MONETARY POLICY AND INFLATION IN NIGERIA ECONOMY

HISTORICAL BACKGROUND OF THE STUDY: The history of economic growth shows that, economic transformation started in England in the Late eighteen century and gradually spread to other parts of Europe and North America. Economic transformations did not get to other parts of thee world until in the 1950s when Japan transformed to become one of world’s major industrial giants. This economic transformation has spread far and wide in the recent times but its spread is highly limited in Africa. It is only South Africa that has experienced it so far. This is clearly demonstrated by the World Bank report of (2001) which states that out of the 46 poorest countries in the World, 35 of them are in Africa.

Nigeria with it’s vast resources of both human and material nature is not left out of the club of poverty stricken countries. This poverty is illustrated by the recent World bank report (2005), which says that more than 70% of Nigerians are living below poverty line.   

It is against this background that this study is being undertaken. This poverty can be tackled using both fiscal and monetary policies to help solve this problem and growing poverty. So far, removing the country from poverty trap that seems almost impossible to be solved using variety of macro-economic policy measures.