Impact Of Fiscal And Monetary Policy In Controlling Unemployment In Nigeria

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Impact Of Fiscal And Monetary Policy In Controlling Unemployment In Nigeria


Abstract


This study is on the impact of fiscal and monetary policy in controlling unemployment in Nigeria. The total population for the study is 200 staff of national directorate of employment. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up human resource managers, administrators, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


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 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.


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 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.


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;

  1. 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
  2. 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

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.


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

  1. 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.
  2. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  3. Chapter three deals on the research design and methodology adopted in the study.
  4. Chapter four concentrate on the data collection and analysis and presentation of finding.
  5. Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to ascertain that the objective of this study was to ascertain the impact of fiscal and monetary policy in controlling unemployment in Nigeria

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of fiscal and monetary policy in controlling unemployment in Nigeria


5.2 Summary

This study was on the impact of fiscal and monetary policy in controlling unemployment in Nigeria. Four objectives were raised which included: To ascertain the impact of fiscal and monetary policy in controlling unemployment in Nigeria, to ascertain the effect of fiscal policy on Nigeria economy, to ascertain the relationship between monetary policy and unemployment control, to ascertain the effect of fiscal policy on unemployment. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff ofnational directorate of employment. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up human resource managers, administrators, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies


5.3 Conclusion

The study has investigated the role and influence of fiscal policy on unemployment reduction and inflation control in Nigeria. The outcome of this study has shown the ineffectiveness of fiscal policy in urgently addressing relevant macroeconomic variables over the years which has contributed greatly to economic instability and heightening poverty situation reflected by high unemployment rate in Nigeria. The finding of the study also presupposes low federal government capital expenditure in consideration of the large population of the country and as such could not reduce unemployment rate timely and adequately. The aggregate capital expenditure and gross domestic product of Nigeria is low in view of the population and this is due to ineffectiveness of fiscal policy application. This is in line with Agu et al (2015) who posit that government investment expenditure is far below recurrent expenditure. The high remuneration of government official, especially the National House of Assembly usurps a large aspect of the total federal government expenditure, hence paltry sum allocated to capital and productive expenditure. A positive change is needed to improve the economy for better.


5.4 Recommendation

The following recommendations were made:

  1. There is the need for massive capital expenditure in productive ventures in Nigeria, especially on agriculture. Nigeria is still agrarians economy as at the moment. Efforts should be focused on establishing integrated agriculture in virtually the entire local government in the country. This requires the federal government collaboration with state, local and multinational agents. This will quickly create employment as articulated by Keynes so as to tackle unemployment, promote economic growth and poverty reduction.
  2. Fiscal policy lags need to be sufficiently addressed and it is also essential to adequately monitor the implementation and execution of fiscal policy. In other words, budgetary allocation and actual spending of allocated revenue should co-opt morally upright individuals who may be government official and/or private individual to ensure that any capital expenditure is channeled strictly to the sector intended. This is to guard against fund diversion and corruption. Proper forecast of the economy at all time is necessary in view of lags in fiscal policy..
  3. Taxes should not be restricted to registered companies. The self employed, drivers and trycylists/motorcyclists among others scattered here and there should not be exempted from taxation. Effective tax design is imperative so as to capture every individual in Nigeria as it is obtainable in advance countries like United States of America where virtually tax is charged on everything without any delay. Such a broad based tax will help to impact on people’s disposable income when the need arises so as to ensure inflation control and economic stability.
  4. It is also needful to diversify the economy by developing other sectors such as solid mineral, agriculture and manufacturing so as to reduce excessive importation and have more goods available in order to counteract inflation at all time. Besides, adequate environment is needed to encourage both domestic and foreign investment in Nigeria.

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