Project Abstract

Abstract
Inflation is a critical economic indicator that affects various aspects of an economy, including purchasing power, investment decisions, and overall economic stability. This study aims to analyze the determinants of inflation in Nigeria, a country that has experienced fluctuations in inflation rates over the years. By identifying the factors that contribute to inflation in Nigeria, policymakers can implement targeted measures to manage and control inflation effectively. The research utilizes a combination of quantitative analysis and econometric modeling to investigate the determinants of inflation in Nigeria. Data on key economic variables such as money supply, exchange rates, GDP growth, and government spending are collected and analyzed to understand their impact on inflation. The study also considers external factors such as global oil prices, as Nigeria is a major oil-producing country and fluctuations in oil prices can influence domestic inflation rates. The findings suggest that several factors play a significant role in determining inflation in Nigeria. Money supply is identified as a key driver of inflation, as an increase in the money supply often leads to higher inflation rates. Exchange rate fluctuations also impact inflation, particularly in an import-dependent economy like Nigeria. Government spending is another important determinant, as excessive government expenditure can fuel inflationary pressures. Furthermore, the research highlights the role of external factors such as global oil prices in influencing inflation in Nigeria. Given the country's heavy reliance on oil exports, fluctuations in oil prices can have a substantial impact on domestic inflation rates. The study underscores the importance of considering both domestic and external factors in analyzing inflation dynamics in Nigeria. Based on the findings, the study provides recommendations for policymakers to effectively manage inflation in Nigeria. These include implementing prudent monetary policies to control money supply growth, maintaining exchange rate stability through appropriate interventions, and exercising fiscal discipline to prevent excessive government spending. Additionally, policymakers are advised to closely monitor global oil price trends and their potential impact on domestic inflation. Overall, this research contributes to the existing literature on inflation determinants in Nigeria and provides valuable insights for policymakers and stakeholders seeking to address inflationary pressures in the country. By understanding the key determinants of inflation and implementing targeted policies, Nigeria can achieve greater economic stability and sustainable growth in the long run.

Project Overview

Title page i

Approval Page ii

Iii Dedication

Acknowledgements

V Summary

Table of Contents vi

CHAPTER ONE: INTRODUCTION

1.1 Background of the study 1

1.2 Statement of the problem 3

1.3 Objectives of the study 4

1.4 Research Hypothesis 4

1.5 Importance of the study 5

1.6 Scope and limitations of the study 6

CHAPTER TWO

2.1 Literature Review 7

2.2 Theoretical examination 7

2.2.1 effects of inflation 11

2.2.2 determinant of inflation in Nigeria 13

2.3 empirical examination 16

2.3.1 The Nigerian inflationary recent experience 17

2.4 Limitations of the previous study. 20

CHAPTER THREE

3.0 Research Methodology 22

3.1 Research Design 22

3.2 Methodology 22

3.3 Specification Model 23

3.4 Assessment Model 23

3.5 Economic Criteria 24 A’priori

3.6 Criteria statistics or first class 25

3.7 Econometric Test Criteria or second order 26

3.8 Data requirements and sources 27

CHAPTER FOUR: PRESENTATION AND DATA ANALYSIS

4.1 Presentation and interpretation of results 28

4.2 Economic criteria a’priori 29

4.3 statistical criteria (first control test) 30

4.4 econometric criteria 33

CHAPTER FIVE

5.1 Summary of Findings, Recommendations and Conclusion 38

5.2 Recommendations 39

5.3 Conclusion 40

Bibliography 41

Appendix