This study,THE CENTRAL BANK OF NIGERIA (CBN) AS A CATALYST TO NATIONAL ECONOMIC POLICY AND DEVELOPMENT (1986 – 2011) contains concise information that will serve as a framework or guide for your project work. The project study is well-researched for academic purposes and are usually provided in complete chapters with adequate References.
1.1 BACKGROUND OF THE STUDY
The role of the central bank in promoting national economic policy and development has in recent years become a topical international economic policy issue. Although the empirical evidence on the relationship between central bank operations and macroeconomic stability proxied by price stability is not conclusive (Folawewo and Osinubi, 2006), the prevailing wisdom supports the need to accord a central bank a reasonable degree of autonomy that will give it substantial discretion to conduct its monetary policy in a manner that will help achieve its assumed central mandate of maintaining domestic price stability, defined as a regime of relatively low inflation rate and an environment free of inflation expectations.
While monetary policy’s aim at long-run price stability is critical to fostering sustainable economic growth, central banks’ role in promoting growth and, more generally, a healthy economy goes beyond the conduct of monetary policy (Sanusi 2002). Through involvement in financial regulation and supervision, as well as in the oversight of payments system operations, central banks play a key role in preserving and enhancing the safety and soundness of the banking and financial system (Alicia and Rio 2003)
The Central Bank of Nigeria (CBN), like most central banks in the developing economies, undertakes some non-traditional central bank functions such as promotion of economic development, especially during the formative years in the 1960s and 1970s. The contribution of the CBN in this regard, was focused on the creation of the financial environment and institutional framework conducive to the mobilization and channeling of financial resources into productive investment. Thus, during the first decade of its establishment, the Bank concentrated on the task of promoting and transformation of the rudimentary financial structure of the economy. These included the issuance of money and capital market securities such as the Nigerian Treasury Bills and Federal Government Development Stocks. Moreover, it provided technical assistance to other relevant institutions, and start-up capital for the development of money and capital market institutions. The CBN initiative to encourage long-term bank lending to the economy included the establishment of various refinance and guarantee schemes, focused on the priority sectors of the economy. Two of such schemes are the Agricultural Credit Guarantee Scheme Fund (ACGSF), and Export Refinance Scheme.
1.2 STATEMENT OF THE PROBLEM
Given the number of years since the Central Bank of Nigeria was established and the substantial financial resources and endowment available in the country, coupled with the existing institutions one will expect that the monetary sector and the economy at large would have been well-established. But one can claim that the entire spectrum of the economy has not been sufficiently active especially when compared with the economy of other developing countries.
Some of the problems that are identified for this include: Political problems in the country, poor implementation of past policies, insufficiency of database, ethical problem.
The main thrust of this study shall be to critically appraisal the performance of the Central Bank of Nigeria (CBN) with a view to suggesting ways to improve its effectiveness and adapt to changes in the economic environment.
1.3 OBJECTIVES OF THE STUDY
The main objectives of the study are as follows:
1. To examine the practice of Central banking in Nigeria;
2. To examine the role and function of the Central Bank of Nigeria;
3. To critically evaluate the performance of the Central Bank of Nigeria in terms of macroeconomic developments;
4. To make suggestions as to how the operations of the Central Bank could be improved.
1.4 Research Questions
1.5 STATEMENT OF HYPOTHESES
The hypotheses to be tested in the course of this research work are:
H0 – That the Central bank’s operations do not affects economic growth in Nigeria.
H1 – That the Central bank’s operations affect economic growth in Nigeria.
H0 – That the Central bank’s operations do not impact on inflation in Nigeria.
H1 – That the Central bank’s operations impact on inflation in Nigeria.
1.6 SIGNIFICANCE OF THE STUDY
This study is significance because it would provide an objective view of the performance of Central Bank of Nigeria in terms of macroeconomic developments.
Besides, it would provide policy recommendations to policy-makers on ways to make the Central Bank more effective.
1.7 SCOPE OF THE STUDY
The financial system is a large component with lot of diverse and sometimes complex parts; this research work will only look at a particular part of the financial sector i.e the Central bank. This work will cover all the facets that make up the operations of the Central bank, with emphasis on the Bank’s impact on selected macroeconomic parameter. The empirical investigation shall be restricted between 1986 to 2011 with special focus on major Central bank’s monetary instruments i.e cash ratio, liquidity ratio and money supply.
DEFINITION OF TERMS
In order to make this work a bit clear certain terms will be defined
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