Having looked at the present trend in the Nigerian economy it is very obvious that price of items has continued to raise especially food related items.

A special reference will be on the impact of inflation in income and wealth distribution of the nation (A case study of Enugu state)

The work is divided into five chapters one focused on the introduction and definition of the problem presented by the study chapter two dwelt on the review of related literature.

Chapter three is all about research design and methodology formed of the research work.

Chapter analysis of data as well as testing of hypothesis while the summary of findings, recommendations and conclusion were death with in chapter five



††††††††††† INTRODUCTION

1.0†††††† Background of study.

1.1†††††† Statements of problem.

1.1    ††††Objective of the study.

1.2    ††††Significance of the study

1.3    ††††Hypotheses

1.4    ††††Scope and limitation of the study



2.0              Review of literature

2.1              Meaning of inflation

2.2              Types/causes of inflation

2.3              Peryas, Veness of inflation

2.4              Brief history on world inflation

2.5              Brief history on Nigeria inflation

2.6              Inflation and economic development

2.7              Effects of inflation on savings

2.81          †Effects of inflation on exports

2.82          †Effect of inflation on import.



3.0              Source of data

3.1†††††† Secondary of data

3.1.2        Questionnaire design

3.1.3        Sample size determination

3.2              Methods of investigation

3.3              †Method of questionnaire distribution




5.0†††††† Summary of findings recommendations, conclusions and areas of further research

5.1              Summary of findings

5.2              Recommendations

5.3              Conclusions

5.4              †Areas of further research.





Inflation is neither new in the economic system of Nigeria nor the world at large.† Variations in magnitude or rates have been noticed to be in existence.

In Nigeria the rate of inflation was about 10 percent between 1969 and 1970. Prices rose by about 14 percent in 1970 (immediately after the civil war of 1970).† Then fell to 3 percent in 1972. Rose by about 16.1 percent in 1974 and reached a rate of about 34 percent increase in 1975.

In the 80ís, the rate of inflation between 1908 and1982 was around 30 percent with the rest of the 80ís at the rate of 40% averagely.

The 90ís were at the rate of 40 to 50% between 1990 to 1992 and then 1994 rate was officially put at above 60 percent.† Inflation was and is still the greatest task to governmentís policymakers in the 1990ís.

In the world, between 1979-1801, prices rose by more then 50 percent. Also between 1939-1941, the prices level was record to be almost what it was before.

The height of Herry V111ís debasement in England (through the mint reducing the weight of remitted coins, lowering their gold and silver content, and increasing the normal value of existing coins by assigning them higher values as well as melting down plate and ornament taken from the ransacked monasteries), and prices between many 1542 and mid 1551, had an inflationary rate of 16 percent per annum 23 percent during war with France and almost 30 percent during the first world war.† This is about the highest rate attained in the world history.

It is now evident that inflation persists both in the developed and developing countries, with difference in magnitude or rates.† The rate is developed countries making comparison with present situations, as the above noted rates were attained during the seventeenth century and the early part of the eighteenth century (1799-1801), and the early to mid parts of the nineteenth century (1939-1951).

In the case of Nigeria, the rates were attained in the rate nineteenth century (1969-1975).

Inflation simply refer to a continuous or in ---- rise in prices.

According to Websterís seventh new collegiate dictionary, inflation is defined as an increase in the volume of money and credit relative to available good resulting in a substantial and continuous rise in the general price level.† This definition points out the fact that inflation cannot occur unless there is undue increase in the volume of money and credit.† This brings about continued rise in general price level of goods, which in not being matched by the proportionate quality of goods and service in the economy.

Inflation become significant in Nigeria after the Nigeria civil war thought it might have been in existence long before then.

Immediately after the Nigeria civil war, prices took an upward turn from their previous level due to the shortage of goods and services, caused by the disruption of productive factors by the civil war.

Furthermore, the caused factor of salaries and wages review should not be left unmentioned.† The review started with the Adhoc Award of 1970 which was followed by the Udoji and William Awards of 1974.† all these awards intensified the inflationary pressure.

Also, the high prices if imported goods arising from increases in foreign prices and instability of international exchange rates.† Surcharge from post congestion, storage facilities, marketing arrangements plus the distribution new work.

The issue of gradual remove of the remaining 20 percent on oil subsidy is the most current inflationary element in the Nigeria economic system.

If inflation were to every one in exactly the same way and degree, it would have no importance what so ever.† Itís social significance arises from the fact that it always does affect people differently.† Itís effect on have wife (A) would differ from itís effect on house wife B depending on personality income and family. Whether in village or town are of relevance to the study.


The inflationary period is a time of high prices of goods and services this lowers the quantity and type of products (goods and services) purchasable by the messes in Enugu state at any point in time. The problem posed is that Enugu dwellers others in the society are unable to purchase types (quality) and quantities of desired products during inflation.

During inflation, income (especially of those fixed income earners and the very poor ones in the society) are unable to match the increasing prices of goods and service.† This continues as long as rising prices and falling purchasing power persists.† The problem as the ability of masses to purchase productsĒ in the light of continued rising prices become reduced.

Equally of importance is the issue of inflation giving rise to the different societal classes, thereby creating gaps in the society with income as the distinctive factor.† There is a high gap between incomes of fixed incomes earners and the profit earners.† This is because the profit earners incomes tend to rise with the rising price of products as opposed to those of the fixed income earners.

It is also worth while to note that during an inflationary period, saving decline.† This is because a decline in savings results in low investment, whereas low investment retards economic growth.

The pertinent questions to ask here is how will the masses be able to purchase the desire mix of products.† How will the fixed income earners be able to maintain their standard of living at periods pf continued rising prices? How do poor masses make both ends meet under a situation of declining purchasing power?

How will the government bridge the gap between the fixed income earners and profit earners?


The objective of the researcher is

1.                  To how inflation affect the income of average individual living in Enugu metro list

2.                  To find out low the negative effect of inflation on income can be corrected or averted.

3.                  To identify the class of workers that inflation affect most


The importance of this study lies in the fact that an analysis of the meaning, cause/ types and effect of inflation on the masses (a market segment of the heterogeneous population) etc, will give a more realistic out look of how the total market segments (the population as whole) are being affected.

It is hoped that a stud of this nature will.

1.†††††††† Expose the sufferings of the masses through its finding to policy makers for formulation and belting pf life for every citizen.

2.†††††††† Help marketer in the planning of the marketing mix for their products

4.                  Assist the planning units of the government through the provision of more efficient feedback information on the effectiveness of their anti inflation policies

1.5†††††† HYPOTHESES

H0-††††† inflation affects the income of average individual living in Enugu


H1-††††† Inflation does not affect income of average individual living in Enugu



Enugu, Onitsha and Awuzu localities were defined by the research to cover the occupational sectors of individuals within these localities this was grouped into five,

1.                  Group A. masses in the parastatals† of the public sector

2.                  Group B. masses that are self employed

3.                  Group C. masses that are civil service

4.                  Group D. masses in the private sector

5.                  Group E. other masses and student house wives

The grouping was on the basis of relative uniform income among the masses in the same sector and also for case of questionnaire administration and control.† Also, the use of occupational basis will aid in the easy determination of which classes individuals suffer most under an inflationary situation.

Furthermore, the locality that has its masses mostly affected will be easily detected, using the same occupational variable as basses for comparison.

The sample space comprised those in the public and private corporations, self- employed, retire (pensioners) ordinary masses (non income earners) and student that are married, with or without children.


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