IMPACT OF INTEREST RATE LIBERALISATION ON SELECTED MACROCONOMIC INDICATORS IN NIGERIA

TABLE OF CONTENTS
Title Page
Certification Page
Dedication
Acknowledgments
Abstract
Table of Contents
Lists of Tables
Lists of Figures

CHAPER ONE: 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       Hypotheses of the Study
1.6       Scope of the Study
1.7       Significance of the Study
            References

CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0       Theoretical Review
2.1       A Review of the Different Interest Rate Regimes on the Performance of Nigeria Economy
2.2       Interest Rate Liberalization on Savings
2.3       Interest Rate Liberalization on Investment
2.4       Interest Rate Liberalization on Economic Growth
2.5       Interest Rate Liberalisation and Access to Credit and Financial Service
2.6       Review of Investment Behaviours in Nigeria pre and post   
            Financial Liberalisation
2.7       Review of performance of Nigerian Economy Pre and post Financial  Liberalisation
2.8       Interest Rate Changes and distribution of Income
2.8.1    Interest Rate Liberalisation and poverty channel of influence
2.8.2    Interest Rate Deregulation and the Monetary Transition-Mechanism
2.8.3  Interest Rate Liberalisation and Financial Deepening
2.8.4  Interest Rate Liberalisation and Bank Credit Growth
2.8.5  Interest Rate Liberalisation and Domestic Financial System Efficiency
2.8.6    Interest Rate Liberalisation and Reduction in Financial Constraints
2.8.7    Financial Liberalisation and Interest Rate Risk Management
2..8.8  Behaviour of Bank lending and Deposit Rates after the Reform
2.9       Determinant of Economic Growth in Nigeria
2.9.1   Gross Domestic Product per Capital Growth rate (GDPPCGR)
2.9.2  ii Credit to private Sector
2.9.4  Overview of interest Rate Liberalization Policy in Nigeria
2.9.5 Trend Analysis of Interest Rates policies and Economic Growth Rates in Nigeria
2.9.6  Impact of Interest Rate Liberalisation on the Financial System
2.9.7  A Brief Review of Interest Rate Reforms in Nigeria
2.9.8  The Impact of Interest Rate Liberalisation on Nigerian Economy
2.10     Empirical Review
2.10.1 Mckinnon-Shaw Analysis
2.10.2 The Post-Keynesians Theory
2.10.3 Proponent of Mckinnon-Shaw Hypothesis
2.10.4 Summary of Review of Related Literature
References

CHAPTER THREE
3.1       Research Design
3.2       Nature and Sources of Date
3.3       Populations
3.4       Description of Research Variable
3.4.1    Dependent Variable
3.4.2  Independent Variable
3.5       Technique for Analysis
3.6       Model Specification
References

CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1       Data Presentation
4.2       Descriptive Statistics of the Employed Variables
4.3       Discussion of Research Findings
References

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1       Summary of Findings
5.2       Conclusion
5.3       Recommendations
Bibliography


ABSTRACT
This research examines the impact of interest rate liberalisation on selected macro-economic indicators in Nigeria. Employing ex-post factor design and using GDP per capita as growth indicator, Total Financial Savings (TFS) as a proxy for savings and Credit to Private Sector as a proxy for investment. The research established a negative relationship between interest rate liberalisation on economic growth, savings and investment which were represented by indices calculated using ordinary Least Square. This research finds that interest rate liberalisation have negative and insignificant effect on economic growth, savings and investment in Nigeria. This supports the numerous past studies which have reported negative results regarding the effects of interest rate liberalisation on economic growth. The research concludes that interest rate liberalisation have negative and insignificant effect on credit to private sector, saving and economic growth in Nigeria.



CHAPTER ONE
INTRODUCTION

1.1              Background of the Study
Interest rate liberalisation can be viewed as a policy response encompassing a package of measures to remove all undesirable state imposed constraints on the free working of the financial market. The measure includes the removal of interest rate ceilings, loosening of deposit and credit control (Killick and Martin 1990). Schmidt Hebbel and Serven (2002) observe that interest rate liberalization grants market forces a dominant role in setting financial assets prices and returns, allocating credit and developing a wider array of financial instruments and intermediaries. Bandiera et-al (2000) notes that the wave of liberalization in many developing countries in the1980 was characterised by more attention given to market forces in allocating credit through market determined interest rate. The financial liberalisation hypothesis holds that allowing the market to determine real interest rates would mobilise savings and increase deposit (Fry1997). Several authors suggest that financial liberalisation spurs GDP growth by fostering productivity growth, not only by raising the funds available for capital accumulation. Theoretical research by Acemoglu and Zilibotti (1997), Soyibo (1992) and Aghion et-al (2005) among others show that financial liberalisation may relieve risky innovators from credit constraints, thereby fostering economic growth through technological change.

According to McKinnon (1973) and Shaw (1973) financial repression largely manifested through indiscriminate distortion of prices including interest rate, has tended to reduce the real rate of growth. Undoubtedly, government’s past efforts to promote economic development by controlling interest rates and securing ‘‘inexpensive’’ funding for their own activities have undermined financial development (Demetriades and Luitel 1997). Prior to August 1987, interest rate in Nigeria was generally fixed by the Central Bank of Nigeria with periodic adjustments depending on the government’s sectoral priorities (Uchendu 1993).....

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Item Type: Postgraduate Material  |  Attribute: 90 pages  |  Chapters: 1-5
Format: MS Word  |  Price: N3,000  |  Delivery: Within 30Mins.
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