INFLATION IN NIGERIA: CAUSES CONSEQUENCE AND CONTROL
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
INFLATION IN NIGERIA: CAUSES CONSEQUENCE AND CONTROL
CHAPTER ONE OF NIGERIA’S INFLATION CAUSES CONSEQUENCES AND CONTROL
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Inflation is defined as the continuous rise in the prices of goods and services caused by the volume of money in circulation. This is an increase in money and credit relative to available products and services, which results in an increase in the general price level.
In order to detect inflation, there should be an increase in the volume of money credit. This increase must exceed the country’s available commodities and services. A significant and centurial increase in the average price level of products and services is expected.
Prices can rise at different rates, hence many names have been given to inflation based on the rate of rise in prices.If the prices of products and services rise, it simply means that the value of money has decreased since fewer things and services can now be obtained for a certain sum of money.
Prices vary in direct proportion to the value of money. The worth of money is demonstrated by the level of prices; a general decrease in the process shows an increase in the value of money.
A commodity’s price is the amount of money that must be paid for it. The quality of goods and services purchased is the value of money. The market price is a measure of the monetary value of goods and services.
1.2 STATEMENT OF THE PROBLEM
Despite the fact that inflation increases investment, which creates employment of production resources and thus higher output, there are indications that inflation discourages savings,
increasing the risk of holding raw materials and lowering the value of money. Inflation will lead to a reduction in the burden of national debt by causing a fixed debt amount to lose purchasing power.
During inflationary eras, the purchasing power of money decreases. Falls in inflation increase the earnings of business share holders and others whose income is fixed in money terms,
but critics claim that it lowers the standard of living of those whose income is fixed, increasing the cost of education, welfare, and cultural facilities available. However, this circumstance makes it impossible for the poor people with fixed incomes to survive in the economy.
Inflation will also result in a trade deficit. The rise in the pricing of household products will cause more consumer items to be imported, causing the country to spend more foreign currency than it receives through exports.
However, because the real value of money declines during an inflationary period, people prefer to spend it rather than invest it. Also, debtors benefit while creditors suffer since the weight of debt is reduced and the money loses purchasing value.
1.3 OBJECTIVES OF THE STUDY
The research focuses on the origins, repercussions, and management of inflation in the Nigerian economy. The detrimental effect of inflation has been a stumbling block to economic development. However, the study’s key goals are as follows:
To fund the root causes of inflation in Nigeria’s economy.
to learn about its impact on the Nigerian economy
To determine the extent to which inflation affects an economy
To fund the methods and propose potential solutions for dealing with the Nigerian economy’s inflationary concerns.
The study will also educate the public on the need of minimising the problem of inflation in order to have an economic boom rather than a doomsday scenario.
To make recommendations on how to reduce inflation through government agencies and individuals.
1.4 SIGNIFICANCE OF THE STUDY
The study’s impact will be enormously important to the following groups.
The investigator
To other scientists.
To Nigeria’s central bank
To the government and the general public.
It will allow the researcher to receive the award of ordinary national diploma OND, and other researchers will use it as a reference and foundation for consultation of their research work.
The study is important to the CBN because it will help us understand and reinforce our economic policies in order to combat the country’s inflationary trend.
This research will also help citizens respond to the demand for economic policies aimed at funding a long-term solution to inflation in order to promote economic policies that benefit our country.
1.6 DEFINITION OF TERMINOLOGY
i. Inflation: This is described as a persistent rise in the prices of goods and services caused by the volume of money in circulation. It is also a process in which too much money is chased after too few things.
ii. CBN is Nigeria’s central bank, also known as the apex bank, which is entrusted with managing the cost volume availability direct and generation of money and credit in an economy in order to achieve some desired economic objectives.
Need help with a related project topic or New topic? Send Us Your Topic