THE ROLE, CONTRIBUTIONS AND IMPORTANCE’S OF TAXATION TO THE ECONOMIC DEVELOPMENT OF THE COUNTRY

CHAPTER ONE

1.1 BACKGROUND TO THE STUDY

The existence of taxes had been before the colonization of African countries. Taxes existed in Africa for the benefits of African populace.

In Nigeria taxes were paid and were properly recognized then and there were few cases of tax evasion and tax avoidance.

Though, compared with what we have now taxes realized then were relatively small but sufficient for the need of the society as at that time.

However, what we have in Nigeria today Is to a large extent an offspring of the British tax system, inherited from our colonial masters.

For example taxes were prominent In the northern part of Nigeria before the colonial era, by the way of rendering free services such as clearing of bush, digging of wells, digging of pit toilets, etc. all these were recognized as taxes for the benefits of the community as a whole.

Cattle rearers and citizens even went to the extent of giving cows and horses so that community could sell them and use the proceeds for the economic development of the community.

There were laws or regulations guiding the procedure, then and even if there were any, they where not on record today.

In those days, the obas, Emirs and obis were appointed and recognized as commissioners for tax purpose which is now equivalent to the modern commissioners for finance and ‘revenue. These chiefs would in turn appoint ward chiefs who would be operating under their authority. Also, the ward chiefs would appoint family heads to carry out any responsibilities given to them.

Any matter which could cause delay in tax administration would be jointly decided by the Oba, Emir or obi and his council of’ chiefs and the Oba, Emir or Obi are usually the chairman of such a panel or meetings. The system ha know been adopted by: the joint tax board with some moderation as the letter is not the combination of chiefs but a combination of different professionals from’ different fields of human endeavour.

If one views the system of tax administration during pre-colonial period, there taxes collected at times, could be less than expresses incurred during the process of collection.

Also, there were few cases of tax evasion and tax avoidance could be attributed to the level and standard of education. People are now educated and so they now know how to avoid and evade tax cleverly.

However, with all these above mentioned points, the pre-colonial tax system has its disadvantage because this custodian of this money could easily run away with it or misappropriate part of the whole money or it may be stolen there were banking in those days.

Secondly, some family head were assigned to collect the tax liabilities of their wards. They could not do much in collecting the taxes from their family members who refuse to pay. They may even except their own immediate families from paying tax.

In view of those problems and disadvantages, in 1904 Lord Lugard introduced community income tax into Northern Nigerian. It is important to mention here that Nigeria tax system as it is today is an offspring of the British tax system.

Though further changes and amendments were made in the 1904 tax, which result to the native Revenue ordinance in 1917, 1918, it was extended to the southern part of Nigeria.

It was in operation in Abeokuta in Ogun State and Benin City in Edo state. In 1928, the provision was extended to the introduced as income tax on the income of individual trade,’ vocation or profession. This was however limited to profit withdrawn by the owners.

The company income tax was enacted in 1943 while the Nigerian income tax was also enacted in 1940. the tax laws and the administration of tax was not met with joy by Nigerians as the colonials masters encountered great problems in executing most of those tax laws. Were not proper and should annulled, consequence of which riot erupted. The same thing happened in the western state in Abeokuta. This was a way of showing the dissatisfaction of the people with the tax laws and many women and children died in the two riots.

Since 1943, there had been some other legislation which is still relevant today. These modern ‘legislation are up to date for the modem economic system.

1.2   STATEMENT OF THE PROBLEM

The serious problem that calls for this study Is the general unawareness of the citizenry about the importance and contribution of taxes to the economy.

Also, major problems being faced by the board of Internal revenue which reduces the revenue generation capacity of the government Include the following:

a.       Shortage of working facilities, such as vehicles, strong safe and cabinet etc.

b.      Manpower problem which has to do with shortage staff. Illiteracy among taxpayers which impedes communication with them.

c.       Some taxpayers don’t keep proper record of account and assessment of such taxpayers is based on the judgment of tax officials

d.      Tax evasion and tax avoidance

e.       Sometime, the statistics departments rely on this market women Information, which may be wrong.

f.        Some tax collectors were not fully trained In the field so they are ineffective when carrying out their duties

g.       Some employers of labour do not always corporate with the tax authority in respect of paye system of their employment and this also occurred in the limited liabilities companies which makes it very difficult for the board of internal revenue to assess their tax liabilities.

h.      Fraudulent practice & by some tax collections

1.3   OBJECTIVES AND PURPOSE OF THE STUDY

i.        The primary objective of this study is to sensitize the citizenry about the Importance and contribution of taxes to the economy of Nigeria as well as to let them now the need to pay their taxes promptly.

ii.       To proffer solutions to the obstacles often faced by tax collectors and the payer in the country.

iii.      To study how revenue is raised for finance of government expenditure.

iv.      To know resources are transfer from the citizens to the government.

It is the main purpose of the study to let students and non students know the role, contributions and importance’s of taxation to the economic development of the country.

This is because of the ignorance of this people on the importance of Nigerian tax system which has caused low revenue generation to the government and consequently a negative effect on economic development.

Many find it difficult to know the importance of taxation and feel cheated when ever they are asked to pay. Up their tax liabilities.

People will not feel reluctant to discharge their civic responsibilities if they are aware of this system and contribution of Nigeria taxes to the development of the economy.

In other words, proper awareness of the people about the tax system and its contribution to the economy of the county will make them discharges their civic responsibilities with enthusiasm.

Hence, government would not hesitate to provide the Masses with vital social amenities, which will definitely lead to economic growth and development.

However, an important purpose is to focus on the areas of difficulties with a view to providing them with possible solutions.

1.4   SCOPE OF THE STUDY

The study is primarily designed to look at the areas of difficulties in order to find the means of bringing them out for possible solution.

Government has many ways of generating revenue through taxes. This study is however restrained to the taxes generated by the stare board of internal revenue which is majorly the personal income taxes of individual is working .either with the government or in the private establishment.

One of the factors determining the revenue generating capacity of the government is the administrative competences of the tax colleting organs of the government, that is the board of internal revenue in this case.

1.5   RESEARCH METHODOLOGY

THE ROLE, CONTRIBUTIONS AND IMPORTANCE’S OF TAXATION TO THE ECONOMIC DEVELOPMENT OF THE COUNTRY

THE ROLE OF TAXATION IN AN ECONOMIC DEVELOPMENT AND PLANNING, A CASE STUDY OF OGBOMOSHO NORTH LOCAL GOVERNMENT

CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Taxation comes from the words “LAT TAX RE” which means “to estimate”. It is a system of compulsory contribution usually in monetary term charged by the government of any country or its agencies against the income or wealth of a co-operative body, individuals or partnership for the provision of amenities.

          Taxes are the most important sources of government revenue. According to K. A. Ishola (2002) he defines tax as a compulsory levy imposed by the public authority on income, consumption and production of goods and services such levies are, for example, made on personal income (consisting of salaries, business profit, interest, income dividend, royalties). Company profit, petroleum profit, capital gain and capital transformers.

          The government has certain functions to perform for the benefits of those its governs. The scope of the economic orientation of the members of a particular society of a giver point in time, their need, aspiration and their willingness or ability to pay tax. This among traditional function of the government is the provision of collective of public goods i.e. goods that cannot be divided among the separate members of the society, but which must be used for the benefit of all, such goods include the maintenance of land order, defense against external aggressiveness and regulation of trade business to ensure social economic justice. A society which deserves to accomplish more benefits through the activities of the government, citizen of a country must be willing to pay more tax to enable the government to meet those objectives and if necessary assume the self discipline needed to create the desire environment for realization of such objectives.

1.2     STATEMENT OF THE RESEARCH PROBLEM

The collection of personal income tax individuals which is the responsibility of the state government and since taxation is the easiest and flexible source of revenue for those government in an area which every government should show a lot of concern. The researcher attempts to embarks on the role of taxation in an economic development and planning (A case study of Ogbomosho North Local Government) the following are the major researcher problems;

  • The historical background of the taxation
  • The reason for taxation.
  • The various methods of collecting tax
  • The effect of taxation economic development and planning
  • The examination of likely problems of administration and collection of tax in Ogbomosho north local government.
  • The expatiation of the problem associate with the judicious use of public funds etc.

1.3     OBJECTIVE OF THE STUDY

It is apparent that taxation forms the compulsory levy imposed by the government authority on the income of individual firms and co-operate bodies. The objectives of the study are;

  1. To examine the historical background of taxation.
  2. To identify, constitute factors impending effectiveness and efficiency generation of revenue in Ogbomosho north local government.
  3. To determine the economic development and planning
  4. Discuss various method of collecting tax
  5. To enumerate the effect of taxation in economic development.
  6. To critically examine the likely problem of administration and collection in Ogbomosho north local government.

RESEARCH HYPOTHESIS

H0: The role of taxation helps in economic development and planning.

Hi: The role of taxation does not help in economic development and planning.

H0: Taxation is promoting economic activities of a country.

Hi:  Taxation is not promoting economic activities of a country.

H0: Taxation does not play a major role in the economic development and planning.

Hi: Taxation play a major role in the economic development and planning.

1.4     SIGNIFICANCE OF THE STUDY

This research is carried out mainly to identify the factors impending effective and efficient generation of revenue, economic development and planning in Ogbomosho North Local Government and also the judicious use of public funds. The research will identify possible solution of taken seriously will enhance state economic and development. The improve economic could be used as a model for other western local government who share similar problem, social, political and cultural background. This may eventually lead to an improve national economy and social, political stability in the state.

1.5     RESEARCH QUESTION

The focus of this study by the researcher is to identify the role of taxation in an economic development and planning. Hence, in the course of the study, effort has made to find solution to the following research question;

  1. What is the historical background of taxation in Ogbomosho North Local Government?
  2. What is the impact of taxation in economic development and planning?
  3. What is the background of economic development of Ogbomosho North Local Government?
  4. What are the various methods adopted in the collection of tax in Ogbomosho North Local Government?
  5. What are the contributions of tax to the current revenue of government?
  6. What are the problems of administration and collection of tax in Ogbomosho North Local Government?
  7. What are the problems associated with the judicious use of public funds etc?

1.6     SCOPE OF THE STUDY

The research is an account for economic development and planning in Ogbomosho as a whole. This research endeavour to identify factors and forces militating against effective economical development and hence, economical growth in the local government. Possible solution aimed of bringing about better economic development and growth using tax generated revenue are suggested.

1.7     LIMITATION OF THE STUDY

The researcher intends to carry out research on the rule of taxation in economic development and planning using Ogbomosho North Local Government as a case study.

However, the research work has been constrain as to time, lack of recent and adequate materials, unwillingness of the respond and the case study to give true replies lack of co-operative of the case study. However, effort has been made to ensure that the above limitation did not hinder effective completion and quality of the research work.

1.8     STUDY PLAN

The research work has been divided into five chapters for every presentation of the facts and figure gathered.

          Chapter one will contain the background of the study, significance of the study, research question, research hypothesis, scope of the study and limitation and definition of the key term and plan of the study.

          Chapter two treated past and current literature review, which include historical background of taxation, economic development planning and growth, principle and canon of a good tax system, tax classification, incidence of tax and type of tax collected by Ogbomosho North Local Government.

          Chapter three highlighted research methodology and a case study effort on the topic which include brief historical of the local government, background of economic development in Ogbomosho North Local Government, general trend in tax revenue and contribution to the current revenue and contribution to the revenue of government.

          Chapter four discusses the presentation and data analysis which include brief introduction of the chapter presentation and analysis of data according to research question, problem of tax administration and collection in Ogbomosho North Local Government and the problem associated with the judicious use of public funds.

          Finally chapter five through light on summary, conclusion and recommendations.

1.9     DEFINITION OF KEY TERM.

In the course of reading the research work, the reader will come across some terms which will be explained below;

THE ROLE OF TAXATION IN AN ECONOMIC DEVELOPMENT AND PLANNING, A CASE STUDY OF OGBOMOSHO NORTH LOCAL GOVERNMENT

THE IMPORTANCE OF COMMERCIAL BANK TO THE GROWTH OF SMALL SCALE BUSINESS IN NIGERIA

CHAPTER ONE

  • BACKGROUND TO THE STUDY
  • INTRODUCTION

In developing countries like Nigeria, majority of the population is rural based, so there is the need to give emphasis to the development of small scale and medium scale enterprises to enable the participation of greater segment of indigenous entrepreneurs in the development process. There is evidence to substantiate the argument that the small industrial sector holds a greater capacity to abort large number of workers who have been unable to secure a wage job in the large and capital intensive industrial sector.

          There is no doubt that small-scale is the backbone of business activities in Nigeria. More than 50% of business in Nigeria meets the standard of smallness if such high proportions of enterprise group, it cannot provide the desire effects.

          Since the establishment of any enterprises whether large medium or small require finance, it is therefore imperative to examine the importance of small require finance, it is therefore imperative to examine the importance of financial institution especially commercial banks in financing of small scale industries in Nigeria financial institution and banks of any forms, pursue identical goals.

          They contribute in no small measure to the country macro-economic objectives for the rapid transformation of the economy. Banks particularly contribute significantly to real development through savings and tending process by stimulating savings, mobilization fo funds and by the ability to ensure the most efficient transformation of the savings into real output.

          The important of banks is primarily to transform the economy depends largely on the development of small scale industries in the country and realizing this, they rose up additional sources of capital ventures especially to small-scale industries to encourage and contribute to the development of small scale industries.

  • STATEMENT OF THE RESEARCH PROBLEM

The focus of this study by the researcher is to identify the important of commercial bank to the growth of small scale business in Nigeria, in the course of the study; effort has been made to find solution to the following research problem.

  1. What is the historical background of the development of small-scale business in Nigeria?
  2. What are the importance of small-scale business in Nigeria?
  3. What is the effect of small-scale on the Nigeria economy?
  4. What is the impact on development of small scale industries?
  5. What are the problems facing the development directives to small-scale industries?
    • RESEARCH QUESTION

The study approach to be adopted in this work would be based primary on secondary method of data collection, most of the work in this research would be based on the primary data collected like Journals, Annual Report, Magazines, Textbooks, Financial papers, interest and other material collected in the library while the secondary data were collected through the interview.

QUESTIONNAIRE, PANELS

  1. What is small scale entrepreneur?
  2. What is small scale business?
  3. How can we invest in the small scale business?
  4. How can we be developed in the small scale business
  5. How can we developed in the small scale business?
  6. What can be the consequence of the small scale business?
  7. How can we risk positive in the scale business?
  8. What are the business in the small scale business?
    • OBJECTIVES OF THE STUDY

This research mainly focuses on the importance of financial institution to the development of small-scale industries in Nigeria.

To the researcher:

  1. It helps in proving an existing fact
  2. It helps them to find out fact
  3. It helps to interpret the findings of other by ways of synthesis of material to support conclusion.

To the government

  1. It improves their contribution of small-scale
  2. It expatiates the meaning of small-scale to them

To the business men and women

  1. It gives them an insight into their problem and how to solve them in order to achieve their aim objectives.
    • SIGNIFICANCE OF THE STUDY

It is believed that the information gathered from this study is of immense values to the academic community management of the banks the researcher, government and also to businessmen and women.

          To the bank, it helps them to improve on their performance especially in the area of loan and advances to small-scale industries.

  • SCOPE AND LIMITATION OF THE STUDY
THE IMPORTANCE OF COMMERCIAL BANK TO THE GROWTH OF SMALL SCALE BUSINESS IN NIGERIA

THE IMPACT OF HUMAN CAPITAL DEVELOPMENT ON THE ECONOMIC GROWTH OF NIGERIA

TABLE OF CONTENTS

Title Page                                                                                         

Certificate                                                                                        

Dedication                                                                              

Acknowledgement                        

Table of Contents                                                                   

CHAPTER ONE:

1.0 Introduction                                                                        1      

 1.1 Statement of problem                                                       2   

    1.2 Objective of the study                                                          3          

1.3 Research question                                                               4              

   1.4 Scope and limitation of the study                                          4       

 1.5 Significance of the study                                                   4                  

1.6 Research methodology                                                       5

1.7 Organization of the study                                                  5                 

1.8 Definition of terms                                                             6

1.9 Methodology                                                                     7

CHAPTER TWO:

 2.0 Literature Review                                                            8       

2.1 The basic purpose of human capital development            10     

 2.2 Training as a part of effective enterprise                                   13          

2.3 Designing a training programme                                        15    

 2.4 Programme design and evaluation                                             16       

 2.5 The training method                                                                   17

CHAPTER THREE:

3.0 RESEARCH METHODOLOGY                                   29

3.1 Sources of data collection                                                  29

3.2 Population of the study                                                     29

3.3 Sample size                                                                       30

3.4 Method of data collection                                                  30

3.5 Method of data Analysis                                                   31

CHAPTER FOUR:

4.0 INTRODUCTION AND DATA PRESENTATION                44

4.1 Introduction                                                                       32

4.1.1 Core research questions                                                    36

4.2 Test of hypothesis                                                              47

CHAPTER FIVE:

5.0 Summary, Conclusion and Recommendation                 53

5.1 Introduction                                                                        53

5.2 Summary                                                                           53

5.3 Conclusion                                                                         54

5.4 Recommendations                                                             54

5.5 Limitations of the study                                                     55

References

CHAPTER ONE
  1. 0 INTRODUCTIOIN

Training is a process were by individuals acquire knowledge, skill and attitude through experience, reflection, study or instruction.

Training is also the planned process to modify attitude, knowledge, skill, behaviour, etc. through learning acquire effective performance in an activity or range of activities. The purpose of training is to develop the ability of an individual to satisfy current and future manpower needed to supplement education or to train for taking up higher responsibilities.

Training is available for both new and existing staff of any organisation, although the new recruit might already have appropriated some skills and good attitude in all profile, human capital development will help to sharpen both areas so that better performance can be achieved both new and existing staff even well-established staff may need skill refinement and upgrading.

Human capital development may be formal or informal. Some organisations invest in and develop their own high quality training facilities and run a regular series of introductory and refresher courses in house. This has the advantage of ensuring that the training is relevant to the organization and its business as well as signifying an on-going commitment to staff development.

Formal and Informal training appear to have existed as long as the origin of man and this has been accorded varied status in human life. With advantage in knowledge, practice and technology, training and manpower development have become sophisticated and resource consuming. It has also been stressed that training and manpower development is an art and a science in its own right.

Hence, an attempt at establishing the actual meaning and manpower development is beneficial to that is globalism, e-commerce, e-banking and universal banking. All of these pose challenges to the twenty first century bankers and all of these innovations need greater skill to be able to meet future objectives of the organization become all of them are operated through online. And these need training and retraining of the entire work force so as to be able to bridge the gap which may exist as a result of these new inventions. This banking industry in Nigeria has been revolutionized. The bank has all been restricted according to their various capacities.

  • STATEMENT OF THE PROBLEM

There has been a growing emphasis on professionalism, growing bureaucracy, competitive growth, rsie in the education level with demand for better leadership, all of these throw the need for a better equipped work force. As a result of the growing rate of the competition in the banking industry in Nigeria, these has been a growing need for mechanization and automation of the banking process and procedures. The employment of high technologically based service delivery the sophisticated nature and development inevitable there is a new trend blowing across the world.    

1.2 OBJECTIVES OF THE STUDY

          In order to identify further the critical importance given to the development of human capital in the Nigerian banks, the main objectives of this study is to test and final out the impact of human capital development on the economic growth of Nigeria.

          The objectives of training are associated with overall growth and priorities that must be realistic and practicable, meaningful and quantifiable. The objectives of these study is to identify the primary objectives of training in an organization as that of ensuring the efficiency and must optional use of its human resources.

The specific objectives are:

  1. To examine the pattern and trend of human development in banking industries.
  2. To estimate the relationship between economic growth of banking industries

1.3 RESEARCH QUESTIONS

  1. Does training and development motivate staff?
  2. Does training and development improve the quality of service in the bank?
  3. Does training modify behaviour, attitude, skill and knowledge of individual staff
  4. Does training and development been able to promote accountability in the bank.

1.4 SCOPE AND LIMITATION OF THE STUDY

          The scope of the research study covers the comprehensive appraisal of the cost, benefit and status of training and manpower development. It also provides and insight to ethical standard in which training and development evolved.

It also covers the effect of emergence of technology in banking activities. The study will cover a period of 5yrs i.e from 2009-2013 due to time, and financial constants, i will not be cover all the banks in the country, my study will therefore tom limited to zenith bank only more so this is the bank i have chosen as my case of the study.

1.5 SIGNIFICANT OF THE STUDY

Zenith bank plc, as a major organization in the banking industries in Nigeria, stands to benefit from the findings of this study. It will know the efficiency of its training and development programmes, recommendations in these training and development policies as well.

Apart from assisting the organization to achieve itself objectives, training and manpower could project the right kind of image of the organization to the outside world. This could influence more customer and attract the right type of employee to the organization. It could also improve the public relations practice in the organization.   

  1.6 RESEARCH METHODOLOGY

This chapter is exclusively devoted to the principles on which this study was based. The researcher drew immensely from the opinion and advice of some human resources manger sought on the appropriate methodology. Items cover in these chapter therefore, include research method and design (a case study of zenith bank plc.) methods and sources of data collection, instrument validity and liability, sampling and sample size and analysis of data.

1.7 ORGANIZATION OF THE STUDY 

THE IMPACT OF HUMAN CAPITAL DEVELOPMENT ON THE ECONOMIC GROWTH OF NIGERIA

THE EFFECT OF GLOBAL ECONOMIC MELTDOWN OF NIGERIA CAPITAL MARKET

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

CHAPTER ONE: INTRODUCTION

  1. Background of the study
  2. Statement of Research Problem
  3. Aims and Objective of the study
  4. Scope and Limitation of the Study
  5. Research Methodology
  6. Significance of the Study
  7. Statement of Hypothesis
  8. Organization and Plan of the Study
  9. Definition of Terms

CHAPTER TWO: LITERATURE REVIEW

  • Theory of Nigeria Capital Market
  • Primary Market
  • Secondary Market
  • The Roles of Capital Market
  • The importance of Capital Market
  • Factors Influencing Activity in the Capital Market
  • Problem Mitigating Against the Growth of Capital Market and Solution to the Problems

CHAPTER THREE: RESEARCH METHODOLOGY

3.1   Introduction of Nigeria Capital Market

3.2   Research Design and Instrument Sampling

3.2.1        Characteristic of the Study Population and Sampling

3.3   Procedure of Data Collection

3.4   Contractors of Data Collection    

CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION

  • A Brief Introduction of the Chapter
  • Presentation and Analysis of Data
  • Analysis and Presentation of Data According to Test of Hypothesis

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION  

  • Summary
  • Conclusion
  • Recommendation

Reference

Questionnaire
Appendix

CHAPTER ONE: INTRODUCTION

The economic global meltdown stated.  In the United State of America in year 2007.  However it assumed to be a danger status in September, following the collapse of two of the world biggest and investment, bonus namely Lehman Brothers and Merrill lynch.  Like wide fire danger spread to other parts of the world prompting major stock markets to tunable and bumble.

This resulted into capital flight which triggered huge demand for foreign exchange between October and November in Nigeria.

From $1.27billion sold in setember, foreign exchange sale shot up to $3.4billion in October and $ 3.1 billion in November.  This prompted a sharp depreciation of the Naira as the exchange rapidly rose from N1/7 per dollar between November and December.

But besides, the above impact of the global economic meltdown on Nigeria capital market has been relatively minimal.  Unlike capital markets the developed countries which suffered credit crunch, several illiquidity and recorded losses as well as take over by government through bailment measures.

The downturn in the capital market experience in the year 2008, will remain undelible in the minds of many investors and other stakeholders.  In the Nigeria economy as the bubbled which was built several years ago.  Suddenly, bursts leaving the investor with better experience, before the intervention by regulations to stem the pathetic situation.

1.1   BACKGROUND OF THE STUDY    

 The initial attempt to establish capital market in Nigeria dated back to 1959, with issue of First Nigeria Development Loan stock by the Central Bank of Nigeria.

This was followed by the inauguration of the Lagos Stock exchange in 1960 it commenced to operation in June, 1961.

Another important development which catalized the growth of the market was the compulsory incorporation of branches of Foreign Corporations following the enactment f the company act in 1968.

In 1972 the promulgation of the Nigeria Enterprises promotion Act otherwise called the indigenization programme gave further implies of the market development accounting for 126.7% smooth in the number of listed equities on the exchange.

The impact of 1977 amendment of the indigenization Act 1972 led to growth of 170.6% in industrial equidity overall the development security.   

The implementation of true indigenization programme of 1972 and 1977, the statutory requirement that certain public institution like the pension find include the development banks should be a greater percentage of their instrument in the market security.

  • STATEMENT OF RESEARCH PROBLEM/ QUESTION

The focus of this research will be to identity thus effect of Global Economic Meltdown of Nigeria Capital Market. In this following research questions.

  • What are the effect of Global Economic Meltdown on Nigeria Capital Market.
  • What are the effect of Global economic Meltdown on the Nigeria Economy.
  • What are the affect of Global Economic meltdown on the Nigeria Investors.
  • What are the effect of global economic meltdown on Nigeria currency?
    • AIMS AND OBJECTIVES OF THE STUDY

The research project main focus is to take cursory look at the effect of global economic meltdown on the Nigeria Capital Market.  Therefore, the aims and objectives of the study will include:-

  • To examine the effect of global economic, meltdown on the Nigeria Capital Market.
  • To examine the effect of Global Economic Capital Market.
  • To examine the effect of Global Economic Meltdown on the Nigeria Economy.
  • To examine the effect of Global Economic Meltdown on the Nigeria Investors.
  • To examine the effect of global economic meltdown on the Nigeria Currency.
    • SCOPE AND LIMITATION OF THE STUDY

The research will focus on the effect, global economic meltdown on the Nigeria Capital Market with special emphasis on the Nigeria Capital Market.

The research will be historical and case study research which may be limited not insufficient finances.  Lack of enough time, lack of co-operation from the respondent and the case study this may linder through research.  However, effort will be made to ensure that the above.  Constraint and limitation do not affect the effective completion of the research work.

  • RESEARCH  METHODOLOGY
THE EFFECT OF GLOBAL ECONOMIC MELTDOWN OF NIGERIA CAPITAL MARKET

EXPORT FINANCE IN NIGERIA A CASE STUDY OF (NEXIM)

CHAPTER ONE

1.1   INTRODUCTION

The structural deformity interest in the Nigerian economy since colonial era finally gave way to restructuring of the economy in July 1986 through the Structural Adjustment Programme (SAP). This programme has is prime objective in the effective attering and restructuring of the consumption and production pattern of the Nigerian economy using market mechanism and proper valuation of the Naira as its major tools.

This singular effort redirected the focus of the government, financial non-financial institution and individual investors of this country towards expanding the economic frontiers of Nigeria away from the non-export status to diversify export orientation. A situation that required among other encouragements.

The argument other people of the improved export financing in Nigeria are among other factors as: it allows for the diversification of the economy from the present dependence on crude oil allied products to the non-oil sector of the economy. A part from this, improved export financing will equally improves the foreign exchange of the country its positive effect.

On the country’s foreign reserves and import financing. Before having a detailed analysis of the benefits accruable to a country from paper and improved export financing, it will be in line to give brief historical perspective to the development and effort towards export financing in Nigeria, while in the interim, the problem, prospects encountered and envisage respectively by the institution (Nigeria Export-Import Bank (NEXIM) statutorily saddled will the responsibility of providing the potential exports.

Exporters and their banks will the necessary financial assistance and guidance will be looked in to the main body of the thesis.

Export financial has been defined as “the provision of short, medium and long term funds for export operation. Historically, before 1945, there was no deliberate effort on the part of the colonial government to finance export, either with the use of export mechanism or specialized institution. What obtains then was not that the multinational companies dominates the export sector of the economy source their fund directly from the existing banks or from their parent companies.

Afterwards, we tied the establishment of the West Africa produce board at the regional level and the Nigeria produce marketing companies limited at the state level. These two body were given the responsibility of sourcing and marketing of local primary products like cocoa, palm kernel and Arabic gum, groundnut just to mention few. But the most profound efforts was made in 1962, by the central bank of Nigeria (CBN), It Introduced the 90 days Bill Of Exchanged as a means Of export financing.

The introduction; of this monetary, in export financing, affords the marketing board the opportunity to meat their case need by drawing such bill on the Nigeria produce marketing company limited that stands as the export to all marketing boards in Nigeria. When such bills have been accepted, the participative pool of commercial banks and acceptance house will now discount the bill with the supportive scheme of rediscounting and refinancing of bills provided by the Central Bank of Nigeria (CBN). The scheme ran into a debt and finally collapsed in 1968 as a result of the uncertainty prevalent in the produce market. This led to the final withdrawals of participating commercial bank and acceptance houses.

As a result of this withdrawal, the Central Bank of Nigeria has no choice but to take over the direct financing of export of the marketing boards. But by 1979, the C.B.N shifted attention from direct finance to direct control as a means of financing exports. This monetary policy stipulates the percentage of the commercial and merchants banks loanable funds That must be made available for export financing or the non-oil export sector of the economy. Based on this, credit control mechanism, the export sector moved gradually from its former point of funds to the sector even on the increase. But the introduction of (SAP) in 1986 saw the non-oil sector financing wearing a new look courtesy of decree 18 of 1986 tagged “Export incentive and

miscellaneous provision decree. This decree brought to existence various incentive that will encourage the active participation the financial, non financial institution and individual investors like in the export sector of the economy, with specific emphasis on non-oil export. The main objectives of this incentive that will be analyzed in detail in chapter of this thesis.

1.1   BACKGROUND TO CASE STUDY (NEXIM)

The final realization and the subsequent establishment NEXlM was rightly observed by Musa Badamosi thus “In the resuscitating ruling economic of both developed and developing countries.

Import-export banking has assured a global Phenomenon from Japan to Jamaica from China to U.S.A.Today Nigeria has also established a similar bank called Nigeria Export-Import Bank (NEXIM) with the man-data of pivoting the country’s economic recovery. The dream to have a specialized financial agency in charge of export and import financing was a result of various steps from the first National Development plan of 1960 to 1988 Decree No. 15 as amended by Decree 38 of 1960, that brought the establishment of NEXIM. The contribution that led to this long delay was the mobility of the Federal government to decide on the type of export-import agency that will has as its that argued that a NEXIM Bank is the best credit agency that the export-import sector of the economy needed. This contention was brought to an end by the recommendation with the assistance of European Economic Community (EEC). In collaboration with AFINEX company, a specialist in Export-Import and related matters that finally led to the establishment of NEXIM Bank instead of a risk bearing agency.

This recommendation led to the mandate given to the Central Bank of Nigeria (CBN) of draft the necessary action that will guide the functioning of NEXIM. A draft that was finally backed by Decree 1 No. 15 of 1988 and later amended by Decree No 38 of 1981. Statutory, the Bank at inception was to perform the under listed function:

  1. The provision of export credit guarantee and export credit insurance facilities to this client.
  2.  To provide foreign exchanged credit from revolving fund to exporters who need to import foreign input to facilitate export production.
  3.  To provide credit in local currency to its client in support of exports.
  4.  To provide trade information and export advisory service in support of export trade.
  5.  To provide credit insurance in respect of external transit trade an inter-port trader.
  6.  To establish and manage fund that are connected with export.

  1.2         OBJECTIVE OF THE STUDY

Until recently, there has not be existence of deliberate effort by government to look into the problems faced by the exporters, potentials and their Banks in terms of sourcing financial at the right, place and at the right conditions for their exports. Even rate, place and at the right conditions for their exports. Even with the ever declining growth of loanable funds for export of non-oil products, the country’s real sector economy. More so, with the simultaneously decline in the revenue generated from oil exports. But the recent sudden interest could be attributed to urgent need to improve the welfare state of the majority of the masses through positive growth in the economy. As such, there was the country by diversifying the sources of foreign exchange earning. This in effect, could be made possible by the easy available of finance availability to the exporter of non-oil product and the agencies responsible for their provision.

  1. The various sources of finance available to the exporter of non-oil product and the agencies responsible for their provision.
  2. The need to have an autonomous Nigeria exporter bank that will be independent in declining on the allocation of the necessary incentive to exporters or importers of export input as to where and when needed.
  3. The need to acquire, the exporter of where to source their export information and the nature of such information.
  4. The cost structure in export venture.
  5. The various documents used in the export financing.
  6. The problems of NEXIM Banks and the possible ways of solving them.

1.3   STATEMENT OF PROBLEMS

The greatest aspiration of every exporter is to get the needed finance at the right quantity, time, condition and rate. This aspiration has only remained a mere dream than a .j. As a result, what has remained a common sight is that every potential exporter that goes in the export business I greatest enthusiasm leaves the sectors dissatisfied and disappointed.

In view of this experience, the NEXIM ha an uphill task to see to the happiness of the participants in the export sector of the economy. As such below, that NEXIM will be confronted with. The study will among other things.

  1. How NEXIM will solve the problem of lack of enthusiasm on the part of the financial institution to participate actively the non-oil export sector of economy.
  2. How the issue of death information in the export financing sector in grapple with.
  3. How prices will be stabilized to ensure that changes in the produce prices will do not always direct effect on the exporters.
  4. How the risk in the export market could be shared by the government with the financial institutions.
  5. How the exporters will have easy access to their foreign exchange by easy reparation and retention process
  6. How legal, tectricial and professional advise will be made easy available its little earnings to inflation.

1.4   SIGNIFICANCE OF STUDY

EXPORT FINANCE IN NIGERIA A CASE STUDY OF (NEXIM)

AN ECONOMIC IMPACT OF VALUE ADDED TAX (VAT) ON GOVERNMENT REVENUE GENERATION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

        The importance of taxation lies in it’s  ability to generate revenue for government, influence the consumption pattern of the people, regulated the economy such as income, employment, purchasing power, prices and other parameters present in the economy. The basic philosophy of taxation is embedded in the reason for the existence of the government. To explain this, human beings are not self sufficient in the society and hence certain crucial collective services or public goods in a community such as defence, roads, justice, law and order, education and health facilities etc are provided by the government.

        In modern times, government has to provide these goods and services and as a result has to be financed. From economic literature, texture is the oldest instrument of financing the public sector. The citizens, in sacrificing their resources to the state, expect the government to reciprocate such gesture by expending public revenue tin such a manner that enhance the citizen’s welfare. This has prompted some scholars to relax this issue in the aspects; what was termed “the principle of taxation and the principle of expenditure”. Adedeji 91969, p.7).

1.2 STATEMENT OF PROBLEMS

        This study is primarily concerned with the problem of perennial dwindling government revenue and the place of VAT. The Nigerian tax system has been racked over the years by high incidence of fraud and has lacked transparency and accountability. These have deprived the government of accrued revenues. This loss of revenue by government have led to fiscal imbalances and continued poor tax administration before VAT in Nigeria. For instance, the period, 1970 to 1992 was characterized by fiscal deficits in government’s operations, thus implying that the budget for each of the successive years ended up in a deficit. This according to Akpakpan (1994:62) “Shows that the government has consistently pumping money into the economy ……. Where the government is trying to get the economy out of a depression, but given what we know about government spending in the country, it cannot be said that is was the objective.

        From the above, there is no doubt that the economy was depressed for the period 1970 to 1992. This is evident in the low profit level of directly productive outfits, low investment, low output an low sales among other things. We may say in practice therefore, that government revenue is unable to sufficiently cover its expenditure because of the following reasons:

Ø    The size of its revenue base

Ø    The inefficient management of its existing sources of revenue; and

Ø    The prevailing taxes evasion

Ø    A study of the contribution of VAT to the Nigerian Economy and its impact on government revenue given the government policy of diversifying its revenue base and reduce her dependence on oil investment. This necessitated the need for a tax reform, which led to the birth of the Valued Added tax system, all these led to the introduction of VAT and VAT as has shown is successful. Bearing in mind the problems that prompted this study and the complexity in making an unbiased conclusion, this study will seek to provide answers to the following questions:

i. What the impacts of broad based VAT on gross domestic product of Nigeria?

ii. What are the effects of VAT on the total revenue of Nigeria?

iii. What are the effects of VAT on Nigerian net income?

1.3   OBJECTIVES OF THE STUDY

                The broad adjectives for this study is to analyses the economic impact of VAT on government revenue generation in Nigeria.

        Specifically this research intends to find out the impact of broad based.

1.     To determine the impact of broad based VAT on gross domestic product of Nigeria.

2.     To evaluate the effect of total revenue on gross domestic product of Nigeria.

3.     To examine the effect of Nigerian net income on gross domestic product of Nigeria.

1.4   HYPOTHESIS OF THE STUDY

Ho1: VAT has no significant impact on gross domestic product of Nigeria.

Ho2: Total revenue does not have any impact on gross domestic product of Nigeria.

Ho3: Net income does not affect the gross domestic product of Nigeria.

AN ECONOMIC IMPACT OF VALUE ADDED TAX (VAT) ON GOVERNMENT REVENUE GENERATION IN NIGERIA

POPULATION GROWTH AND ECONOMIC DEVELOPMENT IN NIGERIA 1981-2011

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

Over the years if has become established that the existence of an efficient
human capital is the key to economic growth and development in any nation. This seems from the fact that every other facility and resources required for economic development is driven by the availability of human capital. More so, in the absence of effective human capital development, an increasing population can have adverse negative effect on the economic growth of a nation. This is because a lot more resources are taken out to manage and cater for the teeming population that the same can generate.

It is therefore correct to state that the economic growth of a nation is 
significantly dependent on the growth of its population. This effect or impact can  be either negative or positive depending at the existence of certain factors and  conditions, when studied and understood can be managed or controlled to ensure continuous and sustainable economic growth and development. Meier (1984).

Economic development and growth depend on many factors or variables. These variables include variable resources, capital, population and technology. Development is also dependent on growth. Lipase (1963).

People have often said to crucial to the development of every society. Growth in population is one of the components of economic growth (wish the associated, although delayed increase in the labour force) has traditionally been considered a positive factor in stimulating economic growth and development. Lipase (1963).

The  relationship  between  economic  development  and  the  growth  of population is theoretically held to be positive especially when the population is largely productive and not dependent. Increased economic growth does not by itself guarantee economic development it makes economic development possible.
Havey (1983). Economic growth enables improvements or positive changes to take place in various of economic activity due to increased production of goods and services.  Larger  population  provide  the  need  consumers  demand  to  generate favourable economies of scale in production to costs of labour force means more productive man power in the economy.

The ability for a country to effectively exploit natural resources is dependent on among other things, the managerial and technical skills of its people. It is the people  who  exploit  natural  resources, accurate capital  and  carry out  national political  organizations  and  carry  out  national  development  programmes.  Thus, labour is the major contributor to prosperity and growth. Tadaro, (1982).

According to the theory of demographic transition growth occurs only after country would have undergone different levels of population growth to arrive to an optimum wide will naturally lead to growth.

A more conventional economic argument is that population growth in many third world countries a region is in-fact desirably to stimulate economic growth and development.

This is not a case in Nigeria; Nigeria is a less developed country and a highly populated one at that, more so her growth rate has always been very low, compared with the increase in population. This features of the nation is an cause for concern.

During the study, it is necessary to state that because development has no unit  if  measurement  and  because of  lack  of  reliable  date on  its  components economic growth will be used as a proxy for measuring development. This is because economic growth is the one component from which other components spin off and to which other components are related.

1.2 STATEMENT OF THE PROBLEM

Growth is a complex process as development is a multi dimensional one. The nature and causes of growth go beyond what is expressed by improvement in Gross Domestic Product.

Every  economics  primary  objective  is  to  develop  in  the  medium  or intermediate, this objective is stated as the need for growth. In the short run it is stated as the need for growth to attain whatever improvement is necessary for growth.  In  relation  to  this  study  the  condition  necessary  for  economics development and growth is population growth while growth itself is a conditionnecessary for development.

Population growth is the rate of which a given population multiplies itself. The population growth rate is as important to economists as the size of the population. Governments and economists would like to know if the population is growing faster or slower than the rates of other economic indicators.

Economics growth refers to the study process by the productive capacity of the economy is increased overtime to bring about increase in the output of goods and services and rising levels of national income. (Hodder’s (1980).

The growth in the output of goods and services (i.e growth in GDP). It is the process by which national income or output is increased. An economy is said to be growing if there is a sustained increase in the actual output of goods and service per head. Meier GM (1984).

The rate of economic growth therefore measures increase in real national income, during a given period of time, usually a year.

Economic development is not the same as economic growth. It means more
than mere growth of the economy (in terms of increased output) it is in the process of increasing  substantial positive transformation in the various  sectors of the economy. Meier GM (1984). The positive changes which take place improve the general rise in the standard of living of the masses with economic development; there are structural transformations in the different sectors of the economy as well as general improvement in different areas of the country, leading to increase economic welfare of the citizens. Economic development on the other hand is generally defined as consisting of “Improvement” in the various aspects of the life of the entire population of a country such improvements are generally manifested
in greater numbers of useful tools for employable persons, higher real incomes, better health conditions, (literacy) and better government services.

Given  Nigerians  economic  structure,  population  and  rate  of  economic 
expansion, most people have blamed Nigerians low growth and development on a high population that is large and not very productive. Other has opined that the little growth the country has attained is a direct consequence of a large population.

These divergences question the theoretical relationship between populated 
but not growing but China is highly populated and growing rapidly. Also the growth of population in Western Europe has lead to its rapid industrialization. This study is prompted by the need to understand population growth and economic development in Nigeria.

The Nigeria population has been growing while the rate of economic growth has such little improvement the question on how best to exploit the theoretical relationship between population growth and economic development has persisted for long and it has become necessary to asses the issues. Thus, this scenario prompts us to find out whether the increasing population growth has a positive or negative effect on Nigerians development.

1.3 RESEARCH QUESTION

The following questions point to our research

1.  Does population growth hamper economic growth?

2.  Does population growth have any effect on income?

1.4 OBJECTIVES OF THE STUDY

The following of the study research includes the followings

1.  To determine whether a relationship exists between population growth and economic development.

2.  To determine the direction of causality between population growth and
     economic growth.

1.5 HYPOTHESIS

The study will be guided by the following hypothesis

HO: There is no significant relationship between population growth and economic development in Nigeria.

Ha: b1=0: There is no direction of causality between population growth and economic development in Nigeria.

1.6 SIGNIFICANT OF THE STUDY

The importance of the research is to be appreciated by all since concepts of population  growth  economic  growth  and  development  affects  everybody irrespective of class, status or occupation.

However,  the  study  will  be  importance  to  the  following  categories  of persons.

i.        Government (policy makers)

The government will benefit from the study since it will provide the basics for making policy changes and formulating future policies. It helps the economy in planning for development.

ii.       Students: The study is important to students since it will reveal more details
and  provide  more  information  for  those  who  are  interested  in  finding  out population trends in Nigeria and its consequences to economic growth in Nigeria and also for further studies.

iii.    Research: This study will provide more information for further research about the population trend in Nigeria.

1.7 SCOPE AND LIMITATIONS OF THE STUDY

Chronologically the study covers the period of about twenty nine years (1981-2011). The data or any other pieces of information utilized in the conduct of the study will be restricted to those published by national institution to ensure consistency.

The population under study covers an estimate for the entire population of the Nigeria economy.

Geographically  the  study  is  restricted  to  the  territory  of  Nigerians sovereignty. In terms of context, the study scope is primary inclined to macroeconomics is nothing but an aggregate of micro-economics.

During the course of its conduct, this study has been limited or hindered from early completion due to factors such as

i.        Financial constraints

ii.       Unwillingness of certain institution to provide needed information.

iii.      Discrepancies between data from different sources.

POPULATION GROWTH AND ECONOMIC DEVELOPMENT IN NIGERIA 1981-2011

DOMESTIC DEBT AND ECONOMIC GROWTH OF NIGERIA 1980 TO 2014

CHAPTER ONE

  • INTRODUCTION

1.1   Background of the Study

Debt is an outstanding credit obligation. It refers to payment which must be, but has not yet been paid to somebody. Legally, debt is a choice in action transferable by the creditor to some other person provided that the transfer is in writing and that whole and not merely a part of the debt is so assigned ( Anyafo, 1995).

Public debt is an amount of money owed by the government to institutions, government agencies and other bodies either resident in or outside a country. When debts are owed to residents within a country, it is known as domestic public debt. Specifically in Nigeria, the sources of domestic public debt are the central bank of Nigeria, commercial banks, merchant banks and the non bank public (Nzotta,2004).

It is the objective of every sovereign nation to improve the standard of living of its citizenry and to promote here conomic well being. Due to the scarcity of resources, nations borrow from within and externally to foster economic growth and to achieve sustainable economic development (Adepoju, Salau & Obayelu, 2007). The necessity for governments to borrow in order to finance a deficit budget has led to the development of both internal and external debts (Osinubi & Olaleru, 2006, Obadan, 2004).

By way of definition, domestic debts refer to the portion of a country’s debt that was borrowed from within the confines of a country. These loans are usually obtained from the central bank of Nigeria, deposit money banks, discount houses and other non bank financial houses. This study therefore is set to assess the degree to which the different components of domestic debts have impacted on the economic growth of Nigeria over the period 1980-2014.

1.2 Statement of Research Problem

The reliance by the federal government in borrowing from the banking system, particularly the CBN, to finance its large and unsustainable fiscal deficits has hindered the attainment of macroeconomic stability and sustainable economic growth in Nigeria. In addition, this has crowded out the private sector from the credit market, thereby stalling investment and output growth. A review of Nigeria’s domestic debt profile indicates that, it has been on the increase in recent times. Various factors account for the phenomenal rise. This includes the increased financing needs of government for developmental purposes and other socio –economic needs before the advent of the oil boom. There was also the need to finance the large fiscal deficits of the government after the oil boom period. Other factors include the financing gaps in the government revenue-expenditure profile and other financing needs of the government. All these had led to the enhanced domestic debt stock of Nigeria In spite of her continued penchant for domestic loans, Nigerian economy is still characterized by low per capital income, high unemployment rates, dwindling economies, inadequate basic amenities and poor infrastructural developments and falling growth rates of GDP; problems that publicly procured funds are supposed to take care of. Paradoxically; it does not appear as if our craving for domestic loans is in any way commensurate to our low level of economic growth and development.

The natural question that readily comes to mind is: What has our leaders and the political class been doing with the huge sums of money procured on our behalf as domestic debts and how beneficial has these sources of loans been to the economic growth of Nigeria? It is against this background that this study will seek to investigate the various components of our domestic debt profile. This is with a view to ascertaining the usage, to which the proceeds were put, and the direction / significance of the effects of such funds. – That is the crux of the matter!

DOMESTIC DEBT AND ECONOMIC GROWTH OF NIGERIA 1980 TO 2014

THE DETERMINANTS OF EXCHANGE RATE IN NIGERIA (1980 TO 2014)

CHAPTER ONE

  1. INTRODUCTION

1.1      Background of the Study

            Exchange rate is the price of one country’s currency expressed in terms of some other currency. It determines the relative prices of domestic and foreign goods, as well as the strength of external sector participation in the international trade. According to Dornbusch (2004), exchange rate is the rate at which one country’s currency is exchanged for the currency of another country. While Mankiw (1997), defined it as the price at which exchange between two countries takes place.

            The role of exchange rate and its effects on macroeconomic performance has continued to generate interest among economist. Many economists argue that exchange rate stability facilities production activities and economic growth. Exchange rate regime and interest rate remain important issues of discourse in the international Finance as well as in developing nation with more economics embracing trade liberation as a requisite for economic growth (Obansa et al, 2013). The relationship it has with other macroeconomic variables has been argued among economists. They are also of the view that misalignment in real exchange rate could distort production activities and consequently hinder exports growth and generate macroeconomic instability (Mamta Chowdhury, 1999). Mordi (2006) argued that the exchange rate movements have effects on inflation, prices incentives, fiscal viability, competitiveness of exports, and efficiency in resources allocation, international confidence and balance of payment equilibrium.

            Prior to the late 1980s, fixed exchange rate was practiced in Nigeria, when the Naira was pegged against the British Pound and later on the American Dollar. After this period, flexible exchange rate policy was adopted and exchange rate was allowed to float which was determined by demand and supply forces. Since then the naira rate of exchange against the dollar has experienced significant fluctuations, such that naira/dollar rate of exchange moved from 0.6091, 0.6369, 3.3166, 9.001, 84.5, 92.52 in 1980, 1981, 1986, 1990, 1995 and 1999 respectively to 132.6, 147.6 and 156.35 in 2004, 2009 and 2013 respectively. Some of the policies employed to stabilize exchange rate in Nigeria include: Second Tier Foreign Exchange Market (SFEM), Autonomous Foreign Exchange Market (AFEM), The Dutch Auction System (DAS) etc. The policies were tried but still were unable to proffer a solution to exchange rate stability. The Naira continued to depreciate against the American dollar.

Some economists have attributed the recent depreciation to the decline in the nation’s foreign exchange reserves. Others argued that the activities of some market operators (speculators) and banks are responsible for the recent decline in the values of naira, while some argued that the over dependency on importation, heavy debt burden, weak balance of payments position and capital flight have explained the reasons for the behavior of exchange rate in Nigeria from the period of regulation to deregulation.

            Entrenching a realistic and sustainable macroeconomic policy in Nigeria has been a huge challenge for years. Although successive administrations have considered carious macroeconomic policies to strengthen the economy, reduce inflation and stabilize the Naira. Economists believe that much still needed to be done to get it right. Economists believe that many of the measures by previous administrations did not yield the desired results, as the Naira remained unstable. Despite efforts by government to maintain a stable exchange rate, the naira rate of exchange still remains volatile (Benson and Victor 2012, Aliyu 2011. This calls for further research efforts to determine the variable that account for levels of exchange rate in Nigeria. Against this background, this research study intends to investigate the empirical analysis of the determinants of exchange rate in Nigeria over a period of 35 years (1980 – 2014)

1.2      Statement of the Problem

            Since the fall of Bretton – wood system in 1970s and the subsequent introduction of floating exchange rates, the exchange rates have in some cases become extremely volatile. It may be quite interesting to note that the naira remained quite stable in the mid 90s i.e. 84.57, 74.6, 84.3 and 92.53 against the American dollar in 19955, 1996, 1997, 1998 and 1999 respectively. In early 2007, the Naira depreciated to N117.968 against the American dollar which could be attributed to decline in foreign exchange reserves and sovereign wealth fund. In a nutshell, the exchange rate of Nigeria Naira to American dollar has been volatile and fluctuating over time. According to Obadan (2006), some of the factors that led to the depreciation of the Nigerian exchange rate include over importation and fragile export base economy.

            Since the adoption of the Structural Adjustment Programme in 1986, Nigeria has adopted different types of exchange rate  regimes to fixed/pegged regimes but it has not solved the problem of exchange rate fluctuation and maintaining both internal and external balance. As part of the measures taken to stabilize exchange rate in Nigeria could be forced to cut further the amount of oil revenue it uses for government spending if the global crude price continued to plummet. Another measure by CBN stipulates that customers who purchase foreign currency through interbank market or an authorized trader must use the funds within 48 hours. None of these could stabilize the naira against other major currencies.

            Past specific Nigerian studies made attempts at determining the variables that account or levels of exchange rate in Nigeria. Some of these include; Udoye (2009), which examined the determinants of exchange rate in Nigeria for period of 1970 to 2006, using the Nigeria time series data. The result suggests that one year past value of exchange rate and immediate past value of trade openness are the major determinants of exchange rate in Nigeria. The result further indicates that there is evidence of long-run relationship between rate and two explanatory variables (gross domestic product growth and trade openness). Again, Ejim (2010) investigated the empirical analysis of the determinants of exchange rate in Nigeria for the period of 1989-2010 and found out that inflation is a key determinant of exchange rate in Nigeria.

According to Jhingan (2005), to maintain both internal and external balance, a country must control its exchange rate. This requires good knowledge of the variables that shape the levels of exchange rate. Therefore, given paucity of empirical evidence on this macroeconomic issue, it becomes necessary to reexamine the determinants of exchange rate in Nigeria. To do this, the study shall be guided by the following research question;

THE DETERMINANTS OF EXCHANGE RATE IN NIGERIA (1980 TO 2014)

ASSESSMENT OF THE ECONOMIC IMPACT OF THE DEVELOPMENT OF SHOPPING MALL ON THE EXISTING RETAIL BUSINESS IN ENUGU METROPOLIS (A CASE STUDY OF SHOPRITE ENUGU)

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY

Retail in Nigeria was once confined to traditional open markets and small local storekeepers loosely referred to as the informal retail sector of the Nigerian economy which serviced communities. Between 1960 and the early 1980s, there were standard retail malls which operated chain stores across the country; their number reduced because of the harsh business environment and the decline in business in that era, leaving the country without standard malls for retail business.

This gap led to the growth of the informal or traditional retail market, which traditionally constitutes a formidable part of the retail structure in Nigeria.

Today, Nigeria is experiencing a tremendous shift to a more sophisticated structure as formal or organized retail continues to gain ascendency. The distribution chain and the organization of outlets continue to reflect those of a rapidly evolving economy as standards of living improve and as the population continues to snowball. In the past eight years, Nigeria’s population has grown from 150 million, as established by the population census conducted in 2006, to a country with an estimated population of 171 million people by 2013. In the midst of this, the middle class continues to expand even as 51 percent of the country’s population now lives in cities.

The rise of organized retail has been rapid in Nigeria in the last two decades. NBS data shows that between 2001 and 2004, the wholesale and retail sector grew by 10 percent per annum. By 2006, its contribution was 16 percent. In the first halves of 2011, 2012 and 2013, it contributed 15.58 percent, 17.05 percent and 18.44 percent of GDP respectively. The old or traditional retail system which is adjudged to account for almost 90 percent of retail activity in Nigeria has continued to decline because of government’s policy, changes in the composition of Nigeria’s population, rising income level and increasing sophistication of the Nigerian consumer. In the last decade, the stable political environment, consistently high oil prices, and rise in GDP have had positive impact on per capita income, which has in turn moved more Nigerians into the middle class. Today, more families shop together and organized facilities which meet their need are attracting more shoppers. Therefore, the old or traditional structure of retail continues to give way to the new.

More than ever, the Nigerian consumer is interested in a decent shopping environment, neatly-arranged and labeled commodities and the experience that goes with buying at an organized outlet.

Opportunities in wholesale and retail stem from the fact that demand has continued to rise. NBS data shows that based on the structure and level of development of the economy, the average Nigerian household spends as much as 80 percent of its income on consumables like food and drinks, clothing, transportation, shelter, education, electronics and power supply. The average amount devoted to consumption has played a major role in elevating Nigeria to the status of a 171 million-populated retail powerhouse on the African continent.

Nigeria has evolved from being a country with 150 million population with no real mega retail store in 2006 to one with 171 million people who have about 20 mega retail stores in less than 10 years. The country has the capacity to support even more malls across its major cities.

1.2 STATEMENT OF PROBLEM

In shopping centers for instance, the rent paid by a tenant bears relation to the ability of thattenant to trade profitably from that location. This has always been a salient criterion but ascompetition has forced retailers to accept lower margins for their profit levels, the impact of‘cost’ on the profit equation has become more important. Retailers of Shopping Centers havebeen forced to look at the cost equation in terms of their space requirement. They aretherefore less willing to accept the level of rents in the market and may consider relocating ifthey feel that current rentals are too high for their cost requirement. This should mean that themarket will adjust to ensure that value in exchange (rental value) and value in use (worth tothe retailer) converge (French, 2000). Hence Sirmans and Guidry (1992) noted thatunderstanding the determinants of shopping center rents is important to the Estate Surveyorsand Valuers who are involved in market analysis and site selection of such properties.

Nevertheless valuers fail to account for variation between retail function and the impact ofindividual property factors on rental value. This potentially leads to misguided valuations. Indetermining the rental value of a subject property, inappropriate evidence may be undervaluedto determine a unit value even though in the market place the subject and comparableproperties belong to distinct tiers (that is the occupier of the subject property would not beexpected to make a bid for the comparable property). Also, valuers interpretations ofevidence may lead to over or under estimations of rents as the perceived impact of a factormay have a positive impact on trade and hence rental bid for one type of retailer and anegative impact for another. Hence Hager and Lord (1985) stated that “the success of avaluation relies extensively on personal knowledge, expertise and interpretation of manyvariables which exist”.

However, the complexity of the property price formation process requires an analyticalapproach which makes it possible to settle the cross-influences between the numerousdimensions affecting property values (for shopping centers) and to assess the marginalcontribution of each attribute underlying property buying decisions (Des Rosier et al., 1996).Much work has been done in the determination of property values (residential and shoppingcenters) in the United Kingdom, United States and Australia (Trott, 1980; Fraser, 1988;Kihore, 1996). In Nigeria, very little effort has been made. The few that exist only looked atthe determinants of residential and office property values (Bello, 2000; Oladapo, 2000).

1.3     Objectives of the Study

As a central objective, this study seeks to assess the economic impact of the development of shopping mall on the existing retail business in Enugu metropolis. The specific objectives are to:

  1. To determine if increase in the development of shopping mall will lead to extinction of retail business in Enugu metropolis.
  2. To examine the correlation between the development of shopping mall and performance of retail businesses in Enugu metropolis.
  3. To assess the economic contribution of the development of shopping mall on the retail prices.

1.4     Research Questions

From the aforementioned research objectives, the following research questions were formulated

  1. To what extent will the development of shopping mall leads to extinction of retail business in Enugu metropolis?
  2. What is the correlation between the development of shopping mall and performance of retail business in Enugu metropolis?
  3. What is the economic contribution of the development of shopping mall on the retail prices?

1.5     Research Hypotheses

Based on the above research questions, the following hypothesis were formulated

Ho: Shoprite has no significant impact on specific dimension of the local retailers   business in Enugu state.

H1Shoprite has significant impact on specific dimension of the local retailers   business in Enugu state.

1.6     Significance of the Study

This study is significant in that it attempts to pinpoint some of challenges facing owners of retail business because of the increase in the development of shopping mall in Enugu metropolis. It has both theoretical and practical significance. Theoretically, the finding of the study will be useful to both students and scholars who wish to advance their knowledge on economic impact of the development of shopping mall on the existing retail business in Enugu. On the other hand, the findings will be of practical significance to the management of retail business operators and other medium scale business organizations, employees and the government, as it will help them to improve the challenges facing retail business operators in Enugu metropolis.

 Significantly, the findings are expected to make the sole proprietor to see the need to improve staff strength through employment and development of skilled manpower. This will help them to plan adequately and suggest the need to organize seminars to the general public on the danger of the aforementioned challenges, adding to the above, it will specifically create awareness on how the challenges facing retail business operators can be managed.

1.7     Scope of the Study

The research work covered the assessment of the economic impact of the development of shopping mall on the existing retail business in Enugu metropolisNevertheless; it focused generally on enumerating the challenges and tested ways of averting/managing it.

1.8     Limitations of the Study

The study was limited by the fact that it relied solely on one enterprise and some of the personnel did not volunteer the necessary information.

1.9     Definition of operational terms

Shopping Centre/Mall: ICSC (1999) defined a shopping centre as a group ofcommercial establishment, planned, developed, owned and managed as aunit related in location, size and types of shops to the trade area the unitserves. It provides on-site parking in a definite relationship to the types andsizes of shops.

Real estate: A real estate refers to land plusanything permanently fixed to it, including buildings, sheds and other itemsattached to the structure. Real estate can also refer to the rights and interestinherent in ownership of real property.

Residential property: Realtors Commercial Alliance(2005) defines Single- ormultifamily housing units that are used, serve, or are designed as a place ofresidence

Real estate or property market: CEM (2006) defined real property market as the interaction of individuals who exchange real property rights or interests for other assets such as money. The function of the real estate property market is to establish a pattern of price so that given sufficient time, land resources are allocated according to their most profitable (highest and best use) relative to other land resources.

ASSESSMENT OF THE ECONOMIC IMPACT OF THE DEVELOPMENT OF SHOPPING MALL ON THE EXISTING RETAIL BUSINESS IN ENUGU METROPOLIS (A CASE STUDY OF SHOPRITE ENUGU)

ACCESS TO FINANCE AND ENTREPRENEURIAL DEVELOPMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Small scale enterprise is very crucial to the development of a country’s economy, especially a country like Nigeria. Entrepreneurship enhances national development, poverty eradication and employment generation. It is the bedrock of any nation’s industrialization.

By definition, small and medium sized enterprises SMEs are seen as the entrepreneurship businesses with small number of employees, small investment capitals and small annual business turn over. According to statistical figure showing the importance of micro, small and medium scale business MSMEs, sector to Nigeria economic growth. A survey carried out by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in conjunction with National Bureau of Statistic (NBS) in 2013 revealed; the total number of MSMEs in the country as at 2013 stood at 37,067,416 with micro businesses recording 36,994,578, small businesses 68,168 and medium businesses recording 4,670. The total number of persons employed by the sector as at Dec, 2013 stand at 59,741,211 representing 84.02% of Nigeria’s total labour force.

Nigeria is an entrepreneurial economy with an estimated 37million micro, small and medium-sized companies, whose contribution to economic growth and job creation is significant. Contributing over 48% to the GDP, employing over 60 million Nigerians and contributing over 7% to exports according to the National Bureau of Statistics.

In Nigeria the level of finance for entrepreneurship is one of the lowest in the world, however, while the World Bank (2010) report indicates that Nigeria’s financial system is highly capitalized and vibrant, her contribution to entrepreneur and MSME’s sector is about 1.6% of the total loans and advances to the private sector as of 2009 (CBN,2009).

Access to finance is the ability of individuals or enterprise to obtain financial services, including credit, deposit, payment, insurance and other risk management services.

Credit is generally understood to mean the finance provided to others at a certain rate of interest and the creation of credit is one of the most important functions of commercial banks.

However, less than a third of the country’s MSMEs have successfully obtained a loan from financial institution, instead, most use their personal savings or reinvested profits as a source of business financing, the smaller the business, the less likely it is to have applied for and received a loan from any financial institution. Many of these businesses have the potential to become bigger and more prosperous but their growth is restricted for a variety of reasons which access to credit is the major.

Access to credit has been identified as one of the key factors required to accelerate growth and improve welfare in developing countries. There is need to intensify efforts in making credit accessible to entrepreneurs, since this will liberate majority of the population from poverty, encourage savings and improve investment in physical and human capital which promotes economic growth. Entrepreneurship would be significantly enhanced through the provision of credit facilities to enable them engage in economic activities and be more self-reliant, increase employment opportunities and create wealth (CBN, 2005). The importance of credit access to entrepreneurial development made the central Bank of Nigeria adopt the financial institution as the main source of financing entrepreneurship in Nigeria. Despite this however, finance is still considered as one of the major hindrances to entrepreneurial development in Nigeria (Ubom, 2003).  While government and non-government organisation (NGOs) have been engaging a number of programme and policies to encourage entrepreneurship in the country. Based on the introductory discussion the paper therefore seeks to examine access to finance and entrepreneurial development.

1.2 STATEMENT OF THE PROBLEM:

A research carried out by Okpara and Wynn (2007) on small business development showed that the rate of their failure in developing countries are higher than in the developed countries.

In Nigeria, empirical report shows that an estimate of about 70% of the industrial employment is held by SMEs and more than 50% of the Gross Domestic Product is SMEs generated (Odeyemi, 2003). Given the role of SMEs to the economy of Nigeria, various regimes of government since independence in the 1960s, have focused on various programs and spent immense amount of money with the primary goal of developing this sector, these have however not yielded any significant results as evident in the present state of the SMEs in the country (Mambula, 1997). SMEs are generally very susceptible and only a certain number of them manage to survive due to several factors such as difficulty in accessing credits from banks and other financial institutions.

The Financial systems in every country play a key role in the development and growth of the economy, although the ability to play this role effectively and efficiently largely depends on the degree of development of the traditional commercial banks which are key players in the financial systems of nearly every economy, have the potential to pull financial resources together to meet the credit needs of SMEs, however, there is still a huge gap between supply capabilities of the banks and the demanding needs of SMEs.

In spite of the enormous contributions ofSMEs in the economy, access to credit facilities from banks and other formal financial institutions has been one of the main issues of SME development, there are various constraint that hinders the smooth access to credit facilities from the formal financial institution which include collaterals, high interest rates charged on loans, literacy levels and the number of lending institutions etc. This study sought to examine access to finance and their role in entrepreneurial development.

1.3       RESEARCH QUESTIONS:

The research was guided by the following research questions;

1.  How does credit access (finance) enhance entrepreneurial development?

2. To what extent does interest rate influence entrepreneurial development?

1.4        OBJECTIVES OF THE STUDY

The main objective of this work is to determine the impact of credit access on entrepreneurial development in Nigeria. The specific objectives are:

  1. To determine the impact of finance on entrepreneurial development.
  2. To ascertain the extent of the influence of interest rate on entrepreneurial development.

1.5        HYPOTHESIS

1.   Finance has no significant impact onentrepreneurial development.

2.  Interest rate has no significant influence on entrepreneurial development.

1.6        SIGNIFICANCE OF THE STUDY

Considering the importance of entrepreneurship in any economy, it is important to understand the role of the financial institutions on entrepreneurial development in the country and the challenges facing the entrepreneurs in the accessing credit.

1.7      SCOPE OF THE STUDY.

This study laid emphasis on credit access and entrepreneurial development in Nigeria from 1992-2016.

1.8    DEFINITIONS OF TERMS

Entrepreneurship – The art or science of innovation and risk-taking for profit making in business.

Access to finance – The ability of individuals and enterprises to obtain external funding to enable them ease cash flow problem.

Entrepreneurial Development –Is the process of improving the skills and knowledge of entrepreneurs through various training programs.

ACCESS TO FINANCE AND ENTREPRENEURIAL DEVELOPMENT IN NIGERIA

IMPACT OF FISCAL POLICY ON ECONOMIC GROWTH IN NIGERIAMENT OF ECONOMIC RECESSION IN NIGERIA 2014- 2017

CHAPTER ONE

INTRODUCTION

  • Background of the Study

 Fiscal policy is seen as that part of government policy concerned with the raising of government revenue through taxation and other means and the decision on the level and pattern of expenditure for the purpose of influencing economic activities or attaining some desirable macroeconomic goals. Economic growth on the other hand may be defined in terms of the total physical output, or real income, of an economy (Udabah, 2002). Fiscal policy can foster growth and human development through a number of channels such as increase in investment and productivity. Macroeconomic instability is particularly damaging to the poor in a nation, as their earnings are not indexed to inflation and they have limited opportunities to invest in assets that provide a hedge against inflation. But macroeconomic stability associated with prudent fiscal policy yields greater benefits, including higher rates of investment and educational attainment, as expected rates of return can better be achieved in an environment of low inflation. Prudent fiscal policy can help enhance factor productivity, leading to higher growth and consequently poverty reduction. The vast literature on endogenous growth theory suggests that fiscal policy can either promote or retard economic growth through its impact on decisions regarding investment in physical and human capital. In particular,increased spending on education, health, infrastructure, and research and development can boost long term growth. Higher growth, in turn, generates greater fiscal resources to finance spending on human capital, further bolstering the dynamism of the economy.  Effectively and efficiently implemented government spending on infrastructure increases private sector productivity by providing complementary public inputs (for example, through spending on roads and bridges that facilitate trade in rural areas) Ineffective fiscal policy, on the other hand, can harm the growth process of an economy. Dead-weight loss from taxes that finance public spending, and the associated adverse factor-supply effects are good examples that readily come to mind.  Unproductive public spending can take various forms, including: expenditure on wages and salaries of unproductive employees. Such resources can be deployed to more productive initiatives that would enhance increased productivity in the economy. Rent-seeking incentives reduce growth by diverting higher human capital away from productive activities with adverse impact on the index of productivity.Macroeconomic dynamics in Nigeria has been dominated in the past by fiscal instability. There have been a strong deficit and debt bias stemming from government revenue volatility. With about 75 percent of revenue from oil and gas, fiscal policy in Nigeria has been heavily influenced by oil driven volatility impacting both revenue and expenditure. Since 1970, both revenue and expenditure have been very volatile while increasing over time. In periods with high oil prices, such as in1979-82, 1991-92 and more recently in 2000-02, revenue and expenditure have increased sharply. The implications of such boom-bust fiscal policies include the transmission of oil volatility to the rest of the economy as well as disruptions to the stable provisions of government services (Thomas 2003).

Since the late 1980s, fiscal (budget) policy has become a major tool/instrument in Nigeria. The reasons for this are not inconsiderable. First is the dominant role of the public sector in major (formal) economic activities in Nigeria. This can be traced to several factors. Among them are the oil boom of the early 1970s, the need for reconstruction after the civil war, the industrialization strategy adopted at the time (import substitution industrialization policy) and the militarization of governance. The second reason for the increasing dominance of fiscal policy in the management of the economy is the fall in the international price of oil in the late 1980s. Furthermore, the persistent fiscal deficit since the early 1970s (and given the decline in oil revenue) required a new fiscal focus that saw the emergence of the public sector in major economic activities (Obi,2007). Although the democratically elected government in 1999 adopted policies to restore fiscal discipline, the rapid monetization of foreign exchange earnings between 2000 and 2004, another era of oil windfall, resulted in large increases in government spending. In 2005 alone, government spending increased to 19 percent of GDP from 14 percent in 20000(CBN bulletin 2015). Extra budgetary outlays not initially included in the budget increased. Worst till, most of this spending were not directed towards capital and socio-economic sectors. Corollary primary deficit worsened from an average of 2.6 percent of GDP in 1980s to one of 6.2 percent in 1990s. In 2002 alone, primary deficit increases to 5 percent of GDP from 2 percent in 2000. These increases in deficits result in a mounting stock of debt, ranging from 88 percent of GDP in 1980s to 96 percent of GDP in 1990s. In 2002 alone, the stock of debt increased to 91 per cent of GDP from 45 per cent in 2000 (Cashin, 1995). However, considering the uncertain fiscal dynamics in Nigeria, the recent fiscal adjustment witnessed in 2005 might still not be sustained. Nigeria’s fiscal revenues are largely coincided with oil revenue accounting for nearly 80 percent of government revenues, which implies that the economy is highly exposed to price fluctuations in the world oil markets. Naturally, oil revenue is very volatile due to world oscillation in oil prices and to unpredictable changes in OPEC assigned oil quota of which Nigeria has been a member since 1958 following the commercial discovery of oil in Oloibiri in River State, Nigeria in 1956. Absence of suitable fiscal rules and a proper finance management framework for oil related risks over the past two decades in Nigeria have led to boom and-bust type fiscal policies that have generated large and unpredictable movements in government finances. Consequently, this has been a recurrent source of destabilizing effect of fiscal surprises on the domestic prices and exchange rate as well as financial system. Issues connected to budgetary (fiscal) policy have become major issues in our polity. The 2012 budget has attracted a lot of criticism. One of the major issues raised against Nigeria’s 2012 budget is the high rate of recurrent expenditure, despite government’s reduction from 74.4 per cent in 2011 to 72 per cent in 2012. Based on the 2012 budget, government proposed spending most of its money on running the administration rather than on badly needed infrastructure projects to create jobs and boost growth in the continent’s second-largest economy. 2014 budget was incremental in nature, the figures shows sharp increases in expenditure and that Nigeria has spent more than she has earned. Within the period, total revenue has witnessed an average increase of 29%, while total expenditure exceeded that by 15%. Between 2015 and 2016 average increase in expenditure was lower than revenue. This may be partly due to the negative impact of insurgency, recession etc. that significantly reduced government revenue. The figure also shows that government expenditure responds to changes in total revenue. Between 2014 and 2016 when government revenue dropped on the average by 0.82% due to significant decline in oil prices, government expenditure also shaded an average of 1.20% within the period. This suggests that Nigerian economy follows pro cyclical fiscal policies to changes in government revenue. Based on the above analysis, this investigation is primarily aimed at assessing the impact of fiscal policy on the economy of Nigeria.

1.2Statement of the Problem.

In Nigeria, despite the importance of existing policies to achieve economic objectives of viable economic growth, the use of fiscal policy for the realization of these growth objectives is still highly questionable. The Nigerian economy has been plagued with several challenges over the years. Researchers have identified some of these challenges as: gross mismanagement/ misappropriation of public funds, (Okemini and Uranta, 2008), corruption and ineffective economic policies (Gbosi, 2007); lack of integration of macroeconomic plans and the absence of harmonization and coordination of fiscal policies (Onoh, 2007); inappropriate and ineffective policies (Anyanwu, 2007). Imprudent public spending and weak sectorial linkages and other socioeconomic maladies constitute the bane of rapid economic growth and development (Amadi and Essi, 2006). It is evident that one of Nigeria’s greatest problems today is the inability to efficiently manage her enormous human and material endowment. In spite of many, and frequently changing, fiscal, monetary and other macro-economic policies, Nigeria has not been able to harness her economic potentials for rapid economic development (Ogbole, 2010). These policies span through two broad periods, which can be classified as “regulation” and “deregulation”. Our main focus is the differential in fiscal policy failed to achieve a satisfactory level of welfare for the society by providing an equitable or fair distribution of income and wealth, or all of these (Ogiji, 2004). The 1930s Great Depression was a confirmation of the reality of the failure of the market economy which led to the evolution of Keynesian economics. Keynes submitted that the lingering unemployment and economic depression were a result of failure on the part of the government to control the economy through appropriate economic policies (Iyoha and Fischer (1990). Consequently, Keynes proposed the concept of government intervention in the economy through the use of macroeconomic policies such as fiscal and monetary policies. Fiscal policy deals with government deliberate actions in spending money and levying taxes with a view to influencing macro-economic variables in a desired direction. This includes sustainable economic growth, high employment creation and low inflation (Microsoft Corporation, 2004). Thus, fiscal policy aims at stabilizing the economy. Increases in government spending or a reduction in taxes tend to pull the economy out of a recession; while reduced spending or increased taxes slow down a boom (Dornbusch and Fischer, 1990). Government interventions in economic activities are basically in the form of controls of selected areas/sectors of the economy. These controls differ, and depend on the specific needs or purpose the government desires to achieve. Samuelson and Nordhaus(1998), distinguished between two forms of regulation, namely:

  1. Economic regulation (involving control of prices, entry and exit conditions, regulation of public utilities, such as transportation and media organizations, regulation of the financial sector operations.
  2. Social regulation (aimed at protecting the health and safety of workers at work place, the environment, and protection of consumer rights. our focus is on economic regulation. Aregbeyen (2007), Ekpo (1994), Amin (1998), Devarajan and Ekpo (1994). (Fuente (1997), Kneller and Galor (2005). Bose, Tanzi, and Zee (1996), established positive relationship between fiscal policy (public spending) and economic growth. Bose et al. (2003) in Aregbeyen (2007) found that the share of government capital expenditures in the gross domestic product is positively and significantly correlated with economic growth, while the growth effect of current expenditure is insignificant. Aregbeyen (2007) believed that although government expenditures were necessary for economic growth, yet the impact of such expenditures on the economy is of primary importance. He concluded that the key to rapid economic growth constituted capital and public investment expenditure and that increased government budget deficits do not automatically guarantee rapid economic growth.It is interesting to know that the available evidence shows that over the years, under review (1981- 2015), Nigeria’s fiscal operations have resulted in persistent overall deficit. Nigeria has recorded over thirty years of deficits. Deficits are meant to accelerate economic activities through investments and induced aggregate demand. But this has become a serious problem to know that despite the fact that Nigeria has been operating deficits over these periods and found itself in a situation of less than full employment, her economy has been in distress, the opposite view of the essence of deficits occur. There is obvious fall in the standard of living of the citizens, decline in the growth of the economy, persistent unfavorable balance of payment, increased public debt; local and foreign, continued depletion of the foreign reserve, little or no savings, decline in exports, increased inflationary pressure, continuous dependence on external economies etc. Finally, it is evident that one of Nigeria’s greatest problems today is the inability to efficiently manage her enormous human and material endowment. In spite of many, and frequently changing, fiscal, and other macro-economic policies, Nigeria has not been able to harness her economic potentials for rapid economic development (Ogbole, 2010).  Thus the aim of this research is to empirically investigate the impact of fiscal policy on the economy by examining the case of Nigeria. According to Adeoye (2006), “The debate on the effectiveness of fiscal policy as a tool for promoting growth and development remains.

 1.3 Research Questions

Therefore, this study aims to empirically investigate the aforementioned problems so as to bridge the gap in knowledge and contribute to existing literature. Thus, this study shall examine and address the following research questions:

1. What is the impact of government revenue (Tax) on economic growth in Nigeria?

2. What is the impact of government expenditure on economic growth in Nigeria?

3. What is the impact of domestic debt on economic growth in Nigeria?

4. What is the direction of causality between the fiscal policy components and economic growth in Nigeria?

 1.4Objectives of the Study

 The broad objective of this study is to empirically investigate/assess the impact of fiscal policy on Nigeria economic growth from 1981 to 2015.More specifically, this study intends to achieve the following:

  1. To evaluate the impact of government expenditure on economic growth in Nigeria.
  2. To determine the impact of government revenue (Tax) on economic growth in Nigeria.
  3. To evaluate the impact of domestic debt on economic growth in Nigeria.
  4. To ascertain the direction of causality between the fiscal policy components and economic growth in Nigeria?

   1.5 Statement of Hypothesis

In carrying out this study, the following hypotheses would be tested and either accepted or rejected, based on the research findings.

1. H01: Government expenditure has no significant impact on economic growth in Nigeria.

2. H02: Government revenuehas no significant impact on economic growth in Nigeria.

 3.  H03: Domestic debt has no impact on economic growth in Nigeria

 4.  H04: Fiscal policy variables have no causal relationship with economic growth in Nigeria.

1.6. Significance of the Study

The findings of this study will be beneficial to individuals, cooperate bodies, researchers and the government and its agencies at large. At the level of the corporate bodies or the individual level, it will help them understand the way the government conducts its revenue and expenditure programs and to know how to respond to such programs and policies. It will also aid the government to predict with accuracy the impact that its revenue and expenditure program will have on the economy at large. This research work will also serve as a reference point for other researchers and the academic. Above all, it will add to existing stock of knowledge thereby filling up the knowledge gap.

1.7 The Scopes and Limitation of the Study

This work is set to do a thorough assessment of the impact of fiscal policy on Nigeria economic growth. The scope of this study will cover the period 1981-2015. Government expenditure, revenue and budget deficit financing will be used as fiscal policy instruments. The data to be used for analysis will be secondary data sourced from the 2010 and the golden jubilee edition of Central Bank of Nigeria statistical bulletin.

IMPACT OF FISCAL POLICY ON ECONOMIC GROWTH IN NIGERIAMENT OF ECONOMIC RECESSION IN NIGERIA 2014- 2017

IMPACT OF HEALTH CARE DELIVERY ON AGRICULTURAL SECTOR OUTPUT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Better health care is a primary human need. According to the World Health Organization (WHO, 2005), fifty percent of economic development differentials between developed and developing nation is attributable to ill-health and low life expectancy. Provision of health is seen as a key element of a policy to promote broad-based national development. The burden of diseases such as HIV/AIDS is known to slow the human productivity of developing countries. Therefore, every country primarily aims to devote huge public fund to health sector so as to empower its human capital.  Hence, the importance of health as a form of human capital cannot be over emphasized. Good health and productive agriculture are important in the economy of any nation; good health enhances work effectiveness and the productivity of an individual through increase in physical and mental capabilities. Disease significantly reduces the productivity of agricultural labor in developing countries due to the loss of labor and know-how of productive adults (World Bank, 2008).

On the basis of economic analysis, there appears to be an inextricable link between health care and human labor productivity channeled to the agricultural sector. Over the years in Nigeria, there have been some financial commitments by the government in the area of health sector which is believed to also affect human productivity exhumed in the agricultural sector. The financial commitments of government to the health sector are both the recurrent and capital expenditure on health. The capital expenditure of government decrease from N7.3million in 1970 to N4.88 million in 1972 before it rose again to N126.75 in 1974. It sharply dropped to N79.2 million in 1982. From 1982 to 1987, capital expenditure on health declined from N72.9m in 1982 to an all-time low of N17.2m in 1987. This development is occasioned by the fact government was more preoccupied in the business of paying workers’ salaries with less attention being paid to capital expenditure. In 1988 there was a significant rise to N297.96m. By 1991, the statistic dropped to N137.3m but plummeted to N33.72m in 1992. The figure rose steadily from N586.2 million in 1993 to N17,717.42m, N33,396.97m and N34,647.9m  in 2003, 2005 and 2007 respectively the capital expenditure on health stood at N64,922.9m in 2008, N79,321.09m in 2011 and increased to N82.98m in 2015.

The recurrent expenditure on health also follows a similar trend. It rose gradually from N12.48 m in 1970 to N59.47m in 1977  but fell to N40.48m in the successive year. The pattern of health expenditure at this period is a reflection of both the product of the disposition of government policy towards health issue and the determination of the Federal Government to improve the health care system with the wind fall of oil revenue.  From 1984 to 1986, recurrent expenditure rose from N101.55m to N134.12m when the recurrent expenditure as a percentage of total expenditure stood at 77.4 percent. The value of recurrent health expenditure reduced significantly in 1987 to N41.31m before it rose steadily from N422.80 in 1988 to N24,522.27m in 2001. This figure rose again from N40,621.42 in 2002 to N44,551.63, N58,686.56 and N72,290.07 in 2005, 2006 and 2007 respectively. Recurrent expenditure on health stood at N18,200.0 million in 2008 and N21,542.9m in 2011, N179.99m in 2013 and N257.72m in 2015.

On the other hand, the agricultural output in Nigeria in 2011 totaled in monetary value as N14,037.83m, and N15,816.00, N16,816.555m, N18.018.61 and N19,936.97m in 2012 to 2015 respectively. Health problems apart from affecting the state of welfare of affected households, affects agriculture and economic growth negatively through the reduction of available labor hours for economic activities, premature loss of  human resources and high cost of diseases treatment which adds to the economic burden of the rural households. Research focusing on agriculture has revealed the negative impact of ill health especially on the welfare of agricultural household affects overall economic development. Against this background, this study is aimed at carrying out an empirical analysis of the impact of healthcare on agricultural output in Nigeria from 1980-2016.

1.2 Statement of the Problem

 Many programs like the River Basin Development Authorities, Green Revolution Scheme have been initiated by the government in order to cut down the issue of food scarcity but to no avail. Agricultural production decreases as a result of several factors such as disease, climate change which invariably affects human health and thereby deepens poverty in Nigeria. Majority (over 70%) of Nigerians depends on agriculture for their means of livelihood and there has been a case of food insecurity which has led to malnutrition and again affects human health. Poor health as a result of ailment and diseases diminish economic opportunities for a large number of the farming household that form majority in the study area and this in turn affects the poor negatively who are stuck in the vicious cycle of poverty. In spite of huge government spending, coupled with bilateral and multilateral assistance in the health sector, the patterns of health status in Nigeria mirror many other Sub-Saharan African nations but are worse than would be expected given Nigeria’s GDP per capital. Poor human resources and policy management have led to unprecedented brain drain in the health sector as health professionals in search for better conditions of service abroad often vote with their feet in droves.

The Nigerian health system is in comatose; health care financing is worse hit especially in the poor continent where health care faces serious problem. Effects of ill health on farm households include three broad impacts: absenteeism from work due to morbidity (and eventual death); diversion of family b time to caring of the sick; and the loss of savings and assets in the course of dealing with diseases and its consequences. Against these problems listed above this research work tends to be an aid in proffering solutions.

  • Research Questions

In the course of this study, the following research questions will be addressed:

  1. To what extent has health care affected the level of agricultural sector output in Nigeria?
  2. How has life expectancy influenced agricultural sector output in Nigeria?
  3. What extent has infant mortality affected agricultural sector output in Nigeria?
  4. What direction of causality exists between health care delivery and agricultural sector output in Nigeria?

1.4 Objectives of the Study

The broad objective of this study is to determine the impact of healthcare delivery on agricultural output. In line with this, the specific objectives of the study are:

  1. To evaluate the effect of life expectancy on agricultural sector output in Nigeria.
  2. To analyze the impact of infant mortality on agricultural sector output in Nigeria.
  3. To examine the causal relationship between healthcare delivery and agricultural sector output.
IMPACT OF HEALTH CARE DELIVERY ON AGRICULTURAL SECTOR OUTPUT IN NIGERIA

THE CONTRIBUTION OF THE AGRICULTURAL SECTOR TO THE DEVELOPMENT OF NIGERIA ECONOMY 1983 – 2015

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In the 21st century agriculture is one of the divers industries which are increasing rural income as well as long term stability of its natural resources. This can create different activities which will affect farmers, stakeholder, customers and government industries. Information and communication technologies have most important information about agriculture in developing countries. These developing countries now are connected with developed nations and getting the latest information and technologies regarding weather, natural resources and other related information (Rao, 2010).

Addul, Barkatullah, Ghulam, and Shakil (2014) noted that most of the developing countries are using different technologies and other sources for the development of agriculture and economic development. The agricultural sector is constantly being developed to the fullest extent possible with available means as a whole can progress only by the efficient and rational use of them. According to Ogidi (2015), in any nation, the agricultural sector has a great importance attached to it. Hence, agriculture constitutes one of the most important sectors of the economy. The significance of agriculture resource in bringing about economic growth and sustainable development of a nation cannot be underestimated. Agriculture contributes to the growth of the economy, provides employment opportunities for the teaming population, export revenue earnings and eradicates poverty in the economy. Abayomi (2009) stated that stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of successful industrialization.

Oji-Okoro (2011) is of the opinion that agriculture resource has been an important sector in the Nigerian economy in the past decades, and is still a major sector despite the oil boom; basically it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy. The pervasive influence of agriculture on Nigeria’s economic and social development has also been articulated by Oluwasami (2013). A strong and efficient agricultural sector would enable a country to feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries. The agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of the multifunctional nature of agriculture (Ogen 2007).

Agriculture has been defined as the production of food and livestock and the purposeful tendering of plants and animals, (Ahmed, 2013). He stated further that agriculture is the mainstay of many economies and it is fundamental to the socio-economic development of a nation because it is a major element and factor in national development. In the same view, Okolo (2004) described agricultural sector as the most important sector of the Nigeria economy which holds a lot of potentials for the future economic development of the nation as it had done in the past. Notwithstanding the enviable position of the oil sector in the Nigerian economy over the past three decades, the agricultural sector is arguably the most important sector of the economy. Agriculture’s contribution to the Gross Domestic product (GDP) has remained stable at between 30 and 42 percent, and employs 65 per cent, of the labour force in Nigeria (Emeka 2007).

Generally, the agriculture sector contributes to the development of an economy in four major ways-product contribution, factor contribution, market contribution and foreign exchange contribution (Abdullahi 2012; World Bank 2010). Therefore, base on the above background this study aims to examine the contribution of the agricultural sector to the development of Nigeria economy between 1983 and year 2015 using econometric technique.

1.2 STATEMENT OF THE PROBLEM

In the study of Manyong et al., (2015) they reported that inspite of Nigeria’s rich agricultural resource endowment, there has been a gradual decline in agriculture’s contributions to the nation’s economy. In the 1960s, agriculture accounted for 65-70% of total exports; it fell to about 40% in the 1970s, and crashed to less than 2% in the late 1990s. The decline in the agricultural sector was largely due to rise in crude oil revenue in the early 1970s. Less than 50% of the Nigeria’s cultivable agricultural land is under cultivation. Even then, smallholder and traditional farmers who use rudimentary production techniques, with resultant low yields, cultivate most of this land. The smallholder farmers are constrained by many problems including those of poor access to modern inputs and credit, poor infrastructure, inadequate access to markets, land and environmental degradation, and inadequate research and extension services. The inability to capture the financial services requirements of farmers and agribusiness owners who constitute about 70 percent of the population is inclusive (Lawal, 2011).

Low agricultural output has a negative effect on the Nigerian economy as a whole. Several factors have been identified to enhance or retard growth in the agricultural sector. These factors include education (Huffman 2009;; Weir 2012), infrastructure (Querioz and Gaultam 2012) and inflation (Gokal and Hanif 2014).

1.3 Research Question

  1. To what extent is technology relevant in increasing agriculture production in Nigeria?
  2. What are the contribution and general impacts of agricultural output on the Nigerian economy?

1.4 Objective of the Study

          The main objective of this study remains on the impact of agricultural sector to the development of Nigeria economy.  Other specific objectives include:

  1. To find out the relevance of technology in increasing agriculture production in Nigeria.
  2. To examine the impact of agricultural output on the Nigerian economy.

1.5 Research Hypothesis

Hypothesis one

Ho:     Technology has no relevance in increasing agriculture production in Nigeria.

Hi:     Technology has relevance in increasing agriculture production in Nigeria.

Hypothesis two

Ho:     Agricultural output does not have any significant impact on the Nigerian economy.

Hi:     Agricultural output has any significant impact on the Nigerian economy

1.6 Scope of Study

The study was limited within Nigeria; the scope is limited to a period between 1983 and 2015. The choice of this study period is based on the availability of data.

1.7. Significance of the Study 

          The study of impact of telecommunication on agriculture is relevant to government, agricultural sector and to academia.

          The findings and recommendation stated in this work will be vital guidelines to government in policy formulation that will enhance the outcome of the agricultural sector of Nigeria economy.

To agriculturalists especially rural farmers, this work provides a comprehensive knowledge of the essence of adopting modern technology in their agricultural activities, as it will help to boost their outputs.

This work serves as one of the contributing literature to ne use for lecturing and reference purposes in the higher institution of learning, and also this study will serve as a guideline to prospective researchers who will wish to develop similar work on this subject.

1.8   Operational Definition of Terms

  • Agricultural Extension: Agricultural extension is the application of scientific research and new knowledge to agricultural practices through farmer education. The field of ‘extension’ now encompasses a wider range of communication and learning activities organized for rural people by educators from different disciplines, including agriculture, agricultural marketing, health, and business studies.
  • Agriculture: Agriculture is the cultivation and breeding of animals, plants and fungi for food, fiber, biofuel, medicinal plants and other products used to sustain and enhance human life.
  • Telecommunication: Telecommunication is the transmission of signs, signals, messages, words, writings, images and sounds or intelligence of any nature by wire, radio, optical or other electromagnetic systems. Telecommunication occurs when the exchange of information between communication participants includes the use of technology.
  • ICT: It stands for “Information and Communication Technologies.” ICT refers to technologies that provide access to information through telecommunications. It is similar to Information Technology (IT), but focuses primarily on communication technologies. This includes the Internet, wireless networks, cell phones, and other communication mediums.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In the 21st century agriculture is one of the divers industries which are increasing rural income as well as long term stability of its natural resources. This can create different activities which will affect farmers, stakeholder, customers and government industries. Information and communication technologies have most important information about agriculture in developing countries. These developing countries now are connected with developed nations and getting the latest information and technologies regarding weather, natural resources and other related information (Rao, 2010).

Addul, Barkatullah, Ghulam, and Shakil (2014) noted that most of the developing countries are using different technologies and other sources for the development of agriculture and economic development. The agricultural sector is constantly being developed to the fullest extent possible with available means as a whole can progress only by the efficient and rational use of them. According to Ogidi (2015), in any nation, the agricultural sector has a great importance attached to it. Hence, agriculture constitutes one of the most important sectors of the economy. The significance of agriculture resource in bringing about economic growth and sustainable development of a nation cannot be underestimated. Agriculture contributes to the growth of the economy, provides employment opportunities for the teaming population, export revenue earnings and eradicates poverty in the economy. Abayomi (2009) stated that stagnation in agriculture is the principal explanation for poor economic performance, while rising agricultural productivity has been the most important concomitant of successful industrialization.

Oji-Okoro (2011) is of the opinion that agriculture resource has been an important sector in the Nigerian economy in the past decades, and is still a major sector despite the oil boom; basically it provides employment opportunities for the teeming population, eradicates poverty and contributes to the growth of the economy. The pervasive influence of agriculture on Nigeria’s economic and social development has also been articulated by Oluwasami (2013). A strong and efficient agricultural sector would enable a country to feed its growing population, generate employment, earn foreign exchange and provide raw materials for industries. The agricultural sector has a multiplier effect on any nation’s socio-economic and industrial fabric because of the multifunctional nature of agriculture (Ogen 2007).

Agriculture has been defined as the production of food and livestock and the purposeful tendering of plants and animals, (Ahmed, 2013). He stated further that agriculture is the mainstay of many economies and it is fundamental to the socio-economic development of a nation because it is a major element and factor in national development. In the same view, Okolo (2004) described agricultural sector as the most important sector of the Nigeria economy which holds a lot of potentials for the future economic development of the nation as it had done in the past. Notwithstanding the enviable position of the oil sector in the Nigerian economy over the past three decades, the agricultural sector is arguably the most important sector of the economy. Agriculture’s contribution to the Gross Domestic product (GDP) has remained stable at between 30 and 42 percent, and employs 65 per cent, of the labour force in Nigeria (Emeka 2007).

Generally, the agriculture sector contributes to the development of an economy in four major ways-product contribution, factor contribution, market contribution and foreign exchange contribution (Abdullahi 2012; World Bank 2010). Therefore, base on the above background this study aims to examine the contribution of the agricultural sector to the development of Nigeria economy between 1983 and year 2015 using econometric technique.

1.2 STATEMENT OF THE PROBLEM

In the study of Manyong et al., (2015) they reported that inspite of Nigeria’s rich agricultural resource endowment, there has been a gradual decline in agriculture’s contributions to the nation’s economy. In the 1960s, agriculture accounted for 65-70% of total exports; it fell to about 40% in the 1970s, and crashed to less than 2% in the late 1990s. The decline in the agricultural sector was largely due to rise in crude oil revenue in the early 1970s. Less than 50% of the Nigeria’s cultivable agricultural land is under cultivation. Even then, smallholder and traditional farmers who use rudimentary production techniques, with resultant low yields, cultivate most of this land. The smallholder farmers are constrained by many problems including those of poor access to modern inputs and credit, poor infrastructure, inadequate access to markets, land and environmental degradation, and inadequate research and extension services. The inability to capture the financial services requirements of farmers and agribusiness owners who constitute about 70 percent of the population is inclusive (Lawal, 2011).

Low agricultural output has a negative effect on the Nigerian economy as a whole. Several factors have been identified to enhance or retard growth in the agricultural sector. These factors include education (Huffman 2009;; Weir 2012), infrastructure (Querioz and Gaultam 2012) and inflation (Gokal and Hanif 2014).

1.3 Research Question

  1. To what extent is technology relevant in increasing agriculture production in Nigeria?
  2. What are the contribution and general impacts of agricultural output on the Nigerian economy?

1.4 Objective of the Study

          The main objective of this study remains on the impact of agricultural sector to the development of Nigeria economy.  Other specific objectives include:

  1. To find out the relevance of technology in increasing agriculture production in Nigeria.
  2. To examine the impact of agricultural output on the Nigerian economy.

1.5 Research Hypothesis

Hypothesis one

Ho:     Technology has no relevance in increasing agriculture production in Nigeria.

Hi:     Technology has relevance in increasing agriculture production in Nigeria.

Hypothesis two

Ho:     Agricultural output does not have any significant impact on the Nigerian economy.

Hi:     Agricultural output has any significant impact on the Nigerian economy

1.6 Scope of Study

The study was limited within Nigeria; the scope is limited to a period between 1983 and 2015. The choice of this study period is based on the availability of data.

1.7. Significance of the Study 

          The study of impact of telecommunication on agriculture is relevant to government, agricultural sector and to academia.

          The findings and recommendation stated in this work will be vital guidelines to government in policy formulation that will enhance the outcome of the agricultural sector of Nigeria economy.

To agriculturalists especially rural farmers, this work provides a comprehensive knowledge of the essence of adopting modern technology in their agricultural activities, as it will help to boost their outputs.

This work serves as one of the contributing literature to ne use for lecturing and reference purposes in the higher institution of learning, and also this study will serve as a guideline to prospective researchers who will wish to develop similar work on this subject.

1.8   Operational Definition of Terms

  • Agricultural Extension: Agricultural extension is the application of scientific research and new knowledge to agricultural practices through farmer education. The field of ‘extension’ now encompasses a wider range of communication and learning activities organized for rural people by educators from different disciplines, including agriculture, agricultural marketing, health, and business studies.
  • Agriculture: Agriculture is the cultivation and breeding of animals, plants and fungi for food, fiber, biofuel, medicinal plants and other products used to sustain and enhance human life.
  • Telecommunication: Telecommunication is the transmission of signs, signals, messages, words, writings, images and sounds or intelligence of any nature by wire, radio, optical or other electromagnetic systems. Telecommunication occurs when the exchange of information between communication participants includes the use of technology.
  • ICT: It stands for “Information and Communication Technologies.” ICT refers to technologies that provide access to information through telecommunications. It is similar to Information Technology (IT), but focuses primarily on communication technologies. This includes the Internet, wireless networks, cell phones, and other communication mediums.
THE CONTRIBUTION OF THE AGRICULTURAL SECTOR TO THE DEVELOPMENT OF NIGERIA ECONOMY 1983 – 2015

EXCHANGE RATE DETERMINATION AND THE NIGERIAN ECONOMY

CHAPTER ONE

INTRODUCTION

  • Background of the study

One of the features that distinguish international trade from domestic trade is that each nation has its own currency and its own banking system. Prices in each country rely on the country’s currency units be it dollars, naira, pounds, euro, rupees, francs, ceddis and so on.   Exchange rate refers to the price of a domestic currency in terms of a foreign currency. Exchange rate plays a key role in international economic transactions because no nation is self sufficient due to varying factor endowment as well as comparative advantages. According to Jhingan (2009), this price is as a result of the interaction of the forces of demand and supply of foreign currencies in any particular period of time. It determines the relative price of domestic goods and services as well as the external sector participation in the international trade. Dornbusch (2004), defined exchange rate as the rate at which one currency is exchanged for the currency of another country. Whereas Mankiw (1997), defined it as the price at which exchange between two countries takes place. The exchange rate has two main components; the domestic currency and foreign currency and it can be quoted directly or indirectly. In a direct quotation, the price of a unit of a foreign currency is expressed in terms of the domestic currency; the foreign currency is the base currency while the domestic currency is the counter currency. In an indirect quotation, the price of a unit of domestic currency is expressed in terms of foreign currency. In this case, the domestic currency is the base currency while the foreign currency is the counter currency. Most exchange rates use the American dollar as the base currency and other currencies as the counter currency. (1: N)  (Base: counter). In addition, there are exceptional cases such as the Euro and commonwealth currencies like British pound, Australian Dollar and New Zealand Dollar.

The exchange rate between the Nigerian naira and the American dollar is the number of naira required to purchase one dollar which is currently about N360 per dollar. The exchange rate of naira per dollar will be maintained in the world exchange market by arbitrage. Arbitrage refers to the purchase of foreign currency in a market where its price is low and to sell it in some markets where its price is high. The essence of arbitrage is to remove differences in the foreign exchange rate of currencies so that there will be a single rate in the world exchange rate market. Exchange rate has played an important role in the macroeconomic performance of a nation. Many economists argue that exchange rate stability facilitates production activities and economic growth and misalignment in real exchange rate distorts production activities and hinders export growth, generates capital flight and macroeconomic instability (MamtaChowdhury 1999).

 The exchange rate appreciated when less of naira is needed to buy a dollar, it was caused by an increase in gross domestic product, favourable balance of payment etc and it depreciates when high amount of naira is needed to buy a single dollar and it was caused as a result of over dependence on importation, heavy debt burden, weak balance of payments position and capital flight.

 Movement in exchange rates have ripple effect on other economic variables such as Foreign Direct Investment (FDI), inflation rate, interest rate, balance of trade etc. These facts emphasize the importance of exchange rate to the economic well-being of every country that opens its doors to international trade in goods, services and cross border investment. Ellsworth (1964) defined exchange rate as the rate at which a country’s currency exchanges for those of other countries measures its external values. An exchange rate is simply the value or price of one currency in terms of another and it makes no difference in which currency the price ratio is expressed (Ellsworth, 1964). Exchange rate is of two types: real and nominal exchange rate.

The real exchange rate is defined as the ratio of the price level abroad and the domestic price level where the price level is converted into domestic currency units through the current nominal exchange rate. Montiel (2003), defined real exchange rate as the relative price of foreign goods in terms of domestic goods. The real exchange rate tells us how many times, more or less goods and services can be purchased abroad. Real exchange rate determines the ratio of price in the local market to the price in the foreign market. According to purchasing power parity, real exchange rates do not change. The nominal exchange rate is defined as the number of units of the domestic currency that can purchase a unit of a given currency. A decrease in this variable is termed nominal appreciation of the currency. An increase in this variable is termed nominal depreciation of the currency. Nominal exchange rate tells how many times an item of goods purchased locally can be purchased abroad. If the nominal exchange rate is high, it will benefit an economy a lot in the trading activities. If it is high, the goods and services get more foreign units. If there is a change in the real exchange rate, the nominal exchange rate is less affected as compared to the real exchange rate. There are factors that can affect exchange rate and they are: inflation rate, interest rate, balance of payments, political stability, internal harmony and these factors can lead to  either increase or decrease in exchange rate.

There are different types of exchange rate regimes practiced all over the world; from the extreme case of fixed exchange rate system to a freely floating regime, and managed floating, whichever that  suits their peculiar economic conditions. For instance, exchange rate managements in Nigeria have witnessed different significant changes over the years. Nigeria maintained fixed exchange rate from 1960 till the breakdown of the Bretton Woods Monetary System in the early 1970s. Between 1970 and 1986, Nigeria practiced a fixed exchange rate when the Naira was pegged against the British Pounds and later on the American Dollar. Nigeria exchange rate policy shifted from fixed exchange rate to flexible exchange rate to the various types of the floating regime since 1986 following the adoption of the Structural Adjustment Programme (SAP) (Sanusi, 2004). This floating was determined by the market forces of demand and supply. Since then, the naira rate of exchange against the dollar has experienced significant fluctuations such that naira/ dollar rate of exchange moved from 0.6091, 0.6369, 3.3166, 9.001, 84.5, 92.52, in 1980, 1981, 1986, 1990, 1995, and 1999 respectively to 132.6, 147.6 and 156.35 in 2004, 2009, and 2013 respectively. In the 1970’s and 1980’s, the naira appreciated against the dollar but in the recent time, naira lost its value up to the extent that a dollar was 500naira. Some of the policies employed by the government to stabilize the exchange rate include: Second Tier Foreign Exchange Market (SFEM), Autonomous Foreign Exchange Market (AFEM), inter-bank foreign exchange market (IFEM), the Dutch auction market (DAS). The policies were unable to provide a solution to exchange rate stability. The naira continued to depreciate against the American dollar. Some economists have attributed the recent depreciation to the decline in the nation’s foreign exchange reserve, over dependency on importation, heavy debt burden, weak balance of payments position and the market activities of speculators and banks and capital flight. 

Exchange rate has maintained consistent fluctuations in Nigeria over the years and these changes are accountable to some macroeconomic variables. It becomes pertinent to estimate the various factors that influence and determine exchange rate in Nigeria. In the light of these, this study is aimed at carrying out an empirical analysis of the determinants of exchange rate in Nigeria covering the period 1980-2016.

  • Statement of the problem

Foreign exchange is said to be an important element in the economic growth and development of a nation because foreign exchange policies influence the economic activities and to a large extent, dictate the direction of the macroeconomic variables in the country. The mechanism of exchange rate determination are different systems of managing the exchange rate of a nation’s currency in terms of other currencies and this should be properly done in a way that will bring about  efficient allocation of scarce resources so as to achieve growth and development. Jhingan (2005) suggested that to maintain both internal and external balance, a country must control its exchange rate.

Over the years, exchange rate fluctuations and volatility in Nigeria has been a major macroeconomic issue and this has resulted to the introduction of many macroeconomic policies to reduce the damage caused by exchange rate fluctuations in the economy. A major and significant issue is to capture to major macroeconomic variables that influence the variations and changes in exchange rate as this will go a long way in controlling the changes. Some of the policies employed by the government to stabilize the exchange rate include: Second Tier Foreign Exchange Market (SFEM), Autonomous Foreign Exchange Market (AFEM), inter-bank foreign exchange market (IFEM), the Dutch auction market (DAS). The policies were unable to provide a solution to exchange rate stability. It was in this light that this study is motivated to evaluate the determinants of exchange rate in Nigeria covering the period 1980-2016.

  •  Objectives of the study

 The main objective of this study is to ascertainthe determinants of exchange rate in Nigeria covering the period 1980-2016. In line with this general objective, the following specific objectives will be pursued:

  1. To ascertain if interest rate is a major determinant of exchange rate in Nigeria.
  2. To find out if inflation is a major determinant of exchange rate in Nigeria.
  3. To ascertain if balance of payment is a major determinant of exchange rate in Nigeria.
  4. To ascertain ifReal Gross Domestic Product (GDP) is a major determinant of exchange rate in Nigeria.

1.4   Research Questions 

The following research questions will guide this study:

  1. To what extent has interest rate determined exchange rate in Nigeria?
  2. To what extent has inflation determined exchange rate in Nigeria?
  3. To what extent has balance of payment determined exchange rate in Nigeria?
  4. To what extent has real gross domestic product determined exchange rate in Nigeria?

 1.5 Statement of Hypotheses

The following hypotheses will be tested in the course of the study.

H01: interest rate is not a major determinant of exchange rate in Nigeria.

 H02: inflation is not a major determinant of exchange rate in Nigeria.

H03: balance of payment is not a determinant of exchange rate in Nigeria.

H04: Real Gross Domestic Product is not a major determinant of exchange rate in Nigeria.

1.6 Significance of the Study  

This research work shall be beneficial to future economic researchers for this shall be a very good reference material to source information on, it will equally benefit the government in making informed decision on the issues relating to exchange rate for policy prescriptions and intervention.As exchange rate is a pure financial variable, the banking sector will find this research relevant given that it will provide clear information on exchange rate.

1.7 scope of the study

 The focus of this study is to estimate the major determinants of exchange rate in Nigeria. Some of the proposed determinants of exchange rate in Nigeria for the study are interest rate, inflation rate, balance of payments and Real Gross Domestic Product (RGDP) covering the period 1980-2016.

1.8 Limitations of the study

The challenges the researcher faced in the process of this research work include:

Time constraint: it was difficult for the researcher to combine her lectures, exams and the research work.  Furthermore, trying to gather material for this study was not an easy task as emphasis was placed on where to source the right material for the work as different textbooks and journals were consulted.

Financial constraint: the researcher found it very difficult to raised fund for her research work.

1.9 Definitions of terms

Gross domestic product: this is the monetary value of all the finished goods and services produced in a country’s borders in a specified period usually one year.

Inflation: this can be defined as the persistent and sustained increase in the general price level of goods and services in an economy over a period of time.

Balance of payment: this is the record of all economic transactions between the residents of the country and of the world in a particular period usually one year.

EXCHANGE RATE DETERMINATION AND THE NIGERIAN ECONOMY

IMPACT OF AGRICULTURAL FINANCING ON THE AGRICULTURAL OUTPUT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study.

Agricultural financing is a financial service ranging from short, medium and long- term loans, towards production and livestock insurance which covers the entire agricultural chain. Agriculture  which can be defined as the activity of man for the production of food, clothing and the optimum use of terrestrial resource.

Agriculture been stated as the back bone of Nigerian economy and the most important human economic activity. However, agriculture is originated from a Latin word ‘Ager’ means “field”, soil and ‘Cultura’ means “cultivation” which deals with the science, art or practising the cultivation of the soil, production of crops and raising live stocks and management of its products.

The importance of agriculture in increasing the food supply for Nigeria’s teeming populations, providing adequate raw materials for agro–based industries, employment, capital and foreign exchange for economic development calls for banks and public sector’s partnership in agricultural financing for increased output.

Nigeria’s quest for food security and self sufficiency will remain unrealisable if the country’s agriculture continues to rely on peasant farmers for agricultural financing. This is why successive Governments and banks in Nigeria have adopted various policies, programmes and actions to increase the flow of financial resources to the agricultural sector, in order to increase that sector’s output for self sufficiency. Self sufficiency in food production has engaged the attention of successive governments in Nigeria since the independence in 1960. This is because no country can claim to be either economically or politically sovereign if it cannot feed its people. However, judging by the growth rate of the agricultural products, the sector cannot be said to have performed optimally.

To achieve the objective of this research, the appropriate agricultural finance policy and strategy must be adopted by the country and measures to intensify the role of financial institutions in accelerating the development of Nigeria’s agricultural needs to be given urgent attention especially in this era of global food crisis. Towards this end, the paper in section two discusses the literature review. Section three and four contain the methodology, results and discussion of findings while Section five is the conclusion and recommendations. In order for Nigeria to successfully diversity its economy and avoid the consequence of depending just on petrol, new innovation should be introduced to boost the agricultural sector as following steps;

Agricultural output in Nigeria can be influenced amongst other factors by Government policy framework in such areas as Central Bank of Nigeria, Bank Credits Guild Lines and Budgets Allocations; and it’s financing remains the mainstay of the economy since it is largest sector in term of its share in employment.

As the watchdog of the economy; Nigeria is placing much emphasis on financing other sectors most especially agricultural sector since agriculture has the potentials to stimulate economic growth through provision of raw material, food, jobs and increased financial stability (Obansa and Maduekwe 2012).

It follows that financing agriculture is one of the most important instrument of economic policy for Nigerian, In her efforts to stimulate development in all directions, finance is required by agricultural sector to purchase land, construct building, acquire machinery and equipment, hire labor, irrigation etc. In certain cases, such loans are needed to purchase new appropriator technologies. Adegeye and Dittohs (1985) gets it insights as the economic study of acquisition and use of capital in agriculture to help in its output in Nigeria.

In recent years, Nigeria has been a land with agriculture, yet the sector still accounts for a significant proportion of her gross domestic products. Agriculture is the leading sector in accounting about 63 and 54 percent to GDP especially in the 50s and 60s respectively (Aigbokhah, 2001). The sectors share in gross domestic product though fell in the post oil boom period, maintained yet persistent increase. For instance, between 1970 and 1980 the share of agriculture in real gross domestic product (RGDP)in Nigeria arranged 29.2%, it was 33.3% between 2001 and 2009;

World (2007) opines that in Nigeria Agriculture is estimated to be largest contributor to non-oil foreign exchange earnings. This means that it holds the abundant potential enhancing and sustaining the country’s foreign exchange. (Food and Agricultural Organization (2006) observed that agriculture contributes immensely to the Nigeria economy in various ways: provision of food for the increasing population, supply of adequate raw material sector, a major source of employment, generation of foreign exchange earnings and provision of a market for the productivity supports. The possible way forward among others, include the provision of finance. Farmers need access to cheap finance and not to be forced to borrow at sky-high interest rate from local money lenders: it can achieve by salting up moral bank – Specializing in the provision of finance to small farmers. Various measures have been adopted in insurance of these objectives in recent years. These include conveyance of credit to agricultural sectors at its interest rate, establishment of agricultural financial institutions and introducing finding schemes.

Also in the recent time in country, following the Central Bank of Nigeria C.B.N (2010) animal growth rate of agriculture dropped from 55.2% in 2002 to 7.4% in 2006, which however, this research will focus on using variable like commercial bank loan to agriculture and loan guarantee to agricultural finance have impacted of agricultural output in Nigeria and its welfare.

1.2 Statement of the Problems

It is obvious that no aspect of the economy will do well without proper financial intermediation from the financial system of the agricultural output. However, the problems that give rise to this study are lack of loan to agricultural sector by commercial bank in Nigeria etc. There is high interest rate on agricultural Loan in Nigeria and the problem of low performance of the agricultural credit guarantee scheme fund which has lefty aims especially the need to make agricultural sector lucrative but it has not lift up his bidding, this calls to empirical assessment with a view to understanding the resultant effects from the huge investment from the government into this sectors. The vast employment opportunity and the quest towards diversification of the revenue sources by the federal government and development agencies have shifted attention towards the informal and agricultural sectors. For instance, example to sustain this agricultural production in Nigeria, the World Bank developed a project allied agricultural development project (ADPS) which was designed to enhance the production of agricultural productivity in Nigeria.

1.3 Research Questions

1.        What is the impact of agricultural credit guarantee scheme funds on agricultural output in Nigeria?

2.        What is the impact of government expenditure on agricultural output in Nigeria?

3.        What is impact of commercial bank credit to agricultural output in Nigeria?

1.4 Research Objectives

The major objectives of this work are to determine the impact of agricultural financing on agricultural output in Nigeria.

1.        To evaluate the impact of agricultural credit guarantee scheme funds on agricultural output in Nigeria

2.        To ascertain the impact of government expenditure on agricultural output in Nigeria.

3.        To determine the impact of commercial bank credit to agricultural output in Nigeria.

1.5 Research Hypothesis

The following hypotheses were formulated after the order of the research objectives to include:

H0.      Agricultural credit guarantee scheme funds have no significant effect Agricultural output in  Nigeria.

1. Government expenditures have no significant effect on agricultural output Nigeria.

2.        Commercial bank credit has no significant effect on the agricultural output in Nigeria.

1.6 Significant of the Study

This study is significant in the sense that it will reveal how agricultural financing can contribute to the growth of agricultural products. if proper attention is given to agricultural output through the financing system it will guide policy makers such as government and private sectors in making polices that will help the agricultural endeavors. This study will be useful to the student of economics, banking and Farmer etc. As it will aid in them for research.

1.7 Scopes of the study

This study is aimed at accessing the impact of agricultural financing to agricultural output in Nigeria, ranking from 1980 to 2015, which captures the extent to which agricultural have improved on agricultural output; through stimulating economic growth. Through our findings it stated that agricultural output will always fluctuate and is not constant, which will always increase at a certain year and also decrease at a certain year.

IMPACT OF AGRICULTURAL FINANCING ON THE AGRICULTURAL OUTPUT IN NIGERIA

IMPACT OF ELECTRICITY POWER SUPPLY ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISE SME IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Access to a reliable electricity supply is widely considered to be vital to the operations of most small and medium-scale businesses (World Bank Enterprise Surveys, 2013). The analysis of Enterprise Survey data according to Foster and Steinbuks (2008), in middle and lower income countries, firms themselves consider access to electricity to be one of the biggest constraints to their business.

Inadequate electricity services can constrain business operations because a supply of electricity may simply be unavailable and, if it is available, securing a connection may be difficult and the supply unreliable, even before its cost is considered. High quality and accessible infrastructure encourages productivity, business growth and investment, but when it is poor and unreliable, businesses’ productivity and growth suffer.

An unreliable electricity supply can affect several aspects of business operations. The most significant impacts to productivity can be due to forced and unexpected halts in manufacturing processes, including running assembly lines, using machine tools, or producing textiles. Communications, delivery times, lighting and refrigeration are also affected by electricity insecurity, with consequences for the routine operation of businesses and their ability to ensure delivery times (Adenikinju, 2005).

Many small and medium-scale enterprises invest in their own stand-by generators to ensure an electricity supply, but these are often expensive compared to electricity from the grid. Generators also require some technical expertise as well as reliable supplies of fuel and spare parts. Yet, in sub-Saharan Africa and elsewhere own-generation by firms is reported to have increased in recent years.

Empirical studies have shown that the small and medium scale industries (SMEs) have in many state enhanced greater employment opportunities per unit of capital invested and aided the development of local technology. This explains the deep interest which developing nation has shown in the promotion of small and medium scale industries since the 1970s (Moyo, 2012).

1.2 Statement of Research Problem

There are various factors affecting the performance of small and medium scale enterprise sub sector ranging from inadequate capital to unfavourable tariff policy, however, the poor state of power supply in Nigeria is one of the significant factors militating against the performance of small and medium scale enterprise.

Despite series of investments made by past government over the years on the power sector to improve the poor state power situation in the country, the entire nation still suffers power shortage and black out (Godwin, 2015). The privatization of the power sector was meant to improve the power insecurity of the country but the national power grid has been on the decline from about 4000 megawatts in 1999 to 1300 megawatts in 2014 (Amadi, 2010).

The equity and quality of a country’s electricity power supply determines its ability to create competitive industries. Since the performance of SMEs In any state is greatly influenced by the electricity supply. Given the pathetic state of electricity power supply in Nigeria it is no wonder that the contribution of the development the state, manufacturing sector and the economy general is very negligible or unsupported by the government.

Power supply has remained unreliable and power out-ages load shedding and rationing has become very frequent. Power supply has been erratic and unreliable that many businesses have resorted to purchasing private generator at a very high cost. The substantial investment in private generating plants is estimated to be of capacity of over 250mm, which is almost half of power holding company of Nigeria (PHCN) available capacity.

1.3 Research Questions

The study would therefore provide answers to the following fundamental questions.

  1. What is the impact of electricity power supply on the productivity of SMEs in Nigeria?
  2. How does commercial Bank credit impact the productivity of SMEs?

1.4 Objective of the Study

The objectives of this research study are to provide a clear picture on the activities of effects of power on the performance of small and medium scale industries. The specific objectives of the study are:

  1. To examine the impact of Electricity power supply on the performance of SMEs in Nigeria.
  2. To examine the impact of commercial Bank credit on the performance of SMEs in Nigeria

1.5 Hypotheses

1.         H0:  Electricity Power Supply does not have any significant impact on the productivity of SMEs in Nigeria.

H1:  Electricity Power Supply has significant impact on the productivity of SMEs in Nigeria.

2.         H0        Commercial Bank credit does not have any significant impact on the productivity of SMEs in Nigeria

H1          Commercial Bank credit does significant impact on impact of SMEs in Nigeria     

1.6   Significance of the Study

The outcome of this study will assist government parastatals and it agencies like the Ministry of power, who are the policy makers and regulatory bodies  and also the electricity distribution company scattered across the country for decision and policy making as regards improving the state of small and medium scale enterprise.

This study will create awareness to the government to see the extent to which neglect of infrastructural facilities such as electricity is hampering the performance of SMEs in meeting the potentials of providing employment per unit investment capital, facilitating   the   development   of   indigenous entrepreneurships,  enhancing  local  resources  utilization  and  value added,  expanding  non-oil  exports  at  competitive  prices,  improving balance of payment position and bring about overall growth and development of the state economy.

It will add to the available literature on the areas of study while also providing the platform for other researchers to further this study.

1.7 Scope of the Study

The research work is concerned basically with the roles to lay emphasis on power supply and the performance of small and medium scale enterprise in the state and will cover those SMEs in state that have electricity as relevant infrastructure for their production process. The analysis covers the period of 1980-2014.

1.8 Definition of Terms

–           Electricity Power Supply

–           Small and Medium Scale Enterprises (SMEs)

–           Productivity or Performance of SMEs

–           Commercial Bank Credit to SMEs

1.9 Electricity Supply

According to Energy Networks Association ‘ENA’ (2008), Customer Guide to Electricity Supply (2008),the physical process of electricity supply is divided into three broad stages; generation, transmission, and distribution. Power generation, transmission and distribution involve flow of currents with heat losses in conductors. These losses can be reduced through better design, construction and maintenance. In addition to the physical aspects, there is a commercial overlay involving the trading of electricity between generators and retailers or, in some circumstances, generators and large electricity users.

SMEs:  These are non subsidiary independent firms which employs fewer than a given number of employees of not less than 10 employees and not more than 250. Commercial Bank credit to SMEs in the case of SMEs, bank credit or loan is the major alternative of external funding (James & Ashamu 2014) the findings shows that Bank Credit to SMEs have significant effect of Nigeria economic growth.

Performance of SMEs:  SMEs all over the world have seen playing a crucial role in promoting economic development as well as industrial production in a developing economy such as Nigerian.  SMEs are considered as a living force for a sustainable economic development because of generating employment improving local technology output diversification developing indigenous entrepreneurship and forward integration with large scale industries. (A.O. Adaramola)

IMPACT OF ELECTRICITY POWER SUPPLY ON THE PERFORMANCE OF SMALL AND MEDIUM SCALE ENTERPRISE SME IN NIGERIA

IMPACT OF PUBLIC SPENDING ON POVERTY IN NIGERIA

CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study

Nigeria, popularly referred to as the giant of Africa because of her endowments and riches in both human and natural resources, and also her affiliation with many powerful economies of the world, is still faced with one of the most challenging global problems –poverty.

Nigeria is still classified as economically retarded in terms of general social welfare. Over the years, it is evident that Nigeria has experienced some level of economic growth, but as a result of mismanagement of resources amongst other ills, poverty continues to thrive in the economy.

Over the years, public spending has been allocated into different sectors of the economy. Thus this has led to an increase in total budgetary allocation per annum. Despite this, there has minimal positive impact on poverty and inequality in the country; hence the galloping widening of the gap between the rich and poor which stifles the quest of the poor towards self-actualization and improved living standards (since a vast majority of them have very little funds).

According to French Economist, Esther Duflo, poverty can be controlled or even eradicated with the right policies. “All it takes is for politicians to translate research into action” implementing programs that have been shown to work.

According to Amartya Sen (1981), poverty analysis should focus on individuals’ potential to function rather than the results the individuals obtain from function. Hence government’s spending towards human capital development is one of the paths towards poverty reduction.

British Economist Keynes asserts that public spending should be increased when private spending and investment are insufficient. He explains that current spending which is expenditure on wages and raw materials and capital spending which involves physical assets likes roads, bridges, hospitals buildings and equipment go a long way toward bettering the society.

Public spending as a “tool” for suppressing poverty in Nigeria has been a very challenging issue majorly because of several political and societal vices inherent in the society. Vices like: misallocation of resources, embezzlement of funds, with corruption as the bedrock of all. This has been the key driver and propagator of poverty in Nigeria.

Government or public spending through subsidies and the likes, is primarily aimed at stimulating economic growth through harnessing and empowering members of the society regardless of the existing notion – corruption. Government or public spending is imperative to mitigating poverty in Nigeria.

1.2 Statement of the Problem

Government Expenditure is a major component of national income. This means it is very crucial to ascertaining economic growth and development in a nation. Government expenditure or public spending is important tools geared at helping members of society attain some substantial level of stability (social welfare). For example, public spending through agricultural subsidies help encourage commercial farming. In spite of this, a vast majority of people doubt the impact of public spending due to the political ills, since the poverty rates has not reduced significantly.

Despite the discrepancies, public spending still remains a very promising tool towards reducing the rate of poverty in Nigeria. Consequently, this study seeks to ascertain the impact of public spending on poverty in Nigeria.

1.3 Objective of the Study

The objective of this study is to ascertain the impact of public spending on poverty in Nigeria from 1981-2015

The specific objectives are:

  • To determine the relationship between public spending and poverty in Nigeria
  • To ascertain the impact of public spending on poverty in Nigeria
1.4 Research Questions

Based on the objective of this study, the study intends to ask the following questions:

  • What is the relationship between public spending and the poverty in Nigeria?
  • What is the impact of public spending on poverty in Nigeria?
1.5 Research Hypothesis

The researcher has formulated these hypotheses as a guide to this study.

H01: There is no significant relationship between public spending and poverty in Nigeria

H02: Public spending has no significant impact on poverty in Nigeria

1.6 Significance of the Study

Results of this study will be beneficial to individuals, firms, industries, researchers, the government and its parastatals; and also international organizations. Members of the society will have a better view and understanding of the role of public spending and its relation to poverty. Government will also be exposed to the flaws hindering poverty rate reduction and procure better policies with good implementation.

1.7 Scope of the Study         

This research seeks to evaluate the impact of public spending on poverty in Nigeria. The scope of this study will cover the periods of 1981-2015.

 1.8 Limitation of the study                            

In this research, some of the factors which affected the researcher were: time, finance, collection of data and gathering of relevant materials. The data collected is Secondary data sourced from the National Bureau of Statistics, Nigeria; The Central Bank of Nigeria.

1.9 Definition of Terms
  • Poverty: is a state or condition in which an individual or society lacks the financial resources and necessities to enjoy a minimum living standard and well-being that is generally accepted in society.
  • Absolute poverty: a condition characterized by severe deprivation of basic human needs including food, water, sanitation, shelter, clothing, health, education.
  • Relative poverty: a standard which is measured in terms of the society in which an individual lives and which therefore differs between countries and overtime.
  • Poverty line: the minimum level of income deemed adequate in a particular country.
  • Poverty trap:  a state where poverty tends to persist due to self-reinforcing mechanism.
  • Public spending: refers to the money or funds spent by the government on public services and other state controlled operations, projects and investments
  • Budget: is an estimation of revenue and expenses over a specific future period of time which is compiledand re-evaluated on a periodic basis.
  • Economic growth: is an increase in the output that an economy produces over a period of time, the minimum being two consecutive quarters.
  • Economic development: can be defined as efforts that seek to improve the economic wellbeing and quality of life for a community by creating or retaining jobs and supporting or giving incomes and the tax base.
IMPACT OF PUBLIC SPENDING ON POVERTY IN NIGERIA

RE-EVALUATION OF THE IMPACT OF MONETARY POLICY ON AGRICULTURAL OUTPUT IN NIGERIA

CHAPTER ONE

INTRODUCTION

  • Background of the Study

Monetary policy includes a number of policies by which a country controls its money stock so as to achieve macroeconomic goals. Monetary policy refers to the combination of measures designed to regulate the value, supply and cost of money in an economy. It can be described as the art of controlling the direction and movement of credit facilities in pursuance of stable price and economy growth in an economy (CBN, 1992). Monetary policy in the Nigerian context refers to the actions of the Central Bank of Nigeria to regulate the money supply which could be through discretional monetary policy instruments such as the open market operation (OMO), discount rate, reserve requirement, moral suasion, direct control of banking system credit, and direct regulation of interest rate (Iyoha, 2002). Agricultural financing also plays a fundamental role in determining access to the needed inputs that facilitates farming and other extensive agricultural practices which ultimately transforms into increased output while increased agricultural output establishes a forward linkage in terms of development to other sectors as well as higher income and better quality of life for the rural poor, (Hazell, 2005).

There exist relationship between monetary policy and other macro-economic variable, the objectives of monetary policy include price stability, full employment and economic growth, targets of monetary policy refer to the variables such as supply of money or bank credit, interest rates which are sought to be changed through the monetary policy instruments such as open market operation and selective credit control etc, so as to attain the laid out objectives (Ahuja, 2013).

Monetary policy thus becomes an indispensable and inevitable variable in any economy that it cuts across every sector, agricultural sector inclusive. The agricultural sector is seen as one of the major sectors in the economy and a key determinant of long run economic development in Nigeria with the sector contributing to development of  an economy through production of goods, foreign exchange and exports. Prior to oil discovery in Nigeria, agriculture was the mainstay of the nation. However, with oil discovery and the oil boom of the 1970s, the sector suffered neglect with the sector’s contribution to GDP declining to 35% in 2014 from 65.7% in 1957 leading to food insecurity and increased level of poverty in the country with the poverty level standing at 33.1% in 2013 (NBS, 2014).

Due to the failing agricultural sector, the Nigerian government became directly involved in boosting the agricultural sector, with several large scale agricultural projects and programmes launched and established while concessionary interest rate structure was employed with direct cheap credit to agricultural sector. Despite these efforts of government in boosting the performance of the sector, the sector is still not witnessing significant development.

 Monetary policy facilitates the establishment of agricultural businesses through availability of credit and finance for start-up, investments, and expansion. The CBN controls the availability of credit through monetary policy instruments. These instruments affect agricultural output through agricultural banks and other financial institutions. Therefore, it is imperative in this study to re-evaluate the concept of monetary policy and agricultural output.

  • Statement Of The Problem

The fundamental problem of any government is it economic or otherwise its implementation. A number of government monetary policy instruments have been designed and applied in Nigeria in the hope of achieving the desired result of stable price level, low level of unemployment, efficient banking system etc.

The agricultural sector in Nigeria today has been characterized by low productivity. Recognizing this, the Nigerian government introduced series of macroeconomic programmes and policies (both monetary and fiscal policy) aimed at improving the sector performance. However, the share of agriculture contribution to GDP declined from 42.20% in 2007 to 40% in 2010 and to a more worsening rate of 35% in 2013 (CBN 2013).

Low agricultural output has a negative effect on the economy as a whole; there is a low production of goods for food and raw materials for industries. A major challenge facing Nigeria is the inability to capture the financial services requirements of farmers and agribusiness owners who constitute about 70 percent of the population. Farmers need access to capital to purchase land and equipment and to invest in the development of new products, services, production technologies and marketing strategies. Yet banks are often reluctant to lend money to farmers for agricultural enterprises due to the lack of creditability and collateral.

Therefore there is need for a research in order to effect necessary changes because activities of the monetary authorities through monetary policy affect the financial institutions and credit availability to the agricultural sector in no small measure this will further affect agricultural output positively.

  1. Research question

1. To what extent has monetary policy impacted on agricultural output in Nigeria?

2. What is the nature of the relationship between monetary policy and the agricultural output in Nigeria?

  1. Objectives of Study

The general objective is to empirical re-evaluate the impact of monetary policy on agricultural output in Nigeria for the period of 1980-2015. . Under this general objective, the specific objectives this study covers are;

1.  To find out if there is a long-run relationship between monetary policy and agricultural output.

2.To determine the impact of monetary policy on agricultural output.               

1.5 The statement of hypothesis

HAo:  monetary policy has no significant impact on agricultural output.

HA1: monetary policy has significant impact on agricultural output.

HBo: there is no long-run relationship between monetary policy and agricultural output.

HB1there is a long-run relationship between monetary policy and agricultural output.

1.6             Significance of Study

This research work is being carried out to empirical re-evaluate the overall impact of monetary policy on agricultural output. The findings of this work will be of immense use and benefit to government Ministries like Ministry of agriculture and Monetary Authorities (Central Bank of Nigeria), Department and Agencies at federal level in solving some macro-economic problems, state and local, policy makers and intellectual researchers who may be willing to improve the work subsequently. Lastly, it will educate the public on various government policies as related to monetary and agricultural issues.

1.7             Scope of Study

This research seeks to re-evaluate the impact of monetary policy on agricultural output in Nigeria. The study shall be carried out using secondary time series data, for a span of 36 years that is from 1980 to 2015 which is sufficient and suitable for conducting a research, making new findings and relevant recommendations.

RE-EVALUATION OF THE IMPACT OF MONETARY POLICY ON AGRICULTURAL OUTPUT IN NIGERIA