The Inflation In Nigeria Causes, Consequences And Control

Project and Seminar Topics with material for Banking and Finance

Project and Seminar Topics with material for Banking and Finance


This project deals with inflation in Nigeria causes, consequences and control which will be discussed under five consecutive chapters for a better comprehension and calamity purpose. This will be discussed in chapter to chapter.

Chapter one deals with the introduction aspect which includes the background of the study, statement of the problem, research questions, scope of the study as well as the significance of the study and definition of terms.
Inflation as an existing phenomenon has a negative connotation to the society at large which can be seen as the consequences. But with the information gathered it will enable one to make adequate suggestions which can stand as a control measures to the inflation problem in Nigeria.

Chapter two is all about the review of the related literature to the aforementioned topics in consideration of meaning of inflation, nature of inflation and control measures of inflation.

Chapter three deals with a research methodology and design. The method used in gathering information includes research questions, observation and also interview method. Other essential ingredients in the chapter include computation of the study, area of study, determination of sample size, sample and sampling techniques etc.

Chapter four embraces data connotation and data analysis with various instruments for data collection all the secondary data collected will be presented with the help of table under the analysis of the information.

Finally, the summary of the findings, recommendation will be based on the analysis of those secondary data and then by drawing of conclusion including references.

Table Of Content

Preliminary Page(s)

  • Title Page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract

Chapter One

1.0 Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Significance of the Study
  • 1.6 Scope of the Study
  • 1.7 Limitation of the Study
  • 1.8 Definition of Terms

Chapter Two

2.0 Review of Related Literature

  • 2.1 Causes of Inflation
  • 2.2 Negative effects of Inflation
  • 2.3 Control of Inflation
  • 2.4 Monetary Policy
  • 2.5 Uses of Fiscal Policy
  • 2.6 Uses of Physical Controls.

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Sources of Data (Secondary source of data only).
  • 3.2 Location of Data
  • 3.3 Methods of Data Collection.
  • 3.4 Literature Work Only
  • 3.5 Method of Data Analysis.

Chapter Four

4.0 Presentation and Analysis of Data.

  • 4.1 Introduction
  • 4.2 Presentation of Data
  • 4.3 Analysis of Data
  • 4.4 Interpretation of Result.

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Introduction
  • 5.2 Summary of Work
  • 5.3 Conclusion
  • 5.4 Recommendation
  • Bibliography
  • Appendix

Chapter One

1.0 Introduction

Nigeria economy has suffered so much since the attainment of independence in 1960. The causes of this suffering could be chiefly attributed to price fluctuation (Inflation) and therefore it is necessary that this vice is defined, exposed and controlled for economic and social progress of the masses.

Inflation can be defined as a continuous rise in price in goods and services caused by too much money in circulation. Any economy that tries to grow rapidly than the required rate of growth is likely to suffer inflation which could be classified in terms of types depending on the degree and intensity of the price increment.

The existence of this financial vice called inflation is attributed to a number of factors and they include;
High cost of production, poor storage facilities increase in wages and salaries with a corresponding increase in the supply of goods and services, low domestic productivity in the industrial and agricultural sector, excessive financing and rapidly increasing in agricultural expenditure.

The consequences of inflation could be grouped in to two (2) bad and good effects. This is probably why some economy recommends mild inflation while others abhor it entirely. But for the sake of this project, inflation will be related as a cankerworm, which weakens the economic activities of an economy.

It is therefore, necessary to put off inflation permanently from our economy since it can cause a lot of harm to the economy with the result of discouraging investors from investing. So, it is worthwhile to put in place some measures like monetary policy, fiscal policy and physical checks to control inflation in our economy.

1.1 Background Of The Study

The term inflation could be defined as a process of steady and persistent rising in prices of goods and services due to the volume of money in circulation.

Nigeria has experienced high volatility in inflation rates since early 1970’s there has been some period of high inflation in excess of 30 percent, this is because money growth has often in excess of real economic growth. In the years preceding 1975 the rates were below 30 percent. Nine years later in 1984 due to pressure from debtor groups to reach an agreement with the international monetary fund (IMF) one of the conditions was devaluation of domestic currency. The expectation that devaluation was imminent fuelled inflation as prices of adjusted to the parallel rate peaked at 39.6 percent but in the year 1997 and 1998 inflationary trend started a downward trend and stood at about 10 percent.

However, one major target of micro-economic policies now is how to achieve stability in price level, stability here does not mean a situation where price will remain fixed, but it means a situation where variation in prices will lost over a long period of time so that people can easily adjust with the price without much complaints.

1.2 Statement Of The Problem

In this research work we focused on the prevalent problems that inflation has been causing in our economy.
These problems are as follows;

Inflation reduces the standard of living of the people whose income is fixed thereby increasing their cost of education, welfare and cultural facilities available. This situation however, makes it difficult for the poor masses with the fixed income to survive in the economy.

Inflation leads to a fall in the burden of national debt by making a fixed debt amount to lose its purchasing power.
Inflation also leads to a balance of payment deficit when the price of domestic goods rise and make more consumer goods to be imported thereby making the country to spend more foreign currency than what it will receive from exportation. However, since the real value of money fall during inflationary period, people prefer to spend it rather than investment.

1.3 Objectives Of The Study

The study embraces the causes, consequences and control of inflation in the Nigeria economy. The negative effect has indeed remained stagnant towards the economic development. However, the main objectives of this study are as follows:

  1. To know its influence in the Nigeria economy.
  2. To determine how inflation affect our economy.
  3. To find out the means and provides solution that can be adopted in solving the problem of inflation in Nigeria economy.

The study will also educate the masses on the need to minimize the problem associated with inflation on a bid to have an economic boom instead of boom.
To give suggestions on how to curb inflation through government agencies and individuals.

1.4 Research Questions

  1. What are the problems that inflation has been causing in our economy?
  2. Can inflation reduce the standard of living of the people whose income is fixed, thereby, increasing their cost of education, welfare and cultural facilities?
  3. Does inflation head to a fall in the burden of national debt by making a fixed debt amount to lose its purchasing power?
  4. How can inflation lead to a balance of payment deficit when the price of domestic gods rise and make more consumer goods to be imported thereby, make the country to spend more foreign currency than what it will receive from exportation?
  5. How can the real value of money fall during inflationary period, people prefer to spend it rather than investment?

1.5 Significance Of The Study

The significance of this study is to achieve a great success as we can in solving the problems of inflation in our economy.
The significance of this study will also be of immense importance to the following groups:

  1. To other researchers
  2. To central bank of Nigeria
  3. To the government and the public at large.

To other researchers, they will use it as a guide and base from consultation of their research work. Its significance to the central bank of Nigeria is that it will help them in strengthen the inflationary trend in the country.
This study will also enable the citizens to adjust to the demand of economic policies which are geared towards finding a lasting solution to this inflation so as to promote economic policies that favour our nation.

1.6 Scope Of Study

The scope of this study will be centered on unilever Nigeria Plc. Enugu.

This research work was face with so many problems which hindered its comprehensive study during the period.
During the course of this research, a lot of factors militated against the effectiveness of the research work.

1.7 Limitation Of The Study

In this research work, numerous problems were encountered which limit the work to this extent of survey. During the course of this research, a lot of factors militated against the effectiveness of the problems include;

Financial Constraint:

As students, there was not enough capital to spend in transport and fact finding and borrowing of necessary literature that would have helped in the writing of this research work.

Time Factor:

It was difficult for the researcher to complete the study within the record time because of the pressures of other academic works.

Inadequate Of Statistical Data:

The statistical data were cumbersome to lay hands on due to the fact that there were inadequate of some sellers to communicate well with their customers.

1.8 Definition Of Terms


Inflation can be defined as the persistent rise in the price of goods and services due to the volume of money in circulation.


It means Central Bank of Nigeria. This is a financial institution set up by the control government of Nigeria to carry its financial business activities of printing of currencies and minting of coins, raising loan, influencing the money supply, controlling the activities of other financial institution.

Chapter Five

5.0 Summary, Conclusion And Recommendation.

5.1 Summary Of The Work:

This is to summarize all the work, which has been carried out the write. The work will be summarized chapter by chapter to enforce quick understanding by the other readers.

In chapter one a problem was identified which is the problem has made thy government to run around trying various policy measures such as monetary and fiscal policies to solve the problem.

The questions that come up were what is the impact of inflation on the Nigerian economy?

That is to say has the economy been affected by inflation.

The purpose of the study was to determine the impact of inflation on Nigeria economic growth and to determine the effect of inflation on employment in the economy. The topic was found necessary because it will help to know if inflation has negatively or positively affected economic growth. The study makes the business sector general public students of economic etc.

In chapter two the result of application of some other theories was observed Kalsor (1961: 14) observed that on increase in the inflation rate retards growth stockmen (1981:11) also observed that on increases in the inflation rate result and people welfare sills (1986) observed that inflation affect expenditure demand. This means that inflationary process reduce the level of real expenditure sills also observed that inflation affec5t the ability of different economic group to puck for higher income.

Also sills observed that inflation alter the redistribution of both income and wealth.

The sources of data were mainly scenery source because of the nature of the study and reliability of secondary data.
Some factor limited the researcher from the worm like tome finance and lack of textbooks.

In chapter four data was presented analysis of data and test of hypothesis was done and the result of the analysis was discussed here and hypothesis stated in chapter three was tested and it was found out that inflation has negatively affected Nigeria economic growth.

5.2 Conclusion

Having considered the present state of the impact of inflation on the Nigerian economy for the period 1980-1988 a tight monetary and fiscal measures and vital to Nigeria development process.

In an era of an ever changing global economic environment especially now that the current economic approach of most countries towards price stability and welfare Nigeria cannot afford to be left behind inflation has significantly affected Nigeria economic growth.

The persistent increase in the prices of good and service has affected the economy tremendously.

Nigerian governments have been trying through various policy measures such as monetary and fiscal policies to reduce drastically inflation to an acceptable level.

However the failure of these policies to achieve the desired impact can be attributed to the myriad of problem which have characterized the Nigerian economy such as corruption political instability management policy inconsistency and the problem of implementation but in would not be wrong to wrong to say that there have not been enough effort by the government as to warrant a far reaching impact on the economic transformation of Nigeria.

5.3 Recommendation

(A) Recommendation On The Work/Study

Based on the findings the following are recommended:

  1. There is need for government to embark special programme with in agricultural to increase out which in turn reduce the prices of agricultural product.
  2. Government should also embark on export promotion in order to get more foreign revenue.
  3. There should be strike adherences to C.B.N’S monetary policy guidelines by both the public and private sector as this will help to arrest the problem of excess borrowing for speculative purchase of foreign exchange.
  4. Mandatory sectarian credit allocation should be imposed so as to induce higher level of output thereby restrain inflation.
  5. Political stability and social security are pre-requisites for the conductive environment that is needed for policy continuity and effectiveness.
  6. Government should strive hard in order to improve on the deteriorating value of naira in the international market.
  7. Government should scrap the policy of giving approval to certain. Unofficial transactions to be funded at the official rate.
(B) Recommendation For Further Study
  1. Effectiveness of monetary and fiscal policies in stabilization of Nigeria economy.
  2. Sectoral credit allocation as a guideline in restraining inflations.
  3. Evaluation of the effort of monetary authorities and the government towards reducing to be funded at the official rate.

The Inflation In Nigeria Causes, Consequences And Control

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