CHAPTER ONE
1.0 INTRODUCTION
A country economic development depends on its industrialization process; this can be done by giving priority to certain areas of the economy such as Banking, Agriculture Housing and Industry because these have contributed immensely to because to the development of any nation.
This led to the establishment of Central Bank of Nigeria by the government which specified responsibility is to provide the basic ingredient for rapid economy development.
Central Bank of Nigeria exists to speed up the country economics development control. The task of economic development and economic growth shall be paramount as such we need to harness all available resources and means towards the economic development and the growth.
One of the major objectives of the past and present Nigeria government is therefore for a country to have stable economy and attain economic growth. One of these vehicles that can be used to achieve these is the role played by central bank on ecomony of the nation.
In Nigeria the central bank undertakes functions on both types of institution especially the banks through the application of various and regulatory measure. The subject of this study dealing as it does on those relationships is there tropical and will address a numbers of many issues on monetary, banking policy and economic development. The analysis of the study some findings and recommendation were given to the banks and financial institution with moral support.
The researcher concluded by saying that the Central Bank of Nigeria played important role in the economy development of Nigeria.
1.1 STATEMENT OF PROBLEM
The researcher wish to find out the problems encounter by the Centre Bank of Nigeria; in the economy development of Nigeria as following:
All the above problems are the reason why the Central Bank of Nigeria fails to achieve its aim and objective
1.2 STATEMENT OF HYPOTHESIS
The Hypothesis is:
Ho: The role played by Central Bank of Nigeria in the development of the Nigeria economy Nigeria does not reduce unemployment in Nigeria
Hi: The role played by Central Bank of Nigeria in the development of the Nigeria economy reduces unemployment in Nigeria.
1.3 OBJECTIVE OF THE STUDY
Objective of this study includes:
1.4 SIGNIFICANCE OF THE STUDY
The gains to be derived from this study cannot be over emphasized about the performances or the other financial for the development of the country. The operational problem of central bank of Nigeria senitized people the misconception help by the bank and other government can be exposed by the study.
The research would also be a source of information for bank investor and educationist.
1.5 SCOPE OF THE STUDY
The project shall actually concern the entire role of the central bank of Nigeria in the nation development. It take a broad view of the various aspect of the role and function of Central Bank of Nigeria, it also look at its position in banking, industry and various roles of the central bank of Nigeria as the primary function, function banking habits and its system with its role in foreign trade insurance.
Finally, the study will consider the importance of the current measure of the Central Bank of Nigeria toward the cutting down the rate of the inflation in Nigeria.
1.6 HISTORICAL BACKGROUND OF CENTRAL BANK OF NIGERIA
The background lies in the characteristics and different monetary systems which recedes it this was the West African Currency Board (WACD)
The WACB was established in 1912, following the recommendation of the eminent communities appointed by the British Colonial Authorities to study ways and means of dealing with basic necessities, one of way financing the need of the African and the other was the eradication of the confused.
In convenient and unsatisfactory currency position in British West African, in colonial office memorandum of 12th December, 1912 although they underwent a series of amendment in 1915, 1923 and 1947 the regulation were designed to issued a West African Currency Government might share in the profit of the currency issued. In effect the WACB was changed with four main functions.
The history of central bank of Nigeria it was established by the Central Bank of Nigeria Act of 1958 and commenced operation on July 1, 1987
The major regulatory objectives of the bank as stated in the Central Bank of Nigeria act of 1958 is to maintain the external reserve of the country, promote monetary stability and a sound financial environment and to act as a banker of last resort and financial adviser to the federal government the financial government. The central bank’s role as lender of last resort and adviser to the federal government has sometimes pushed it into murky regulatory waters. After the end of colonial rule, the desire of the government to become pro – active in the development of the economy became visible especially after the end of the Nigeria Civil War; the bank followed the government’s desire and took a determined effort to supplement any short falls in credit allocation to the real sector.
The bank soon became involved in lending directly to consumer, contravening its original intention to work through commercial banks in activities involving consumer lending. However, the policy was an offspring of the indigenization policy at the time. Nevertheless, the government through the central bank has been actively involved in building the nation’s money and equity centers forming securities regulatory board and introducing treasury instruments into the capital market.
The WACB rigorously discharge those functions however, it was characterized by three elements falls partly of local currency with starting coverage, these characteristics is straight and according to them, the system had advantages for Nigeria to detect but the detect where neither small nor have little practical application
In the first place, the currencies issued were not an expatriate sterling a dependent currency in all British pounds.
Beside its automatic link worth starting of the British pounds indeed wherever its virtues had no room for monetary management. Another short coming of the WACB it did nothing to the African in the acts of monetary management or develops indigenous banks and their financial institutions.
Finally because the WACB invested all its reserves in oversea London although there was no legal obligation to on local investment out let was develop.
1.7 DEFINITION OF TERM
To successfully carryout the write up of this project, it would be necessary to define certain basic concepts.
A bank: This is a financial institution duly incorporated under the company and allied matter decree not being carried out there in
Central Bank: This is a financial institution set up by government to cater for keeping of government money and issuing of currencies and overall direct flow in and out of the money in circulation.
Economics: This is the scientific study of people and their institutions and consuming goods and services and how they face the problem of making resources.
Expatriate Banks: These are foreign banks operating in the country they provide service to Nigerians but their ownership belong to the foreigners.
Currency: This is the system of money that country uses example, naira and kobo are being used in Nigeria
Legal Tender: This is the currency that is backed up law to be used as medium of exchanged settlement of debt, unit of account and measure of value etc.
Monetary policies: These are policies designed to control the quality price and direction of money supply in pursuit of national economic goals.
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