EFFECT OF STABILIZATION POLICIES ON NIGERIAN ECONOMY.
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
EFFECT OF STABILIZATION POLICIES ON NIGERIAN ECONOMY.
Chapter one
1.1 Introduction
Nigeria has undertaken deliberate and determined efforts over the years to achieve a high level of social and economic transformation of the economy in order to achieve development goals, which include monetary policy, fiscal policy, exchange control measures, and income and price management. The actions used were modified from time to time to reflect the changing economic climate and conditions.
This study focuses on two of the policies implemented (monetary and fiscal policy) and how they are used to promote economic growth and stability in Nigeria. Since the primary weight of aggregate economic policy must fall on either monetary policy or fiscal policy, or a mixture of the two.
The debate arises as to whether a clear distinction can be made between “monetary” and “fiscal” policy. The truth is that there is a great deal of ambiguity surrounding these concepts, which frequently leads to ineffective argument and confusion.
However, monetary policy can be defined as a measure in which monetary authorities exercise discretionary control over the money supply in order to achieve stated economic objectives. In other words, it uses the volatility in the money supply to achieve economic goals.
Fiscal policy, on the other hand, can be defined as a government’s policy of influencing economic activities in the economy by modifying the quantity and content of taxation, spending, and public debt in order to achieve a specific goal.
Although these two policies are independent weapons for economic stabilisation, most governments combine them to have a stronger impact on the economy.
Nigeria’s monetary and fiscal policies aim to achieve four basic objectives. Objectives include:
· Maintaining relative stability in domestic prices.
· Achieving rapid and sustained economic development.
The government’s economic policy should prioritise maintaining balance of payment equilibrium, which is strongly linked to growth and stability.
Economic growth can be assessed by annual gains in net national output in constant price. Such a statistic tells us how much larger the whole economy is becoming over time, but it says nothing about changes in people’s level of life.
The main significant indices of economic growth are real net national product growth divided by population size. There are numerous aims for economic growth and development. They include
• Income Distribution Gross National Product Sectoral development (e.g. agriculture, industry)
· The demand to provide economic stability is so intense that measures to promote the federal government fidget.
· Stability is essential for achieving the highest growth rate possible. This does not imply a perfectly smooth rate of growth, but rather one that is not interrupted by recessions or depressions.
Annual stabilisation policies aim to maintain a stable national income by preventing significant inflation and deflationary gaps, allowing for near-full employment without rapid inflation.
The government utilises monetary and fiscal policies to shape economic growth and development. Nigeria’s monetary authorities can use the following monetary policy instruments:
• Discount rate
· Interest Rate Structure
· Reserve required.
· Direct credit control.
• Exchange rates and
· Moral suasion
Tax incentives (capital allowance, income tax relief, reconstruction tax exemption, etc.), import duty relief, tariff measures, and budgetary measures are some of Nigeria’s fiscal policies aimed at promoting economic growth and stability. The government employs the instruments to achieve economic growth and stability.
1.2 Statement of Problem
This study is primarily focussed towards
– Has there been an effort to investigate the monetary and fiscal policies utilised by the Central Bank of Nigeria (CBN) to achieve economic development and stability?
– The ability to assess the efficiency of monetary and fiscal policy.
– Has there been a recommendation to remedy the noticed mistake by (CBN)? If done correctly, the monetary authorities will be able to make the best use of the numerous monetary and fiscal tools at their disposal in order to achieve rapid economic growth and stability.
Need help with a related project topic or New topic? Send Us Your Topic