1.1 BACKGROUND OF THE STUDY
Nigeria gained its sovereignty on October 1st 1960, and like most developing countries, it has its “teething problems, economic wise, most past governments have introduced either one measure or the other. These economic measures are aimed at restricting the economic situation of the nation. The Nigerian workers has always and is still bearing the burden of all these economic shortfalls.
Before I delve into what this research is all about, I will like to acquaint the Nigerian worker very briefly, on our past economic situation and how it has impacted her livelihood.
Prices of goods and services increased drastically from 1979 to 1983, this was caused by the following factors:
i) High cost of production of goods
ii) Scarcity of raw materials
iii) Manufacturers bid to maximize profits at the expense of consumers and hoarding of goods of middlemen.
iv) Traders formed market associations which fixed prices arbitrarily and restricted free entry of non-members into the market.
v) The demand for goods by consumers where higher than producers supply and lastly there was a let of mischvious acts associated with the issuance of import license;
This can be seen when we consider how prices of some basic commodities like beverages and toiletries where increasing daily. In 1983 an economist ascertained that prices of these item had risen by 400 percent. Invariably the socio-economic life of the Nigerian workers became low due to the high inflationary rates.
This brought about a let of hardship on the Nigerian worker.
All through this period (1979 – 1983) each successive government introduced their own respective economic measure or decisions, which were aimed at allevating the problems of the Nigerian worker. For example in 1981, the federal government introduced the National increase in wages and salaries. These increments however did not improve the condition of the Nigerian worker because the cost of living was still high. In 1983, the federal government introduced the recovery fund and other levies, these economic measures were directed at restricting the crunched economy. But it however had a negative impact on the Nigerian worker, in the since that, he had to pay these levies from his meagse salary as well as paying for the high prices of gods and services.
The presents Administration came into power in 1985, they detected that the major reason tht was responsible for the worsening condition of the economy of the Nation was because the Naira was over valued, however the percentage at which the Naira was over valued was not stated.
On September 29th, 1986, the federal government introduced the Second Tier Foreign Exchange Market (SFEM) in which the Naira exchange rate vis-à-vis the major international currencies would be determined. The overall objectives of the “SFEM” programme was to determine the value of the Naira through the price mechanism of demand and supply and the provision of a forum for the National allocation of scarce Foreign Exchange resources. The over valuation of the Naira as was observed by financial expects had brought about distortion in the economy prices did not reflect the cost of production, and consumption tended to be in favour of imported goods and services.
The “SFEM” programme metamophored to a single tier foreign exchange market (FEM) on July 2, 1987, this programme (SFEM) which was introduced three yrs ago is now having an impact on the Nigerian worker, in the sense that it is affecting her socio-economic life both Negative and Positively.
The cost of living is still very high, for example most staple foods prices have risen; in May 1988 the prices of garri was given at 7 cups for N1 bg June, 1988 the price increased to 2 cups for N1 which indicated that there was a sharp percentage increase in the price of garri within this short period. The percentage increase was 333.331 percentage as at now the price of garri has increased to 4 cups for N5. this table which only covers the period of June 1988 and May 1989, indicating the percentage increase in the price of garri with the period given using the iaspeyrs index method.
Impact of foreign exchange market in the Nigerian workers in all spheres. This programme (FEM)