Role of money market in economic development of nigeria

Monetary Policy in Nigeria – The Impact of Monetary Policy on Nigeria’s Economic Growth

Furthermore, the effectiveness and capacity of the supervisory authorities were beefed up. There is no economy that is totally protected from economic problems like high unemployment rate, balance of payment disequilibrium, inflation unsustainable growth rate, increase in printing of fake currency etc.

Corporate Bonds and Debentures In the private sector, corporate bonds and debentures are not often or have not been considered as an option by many companies in funding expansion and innovation. However despite the resent of the above-named resources, other influence industrialization.

We must start from the grassroots to transform the economy. Many banks extended margin loans and over leveraged their assets by diverting liquidity from long-term investments that would have been more meaningful for the real sector of the economy to artificially inflated stock prices.

The increased use of modern technologies has increased the yield of crops per hectare. Other companies such as GT Bank, Plc, and Access Bank, Plc have issued foreign currency dominated bonds and convertible bonds respectively. For example, increased use of floating interest rates and moral suasion and flexible loan packages may result in less discouragement to marginal borrowers as rate rises.

According to him, evidence indicate that apart from acute shortage of financial and managerial skills and poor financial management, capital remains the source of great concern to the entrepreneur in this sector.

In identifying the importance of industrialization, Alhaji Mukhter Ahmed observed that the industrial development in Nigeria was not motivated by specific sets of institutional forces, but by the speculative notion of the promise, which industrialization holds for rapid economic growth.

Lastly, the result of the study will assist government in an attempt to stabilize the economy to make use of effective and efficient monetary policies.

The monetary and financial policies pursued in recent years have been designed to support the attainment of basic objective of the economic reform programme adopted in July to restore macro economic stability in the short term and induce the resumption of sustainable growth.

In other words, it aims at maintaining a low and stable level of unemployment, Anyanwu As tradition might have it, the bank of any banks has been depicted to encompass the development of the economy, people and the bank itself. This process is important because it helps to establish the upper limit that a PDMM can leverage its assets in bond purchasing and trading.

Thus the introduction of tender system of selling government securities and the move to a floating exchange rate regime increasing the monetary authorities potential control over injections of liquidity into the domestic monetary system thus, enhancing their ability to use open market operations to influence domestic monetary condition.

Can government cash transfers scale up financial access for the poorest. Surplus workers migrate from the farm sector to industries, which are mostly situated in urban centers.

A special ingredient for the monetary policy effectiveness is the money market segment. In Nigeria, monetary policy effectively implemented is a veritable tool for stable economic growth.

Industrialization and Economic Development

The Central Bank may decide to place a limit on the rate of interest and in such a situation the rate of interest cannot fluctuate beyond that limit. The mandatory special deposits are a major measure in reducing the deposits available for banks to lend to their customers.

When prices are rising, the central bank raises the reserve ratio. The first notable activity of the era was the establishment of a botanical research station in Lagos by Sir Claude Mcdonald in The question may arise why can Nigeria not industrialize when Japan that is today an industrialized nation imports all its petroleum and almost all its wood.

Although, in-spite of the renewed demand presume on the foreign exchange market, the exchange rate in parallel with bureaux d-change which depreciates significantly. The problems of industrialization in this country can be summarized as: There was need to address basic elements of economic instability such as the expended government spending which resulted in large deficits.

Others have expressed frustration in holding bond inventories that ordinarily would have been traded for other opportunities in the capital market. They were food self-sufficient and produced a variety of commodities that were exported overseas. This has been a serious hindrance to he ful actualised plans.

Against this back ground as stated earlier on, the world Bank mobilizes financial resources from the surplus units of the world economy and channels them to the deficit units through the extension of loans, though given the level of our development industrially, the world bank may not be scored well in the work done so far.

They pointed out that Japan and the Soviet Union were back ward until large — scale industrialization to place is it out possible to repent the Japanese, miracle in the poor countries today. For instance, if the economy experiences inflationary pressure, the Central Bank raise the discount rate thereby making it very costly for the commercial banks to obtain founds from her.

Yet, to look back at our growing up problems as if they are burdens, which we must cast off immediately, or run away from, is to be superficial and incapable of understanding ourselves, an offshoot of our character.

Monetary Policy In Nigeria – The Role In Promoting Economic Stability In Nigeria

Keynes in his contribution said that if for instance, the economy is initially at equilibrium and there is an open market purchase of government securities by the CBN, the operation OMO will increase the commercial banks reserve k and raises the banks reserves earning asset ratio.

The achievement of this objectives has been necessitated by the phenomenal growth of international liquidity. In the modern economy, the price level tends to be sticky if not rigid in the downward direction, so that the problem of price level stability has essentially been that of avoiding inflation.

This is concretised by the millions of naira worth of Ajaokuta steel complex that has for long refused to mature. On the other hand, a reduction in reserve requirement release assets held for this purpose for lending as loans and advances by the banks.

This will, in effect, cause investment to shrink, and employment, income and the general price level will all fall. It is at this Junction that the idea of absolute and comparative advantage comes in. The inadequacy o f funds prevents industries from producing to full capacity.

But at the same time, processing the raw material at home curtails the import of goods, thereby helping to conserve foreign exchange.

Oct 15,  · The Role Of Stock Market In The Growth Of The Nigerian Economy CHAPTER ONE BACKGROUND TO THE STUDY Primarily, a stock market is the place where Impact Of The Nigeria Capital Market On The Growth Of Insurance Sector In Nigeria.

Industrialization plays a vital role in the economic development of underdeveloped countries.

Stock Market Development: Its Impact on the Economic Growth in Nigeria

As the historical record shows, the developed countries of the world broke the vicious cycle of poverty by industrializing, rather than focusing on agricultural or the production of national resources.

Sep 28,  · Ms Laure Beaufils, Deputy High Commissioner, British High Commission, Lagos, said that capital markets had an essential role to play in economic development. “Capital markets have an essential role to play to help unlock capital that can be invested in the real economy and that can contribute to job creation and inclusive growth.

explore the impact of capital market development on Nigeria‟s economic growth from the demand-following It is often argued that the liquidity role of the stock market stands out clearly as the most significant, among its market development. Money supply on the other hand was found to have no significant effect on the dependent.

Nigeria Table of Contents. Some of Nigeria's political leaders have advocated African socialism, an ideology that does not necessarily coincide with the Western socialist concept of the ownership of most capital and land by the state. This is a program designed by CASADE in conjunction with leading world universities to provide individuals already employed in the public sector or plan to work for governments in policy-making capacity the requisite background on efficient resource-allocation in developing countries.

Role of money market in economic development of nigeria
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ROLE OF MONEY MARKET IN THE DEVELOPMENT OF NIGERIA ECONOMY | MARTINS LIBRARY