The Impact of Monetary Policy On Inflation in Nigeria
The Impact of Monetary Policy On Inflation in Nigeria
BY
DEPARTMENT OF ECONOMICS
FACULTY OF MANAGEMENT AND SOCIAL SCIENCES
CARITAS UNIVERSITY, ENUGU.
AUGUST 2012
CERTIFICATION PAGE
This is to certify that the research project titled the impact of
monetary policy on inflation in Nigeria has been fully supervised and found
worthy of acceptance for the award of Bachelor of Science (B.Sc) degree in
economics caritas university Enugu.
....
Date.
Dr. C. C Umeadi
Project supervisor
....
Date.
....
Date.
Prof. Umeh
Dean of faculty
....
Date.
External Examiner
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DEDICATION
This work is dedicated to the Sacred Heart of Jesus and the
Immaculate Heart of Mary. These two hearts gave me the strength and
courage all through my academic pursuit; also to my beloved parents Hon.
and Mrs. Patrick Okung, whom God blessed to sustain my career to this
extent.
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ACKNOWLEDGEMENT
I also in a special way thank my supervisor Dr. C.C. Umeadi who took pains
to read through my work, also to my head of department Barr. Onwudinjo
PC and lecturers of economics department, Mrs. P. Okonkwo, Mr. Ezekiel
Uche, Mr. Ojike R.O, Mr. Odo, Mr. Osodiuru, Mr. Ikpe and Mr. Odionye J.,
who were a path to this success.
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I also express my gratitude to Rev. Fr. Godwin Elijah whose prayers, words
of encouragement and financial aid supported the first stage of my career.
Also to Reverend Cyril Akpan, Paul Udofia and Francis Damina.
Finally, my sincere thanks go to my friends Nancy, Ada, Chichi (all serving
corp. members) Vera, Id, Rosemary, Steve, Ijeoma, roommates, Kenneth
Emmanuel, my course mates and all who were a path to this success.
ABSTRACT
One of the main objectives of the government is to control the rate of inflationary
pressure in the economy. The government employs a deliberate manipulation of cost and
availability of credit and money to achieve this economic objective. The Central bank of
Nigeria being the 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 this research is carried out to
ascertain the effect on the use of monetary policies such as money supply, interest rate
and cash reserve requirement to control the rate of inflation. Also to determine the
relationship that exists between the independent variables and inflation rate from the
secondary data for the period under study (1986-2010). The ordinary least square (OLS)
method was employed for this analysis. This research recommends the stabilization of
growth rate in money supply. Also it recommends the increase in the cash reserve
requirement of banks so as to reduce the amount of loanble funds available to banks.
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TABLE OF CONTENT
TITLE PAGE
-I
CERTIFICATION PAGE
- II
DEDICATION
--
- III
ACKNOWLEDGEMENT
- IV
ABSTRACT
-V
TABLE OF CONTENTS
- VI
-1
-1
-4
CHAPTER ONE
1.0
INTRODUCTION
1.1
1.2
1.3
-6
1.4
STATEMENT OF HYPOTHESIS
-7
1.5
-7
-9
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CHAPTER TWO
2.1 LITERATURE REVIEW
- 10
- 10
- 12
- 13
- 16
- 20
- 24
- 26
- 27
- 30
- 31
- 35
- 39
- 39
- 40
- 42
- 44
- 45
CHAPTER THREE
3.1 RESEARCH METHODOLOGY
- 45
- 46
- 49
- 50
- 50
-50
- 52
- 56
CHAPTER FOUR
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CHAPTER FIVE
5.0 SUMMARY, RECOMMENDATION, AND CONCLUSION
- 61
- 61
5.2 RECOMMENDATIONS
- 62
5.3 CONCLUSION
- 63
BIBLIOGRAPHY -
- 64
APPENDIX