MONETARY POLICY AND ITS IMPACT IN NIGERIA FINANCIAL INSTITUTION [A CASE STUDY OF AFRI BANK ILORIN KWARA STATE]
TABLE OF CONTENTS
Table of content
CHAPTER ONE: INTRODUCTION
1..1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF THE PROBLEM
1.3 RESEARCH QUESTION
1.4 SIGNIFICANCE OF THE STUDY
1.5 SCOPE OF THE STUDY
1.6 LIMITATIONS OF THE STUDY
CHAPTER TWO: LITERATURE REVIEW
2.1 OBJECTIVES AND OPERATION OF MONETARY POLICY IN NIGERIA
2.3 INSTRUMENT OF MONETARY POLICY
2.4 IMPACT OF MONETARY POLICY IN NIGERIA FINANCIAL INSTITUTIONS
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 HISTORICAL BACKGROUND OF THE CASE STUDY
3.2 RESEARCH DESIGN
3.3 STUDY POPULATION
3.4 SAMPLE AND SAMPLING TECHNIWQUES
3.5 DATA COLLECTION INSTRUMENT
3.6 METHOD OF DATA COLLECTION
3.7 METHOD OF DTAT ANALYSIS
3.8 LIMITATIONS OF THE METHODOLOGY
CHAPTER FOUR: DATA PRESENTATION ANALYSIS AND INTERPRETATION
4.1 DATA PRESENTATION
4.2 DATA ANALYSIS AND INTERPRETATION
4.3 DISCUSSION OF FINDINGS
CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.0 A BRIEF INTRODUCTION OF THE CHAPTER
5.1 SUMMARY OF THE WHOLE STUDY
5.2 SUMMARY OF FINDINGS
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Few years ago, Nigeria economy undergone different macroeconomic problem which are characterized by slow down in an economic activities increase in the rate of unemployment intensified exchange rate having a persist increase in the general price level of goods and services and government deficit financing which has also been identified as major factor which lead to macro economic problems.
There are different macroeconomic policies which are monetary policy and fiscal policy. One of the functions of central bank was the formation of monetary policy and also choose different monetary instrument to be applied in an economy for effective utilization of stock of money in circulation. The central bank also control commercial banks and other financial institution to create credit by varying liquid reserve ratio and by influencing the interest rate through open market operations (OMO)
From the above explanation monetary policy can now be defined as " A deliberate action taken by monetary authorities to change the domestic stock of money supply or it refers to the combinations of different measure design to regulate the value, supply and cost of money in an economy" monetary policy can be expansion to contraction in nature, the expansion means decrease in stock of money in circulation. Monetary policy is very important in an economy because without it economic growth economic development will not be ascertained. Therefore, the Central Bank of Nigeria(CBN) should make conscious effort toward the control of other financial institution for the economy to maintain growth and development through the monetary policy.
1.2 STATEMENT OF THE PROBLEM
The focus of this research was based on monetary policy and its impact in Nigeria financial institution using AfriBank of Ilorin Kwara State as a case study. In the course of the research' answers will be provided to the following research question;
1. What is the historical background of Afribank Ilorin Kwara State?
2. What is the meaning of monetary policy?
3. What are likely instruments of monetary policy?
4. What the various objectives of monetary policy?
5. What is the impact of monetary policy in Nigeria financial institutions?
6. How do CBN and government of the country operate monetary policy in Nigeria?
1.3 RESEARCH OF QUESTION
In the course of this study some question come under consideration which are;
1. What is the impact of monetary policy in Nigeria financial institution?
2. What are the instruments of monetary policy used by Central Bank of Nigeria (CBN)?
3. What are the reasons for the implementations of monetary policy in Nigeria?
4. How does CBN and government of the country deal with operation policy in Nigeria?
1.4 OBJECTIVES OF THE STUDY
The main objectives of this research work which was based on monetary impact in Nigeria financial institution a case study of Afribank ilorin kwara state is to provide accurate answers to the problem of the study above, the answer are the following;
1. To know the historical background of Africabank ilorin kwara state.
2. To critically examine the meaning of monetary policy
3. To examine the likely instrument of monetary policy.
4. To know how Central Bank and government of the country operate monetary policy.
5. To identify the various objectives of monetary policy.
6. To know the impact of monetary policy of Nigeria financial institution.
1.5 SIGNIFICANCE OF THE STUDY
This study is carried out to know the impact of monetary policy in Nigeria financial institution using "Afribank Ilorin kwara state.
Monetary policy implementation has many importance to Nigeria economy, there include control inflation, maintain of full employment, maintenance of healthy balance of payment position and also maintain stability in external value of money all these leads to economic growth and economic development in Nigeria.
Monetary policy can be used by the government of the country, commercial bank, central bank and other financial institution.
1.6 SCOPE OF THE STUDY
This project work is confined to a certain period of time which gives me an opportunity to analyze the data collected properly. This study draw2s it finding with Afribank study will cover the Afribank of Nigeria within Ilorin metropolis.
1.7 LIMITATION OF THE STUDY
During the execution of this research there are limitations and constraints. Some comes from the bankers who are respondents while others related to finance and time constraints.
The researcher faced financial problems because of the high cost of internet browsing and cost of meeting the bankers for information lastly is the time factor in the sense that the research was conducted during the normal school period which has to attend myriad of lectures and engaged in other vital comments such as seminars, symposiums continuous assessment test and examination.
CHAPTER TWO: LITERATURE REVIEW
This project will however seem not complete without reviewing the view some writers on the topic. The CBN is able to control the supply of money through this monetary policy.
According to V.A ODOZ (1990) defines monetary policy as control of money stock in order to influence other broad objectives which include price stability, high level of employment, sustainable economic growth and balance of payment these objectives are achieved through the use of aggregate instrument or tools depending on the level of economy in which monetary policy is being implemented.
According to MICHEAL P.T (2002) in his own view, he argues that monetary policy works on two principal economic variable. The aggregate supply of money in circulation and the level of economic activity in the sense that, a great money supply includes expanded activity by enabling people to purchase more goods and services.
According to ADEKUNLE F (1986) it was suggested that the reason why government attempt to control the money supply it because of its belief that it rate has an effect on the rate of inflation.
According to WILLIAM PIGOTT AND ROBERT H.S (2011) express that monetary policy refer to those action of government that affect the behavior or monetary aggregate fort example monetary base M1, M2 money apply bank credit according to them its does not mean that whenever interest rate or high or rise that monetary interest rate restrictive in an absolute sense nor that is responsible for degree of credit restrain.
According to BOOTLE (2011) in addition to credit control condition says monetary, price stability growth and balance of payment equilibrium which income distribution as other objectives. in his view, monetary policy is merely one of the general weapons which the authorities can employ to achieve these ends.
According to HOWSON J.L (1993) unlike other writers placed more emphasis on fact that monetary policy takes effect through variation in volume of purchasing power. The objectives of monetary policy stated are many and varies, the method by which it is attain can be used to reduce the volume of purchasing power in the country to check demand or should take a measure to encourage as expansion of demand by measuring the volume of purchasing power.
Therefore, it would be more accurate to say that monetary policy aim at influencing liquidity since there are many asset that are close substitute to money.
According to AHMED A (1991) note that the current state of proposal by the federal government to strife the techniques of money and credit management from the imposition of credit ceiling on banks to one which relies on the use of market based instrument is that which is commonly referred to as indirect monetary control.
He also noted in 194 and said, it become imperative to strengthen the power of the central bank of Nigeria to cover their new institution in order to enhance effectiveness of monetary policy and the regulation and the regulation and supervision of bank and non-bank financial institution Decree 24 and 25 of 1991 which could be righty described as significance legislative reforms have been promulgated to meet these urgent need.
According to FALEGAN (1987) monetary policy deals with the discretionary control of money supply by monetary authorities in order to achieve stated desired economic objectives. But why does government believes that its rate of growth has in effect in the rate of inflation, so monetary policy comprises those governments.
Also in central bank of Nigeria economic report for (1994) CBN brief 94/03 defines monetary policy as the combination of measure designed to regulate the value, supply and cost of money in an economy in consonance with the level of economic activities. An excess demand for goods and services which induce stagnation in the economy thereby, retarding growth and development.
Consequently, the monetary authorities must attempt to keep the money supply growing at appropriate rate to ensure sustainable economic growth and to maintain internal and external stability. The discretionary control of the money stock by monetary authorities involve the expansion or contraction of money influencing interest rate to make money cheaper or more expensive depending on the prevailing economic and conditions.
Judging from the above comment one can say without doubtful mind that the central play an important role in management of financial institution and economic development of the country..