THE IMPACT OF MONETARY POLICY ON NIGERIA’S ECONOMIC DEVELOPMENT
Monetary policy being an economic tool is used to stabilize the economy. It is a tool used by the government through monetary agencies like the Central Bank to control the supply of money in an economy. It is used to bring about economic growth and development through the control of inflation. It impacts the economy cannot over-emphasized. It has very positive impacts on the economy and helps in building a sustainable economy. Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. It is maintained through actions such as increasing the interest rate, or changing the amount of money banks has to keep in the vault(bank reserves). It can be used to increase or decrease the volume of money in circulation based on the situation at hand. PURPOSE OF THE STUDY The intent of the proposed study is to critically examine the impact of monetary policies on the Nigerian economy. The focus will be on how monetary policies adopted in recent years have impacted on the Nigerian economy. How the federal government have strived through the use of monetary policies to stabilize and develop the Nigerian economy. The intent is to provide adequate information to readers on the roles played by monetary authorities and monetary policies in ensuring economic growth and development in the entity called Nigeria. An objective approach shall be employed in order to bring about valid arguments and conclusions.
Scholars in the economic and financial field have written articles on the proposed research topic. Professor Kunle Adamson in 2002 wrote an article in this regard.he placed emphasis on the then proposed re-denomination of the naira by the then CBN governor Professor Charles Soludo. He critically analysed how the re-denomination of the naira would have impacted the Nigerian economy. Another literature to be reviewed is the article written by Dr Okoro A. Sunday(Ph.D) of the Ebonyi State University. He critically examined the long-run equilibrium relationship between monetary policy instruments and economic growth in Nigeria. The intent of the proposed research is to explore the various angles to the research topic. The poor implantation process would also be critically examined.