THE EFFECTIVENESS OF MONETARY POLICY AS A TOOL FOR CONTROLING INFLATION IN NIGERIA (1980-2004)

ABSTRACT

This study is designed to empirically analyze the effectiveness of monetary policy as a tool for controlling inflation in Nigeria.

To investigate on this, hypothesis were formulated as follows:

        Ho: Monetary policy measures adopted over the years have no significant impact in inflation control in Nigeria.

        Hi: monetary policy measures adopted over the years have significant impact on inflation control in Nigeria.

        The researcher adopted the method of linear regression, the ordinary least square (OLS) technique in analyzing the secondary data of inflation rate and money supply (1980-2004). The researcher were further subjected to t-ratio and f-tests, the result of which confirmed.

I.            Monetary policy measures adopted by the monetary authorities between 1980 and 2004 were not effective and had no significant impact in controlling inflation.

2. Quick monetary remedies for inflation control do not 

     exist.

Based on the above findings, the following are the policy recommended:

        The elimination of inflation requires the eradication of inflationary expectation.

        Government should concentrate more on productive investment, which will reduce inflationary pressure in Nigeria.

        The monetary authorities should maintain vigilance in its efforts to keep inflation in check by adhering to effective monetary and fiscal policies.

        Government should monitor the implementation of monetary policies to ensure its success.

        It is believed that if the monetary authorities  follows the above recommendation, effective will be achieved.

TABLE OF CONTENTS

TITTLE PAGE                                                           i

APPROVAL PAGE                                                     ii

DEDICATION                                                           iii

ACKNOWLEDGEMENT                                            iv

ABSTRACT                                                               v

TABLE OF CONTENTS                                               vi

CHAPTER ONE

1.0      INTRODUCTION

1.1   BACKGROUND OF THE STUDY

1.2   STATEMENT OF THE PROPLEM

1.3   OBJECTIVES OF THE STUDY

1.4   HYPOTHESIS OF THE STUDY

1.5   SIGNIFICANT OF THE STUDY

1.6   SCOPE OF THE STUDY

1.7   DEFINITION OF TERMS

        CHAPTER TWO

2.0      LITERATURE REVIEW

2.1   THE MEANING OF MONETARY POLICY

        EVOLUTION AND APPLICATION OF MONETARY POLICY  

         INSTRUMENTS IN NIGERIA

2.2    EMPIRICAL LITERATURE

2.2.1 OBJECTIVE OF MONETARY POLICY IN NIGERIA

2.2.2  RECENT DEVELOPMENT OF THE NIGERIA MONETARY

          POLICY

2.2.3  PRE-STRUCTURAL ADJUSTMENT PROGRAMME (SAP)

          MONETARY POLICIES IN NIGERIA

2.2.4  POST-SAP MONETARY POLICIES IN NIGERIA

2.2.5 THE IMPACTS OF NIGERIA’S MONETARY POLICIES IN

         THE INFLATION CONTROL     

2.3    ECONOMIC IMPLICATION / CONSEQUENCES OF       

            MONETARY POLICY.

   CHAPTER THREE

 3.0  METHODOLOGY

3.1   THEORITCAL FRAMEWORK

3.2   MODEL SPECIFICATION

3.3      METHOD OF EVALUATION

3.4      DATA REQUIREMENT AND SOUCE

CHAPTER FOUR

4.0   DATA PRESENTATION AND ANALYSIS

4.1   EMPERICAL RESULTS

4.2   STATISTICAL TEST OF SIGNIFICANCE

4.3  EVALUATION OF THE WORKING HYPOTHESIS

4.4   IMPLICATION OF THE RESULT

CHAPTER FIVE

5.O  SUMMARY OF FINDING, CONCLUSION AND

        RECOMANDATION       

5.1   SUMMARY OF FINDING

5.2   CONCLUSION

5.3   RECOMMENDATIONS

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