Nigeria’s monetary and quasi-fiscal operations and it’s impact on the economy

Abstract

This paper investigates Nigeria’s monetary and quasi-fiscal operations and its impact on the economy. Through a comprehensive analysis of survey data and relevant literature, the study examines the effectiveness of CBN’s policies in stimulating GDP growth, managing inflation, and maintaining exchange rate stability. The research employs quantitative methods, including survey questionnaires conducted among stakeholders and econometric analysis of macroeconomic indicators. Findings indicate that CBN’s monetary interventions, particularly direct credit interventions, significantly contribute to GDP growth by stimulating economic activities, especially in critical sectors such as agriculture and manufacturing. However, challenges persist in effectively managing inflationary pressures exacerbated by quasi-fiscal measures that increase money supply and aggregate demand. Mixed perceptions regarding CBN’s effectiveness in maintaining exchange rate stability highlight the complexities of external economic factors impacting currency fluctuations. Sector-specific analyses reveal varied impacts across industries, emphasizing the need for tailored policies to address sector-specific challenges. Recommendations include enhancing transparency and accountability in CBN’s operations, strengthening direct credit interventions, and adopting targeted inflation control measures.