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THE ROLE OF MONEY MARKET IN THE ECONOMIC DEVELOPMENT OF NIGERIA (1981-2010)

  • Type:Project
  • Chapters:5
  • Pages:84
  • Methodology:Ordinary Least Squares
  • Reference:YES
  • Format:Microsoft Word
(Banking and Finance Project Topics & Materials)
THE ROLE OF MONEY MARKET IN THE ECONOMIC DEVELOPMENT OF NIGERIA (1981-2010)
ABSTRACT
This project work reviewed the role of the Nigerian money market in the economic development of Nigeria. Based on the research work carried out we are able to identify the various effect it has in the economic development of the Nigeria Economy.
 TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION
1.1    Background of the study                   
1.2    Research Problem                       
1.3    Objectives of the Study                       
1.4    Research Questions                       
1.5    Research Hypothesis                       
1.6    Significance of the study                   
1.7     Scope of the Study                       
CHAPTER TWO: LITERATURE REVIEW
2.1    The Concept of Money Market               
2.2    Money Market Instrument                   
2.3    The Money Market and Economic Development    
2.4    Structure of the Nigerian Money Market         
2.5    Performance of the Nigerian Money Market         
2.6    Problems of the Nigerian Money Market.        
CHAPTER THREE: METHODOLOGY
3.1    Introduction                           
3.2    Research Methodology                      
3.3    Research Design                           
3.4    Sources of Data                           
3.5    Model Specification                       
3.6    Method of Analysis                        
3.7    Limitation of the Study                       
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1     Performance Evaluation of the Nigerian
Money Market                           
4.2    Regression Analysis                        
4.3    Hypothesis Testing                       
CHAPTER FIVE: SUMMARY, RECOMMENDATION AND
            CONCLUSION
5.1    Introduction                             
5.2    Summary of Findings                       
5.3     Policy Recommendations                   
5.4     Conclusion                               
    Bibliography                           
    CHAPTER ONE
1.1    BACKGROUND OF THE STUDY
    There are various financial markets, which are institutional arrangement that facilitate the intermediation of funds in and economy. The financial market is divided into two: one is the money market, which deals with short term funds and the other, the capital market which deals in long term in loanable funds. The basis of distinction between the money market and capital market lies in the degree of liquidity of instruments bought and sold in each of the market, which can be further sub-divided into the primary and secondary markets. While primary market is concerned with the raising of new, funds, the secondary market exists for and purchasing hands, thus, enabling savers, who purchased securities when they are in surplus funds to recover their money when they are in need of cash.
    Money markets play a key role in banks’ liquidity management and the transmission of monetary policy. In normal times, money markets are among the most liquid in the financial sector. By providing the appropriate instrument, and partners for liquidity trading, the money market allows the refinancing of short and medium term positions and risk. The banking system and the money market represents the exclusive setting monetary policy operates in a developed, active and efficient interbank market enhances the efficiency of central bank’s monetary policy, transmitting in impulses into the economy best. Thus, the development of the money market smoothest the progress of financial intermediation and boosts lending to economy, hence improving the country economic and social welfare. Therefore, the development of the money market is in all stakeholders interests (the banking system itself, the central bank and the economy on the whole).
1.2    STATEMENT OF THE PROBLEM
    The role of the financial market in the development of the real sector and the economy at large cannot be over emphasized. A critical feature of the monetary market is that it should be deep and broad so as to absorb large volume of transactions without significant effects on security prices and interest. This characteristic requires that there exist active market participants such that the transactions of an individual investor will have just infinitesimal effect on security prices and interest rates. The varieties of securities ensure that there are always alternative investment instruments available to satisfy the respective return risk desires of investors in the market. A money market that has depth and breadth will be informationally effect as well as operationally efficient and all contribute significantly to the growth of the economy.
    Iyegbuniwe (2005) opine that although the Nigerian money market has experience important growth, both in the breadth of securities as well as the volume of trading since the liberalization of the financial system in 1986, it still need to be deepened further to achieve the required vibrancy that is expected of a money market. This is not to say that the Nigerian money market is effective. Much have been said and written about the Nigerian capital market but the reversal  is the case for the money market in the economy. Therefore, there is the need to examine this crucial market and evaluate its performance in terms of its contribution to economic development.
1.3    OBJECTIVES OF THE STUDY
    The main objective of this study is to examine the operations, and activities of Nigeria money market. The specific objectives of the study are stated below:
1)    To evaluate the contribution of the Nigerian money market to the economic growth of the country.
2)    To investigate the role of money market in financial development in Nigeria.
1.4    RESEARCH QUESTIONS
    The research questions, which would guide this study are as follows:
i)    Is there any significant relationship between money market and economic growth in Nigeria?
ii)    Is there any significant relationship between money market instruments and the development of Nigerian financial system?
1.5    RESEARCH HYPOTHESES
    The hypotheses to be tested hence will include the following:
Hypotheses I
There is no significant relationship between money market and economic growth in Nigeria.
Hypotheses II
There is on significant relationship between money market instruments and the development of the Nigerian financial system.
1.6    SIGNIFICANCE OF THE STUDY
    The study will explore the impact of effectiveness of money market instruments on stabilization of the economy, (the scope of the study will be limited to the financial sector) it is hoped that the exploration of his sector will give a broad view of money market instruments on economic stabilization, it will serve as a inspiration to other potential students and institutions or individuals as it will contribute to practical life, knowledge advancement and stabilization of Nigerian economy.
1.7    SCOPE OF THE STUDY
    The economy is a large component with lot of diverse and sometimes complex parts; this research work will only look at a particular part of the economy (the financial sector). The work cannot cover all the facets that make up the financial sector, but will look at the money, market and its instruments as being used by the government for the stabilization of the economy on its road to industrialization and development. In other words, its focus is not on the entire financial sector which is a combination of both money and capital markets, but exclusively on the money markets, the empirical analysis and estimation covers the period between 1981-2010. (The estimation period shall be restricted to the period between 1981-2010 due to non-availability of needed data)
    The data for this study would be obtained mainly from secondary sources, particularly form central bank of Nigeria (CBN) publication such as the CBN statistical bulletin, CBN Annual Reports and statements of Accounts, CBN Economic and financial review bulletin and Bureau of statistics publications.  The estimation period shall be restricted to the period between 1981-2010 due to non-availability of needed data.      


THE ROLE OF MONEY MARKET IN THE ECONOMIC DEVELOPMENT OF NIGERIA (1981-2010)

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Details

Type Project
Department Banking and Finance
Project ID BFN0935
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 84 Pages
Methodology Ordinary Least Squares
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Banking and Finance
    Project ID BFN0935
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 84 Pages
    Methodology Ordinary Least Squares
    Reference YES
    Format Microsoft Word

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