Real Sector Output and Economic Growth in Nigeria
Chapter One
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain the relationship between real sector output and economic growth in Nigeria
- To find out whether the real sector can create job opportunities
- To find out whether the real sector boosts Nigeria economy
CHAPTER TWO
REVIEW OF RELATED LITERATURE
THE FINANCE AND ECONOMIC DEVELOPMENT NEXUS
Economic growth is about enhancing the productive capacity of an economy by employing available resources to reduce risks, remove impediments which otherwise could lower costs and hinder investment. The financial system plays an important role in promoting economic growth and development through the process of financial intermediation. The cost of acquiring information, enforcing contracts and making transactions create incentives for the emergence of particular types of financial contracts, market and intermediaries. Theory suggests that when financial institutions and markets are effective, they assist to alleviate market frictions occasioned by information asymmetries and transaction costs and can therefore, foster economic growth through several channels. Generally, in the process of reducing market frictions, financial arrangements change the incentives and constraints facing economic agents. A well developed financial system eases the exchange of goods and services by providing payment services; and, helps to mobilize and pool savings from a large number of investors. Other functions include acquiring and processing information about enterprises and possible investment projects, thereby allocating society’s savings to their most productive use; monitor investments and exert corporate governance; and help diversify and reduce liquidity and intertemporal risk (Levine, 1997 and 2005). Therefore, financial systems may influence savings rates, investment decisions, technological innovation, and consequently long-run growth rates. Why is the financial sector important for economic development and how does it contribute to economic growth? The role of finance in economic development is widely acknowledged in the literature. According to Schumpeter (1912), the financial sector plays a key role in economic development. He opined that financial intermediation plays a pivotal role in economic development by affecting the allocation of savings, consequently improving productivity, technical change and the rate with which the economy grows. He added that the efficient allocation of savings, through identification and funding of entrepreneurs that possess the best chances of implementing innovative products and production processes, are tools to achieving this objective. The financial sector is important because the financial intermediaries are responsible for resource allocation. Well-working financial intermediaries improve the efficiency of capital allocation, encourage savings, and lead to more capital formation. In the process of providing payments and intermediary services, the financial industry promotes the efficient allocation of resources. As documented by Levine (1997) and Watchel (2003), there are at least four ways in which the financial sector contributes to growth. First, the financial sector improves the screening of fund seekers and the monitoring of the recipients of funds, and these activities improve the allocation of resources. Second, the industry encourages the mobilization of savings by providing attractive instruments and saving vehicles. Such encouragement may also increase the savings rate. Third, economies of scale in financial institutions lower costs of project evaluation and origination and facilitate the monitoring of projects through corporate governance.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought the real sector output and economic growth in Nigeria
Sources of data collection
Data were collected from two main sources namely:
(i)Primary source and
(ii)Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
Population of the study
Population of a study is a group of persons or aggregate items, things the researcher is interested in getting information the real sector output and economic growth in Nigeria. 200 staff of CBN, Uyo, Akwa Ibom was selected randomly by the researcher as the population of the study.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain real sector output and economic growth in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of real sector output and economic growth in Nigeria
Summary
This study was on real sector output and economic growth in Nigeria. Three objectives were raised which included: To ascertain the relationship between real sector output and economic growth in Nigeria, to find out whether real sector can create job opportunities, to find out whether real sector boost Nigeria economy. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of CBN, Uyo, Akwa Ibom. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made human resource managers, customer care officers, senior staff and junior staff were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The real sector plays strategic roles in an economy, it is the driving force and engine of economic growth and development. The major ingredient for economic growth and development is capital accumulation. The financial system plays an indispensible role in the process of economic growth and development. In promoting growth and development, the financial system plays the traditional role of intermediation. Getting credit to fund productive activities has been the bane of the real sector because of the nature and depth of the financial sector in Nigeria. The dearth of longer tenored financial instruments has been a key constraint to real sector growth. Sustainable development can only be achieved if adequate financial resources are efficiently mobilized and transformed into productive activities that would engender growth and generate employment
Recommendation
The essence is to promote sustainable output and employment in the economy while maintaining price stability over time. The efforts of the CBN in growing the real sector for employment generation, however, can only be maximized and sustained if complementary effort is made by government as other stakeholders to address the debilitating challenges confronting the sector.
REFERENCES
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