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THE EFFECTS OF INFLATION ON ECONOMIC DEVELOPMENT OF EDO STATE: (A CASE STUDY OF ESAN NORTH EAST LOCAL GOVERNMENT AREA OF EDO STATE.)

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Abstract

This study has been designed to investigate the effect of inflation on the economic development of Edo state: A case study of Esan North Local Government Area. To enhance the effective implementation of the study, ten hypotheses were formulated and were critically analyzed and recommendations were also put to remedy the problems. Some of the recommendations is that the government should set aside a monetary committee to monitor the supply of money by the Central Bank of Nigeria (CBN) in the society. There should be policy in the increase of the amount of goods and services in the market. The government should encourage the importation of goods and services which make goods and services in the economy cheaper and easy to purchase.

• BACKGROUND TO THE STUDY

Inflation has been a major problem to economic development of Edo state and Esan North East Local Government Area. Apart from the state, country and the entire globe is being affected by inflation.

This project work is to cover the effect of inflation and economic development in Edo state with more concentration in Esan North East Local Government Area and various ways in which this scourge has been controlled by the various administrations and the relevance of such control method. As the name implies, inflation refers to a situation whereby there is continuous and upward increase in the price of goods and services.

Inflation also occurs when there is too much money in circulation and a few goods and services to be purchased with that money. Inflation can also occur when there is increase in money supply in the society. These and other reasons are the cause of inflation which will be discussed extensively in the cause of this project work.

 

 

• STATEMENT AND EFFECT OF THE STUDY

• Persistence and continuous increase in the general level of goods and services.
• Economic backwardness in areas of saving, investment, development of capital oriented environment, social activities etc.
• Constant devaluation of currencies which lead to destabilizing the saving habit of the citizens and discouraging leading of long terms loan for capital project.
• Re-distribution of income as workers and peasants become poorer whereas businessmen become richer.
• The burden of the national dept falls since the country’s dept in terms of a specified amount of money continuously loses its value.
• Fixed income earners real income fall during inflation because what money can buy falls since fixed income receivers like salary/pension.
• Increased balance of payment difficulties since imports of consumer goods rise as they become cheaper relative to domestic, prices of goods which in turn discourage export.
• Though there is increase in employment of resources labour, but the income/wages are less value with time
  • RESEARCH QUESTIONS

The problem of the study is indentified in order to give direction to this work. Some research questions formulated are as follows:

1. Does inflation lead to scarcity of goods and services in the society.
2. Is the government for inflationary trend?
3. Is the financial indiscipline of the government responsible for inflation?
4. Does inflation have adverse effect on growth of Nigeria economy?
5. Do the people feel the effect on inflation on the economy?

 

 

  1.4 PURPOSE OF THE STUDIES                        

A the end of the study, one should be able to know the effect of inflation in the economic development of inflation in the economic development of Edo state with a case of study of Esan north local government area and also proffer solution to solving the problem of inflation to enhance economic development. This will in general lead to good for costing and policy formulation with respect to controlling Esan North East and other councils.

• COPE OF THE STUDY

This work is to cover the effect of inflation economic development in Edo state with more concentration in Esan North Local Government Area and also various ways in which this scourge had been controlled by the various Administrations and the relevance of such control method.

• SIGNIFICANCE OF THE STUDY

This study, “The effects of inflation on the economic development of Edo State: A case study of Esan North East Local Government Area of Edo State” will enhance the economic development of Edos State.

Government will be able to know how to formulate policy that will favour the people of this area. This policy will affect the reduction of pale of goods in the area.

Also, it will also sanitize the general public on how to manage their resources.

• LIMITATIONS OF THE STUDY

With the problem of inaccurate and in some situation, absent of data from relevant agencies and cost of mobility and other unforeseen expenses this project work will be restricted to Esan North East Local Government Area of Nigeria . It will be restrained to one decade so as to enable brief comparison between the military rule and civilian rule, in this present dispensation.

• OPERATIONAL DEFINITION OF TERMS

1. Inflation:    This can be defined as the continuous and persistence general increase in the price level of goods and services.
2. Development: This means an increase in the national income of production of goods and services in the social, political and economic lives of the people inhabiting that country.