CENTRAL BANK’S MONETARY POLICIES UNDER STRUCTURAL ADJUSTMENT PROGRAMME IN NIGERIA

CENTRAL BANK’S MONETARY POLICIES UNDER STRUCTURAL ADJUSTMENT PROGRAMME IN NIGERIA

Abstract

This study evaluates the result of Structural Adjustment Programme (SAP) on Nigerian economy. The period under review was bifurcated into pre-SAP (1960-1985) and during SAP (1986-2008) periods to enable us investigate the extent to which SAP has achieved the cardinal objectives of exchange rate stability, minimal price escalation and trade balance adjustment. Using quarterly data for the period 1960 – 2008, we employ co integration analysis and error correction mechanism (ECM) technique to tests whether the objectives have been achieved. The results suggest that in both time horizons, the role of exchange rate depreciation in trade balance adjustments appears to be inconsequential. The results further suggest that the problem of Nigeria appear not to be that of demand management as diagnosed by prescribers of SAP, but rather that of supply. The exchange rate has remained volatile and kept a downward trend while inflation and import index have kept rising profiles. All these suggest that SAP failed to achieve the cardinal objectives in terms of exchange stabilization, minimum acceptable inflation rate, substantial reduction in import demand index and non-oil export promotion. This must have accounted for it’s official abandonment in 2006. To this effect, we suggest that the Central Bank of Nigeria plays its stabilizing role in the economy through reversed appropriate economic policies tailored towards effective supply management for improved internal and external sector performance.

TABLE OF CONTENT

Title page- – – – – – – – – i
Approval page – – – – – – – -ii
Dedication – – – – – – – – -iii
Acknowledgement – – – – – – – -iv
Abstract – – – – – – – – – -v
Table of content – – – – – – – -vi

CHAPTER ONE
INTRODUCTION – – – – – – – -1
1.0 Background of the study – – – – -1
1.1 Statement of the problem – – – – -5
1.2 Purpose of the study – – – – – -6
1.3 Significance of the study – – – – -8
1.4 Research questions – – – – – -9
1.5 Scope of the study – – – – – – -10

CHAPTER TWO

LITERATURE REVIEW – – – – – – -11

CHAPTER THREE

Research methodology – – – – – – -39
Design of study – – – – – – – -40

CHAPTER FOUR

Presentation, analysis and interpretation of data – -48

CHAPTER FIVE

Summary of findings – – – – – – -60
Conclusion – – – – – – – – -61
Recommendations – – – – – – – -62
Suggestions for further research – – – – -64
References – – – – – – – – -65
Appendix I – – – – — – – – -68
Questionnaire. – – – – – – – -69

CENTRAL BANK’S MONETARY POLICIES UNDER STRUCTURAL ADJUSTMENT PROGRAMME IN NIGERIA

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