THE ROLE OF CENTRAL BANK IN STABILIZING NIGERIAN ECONOMY

(A CASE STUDY OF CBN)

By

EZEUGWU GERTRUDE. N

Presented To

Department of Accountancy

ABSTRACT

The purpose of this study was to appraise the role of central bank in stabilizing Nigeria economy to guide. This study 14 research question were formulated. The book is arranged in such a way that one chapter flows and naturally lends another. It organized in five chapters, the study start in chapter one with the background to the study and discusses in chapter two. After discussing research design in chapter three, chapter four deals with presentation and analysis of data.

Chapter five deals with finding, conclusion and recommendation.

TABLE OF CONTENTS

The title page

The approval page

The dedication

The acknowledgment

The table of content

The list of table

The Abstract

CHAPTER ONE

Background of study

Statement of problem

Purpose of study

Objective of study

Significance of study

Research question

Definition of term

CHAPTER TWO

The literature review

The role and significance of CBN

The measure that stabilize economy

CHAPTER THREE

Research methodology and design

Design of study

The population of study

Sampling of study

Instrument for data collections

Method of data collection

Method of data analysis

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

CHAPTER FIVE

Discussion of finding

Conclusion

Recommendation

References

THE LIST OF TABLE

TABLE 2

Are you satisfied with the combination of measures which central bank of Nigeria designed to regulated supply of money to Nigeria economy?

TABLE 2

Are you satisfied in legal tender currency issued by central bank of Nigeria.?

TABLE 3

Would you agree that central bank of Nigeria safeguard the value of currency in Nigeria?

TABLE 4

Would you agree that CBN promote monetary stability and sound financial system in Nigeria economy?

TABLE 5

Are you satisfied with improvement of CBN.?

CHAPTER ONE

INTRODUTION

1.1 BACKGROUND OF STUDY

The development of central banking can be said to data from the middle of the 19^th century. But precisely, there was no exact data when banking started in Nigeria . historically, records showed that domestic banking activities started in 1961 when a sipping company elder dumpster line started banking service in Lagos , the chairman of the company in 1892 established the first banking institution African banking, corporation which metamorphosed into first bank now known as union bank of Nigeria plc. Was established.

Before 1952,the west African currency board (WACB) established 1912 was used as state banking for Anglo- phone west African countries, such as Nigeria, sierra-leone, Ghana and Gambia. The WACB was based in London and it issued noted and coins for the Anglo -phone west African countries.

The banking failure of the 1950s could not but head to the establishment of central bank to serve as banker to the banking system, to perform supervising role over the commercial bank issue currency notes and come thus, regulating the supply of money in Nigeria not only these, it acts as financial adviser to the government on monetary policy and implementing the policy and behalf of the government.

The central bank of Nigerians is government bank, establish to keep a country's financial system under control and close supervision. The responsibility of managing the CBNis vested in the hand of the board of directors whose measures are appointed by the government .

The CBN is expected particularly in promoting economic growth by fostering the development of money and capital markets develop banking habits and sound financial system, in order to facilitate economy development , CBN tent to enjoy activities which extend beyond its traditional function. In this record, it played a unique role in the development of a Nigeria economy, particularly in promoting agricultural and industrial development in general.

1.2 STATEMENT OF PROBLEM.

Central bank of Nigeria can issue stabilization of Nigeria securities to specified institution to map up the excess liquidity of such institution. The effect that special depositor stabilization security would reduce the cash reserve and like other quantitative tools, reduce credit creation and therefore money supply.

Special deposits and stabilization securities are used when other instrument fail to achieve their targets they could be seem as instrument of last resort and target is the aggregate deposit in the banking system. Apart from the quantitative credit control which strive to control he flow of bank credit to different sector of the economy. By the means of selective credit control, the central banks on the sector of the economy or the economy activities to which loans should be given.

1.3 PURPOSE OF STUDY

a. To stabilize the price of goods and services in Nigeria

b. Equitable distribution of wealth

c. To satisfy the needy

d. To provide full employment

e. To maintain favorable balance and payment

f. To change in markets environment to which financial institution

markets and their users respond.

1.4 SIGNIFICANCE OF STUDY

The existing of central bank of Nigeria has benefits the Nigeria economy. The anger social and economic benefit of the CBN are

1. Issuing of currency

2. Control of the value

3. Funding agriculture

4. Funding industries

5. Prevention of bank crisis

6. Advise to government

7. Watching the external reserve

8. Encourage of exportation

9. Encourage of economic growth

10. Price stability

1.5 SCOPE OF STUDY

THE study contras on the role of central bank in stabilizing Nigerian economy, the function and objective of CBN will be examined.

Moreover, the problem of CBN encounter in stabilizing the economy and likely solution will be preferred.

1.6 RESEARCH QUESTIONS

1. To what extent has the central bank of Nigeria stabilized Nigeria economy?

2. To what extent has it protected the local industries from unfavorable foreign competition.

3. To what extent has it generated more revenue in Nigeria economy?

4. To what extent has it been acts as banker to commercial banks.

5. To what extent has it increase the amount of goods and service produced economy.

1.7 DEFINITION OF TERMS

Balance of payment : where there is a trade must be payment either now or later. It is the record of all financial and economic transaction between one country and the rest of the world over a given period of time. It is a record, it could be surplus or defits

Direct monetary policy : this is the use of banks credits on banks sectorial allocation of bank credit, interest rate policy errand serene influencing the cost and availability of credits.