THE ROLE OF CENTRAL BANK IN ESTABLISHING NIGERIA ECONOMY  (A CRITICAL REVIEW)

ABSTRACT

          Central banks are general known to be concerned with the maintenance of monetary stability.  This task involves the regulation of money in circulation consistent with the absorphic capacity of the economy axiomatically, excessive growth in money supply rates to high rates of spending on domestic or foreign goods given that domestic supply of goods and services in essentially in elastic in the short run, excess liquidity is likely to result in substantial inflationary is likely to result in substantial inflationary pressures in the economy.  To the extent that spending pressures are directed towards foreign goods or (assets0 balance of payment pressures will ensure.  Thus, the task of monetary authorities is to ensure that the growth in the domestic  liquidity is consistent with the  objectives of out-put growth, inflation and the balance of payments.  This at any given time the CBN would ensure that supply of money is sufficiently optimal to sustain non-inflationary out-put rate and exchange rate stability.

          One of the strategies of achieving this objectives is through the adoption of the liquidity management policies / techniques which afford the CBN,  the use of monetary policy instrument to influence bank reserve and consequently the growth in money supply.  The ability of the central bank to effectively control domestic liquidity depends interaction the level of the economic development particularly the state of its financial system the number and types of policy instruments available to the central banks and degree of harmonization between monetary and fiscal policies

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Abstract

Table of contents

CHAPTER ONE

1.1            Introduction

1.2            Objective of the study

1.3            Research questions

1.4            Statement of hypothesis

1.5            Statement of problem

1.6            Significance of study

1.7            Scope and limitations of the study

1.8            Definition of terms

CHAPTER TWO

REVIEW OF RELATED LITERATURE

1.0            Introduction

1.1            Meaning of central bank

1.2            The central bank Vs commercial banks

1.3            The relation of CBN with other banks

1.4            Central bank of Nigeria and its objectives and functions

1.5            Monetary policy, meaning, objectives and instruments

1.6            Fiscal policy, meaning, objectives and instruments used.

1.7            Stabilization policies, objectives and conflicts,

1.8            The role of CBN in stabilizing Nigeria economy

1.9            Problem faced by CBN ins stabilizing Nigeria economy

CHAPTER THREE

RESEARCH DESIGNS AND METHODOLOGY

3.0            Introduction

3.1     Population

3.2            Samples selection

3.3            Description of instruments used in data collection

3.4            Questionnaire

3.5            Abstract

3.6            Personnel interview

3.7            Questionnaire distribution and control

3.8            Sources of data

3.9            Procedure of data Analysis

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.0            Introduction

4.1     Analysis of response to questionnaire

4.2            Testing and proofing of Hypothesis

CHAPTER FIVE

SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.0            Summary of findings

5.1     Recommendations

5.2            Conclusions

Questionnaire

Bibliography

CHAPTER ONE

1.1     INTRODUCTION

The growth and development of international trade along  west African coast played a major role in extending the medium of exchange beyond trade by barter in the nineteenth century.

The ‘’native currency’’ system which relied  on item  such as manila, cowries, brass  and copper rods   had to accommodate foreign currencies such as Maria Theresa dollar and British  silver coins  increased trade motivated  the setting up of the Bank of British West African [BWA] in 1894, thereby drastically reducing the barter system and ushering in a rudimentary form of commercial banking.

The issue of legal  tender currency for the  West African region  was however deferred till 1912 when the west African currency Board  [WACB] was established. The WACB was an offshoot of the recommendation of the EMMOE committee set up by the then secretary of  state the Rt. Ifon. Lewis Harcourt. The WACB retained  the services of the BBWA as its currency distribution agent. It set  up four currency centers in Lagos [Nigeria] and Bathurst, now Banjul [the Gambia].The currency in circulation  in West Africa increased steadily through the 1950s  in response to the growing  demand and increase in the World price for west African  primary products such as cocoa, groundnuts and  palm oil.  

The WACB, however, did not have discretionary  control over the money stock of the territories under  the  money stock of the territories under its  sphere of influence. It was set  up primarily to promote the influencing of export trade. Specifically, it was changed with the issue of a west  African currency, the repatriation of  such currencies and the investment of reserves.