IMPACT OF THE MONEY MARKET IN THE GROWTH OF NIGERIA IN ECONOMY


IMPACT OF THE MONEY MARKET IN THE GROWTH OF NIGERIA IN ECONOMY  

ABSTRACT:              

This project work reviewed the role of the Nigerian money market in the economic development of Nigeria. Based on the research work carried out we are able to identify the various effect it has in the economic development of the Nigerian economy.

TABLE OF CONTENT   

Title Page

Certification

Dedication

Acknowledgment

Table of content

Abstract

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

1.2 Research Problem

1.3 Objectives of the Study

1.4 Research Hypothesis

1.5 Significance of the Study

1.6 Scope of the Study

1.7 Limitation of the Study

CHAPTER TWO: LITERATURE REVIEW

2.1 The Concept – Money Market

2.2 Money Market Instruments

2.3 The Money Market and Economic Development

2.4 Structure of the Nigerian Money Market

2.5 Performance of the Nigerian Money Market

2.6 Problems of the Nigerian Money Market

CHAPTER THREE: METHODOLOGY

3.1 Introduction

3.2 Research Design

3.3 Sources of Data

3.4 Model Specification

3.5 Method of Analysis

3.6 Limitation of the Study

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Performance Evaluation of the Nigerian Money Market

4.2 Regression Analysis

4.3 Hypothesis Testing

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS

5.1 Introduction

5.2 Summary of Findings

5.3 Policy Recommendations

5.4 Conclusion

BIBLIOGRAPHY

APPENDIX

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

The financial system of any financial company provide the catalyst through financial intermediation for productive activities to ensure economic growth and development Olowo (2008).

The Nigerian financial sector is undoubtedly the most important in the political economic system because it provides the necessary lubricant that keeps the wheel of the economy turning and it is an engine for economic growth. The sector provides fund for investment and also allocates these funds for investment and also allocates these funds as efficiently as possible to those project that offers best returns to fund owners. The well being of the sector to a very large extent determines a growing economy. However, if the sector happens to be weak, the economy suffers for it.

There are various financial market which are institutional arrangement that facilitates the intermediation of funds in an economy. The market which deals with sort term funds and the capital market that is for long term dealings in loanable funds Anyanwu (1996). The basic of distinction between eh money market and the capital market lies in the degree of liquidity of instrument bought and sold in each of the market which can be subdivided into the primary and secondary market is concerned with raising of new fund, the secondary market exist for the sale and purchasing of existing securities. Therefore enabling savers who purchased securities when they had surplus to recover their money when they are in need of cash Afolabi (1991).

The major concern for the study is the money market, the money market represent the short end of the financial system which provide short term investment having a maturity date of less than one year. Also the money market is an intermediary for short term financial asset that are close substitute for money in Nigerian money market as established by the Central Bank of Nigeria primarily for mobilizing domestic savings for productive investments as well as providing government with funds to enable implement programmes. Nibeabuchi (2004).

The Nigeria money market offers opportunity for trading in the short term instrument which are very liquid and have negligible risk and the money market also provides the basis for implementation of monetary policy. The types of instrument traded are treasury bill, treasury certificate, commercial paper, bankers acceptance etc. commercial papers are the dominant players in the market while the market provides the basis of operations, manipulation and execution of monetary policy (indirect instrument) with discount houses intermediary between the Central Bank and other banks where the former is playing the role of the lender of last resort to the market. Jhingan (2004).

The role of the money market in the development of the economy cannot be overemphasized as the money market plays a key role in banks liquidity management and transmission of money policy by providing the appropriate instrument and partners for liquidity trading, the money market allows re-financing of short term positions and facilitates the mitigation of business liquidity.

However, a developed money market has different types of near asset in large number such as promissory note, treasury bill etc. as the number of near money asset increases, the more developed the money market becomes. The market also attracts adequate funds and easy access to financial sources from within an outside the country.

Thus the development of the money market smoothens the progress of financial intermediation and boost lending to economy which in turn improves the country’s economy and brings about development in its economic activities.

1.2  RESEARCH PROBLEM

The Nigerian economy is based on the money which is designed as a means of liquidity adjustment and also a potential path for development. Therefore the money market needs to be infused with more liquidity to ensure safety for investors in order to help fund economic development.

The largest problem with the market is corruption of the system that even transparency cannot fix, provision of more regulation will be appropriate.

Iyiegbuniwe (2005) pointed out that although the Nigerian money market has experienced significant growth, both in breadth of securities as well as the volume of trading since the liberalization of the financial system since 1986, it still needs to be deepened further to achieve the required vibrancy that is expected of a money market. This does not mean that the money market is inefficient, it goes a long way to explain that there is serious need to evaluate its performance in relation to its contribution to economic development of the country.

Therefore, the Nigerian money market should be deep and broad to be able to absorb large volume of transaction without substantial effect on security prices and interest. The above defining feature of the market demands that, there exist many active market participation such that the transaction of an individual investor will have just little impact on security prices and interest rate. It also requires that there are different varieties of securities to ensure that there is always alternative (other options) investment instrument available to be able to satisfy the respective return and risk of investors.

Therefore, a deep and broad market which is very efficient in information and operations including an adequate regulation and more liquidity will contribute to the development of the Nigerian economy.

1.3  OBJECTIVES OF THE STUDY

The main objective of this study is to examine the role of the money market in the economic development of Nigeria. Some other objectives are written below:

To examine if the Nigerian money market has developed. To examine the relationship between the money market and the economic development in Nigeria.

1.4  RESEARCH HYPOTHESIS

H0:  The Nigerian money market has not developed H1:  The Nigerian money market does not contribute to the economic development of the Nigerian economy.

1.5  SIGNIFICANCE OF THE STUDY

The study will explore the effectiveness and usefulness of the money market to the economy. The study will be a reference material for further study on the market and the economic development of Nigeria. The result of the study will contribute to practical knowledge, the existing body knowledge advancement and stability of the Nigerian economy. The bank and other financial sectors of the economy will be well guided in the effect of the money market to the development of the Nigeria economy. It will provide various policy recommendations to policy makers on ways to use money market instrument more effectively in the developing Nigerian economy.

1.6  SCOPE OF THE STUDY

The study cannot cover all the areas of the financial sector, it is therefore limited to the money market, its instruments and policies and regulation used by the government to stabilize its road to economic development.

The empirical investigation of the role of money market in the development of the Nigerian economy shall be restricted to the period from 1980-2009.

1.7  LIMITATION OF THE STUDY

Time constraint Another limitation shall be based on data collection and methodology, which have various impacts. The data to be used for the regression are annual data sourced from different authorized bodies such as the Central Bank of Nigeria etc. the unavailability of the data for some variables using previous years act as a hindrance in the range of data. The accuracy of the data is subject to sincerity and dedication of the officials involved in the collection and collation of data. All the above may not be achieved due to time constraint.  

.

IMPACT OF THE MONEY MARKET IN THE GROWTH OF NIGERIA IN ECONOMY



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.