The impact of fiscal and monetary policy in controlling unemployment in Nigeria.
ABSTRACT
This study is motivated by the fact that federal expenditure and money supply as a tool on the rate of unemployment. But to which extent, these instrument have contributed either to worsen the problem of unemployment or alleviate it.
To investigate this problem, two hypotheses were formulated as follows.
Ho: There is no relationship between money supply and unemployment.
Hi: There is no relationship between federal expenditure and unemployment.
In testing the hypothesis, secondary data was used and analyzed using regression and correlation analysis as well as student t-test. The following are summary of the major findings from the analysis carried out in the study.
Federal expenditure and money supply contributed little to the reduction on the rate unemployment between (1980-2000).
The package of National directorate of employment programme conmcerning encouragement and generation of employment opportunities for most especially school teachers from secondary school and graduate from higher institution seems to be less vigorous since 1992 till date.
The inability of government of both federal and state levels to lift embargo on public sector employment from (1994 to August 1999) could be partly responsible for the high level of graduate unemployment in the Urban areas.
On the strength of the findings, the following recommendations were made.
The use of these tools (federal expenditure and money supply) need to be reviewed to enhance their potential for addressing the rate of unemployment.
Alternative tools may be used to complement federal expenditure and money supply towards the alleviation on the rate of unemployment.
The tool thrust should be the establishment of most micro-credit scheme to assist enterprising unemployed people to set on micro business across the country.
There is need to build up human capital, this mean improving the knowledge, shall, capacities and the mental and physical conditions of the masses.
TABLE OF CONTENTS
CHAPTER ONE
Reference
CHAPTER TWO
2.1 Theoretical Literature
2.2 Empirical Literature
2.3 References
CHAPTER THREE
3.1 Model specification
3.2 Area of study/coverage
3.3 Source of data / analytical techniques
3.4 Decision rule
CHAPTER FOUR
4.1 Presentation data
4.2 Presentation of table
4.3 Interpretation of table
4.4 Test of hypothesis
4.5 Reference.
CHAPTER FIVE
5.1 Conclusion
5.2 Recommendation
5.3 Suggestion for further research
5.4 Bibliography
CHAPTER ONE
INTRODUCTION
Unemployment is an issue that has generated debates from every nook and cranny of the world. Its impact was more, felt during the industrial revolution when the dimension of man power absorption changed towards the consideration of skill as a fundamental pre-requisite. However, over the years, government around the world have been concerned with how the unemployment question could be answered – similarly, the Nigeria economy was characterized by severe unemployment, especially after the civil war which necessitated policy measures aimed at reducing it’s.
Different government since 1970 till date have tried different strategies in order to reduce unemployment, but the result still remain persistent unemployment resulting in a number of social and economic problems like crime, destitution, prostitution, corruption etc associated with it.
Index, unemployment in Nigeria has assumed a frightened proportion. It is even more frightened considering the fact that high rate of unemployment create poverty, misery and threatens social cohesions reduction in the rate of unemployment has thus become a major policy thrust of the government with the assistance of some international agencies such as the international labour organization.
Moreover, since early 1970’s the revenue base of the country has depended largely on the oil sector which has provided over 80% of total government revenue. The growth of resource in the sector private opportunity to initiate huge programme which substantially.
Scrutinizing the time series data on unemployment in Nigeria b/w 1960 and to mind 1980. Nigeria was at a period of economic boom, which means unemployment was something nobody could have dreamt about, but today unemployment has become so severe that nobody likes to embrace it.
However, unemployment in Nigeria is primarily youth unemployment, especially secondary school leaver for instance in 1986, they constituted 65-3 percent of all the employed in Nigeria. The figure for 1987 for this group was 70-7 percent when figures are desegregated by location figures for Urban unemployment were higher for all the years under survey with the exception of 1986. The national figures for unemployment was 6.1 percent in 1986. It tell slightly to 5-3 percent in 1986 for all the year data indicate that unemployment was higher in the urban than within the rural area.
Today, there is a nation wide high rate of unemployment particularly among the youth that are leader of tomorrow unemployment appear to be inherent in the nation economic system, first, because intentionally or unintentionally the policy maker do not resort to measure capable of reducing unemployment to an acceptable level.
Furthermore, tax collected from companies an private individual are misappropriated. The expenditure on capital project are divested to private purses whilst expenditure on personnel emolument are delayed by government officials.
This study is therefore concerned with finding out the effect federal government expenditure and money supply on rate of unemployment. Also, intend to investigate clearly the extent to which these policies have contributed to worsen the problem of unemployment or alleviate it completely.
The objective of the study is to make some reasonably investigations and, then find out some facts paltering to the rate of unemployment and it level of existence in Nigeria.
Hence, the research work will go as far as tracing the root of the problem, ever increasing number of the unemployment rate among Nigerian and the cause of it, mostly especially our youth.
Unemployment has been characterized as one of the major attributes used to distinguish developing nation such as Nigeria, from most developed nation, such as U.S.A. in fact, the rate at which this phenomenon has been skyrocketing in Nigeria has become much more alarming and beyond expectation.
HYPOTHESIS
Ho: There is no significant relationship between money supply and unemployment.
Hi: There is significant relationship between money supply and employment.
Ho: There is no significant relationship between federal expenditure and unemployment.
Hi: There is significant relation between federal expenditure and unemployment.
Where Ho: Null hypothesis
Hi: Alternative hypothesis
In our nation Nigeria, it has been confirmed and indeed apparent that no social or economic welfare equaled finding job for the jobless citizens among us. In fact this has created a dilemma that has inspired the researcher to investigate the roles played by government on the changing or rat of unemployment at a goal.
Therefore, the result of this research will help the provision of much needed information that would enhance the creation of more employment opportunity for the masses in the society, and these jobs may possibly come from three tiers of government (ie) Federal, state & local the private and the citizens themselves.
Much more than that the result will serve as a guide to the government and other employers toward initiating programs for employment of the jobless Nigeria scattered all over the country.
It is rare or completely impossible to have a research work that does not have one difficult or another. In order word every research study has some shortcoming, which arise as a result of problem encountered by the researcher in the course of his research some limitation notably are:- History or today in most cases are not adequate and this specifically hampered the results of the study since a full data on unemployment and advertised vacancies in Nigeria by industrial sector was no taken on some of the case.
Also notable as a limitation is the lade of sophisticated investigation of domestic data relating to the number of unemployment citizens of Nigeria.
The problem of not having a central process of advertising vacancies both in private public sector also constitute a limitation.
Finally, the problem of inefficient organized records, as well as parts the researcher into the difficult task of locating the various case notes.
Also, the late arrived of publication from the federal office of statistics (FOS) on their statistical computation for unemployment are also a problem that in fact keeps the research work non absolute. In addition the (insufficient) hour permitted to be used at (CBN) central bank of Nigeria library for the research work contributed largely to the limitation a well.
Monetary Policy:-
This is constructing to be action by the monetary authorities to influence the national economic objective by controlling or influencing the quantity and direction of money supply, credit and the cost of credit. If is aimed at ensuring adequate supply of money to support financial accommodating for growth and development programs on the one hand and, stabilizes various sector of the economy for sustainable growth and development on the other hand, monetary policy is defined as policy employing the Central Bank Control of the money supply as an instrument for achieving the objective of economic policy. Similarly from synthesis of most of the literature and in the context of the Nigeria.
The ultimate targets of the monetary policy within the time frame are:-
FEDERAL EXPENDITURE:
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