1.1 BACKGROUND OF THE STUDY
The development of central banking can be said to date from the middle of the 19th century. But precisely there is no exact data when banking started in Nigeria. Historically, records showed that domestic banking activities started in 1961, when a shipping company Elder Dempter Lines started banking services in Lagos the chairman of the company in 1392 established the first banking institution called African Banking Corporation, which metamorphosed, into First Bank of Nigeria. In 1917, Barchays banks now known as Union Bank of Nigeria Plc was established.Before 1952, the West African Currency Board (WACB) established I 1912 was used as the state banks for Anglo-phone West African Countries, such as Nigeria, Serra-Leone. Ghana and Gambina. The West African Currency Board (WACB) was based in London and it issued notes and coins for the Anglo-phone West African countries.
The banking failure of the 1950’s could not but lead to the establishment of Central Bank to serve as banker to the banking system, to perform supervisory role over the commercial banks and issue currency notes and coins thus, regulating the supply of money in Nigeria. Not only these, it acts as financial adviser to the government on monetary policy and implementing the policy on behalf of the government.
The central bank of Nigeria is government bank, established to keep a country’s financial system under control and close supervision. The responsibility of managing the central bank of Nigeria is vested in the hand of the board of directors whose members are appointed by the government.
The central bank of Nigeria is expected particularly in promoting economy growth by fostering the development of money and capital market; develop banking habits and sound financial system. In order to facilitate economy development, central bank of Nigeria tends to engage in activities, which extend beyond its traditional functions. In this regard, it played a unique role in the development of Nigeria economy, particularly in promotion agricultural and industrial development in general.
Central Bank of Nigeria was established to act as the organ of government that should undertake the major financial operations of the government and by its conduct influence the behaviour of financial institutions so as to support the economic policy of the government. It follows therefore that the central banks of Nigeria must in some sense be a part of the government machinery with its action clearly co-ordinated with those of other executive branch of government.
Argument has been advanced for the complete independence of the central bank of Nigeria; so far this has not been achieved as there is no country where the central bank is completely free from government intervention.
There is no gainsaying in the fact that the role played by the central banks of Nigeria is establishing Nigerian economy through monetary policy is an enormous one.
Since it inception in 1958, it has engaged in one stabilizing role or the other, that is direct or indirect monetary policy.
1.2 STATEMENT OF PROBLEMS
The wind of change economically which is more pronounced in the development countries, especially Nigeria. In attainment stability in the economy of Nigeria the central bank of Nigeria is faced with many problems.
These problems include:
Dependence in agricultural sector, unemployment, poor standard of living and low income per capital are the major problems facing Nigerian economy.
1.3 OBJECTIVE OF THE STUDY
Every research work is aimed at solving a specific purpose. The purpose of this research is to:
1.4 SIGNIFICANCE OF THE STUDY
The study of the role of central bank in the regulation of Nigeria economy through monetary policies with particular focus on Enugu state will be of immense benefit to both the private and public sectors of the Nigeria economy.
Student’s captains of industries, political office holders, National Assembly members, and infact, the general public will benefit a lot from this study. Investors, especially those who trade on government securities will also benefit a lot.
Foreign investors who are always eager to see a stable and viable economy will find this study very beneficial.
1.5 SCOPE OF THE STUDY
This study covers the role central bank of Nigeria plays in the economic development of Nigeria using the measures know as monetary policies/commercial banks.
1.6 RESEARCH QUESTIONS
The following research questions were formulated to get to the indept of the topic and also based on the statement of problems.
In undertaking the study, some constraints were encountered. They include:
BALANCE OF PAYMENT: This is the difference between the amount a country pays for import and the amount it receives for export in a particular period of time.
CBN: Central Bank of Nigeria, the monetary authority of Nigeria, owned by the federal government where it exists,
COMMERCIAL BANKS: These are banks that accept cash inform of deposit and issues cheques to customers. They are been governed by the CBN.
DEFICIT; this is the amount by which money owed is greater than the money earned in a particular period of time.
EFFECTS: These are situations where it is either negative or positive.
EXPENDITURE: the act of spending or using money, an amount of mount system reduction in public government.
REVENUE: the money that a government receives from taxes or from as an organization etc.
REGULATORY: These are rules laid by the head department of to be followed by the subordinate.
NIGERIA: A country not limited by territories (Economy) in Africa.
MACRO ECONOMIC: the study of large economic system such as those of whole countries or area of the world.
FINANCIAL SECTOR: This is a sector of the Nigerian economy which deals with the acceptance and deposition of money from customers inform of savings.
DEREGULATION: is a free trade, a business activity etc. From rules and countries.
MONETARY POLICY: this is an item of title monetary value closer in Europe political monetary economic and union.
INFLATIONARY: causing or connected with a generally rise in the price of services and goods.
MONEY: money is anything that is generally accepted as a medium of exchange an as a store of value in settlement of debts or is what you earn by working or selling anything and use for the purchase of things.