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THE IMPACT OF CENTRAL BANK OF NIGERIA FINANCIAL MANAGEMENT ON THE NIGERIAN ECONOMY (A CASE STUDY OF UNION BANK OF NIGERIA).
BACKGROUND OF STUDY
The Nigerian economy has undergone structural changes in the past three decades from a predominantly agricultural economy in the 1960s to an economy mainly valient on oil from the mid 1970s
The growth in oil earnings was not fully internalized into the economic system. The result was that the consumption production pattern became largely import oriented inability to emergence of trade arrears.
A growing department burden also surface in the early 1980s as a result jumbo trans contracted from the international capital market. External Debt outstanding rose drastically from US 93.6 million to 1976 to us 18.6million in 1986 and to about us 30.8 billion in 1990.
The pursuit of an over valued exchange rate policy, the subsequent relegation of the agricultural sector to the background, heavy public sector pending and combined to create distortion in the production. Consumption and payments patterns.
The prections decline in oil earnings in the 1980s necessitates policy redirection aimed at realigning the domestic production patterns with the local resources base.
The structural adjustment pro (SAP) was introduced in July 1986 to eliminate structural distortions and encourage a diversified and broad productive base the major feature of the SAP includes: -
(a) The re- alignment of the naira exchange rate to reflect forces.
(b) Tread liberalization.
(c) Privatization and commercialization of government owned enterprises and the promotion of locally secured raw materials
(d) The deregulation of the economy.
The banking system has been an integral part of the on- going structural reforms and it has played a heading role in the management of policy changes within the banking system
The Union Bank plays a leading role in the management economy.
The union adopts measures describe appropriate to influence the performance of the financial sector for the achievement of desired objectives which in of monetary stability and a sound financial structure.
In their performance of the supply of credit and money and sustainable growth without generating inflationary pressures and undus instability in the exchange rate.
The banking failures of the 1950s lead to the introduction of a Union Bank following the recommendation of J.B. Loynes.
The ordinance establishing the C. B. N. was promulgated in 1958 and it became fully operational on the lot of July 1959.
The main provision of the ordinance includes: -
(1) Issuance of legal tender currency in Nigeria maintenance of external reserve in order to safeguard the internal value of the currency.
(2) Promotion of monetary stability and a sound financial structure.
(3) Bank to bank in Nigeria and abroad Ambassador Olatopo Falowon opined that Union Bank has not been playing the traditional roles structure part from control of the money stock are to prevent systematic financial instability and meliorate concerns about the efficiency and equity of financial intermebation failure of the financial institutions to loss of confidence in the system.
Finally, the Union Bank Decree of 191 upon which this study is based – Bases on the conflicting view of others and an personal experience as a banker, the researcher was motivated to undertake this study.
(A case study of Union Bank of Nigeria Plc. money by in creasing their lending.
1.2 STATEMENT OF THE PROBLEM
There is the problem of low capital formation in the economy. As a result of the irregular savings investment procedures. Hence low per capital income. There is also the problem of under development of the Nigerian financial system i.e. insufficient financial institutions, financial instruments and financial markets.
There are equally the problem of inadequate credit to the economy to stimulate productive activities.
There is also the problem of continuous inflation in the economy.
There is also problem of employment of our human and material resources.
Finally, there is the problem of continued depreciation of the naira.
1.3 PURPOSE OF THE STUDY
The purpose of the study is to: -
(1) Find out the extent there has been improvement in the local capital formation as a result of Union Bank financial management, hence increases investment activities.
(2) To find out the extent that the Union Bank has influenced aggregate credit to the economy.
(3) To find out the extent there has been developed in our fianacial system.
(4) To find out the extent there is improvement in the economy.
(5) To find out the extent there is improvement in the economy.
1.4 DELIMINATION AND SCOPE.
This research study conducted on the Union Bank of Nigeria conducted on the Union Bank of Nigeria Enugu. The bank in Nigeria is ho0wever divided into two, the banking office and the regional office, which is more or less subdivided of the head office.
1. DEARTH OF DATE
The researcher was hindered to a large extent due to the scarcity of data on the topic. All the efforts made to gather more information for the study yielded minimal result.
2. COST CONSTRAINT
This research topic is such an interesting topic that would have been better conducted on the union bank of Nigeria. However, due to the limitation of finance, the researcher decided to concentrate the study on the Enugu office of the bank and specially on the regional office of the bank.
3. TIME CONSTRAINT
Suffice it to say time was one of the greatest constraint faced by the researcher in con ducting this study. As a result researcher was unable to visit some libraries the British council and infact to make a detailed study of the topic.