Impact Of Monetary Policy Instruments On Unemployment In Nigeria

1.2   Statement Of The Problem
One of the major objectives of monetary policy in Nigeria is price stability. But despite the various monetary policy instruments that have been adopted by the Central Bank of Nigeria over the years, inflation still remains a major threat to Nigeria’s economic growth. 

Disappointedly, the average growth of the aggregate economy was accompanied by increased in the average growth of unemployment and poverty rates from 3.93% and 42.07% respectively between 1981 to 1990 to an alarming rate of 14.7% and 63.99% respectively between 2001 and 2010. Also, within this period the disparity in income distribution (measured by Gini Index) rose from 34.18 in 1980 to 42.9 in 2004 and further to 48.8 in 2013 (World Bank Indicators, 2013).
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 were 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.
This study is therefore concerned with finding out the impact of selected monetary policy on unemployment in Nigeria. Also, intend to investigate clearly the extent to which these policies have contributed to worsening the problem of unemployment or alleviating it completely through these question;
Does monetary policy have any impact on unemployment in Nigeria?
What is the relationship between monetary policy and unemployment?

1.3    Objectives of the Study
The general objective is to determine the impact of selected monetary policy on unemployment in Nigeria for the period of 1980-2015.  Under this general objective, the specific objectives this study covers are;

1. To determine the impact of selected monetary policy on unemployment in Nigeria.
2. To determine if there is a long run relationship between monetary policy and unemployment.

1.4 The statement of hypothesis

The study is guided with both null and alternative hypothesis which is denoted using Ho for null hypothesis and Hi for alternative hypothesis.
Ho- Monetary policy has no significant effect on unemployment rate.
Hi- . Monetary policy has significant effect on unemployment rate.

1.5 Significance of the Study
This research work is being carried out to determine the overall impact of monetary policy on unemployment. The findings of this work will be of immense use and benefit to government Ministries, National Directorate for Employment  and Monetary Authorities (Central Bank of Nigeria), Department and Agencies at federal level in solving some macro-economic problems, state and local, policy makers and intellectual researchers who may be willing to improve the work subsequently. Lastly, it will educate the public on various government policies as related to monetary and unemployment.
1.6 Scope of the Study

The research work deals with the impact of selected monetary policy on unemployment. This research work covers the period of years (1980-2015) which is sufficient and suitable for conducting a research, making new findings and relevant recommendations.