
This project will also be useful to other researchers that are writing on a similar topic.
1.6    RESEARCH HYPOTHESIS
    The hypothesis to be tested in the course of this research work is:
Monetary policy instruments do not have significant impact on the economic growth in Nigeria.
1.7    SCOPE OF THE STUDY
    The Nigeria economy is a large component with lots of diverse and sometimes complex growth components such as gross domestic product, price level, exchange rate and balance of payment equilibrium. This study will cover all the facets that makes up the monetary policy, but shall statistically investigate the effect of the major ones. The statistical investigation of the impact of monetary policy on macro-economic variables in Nigeria shall be restricted to the period between (1990-2012). The study would also examine the monetary policy regimes that have been adopted in Nigeria since 1960 to date.
REFERENCES
J.C Anyanwu (1993). Monetary Economics Theory, policy and
    institutions.
Charles Onyeiwu (2012). Monetary policy and economic
    growth of Nigeria.
Central Bank of Nigeria economic and Financial Review     volume 34 September, 1996.