AN ANALYSIS ON MONEY SUPPLY AND EMPLOYMENT IN NIGERIA ECONOMY

Abstract
The paper examines the contributions of international trade statutory instruments to economic
growth in Nigeria measured by real gross domestic product (RGDP). We used time series data
obtained from CBN for a period of 18 years. Financial statutory instruments is one of the
macroeconomic instruments with which monetary authority in a country employs in the
management of money supply and the economy thereof to attain the fundamental objectives of
fundamental sustainable economic growth. The monetary policy strives to explain the correlation
between macro economic variables and the monetary variable and this form the focal point of
this study. The study also set out to ascertain the impact of CBN money supply on the growth of
Nigeria economy, ascertain the extent of correlation that exists between money supply and
economic growth. Scholars in the field opined that contractionary monetary policy negatively
influences total consumption, CBLA and economic growth. Within this framework, money
supply, CLBA and output variables are analyzed for the period of 18 years (1994-2012) using
Statistical package for social sciences (SPSS) tool. The findings shows that change in money
supply (M2) has significant effect on variables such as CBLA and output in Nigerian economy
within the period under review, Also there is a significant strong multiple correlation among
Real GDP, Money supply and Commercial Banks’ loans and Advances (R= 95.1%). The
coefficient of Determination (R2) reveals that 90.5% of variations in RGDP were explained by
our selected explanatory variables (Money supply and Commercial Banks’ loans and Advances).
As such the effective and efficient management of the country’s financial system have gone a
long way in improve the economic growth ratio over the period under review.
INTRODUCTION
Economic growth is reasonably unambiguous; it is the change in national income over time,
usually measured over one year. National income is the amount produced by a country in one
year. It can be measured it by the percentage change in the level of national income, often over the period of one year. There are three ways of adding it up: production, or income.
GDP = gross domestic product (produced within a country).
GNP = gross national product (includes income coming into or going out of country).
NNP = net national produce (an allowance is made for depreciation of capital).
National income per capita often matters most if looking at how well off a country is; how well it
is doing; or if comparing it with another country (Bucknall, 2013).
Economic Growth and Development – Conceptual Approach
Though no unanimously accepted definition has been forgotten by now, most of the theoreticians
think of the economic development as a process that generates economic and social, quantitative
and, particularly, qualitative changes, which causes the national economy to cumulatively and
durably increase its real national product (Folawewo & Osinubi, 2006).
In contrast and compared to development, economic growth is, in a limited sense, an increase of
the national income per capita, and it involves the analysis, especially in quantitative terms, of
this process, with a focus on the functional relations between the endogenous variables; in a
wider sense, it involves the increase of the GDP, GNP and NI, therefore of the national wealth,
including the production capacity, expressed in both absolute and relative size, per capita,
encompassing also the structural modifications of economy. We could therefore estimate that
economic growth is the process of increasing the sizes of national economies, the macroeconomic indications, especially the GDP per capita, in an ascendant but not necessarily linear
direction, with positive effects on the economic-social sector, while development shows us how
growth impacts on the society by increasing the standard of life (Fasanaya, et al., 2013).
Typologically, in one sense and in the other, economic growth can be: positive, zero, negative.
Positive economic growth is recorded when the annual average rhythms of the macro-indicators
are higher than the average rhythms of growth of the population. When the annual average
rhythms of growth of the macro-economic indicators, particularly GDP, are equal to those of the
population growth, we can speak of zero economic growth. Negative economic growth appears
when the rhythms of population growth are higher than those of the macro-economic indicators.

Economic Growth and Development – Conceptual Approach
Though no unanimously accepted definition has been forgotten by now, most of the theoreticians
think of the economic development as a process that generates economic and social, quantitative
and, particularly, qualitative changes, which causes the national economy to cumulatively and
durably increase its real national product (Folawewo & Osinubi, 2006).
In contrast and compared to development, economic growth is, in a limited sense, an increase of
the national income per capita, and it involves the analysis, especially in quantitative terms, of
this process, with a focus on the functional relations between the endogenous variables; in a
wider sense, it involves the increase of the GDP, GNP and NI, therefore of the national wealth,
including the production capacity, expressed in both absolute and relative size, per capita,
encompassing also the structural modifications of economy. We could therefore estimate that
economic growth is the process of increasing the sizes of national economies, the macroeconomic indications, especially the GDP per capita, in an ascendant but not necessarily linear
direction, with positive effects on the economic-social sector, while development shows us how
growth impacts on the society by increasing the standard of life (Fasanaya, et al., 2013).
Typologically, in one sense and in the other, economic growth can be: positive, zero, negative.
Positive economic growth is recorded when the annual average rhythms of the macro-indicators
are higher than the average rhythms of growth of the population. When the annual average
rhythms of growth of the macro-economic indicators, particularly GDP, are equal to those of the
population growth, we can speak of zero economic growth. Negative economic growth appears
when the rhythms of population growth are higher than those of the macro-economic indicators.