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IMPACT OF FISCAL AND MONETARY POLICY IN CONTROLLING UNEMPLOYMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1      Background of the study

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 its.  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.

1.2 STATEMENT OF THE PROBLEM

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 were 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 nationwide 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 is misappropriated. The expenditure on capital project is divested to private purses whilst expenditure on personnel emolument is 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.

 1.3 OBJECTIVE OF THE STUDY

The objectives of the study are

1.   To ascertain the impact of fiscal and monetary policy in controlling unemployment in Nigeria

2.   To ascertain the effect of fiscal policy on Nigeria economy

3.   To ascertain the relationship between monetary policy and unemployment control

4.   To ascertain the effect of fiscal policy on unemployment

1.4 RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H0:   fiscal and monetary policy does not have any impact in curtailing unemployment in Nigeria

 H1: fiscal and monetary policy does have an impact in curtailing unemployment in Nigeria

 H02: there is no relationship between monetary policy and unemployment control

H2: there is relationship between monetary policy and unemployment control

1.5 SIGNIFICANCE OF THE STUDY

The study will give clear insight on the impact of fiscal and monetary policy in controlling unemployment in Nigeria. The study will be benefited to Nigeria government and for the researchers that will embark on this topic

1.6 SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers the impact of fiscal and monetary policy in controlling unemployment in Nigeria. The researcher encounters some constrain which limited the scope of the study;

 a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study

b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities

1.7 DEFINITION OF TERMS

FISCAL POLICY: In economics and political science, fiscal policy is the use of government revenue collection and expenditure to influence the economy.

MONETARY POLICY: Monetary policy is the process by which the monetary authority of a country, typically the central bank or currency board, controls either the cost of very short-term borrowing or the monetary base

CONTROL: the power to influence or direct people’s behaviour or the course of events

UNEMPLOYMENT: Unemployment is the situation of actively looking for employment but not being currently employed. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows

Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

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