Role of Nigerian Money Market in the National Development

1.0 Introduction
The money market in our economy in a very vital sector and its position in the economy cannot be over emphasized. The money market in Nigeria was fashioned along with that of britain, established and nurtured by the CBN primarily for mobilizing domestic savings for productive investment as well as providing the government with funds to enable it implement its economic programmes.
Money market as an intermediary for short term financial assets that are close substitute for money consists of the CBN, Deposit money bank, Discount house, corporate bodies, individuals, finance companies Bureaux de change as its major operators and deals on various financial instrument such as bills, certificates, commercial papers, certificate of deposit etc which one transferable and desirable in nature.
Notwithstanding, the recent global economic meltdown which tends to set a disjunction between the surplus and the deficit sectors, the surplus sector appears not to be interested in lending to the deficit sector, this pose a serious bottleneck to the proper functioning of the money market, thereby reducing the level of investment in the economy. The logic question now is what would be the lot of Nigerian economic and its inhabitants in general.

1.1 Statement Of The Problem
The link between the deficit and the surplus sectors of any economy is very important, if the link does not exist, the surplus sectors will have excess funds which will probably be held as idle balances instead of investing such funds to earn interest.
Conversely, people in the deficit sectors who can invest profitably may not be able to do so because of lack of fund. Though both of them will be losing but it is the economy that sustains the height loss as economic growth and development is hampered due to low level of investment arising from poor capital formation. This will initial a problem, the question now is what will be the lot of Nigerian economy and its inhabitant in general. There is need therefore, to evaluate the role of the Nigeria money market in the national development of the country.

1.2 Need For The Study
This research work is carried out to reveal the vital role of a sound money market system in relation to maintaining an efficient and dynamic financial sector.
These works will also e of great help and benefit to other sectors, both public and private sector. I strongly believe that the management of Nigeria money market will use the findings of this research work to equip themselves with appropriate checks and control that are necessary for the development of an enviable financial system. Prospective investor, promoters and shareholders would as well find this study very useful it will serve as an eye opener on what it takes to invest in the money market. Government agencies and parastatals are not left out in the array of people that will find this study beneficial. This is with the belief that the findings will help them avert improprieties that characterized the system.

1.3 Objective Of The Study
The main objective of this study is to ascertain the role of Nigerian money market in the national development of the country. Specifically, the study aims at

1. Ascertaining whether the supervisory role of the regulations has any impact on the money market operations
2. Whether the operators operation affect the money market operation
3. Whether there is hindrance in money market operation.
4. To offer suggestion on how to improve the money market operation

1.4 Scope Of The Study
This study is delimited to identifying the role of Nigerian money market in the national development, the risk associated with money market operation and strategies that could be adopted to manage the risk identified.

1.5 Assumptions Of The Study
Financial institutions such as the CBN, Deposit money bank, Discount house, individuals, finance companies, corporate bodies, Bureau de change which are the major operator in the money market are actively involved in fund transfer. It is therefore assumed that they are in better position to perceive the role of money market in the national development.

1.6 Limitation Of The Study
Due to financial and time constraints usually associated with studies of this nature, this study is restricted to only Nigerian money market.

1.7 Definition Of Terms

• Bills is a form of IOU ( I owe you) promising to pay whosoever hold it a certain sum of money on a specified future date.
• CBN: This central bank of Nigeria is the issuer of the domestic currency, it participates actively in the money market in the process of implementing its monetary policy and by virtue of its role as the bankers bank.
• CERTIFICATE OF DEPOSIT: is an inter- bank dept instrument designed to channel surplus funds from one institution to another.
• COMMERCIAL PAPER: are promissory note with maturing period range from few days to 270days (9 months). They are issued by corporate entities evidencing indebtedness.
• FINANCIAL COMPANIES: These are institution that specialized in short term non-bank financial intermediation.
• INDIVIDUALS: This constitutes the basic economic units in any society.
• INVESTMENT: are assets acquired by an enterprise for purpose of capital appreciation or income generation with out any activities in the form of production, trade or provision of services.
• OPERATORS: These are financial institution operating in the country. They are actively engaged in the financial intermediation process.