THE EFFICIENCY AND EFFECTIVENESS OF GOVERNMENT AGENCIES IN THE IMPLEMENTATION OF FISCAL AND MONETARY POLICIES MEASURES
(A CASE STUDY OF THE NIGERIAN ECONOMY)
This research is conducted on the efficiency and effectiveness of government agencies in implementing the fiscal and monetary policy measure. Government agencies in the context of this write up implies structures put in place to formulate and ensure the implementation of policy programmes for the realization of Macro economic objectives. This policy could be fiscal or monetary policies while the former is administered by the ministry of finance through some specialized agencies such as NCS, SBIR, FBIR etc. the latter is formulated by the Central Bank of Nigeria and implemented through banks and corporate bodies. As the goal of the policy formulator is to curb inflation, reduce unemployment; stabilize prices, ensure economic growth and done all enhance the realization of a favourable balance of payment objective. The main objective of this study is to determine how these agencies have faired in the actualization of their policy dreams and targets. To achieve this, hypothesis were formulated and tested. The findings revealed that the CBN is effective in implementing the monetary policy measure while other agencies under study are neither efficient nor effective. The research also studied the problems militating against the efficiency and effectiveness of these agencies in Nigeria. After a critical analysis of these problems aid the outcome of the findings, the researcher proffered recommendations with a view to finding a lasting solution to the problem.
TABLE OF CONTENT
1.1 Background of the study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Significance of the Study
1.5 Scope and Limitation of the Study
1.6 Research question/hypotheses
1.7 Definition of terms
2.0 REVIEW OF RELATED LITERATURE
2.1 An overview of Fiscal and Monetary Policies
2.5 Co-ordination of Fiscal and Monetary
2.6 Government Agencies, their Efficiency
2.7 Central Bank of Nigeria (CBN)
2.8 Factors Militating Against the Efficiency and
Effectiveness of Government Agencies in Implementing
The Fiscal and Monetary Policy Measures
3.0 METHODOLOGY OF THE STUDY
3.1 Sources of Data
3.2 Primary Data
3.3 Secondary Data
3.4 Sample/Population Size
3.5 Method of Investigation
3.6 Validation of Research Instruments
3.7 Statistical Methods used for Data Collection
4.0 PRESENTATION AND ANALYSIS OF DATA
4.1 Data Presentation
4.2 Data Analysis
4.3 Data Interpretation
5.0 DISCUSSION OF FINDINGS, CONCLUSION AND
SUGGESTION FOR FURTHER RESEARCH
1.0 BACKGROUND OF THE STUDY
Countries all over the world have organized agencies established in order to monitor and ensure stability in the economy. These agencies are provided with the necessary facilities with which to achieve this laudable objective. Their ability to achieve their desired goal depends on the level of development in that country. Record shows that the so called developed countries of the world have been able to achieve about 70% of the Macro economic objectives of full employment, price stability, favourable balance of payment among others. This is because their agencies have succeeded in implementing their economic policy measures efficiently and effectively. The developing nations where Nigeria belongs are still below 50% in the actualization of the aforementioned objectives while the underdeveloped countries are still winking in the dark.
In Nigeria, the Central Bank of Nigeria, State Board of Internal Revenue, Nigeria customs Service and others are the agencies instituted to implement the policy measures for the attainment of macro economic objectives. These agencies have not totally succeeded in implementing the policy measures in the interest of the populace. This is attributable to the country’s state of development which affects the functioning of these agencies.
The Central Bank of Nigeria is at the forefront of the policy formulation. She assesses the economy with a view of identifying the economic problems. These problems are communicated to the Minister of Finance who in collaboration with the Apex bank determines how to resolve the identified problem. The fiscal policies are administered by the ministry of finance and when formulated are not just implemented but subjected to the approval of the National Assembly before actual implementation. The monetary policies on the other hand are formulated and implemented by the Central Bank of Nigeria.
According to George (1994: P. 222), the economy of any country regardless of its structure is regulated by certain policies developed by the government. Economic and social policies are some of them but the economic policies mentioned above are more fundamental and crucial because it serves as a foundation for the success of the other policies of the government. These policies require a functional agency for its success in an economy.
These agencies are as old as the policy measures themselves. Mule (1970: P. 369) observed that “Fiscal policy as an effective tool for economic reconstruction and development has been in existence before the second world war” after the war, many economists advocated theories in order to increase economic prosperity because of the adverse effect of the war. Early in the twentieth Century, Lord Maynard keyness put forward an articulated and constructive solution to solving economic problems.
Therefore, it is clear from the fore going that these stabilization measures are monitored and directed by the established agencies that are as old as the policy measures themselves. This implied that these agencies have been in charge of the upswings and downswings the nation has been experiencing before now. Hence, it is the focus of this work to assess the efficiency and effectiveness of these agencies in implementing the policy measures with a view to identifying those factors that contributed to their success or failure in the Nigerian economy as the case may be.
1.1 STATEMENT OF THE PROBLEM
Because the Nigerian economy is bestowed with acute episode of inflation, unemployment and price instability, life have been difficult and unbearable for the citizen. As a result, many have been relocating to the shores of these developed counties where they will be well catered for. Also, investors who prefer a “safe haven” for their investment have been committing their excess fund in these countries for investment purposes.
All these are as a result of the ability of these agencies to create a conducive atmosphere for the Nigerian populace by manipulating the appropriate policy instrument. A number of problems are encountered by these agencies in implementing the policy measure.
Some of which are:
1. The activities of non-bank financial intermediaries.
2. High level of illiteracy among Nigerians.
3. Frequent change of government.
4. Non compliance of banks to CBN’s regulation.
5. Unscrupulous art of importers and exporters.
6. High level of corruption among Nigerians.
7. Incompetence Staff.
Some of these problems are within the control of these agencies while many others are outside their control. Hence, the ways and manner in which these problems affect their efficiency and effectiveness will be harnessed in further chapters.
1.3 OBJECTIVIES OF THE STUDY
In view of the existence of the aforementioned problems, which affects the operation of these government agencies, it is the intention of the researcher:
1. To find out how the activities of the non-bank financial intermediaries affect the effectiveness of the Central Bank of Nigeria in implementing the monetary policy measure.
2. To investigate bank’s non-compliance with the CBN regulation as regard policy implementation.
3. To evaluate the effectiveness of CBN in implementing the monetary policy measures.
4. To ascertain the extent to which the illiteracy level among Nigerians affect the realization of policy objective.
5. To measure the effectiveness of the Nigeria customs service in implementing the fiscal policy measures.
6. To highlight the importance of a properly implemented fiscal and monetary policy measures to the development of the Nigerian economy.
7. To assess the efficiency of the government agencies (CBN, SBIR and NCS), in implementing the fiscal and monetary policy measures.
8. To determine the effect of inadequate statistical data to the operation of CBN.
1.4 SIGNIFICANT OF THE STUDY
At the end of this write up, the work will be of immense benefit to diverse group of people ranging from the general public to their other researchers and the government authorities.
This work will be beneficial to the general public especially the layman on the street who knows next to nothing about policy instruments and their application in the Nigerian economy. It also educates the members of the public on the need to inculcate banking habit. It further went ahead to reveal to them how the unscrupulous merchants in the country have been hindering the actualization of policy objectives.
The study will be of immense benefit to other researchers writing on this topic and other related topics because it serves as reference point and also as a source of data.
The work reveals the adverse effect of illiteracy to the development of the Nigerian economy and hence the need for government to institute a functioning programme for its eradication. It also shows the effect of excessive taxation on investment, consumption, employment and output.
1.5 SCOPE OF THE STUDY
The researcher recognized that there are lots of agencies established to implement these stabilization measures in Nigeria but because of time constrain, the study will be limited to the activities of the Central Bank of Nigeria (CBN) Enugu Branch, State Board of Internal Revenue (SBIR) and the Nigerian Customs Service (NCS).
The work will be narrowed down to how these agencies will function efficiently and effectively in the face of the Nigerian environment.
1.6 RESEARCH QUESTIONS/HYPOTHESES
1. Is the Central Bank of Nigeria (CBN) effective in implementing the monetary policy measures?
2. Is the State Board of Internal Revenue effective in implementing the fiscal policy measures?
3. Is the Nigerian Customs Service effective in implementing the fiscal policy measures?
4. Are these government agencies efficient in implementing the fiscal and monetary policy measures?
The study has following assumption
HO: The Central Bank of Nigeria is not effective in implementing the monetary policy measures.
HI: The Central Bank of Nigeria is effective in implementing the monetary policy measures.
HO: The State Board of Internal Revenue is not effective in implementing the fiscal policy measures.
HI: The State Board of Internal Revenue is effective in implementing the fiscal policy measures.
HO: The Nigeria Custom Service is not effective in implementing the fiscal policy measures.
HI: The Nigeria Custom Service is effective in implementing the fiscal policy measures.
HO: The Government agencies are not effective in implementing the fiscal policy measures.
HI: The Government agencies are effective in implementing the fiscal policy measures.
1.7 DEFINITION OF TERMS
1. Efficiency: This is the ability to perform one’s duty well. That is, knowing what to do and doing it at the appropriate time to the satisfaction of the people.
2. Effectiveness: This is the ability to achieve the expected result that is, having an effect or making a striking impression.
3. Government: This implies the rulers and the ruled. It refers to government at various levels such as Federal, State and Local government.
4. Agencies: Agency in this content implies the operating arm of government. Those who ensure that government policies are actually implemented to the betterment of the lives of the Nigerian populace.
5. Implementation: This is the carrying out an undertaking agreement or contents of a policy into effect.
6. Fiscal: The term fiscal means public revenue and expenditure.
7. Monetary: This refers to money or currency.
8. Policy: This term refers to plan of action or statement of aims and ideals.
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