Project Abstract

Project Overview

<p> </p><div><p><strong>INTRODUCTION</strong>.</p><p><strong>1.1 &nbsp; &nbsp;</strong><strong>BACKGROUND OF THE STUDY</strong></p><p><a target="_blank" rel="nofollow" href="https://www.projecttopics.org/effect-of-inflation-on-the-economic-development-of-edo-state.html">Inflation has been a purpose facing many countries of the world especially the developing countries. It started during the early 60s, which results to the incorporation of economic policies as measures to reduce the effect of the inflation in the economy. And most of these measures taken by developing countries to check the problem of inflation are in the form of the use of central bank instruments of credit control. This is aimed at reducing the volume of money in circulation and maintaining it to ensure low cost of living.</a></p><a target="_blank" rel="nofollow" href="https://www.projecttopics.org/effect-of-inflation-on-the-economic-development-of-edo-state.html"><p>Nigeria as other developing countries is also faced with the problem of inflation. In Nigeria inflation has a problem for policy makers since the 1990s. And ever since then to date the rate of inflation is on the increase.</p><p>In defining what inflation is various perspectives from different economists are as follows:</p><p>1. Whereby too much money is chasing two few goods</p><p>2. Whereby there is a fall in the purchasing power of money.</p><p>3. Where there is an increase in the amount of money in circulation.</p><p>4. Where there is an excess of wage clearing over productivity growth.</p><p>For the purpose of this study inflation is defined according to Ben Chukwuemeka Anibueze Banking Practice volume three as a sustained rise in the general level of prices of most goods and services that is to say that there is always and increase in price without inflation.</p><p>The causes of inflation in Nigeria can be attributed to four major factor which are money supply, the nature of government expenditure and policy, limitation in real output and strong influence of imported inflation.</p><p>The supply of money would be affected due to increansement in wages and salaries especially if there is no increansement in productivity and also increansement in petroleum pump price which the federal government has initiated can also result to inflation.</p><p>Also, government expenditure can create or increase the rate of inflation.</p><p>This is due to some uavaidulde government consumption expenditure on the economy.</p><p>The central bank of Nigeria has tried to regulate the liquidity position in Nigeria economy through its credit guidelines some of which are:</p><p>(a) Control of the rate of expansion of commercial and merchant banks aggregate loans and advances.</p><p>(b) Guide the banks in channeling their credit to difference sectors of the economy</p><p>© Regulate the banks leading into a view to ensure that they exercise prudence in their granting of loans and advance.</p><p>This guideline helps in regulation of expansion of money circulation.</p><p>Thereby curtailing inflation in the economy.</p><p><strong>1.2 &nbsp; &nbsp;</strong><strong>PROBLEM OF THE STUDY</strong></p><p>The central bank of Nigeria being the upper bank in empowered with the responsibility of formulating and executing monetary policy in Nigeria.</p><p>There are many objectives behind the formulation of monetary policy, which varies with time and places. In Nigeria they stand as</p><p>(a) &nbsp; &nbsp;Maintenance of confidence in Nigeria currency through measures to stability domestic wages and price.</p><p>(b) &nbsp; &nbsp;Support for increasing level of agricultural and industrial output.</p><p>(c) &nbsp; &nbsp; Effective arrangements for supplementing current government expenditure and for providing developing finance.</p><p>The bank of Nigeria was established by act of 1985 and empowered to use certain monetary control instrument available to it. With these instruments of credit control, cash and liquidity ratios are being regulated.</p><p>The central bank of Nigeria can also reduce liquidity by completing government and it parastals to withdraw all their deposit from merchant and commercial banks and deposit some with the central bank. This will help in checking inflationny rate in the economy.</p><p><strong>1.3 &nbsp; &nbsp;</strong><strong>OBJECTIVE OF THE STUDY</strong></p><p>The objective of this work is to explore into the hindrance against effective measures under taken to initial the rate of inflation in Nigeria.</p><p>It will also determine the effectiveness of the use of various instrument of credit control employed by the central bank of Nigeria to check the volume of the economy.</p><p>The work will further ascertain why inflationny rate will seems uncontrollable undermining all the measures that has been taken to reduce it at least to a certain level. This research is aimed at identifying these problems and making necessary recommendations on ways to employ in order to control inflation in the country.</p><p><strong>1.4 &nbsp; &nbsp;</strong><strong>SIGNIFICANCE OF THE STUDY</strong></p><p>This study will help in policy making and investment. It will also serve as a guide to monetary authorities on how to control inflation through the use of instruments of credit control in the country.</p><p>After identifying the problems, it would also help the federal government and central bank of Nigeria in allocating resource to different sector of the economy by checking its expenditures.</p><p>Banks would also benefit from the study in solving their credit creation problem, which is a constraint to the profit making abilities in most banks.</p><p><strong>1.5 &nbsp; &nbsp;</strong><strong>DEFINITION OF TERMS</strong></p><p>In order for one to understand this work easily there are certain terms one need to know. These include:</p><p>(a) &nbsp; &nbsp;CREDIT: Credit is referred to as money which banks gives to customers in the from of loan and overdraft.</p><p>(b) &nbsp; &nbsp;LOAN: This is whereby a bank borrows out or lends money to its customer, which will be paid back on a specified time with interest.</p><p>© OVERDRAFT: This is a situation whereby a customer with current account is allowed to withdraw money more than he has in his account.</p><p>(d) &nbsp; INFLATION: It is a situation whereby there is a continuous increase in the general level of price of goods and services.</p><p>MONETARY AUTHORITY: This is the institution that is charged with the responsibility of controlling the supply of money. The central bank of Nigeria (CBN) and Federal government are responsible for this</p></a></div><a target="_blank" rel="nofollow" href="https://www.projecttopics.org/effect-of-inflation-on-the-economic-development-of-edo-state.html"><h3></h3></a><br> <br><p></p>