Effects Of Micro-Economic Policies On The Financial Sector

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The Nigerian economy was propelled by the astronomical increase in petroleum prices and the subsequent increase in foreign exchange in flow in the 1970s sound uchendu (1994: 54) this new wealth resulted to a consumption pattern and taste, which altered aggregate demand in favor of imported goods, services and technology. In view of this strong demand for oil in the 1970s, and the expectation that it would remain so future earning were borrowed to support present consumption and unproductive investment in the 1980s.
At this time, economic performance weakened while the maturing external debt threatened the economy. Eventually, economic growth stagnated while the balance of payment deteriorated.
Against this, the government came out with numerous macro- economic policies as to arrest this in balance. The stabilization security was introduced in 1986 as a means of mapping excess liquidity. There after other macro-economic policies were introduced. Some of them are: structural adjustment programme (SAP) introduced between 1986 to 1998 with the objective of deregulating economic activities aimed at creating non-inflationary economic growth and balance of payment validity, retransfer of government according to commercial banks as contained in the 1997 budget deregulation of interest rate etc. these among others were designed to help in redressing the in balance in the Nigerian economy.

STATEMENT OF THE PROBLEM
This topic the effect of macro-economic policies on the Nigerian financial sector is targeted to the commercial banks that through there activities have direct effect on the Nigeria economy.
We recall that Nigeria has under-gone several monetary phases and different policies have been evolved to ensure it doesn’t get worse.
To what extent has the government been able to achieve macro- economic stability through the use of the various monetary instruments the statement of problem. All these macro- economic policies are designed to propel the Nigeria economy to stability, sustainable and self- reliant economy. Has the Nigeria economy attained the above stated objective?
Except in 1987, the overall balance of payment was in deficit from 1986 till 1993.

OBJECTIVES OF THE STUDY
The objective of this research shall be to examine among other issues the following policies:
1. The effectiveness of macro- economic policies in the Nigeria economy.althuogh SAP was introduced as policy instrument, but between 1986 -1993 there was deficit in the overall balance of payment.
2. The research would examine if there are factors, inhibiting the use of macro- economic policies as instruments towards redressing. The Nigeria economic. It was absolved that during the SAP era inflation rate. Fluctuated from 5.4, 10.2; 40.0 percents between 1986 and 1992 to an alarming rate of 57.2 percent in 1993.
3. The research will ascertain if there are any other macro- economic policies that could be infused into the existing monetary instrument.
4. Finally to make suggestion as regards how to com bat these identified effect of macro economic policies.

SIGNIFICANCE OF THE STUDY
After independence the government through the central bank of Nigeria has adopted several policies aimed at piloting the economic to sustainable and self – reliant economic. The CBN brief ( 1996: 1) looked at macro- economic policy as, a design of process by the which the agency responsible for the economy manipulates a set of instrument variable in order to achieve desired economic objective.
Readers from the large segment of the society especially the business community will find this work useful in mapping out business strategies by; examining and identifying the “effect of macro- economic policies in the Nigeria financial sector conclusion would be drawn and the recommendation made would be of immense benefit to executives directly involved in the finance of Nigeria. Members of the academic researching on “macro- economic policies or the effects on Nigeria” will find this work valuable. The average reader will also know what it entails.
As this study is expected to identify the problems in clouding the policies. It is also expected that the monetary authorities would appreciate and redress their position where necessary and show commitment to the full realization of this available plan.

SCOPE AND LIMITATION
Actually the scope of this study is limited to banking activities in Nigeria economy consequently because of the highly technical nature of the issue involved in this research the survey is confined to bank i.e. (commercial bank both in port-Harcourt and Enugu). Few surveys will be carried out with knowledgeable person that have been affected by these policies. These importers, exporters etc.
For the fact that this research was number some and enormous, a lot of set backs were encountered, such as keeping of vital information by the banking management. However of the fact finding would be limited to mouthy annual reports, bullion magazines published by central bank of Nigeria and current monetary circulars.

DEFINITION OF TERMS
For the avoidance of ambiguity and misconception of ideas, it is necessary to define some concept in the research.
Macro- economic policies: this is the design process by which the agency responsible for the conduct of economic activities, manipulate a set of instrument variable in order to achieve derived objective or goal.
STABILIZATION SECURITIES: this is the monthly instrument policy designed to mop (up) excess liquidity.
STRUCTURAL ADJUSTMENT PROGRAMME (SAP):
Ashikwe an economist and the publisher of “financial post defines SAP as a macro- economic policy designed to transform Nigeria into a strong industrial country that can stand. Its grand’s in the competitive capitalist market.
SAP can also be defined as an institutional policy intended to change the management of the Nigeria economy from pervasive governmental

intervention in the various markets towards greater reliance on market forces in the allocation of goods, services and financial resources.