LITERATURE REVIEW
TELECOMMUNICATION IN
NIGERIA
Telecommunications
in Nigeria include radio, television, fixed and mobile telephones, and the
Internet.
Radio stations:
Network
of federal government-controlled national, regional, and state radio stations;
roughly 40 state government-owned radio stations typically carry their own
programs except for news broadcasts; about 20 private radio stations;
transmissions of international broadcasters are available (2007) 83 AM, 36 FM,
and 11 shortwave stations (2001). Radios: 23.5 million (1997).[dated info]
Television stations: nearly 70 federal
government-controlled national and regional TV stations; all 36 states operate
TV stations; several private TV stations operational; cable and satellite TV
subscription services are available (2007).
Television sets: 56.9
million (2007).
Nigeria's
media scene is one of the most vibrant in Africa. Because newspapers and
television are relatively expensive and literacy levels low, radio remains the
most important medium of mass communication and information. International
broadcasters, including the BBC, are popular. TV viewing is concentrated in
urban areas.[3][3]
The
largest broadcasting companies are the government-owned Federal Radio
Corporation of Nigeria (FRCN)[4] and the Nigerian Television Authority
(NTA).[5] The NTA has two television services. One is NTA 1, which is
distributed among NTA's six television zones. The other is NTA 2, which is
distributed nationwide and is funded mostly by advertising. NITEL owns a
majority of the transmitters that broadcast FRCN and NTA programming.[citation
needed]
Each
state also has a broadcasting company that broadcasts one or two locally
operated terrestrial stations.[3] This means that there are about 50 government
owned, but partly independent television stations. Private players in the
Nigerian television scene include: Silverbird Television (STV),[6] Africa
Independent Television (AIT),[7] Channels Television,[8] Superscreen
Television,[9] and several others. Most of their programming is aimed for the
African and global markets and is broadcast globally from Lagos, Abuja, Obosi
and Port Harcourt centers with affiliated TV stations in several African
countries. African Independent Television (AIT)[10] is a high profile satellite
television station broadcasting globally from its Lagos and Abuja centers.
Other direct satellite television stations with international reach operating
in Nigeria are Murhi International Television, ON Television, Galaxy TV, TV
Continental, etc. all in Lagos.[3]
There
is general access to cable television[3] like DSTV,[11] a South African cable
television station, broadcast over satellite. HiTV,[12] DaarSat,[7] StarTimes[13]
and Infinity TV[14] are other examples of cable TV in Nigeria. M-Net ceased
operations in December 2011, but had offices in most Nigerian cities, and was
watched by a large number of people.[citation needed]
AN OVERVIEW OF
NIGERIAN ECONOMY
Nigeria's
economy is struggling to leverage the country's vast wealth in fossil fuels in
order to displace the crushing poverty that affects about 57% of its
population. Economists refer to the coexistence of vast wealth in natural
resources and extreme personal poverty in developing countries like Nigeria as
the "resource curse". Although "resource curse" is more
widely understood to mean an abundance of natural resources which fuels
official corruption resulting in a violent competition for the resource by the
citizens of the nation. Nigeria's exports of oil and natural gas—at a time of
peak prices—have enabled the country to post merchandise trade and current
account surpluses in recent years.
Reportedly,
80% of Nigeria's energy revenues flow to the government, 16% cover operational
costs, and the remaining 4% go to investors. However, the World Bank has
estimated that as a result of corruption 80% of energy revenues benefit only 1%
of the population. In 2005, Nigeria achieved a milestone agreement with the
Paris Club of lending nations to eliminate all of its bilateral external debt.
Under the agreement, the lenders will forgive most of the debt, and Nigeria
will pay off the remainder with a portion of its energy revenues. Outside of
the energy sector, Nigeria's economy is highly inefficient. Moreover, human
capital is underdeveloped—Nigeria ranked 151 out of countries in the United
Nations Development Index in 2004—and non-energy-related infrastructure is
inadequate.
From
2003 to 2007, Nigeria attempted to implement an economic reform program called
the National Economic Empowerment Development Strategy (NEEDS). The purpose of
the NEEDS was to raise the country's standard of living through a variety of
reforms, including macroeconomic stability, deregulation, liberalization,
privatization, transparency, and accountability. The NEEDS addressed basic
deficiencies, such as the lack of freshwater for household use and irrigation,
unreliable power supplies, decaying infrastructure, impediments to private enterprise,
and corruption. The government hoped that the NEEDS would create 7 million new
jobs, diversify the economy, boost non-energy exports, increase industrial
capacity utilization, and improve agricultural productivity. A related
initiative on the state level is the State Economic Empowerment Development
Strategy (SEEDS).
A
longer-term economic development program is the United Nations (UN)-sponsored
National Millennium Goals for Nigeria. Under the program, which covers the
years from 2000 to 2015, Nigeria is committed to achieve a wide range of
ambitious objectives involving poverty reduction, education, gender equality,
health, the environment, and international development cooperation. In an
update released in 2004, the UN found that Nigeria was making progress toward
achieving several goals but was falling short on others. Specifically, Nigeria
had advanced efforts to provide universal primary education, protect the
environment, and develop a global development partnership. However, the country
lagged behind on the goals of eliminating extreme poverty and hunger, reducing
child and maternal mortality, and combating diseases such as human
immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) and
malaria.
A
prerequisite for achieving many of these worthwhile objectives is curtailing
endemic corruption, which stymies development and taints Nigeria's business
environment. President Olusegun Obasanjo's campaign against corruption, which
includes the arrest of officials accused of misdeeds and recovering stolen
funds, has won praise from the World Bank. In September 2005, Nigeria, with the
assistance of the World Bank, began to recover US$458 million of illicit funds
that had been deposited in Swiss banks by the late military dictator Sani Abacha,
who ruled Nigeria from 1993 to 1998. However, while broad-based progress has
been slow, these efforts have begun to become evident in international surveys
of corruption. In fact, Nigeria's ranking has consistently improved since 2001
ranking 147 out of 180 countries in Transparency International's 2007
Corruption Perceptions Index.
DEVELOPMENT OF THE
NIGERIA MONEY MARKET AND ITS POSITIVE AND NEGATIVE IMPACTS
No
money market existed in Nigeria before the establishment of the central bank of
Nigeria (CBN) in 1958 via CBN act of 1958. This however not to say that money
market for short – term funds did not exist before then. Before the advent of
central bank of Nigeria (CBN) and commercial bank, existed some elements of
short – term lending and borrowing. The market was an integral part of the
London money market, it worked by involving funds from London to Nigeria during
the season and in order to finance the export produce at the end of the season
(Noko, 2011). The market comprising banks and other financial institutions such
as discount houses, finance house etc. dealing in monetary assets. These
markets have witnessed tremendous changes from start to date informing the
numerous amendments of the CBN act to reflect the changing economic
circumstances. Being largely responsible for implementing monetary policy in
the country under the close watch of the CBN, institutions in the money market
through their instruments and operations are the key to a monetary economy such
as we have in Nigeria. These have implications for economic growth and
development.
The establishments of central bank
of Nigeria as the apex regulatory authority of the financial sector of the
country by CBN act of 1958. Although, the apex bank started operation in July
1959 with an initial capital of N17million naira. The banks function as
enshrined in section 54 of the CBN Act 1958. The objectives of the CBN have
remained largely unchanged to include:
· To issue legal tender currency note coins in
Nigeria
· To act as lender of last resort
· To maintain Nigeria’s external reserves to
safeguard the value of the naira in international markets.
· To promote and maintain monetary stability
and a sound and efficient financial system.
· To act as a banker and financial adviser to
the federal government of Nigeria.
Hence,
to achieve the above objectives, the CBN as part of its statutory functions
formulates and implements the monetary policy through direct and indirect
control techniques. Direct techniques like interest rate ceilings,
administrative determination of interest rate, restriction of banks credit
expansion, mandatory holding of government securities, and sectoral allocation
of credit were abandoned when it was obvious that monetary resources were
misallocated as price did not reflect their true value. Indirect techniques,
which the CBN has adopted since SAP in 1986, rely on underlying demand for
supply of monetary assets, targeting the balance sheet of deposit money banks.
Adopting indirect control techniques involved regulating credit banks using the
minimum anchor for all money market interest rates, to alter variations in the
demand for and supply of monetary assets in the direction that is consistent
with price stability.
Money market as the
greatest CBN indirect monetary control instruments, comprising banks and non –
banks institutions. These include:
Commercial
bank, merchant banks, development banks, discount houses, financial houses,
primary mortgage institutions, insurance companies. They are operators in the
money market in Nigeria, contributing to the allocation of monetary assets
between economic units. Banks in a financial system performs intermediating
rates by mobilizing role resources and channeling then to productive activities
in the economy, thereby channeling productive resources from surplus sectors to
the deficit sector, so, ensuring a more efficient resources allocation and
utilization.
A
measure of the performance of the banking sector lies in its ability to promote
banking habit captured in the currency ratio (currency outside banks to broad
money). Infact, as at May, June & July 2010, the currency ratio stood at
7.6%, 7.3% and &.4% respectively (CBN money and credit statistics, 2010).
Banks major function however, is to mobilize saving to GDP ratio, at the prime
of the market in 1960 the ratio was 1.96 percent, for 1970, it was 7.8 percent
1984, 11 percent in 1989.90 and grew to 13 percent as at 2007 (CBN statistical
bulletine 2008).money market ensure the maintenance of equilibrium between the
demand and supply of funds, hence it always equilibrate saving and investment
in an economy. It ensures the application of economy in the use of cash.
EMPIRICAL LITERATURE
OF MONEY MARKET ECONOMY: MONETARY POLICY
The role of money market in any economy
continue to enjoy debates, hence a number of studies have evolved over the
years. Money markets play a key role in
banks liquidity management and the transmission of monetary policy (Rigg and
Zibell, 2009). In normal times money markets are among the most liquid in the
financial sector by providing the appropriate instrument and partners for
liquidity trading, the money markets allows the refinancing of short and medium
terms position which facilitates the mitigation of your business liquidity
risk.
Among
the leading studies on money market, its role in the economy is the research
carried by Owoye and Onafawora (2007). Analyzing the relationship between money
supply (M2), the stability of real money demand and effects of deviation of
actual real Nigerian economy since the introduction of the Structural
Adjustment Programme (SAP) in 1986 found that long – run relationship exists
between the real (world) broad money supply, real GDP, inflation rate, domestic
interest rate foreign interest rate, and expected exchange rate. Ezirim and
Eneta (2006) while studying discount houses, the money market and the Nigeria
economy, X – rayed the operations of discount houses in Nigeria economy in
general.
They
recognized the central roles which discount houses play in the open market
operations of the central bank (central bank of Nigeria, 2004; Ezirim, 2005).
From the inception discount houses in achieving their expected objectives could
be made. For their study, they were particularly interested in analyzing the
operations of discount housed to expose their relationship with the performance
of the money market and the entire economy. They employed estimation and analysis
of regression models in their investigation covering the period of 1993 to
2004, involving the 5 discount houses in Nigeria at the time.
The
deponent variable in the study were the operational performance indices of the
money market and the entire economy namely, the total value of the operations
of the money market and the real gross domestic product (GDP) respectively. The
independent variables were the operational performance indices of the discount
houses, namely the discount houses shareholders’ funds and the discount assets.
The researcher found a significant relationship of the independent and
dependent variables. So, they rejected the null hypothesis of no significant
relationship. They concluded that discount houses operations in Nigeria affect
the Nigeria money market and economy both positively and significantly.
Ogunmuyiwa
and Ekonne (2010) in studying the impact of money supply and economic growth
between 1980 and 2006 found that aggregate money supply is positively related to economic growth and development
even through money supply does not have significant predictive power in
predicting growth of real GDP.
In
studying the Chinese macro – economy for the effects of money on price level
and output, Chow and Shen (2004) in attempt to explain inflation from 1954 –
2002. Using vector auto – regression, they found that output react to money
disturbances first, but for a short period and prices later but last longer to
the Chinese economy. Trying out the vector – auto regression with data from the
United States, they found a similar pattern of occurrences, confirming the
proposition of tried man and its universality (Bermanke, 2003). They concluded
that in spite of the institutional differences between China and the more
developed economics, from which empirical evidence supporting freed man’s
proposition was drawn, the same theory of inflation and of the effects of
monetary disturbances on price and output applies.
Ajisafe
and Foluronsho (2002), studied the relative effectiveness of monetary policy
and fiscal policy on economic activity. The authors used annual series data for
1970 to 1998 from the central bank of Nigeria (CBN) statistical bulletin. They
found from the result of their analyses that monetary rather than fiscal policy
exerts a greater impact on economic activity in Nigeria, even though they found
that both monetary and fiscal policies should be complimentary.
EFFECT AND IMPACT OF
TELECOMMUNICATION ON PRICE STABILITY
The
quantum development in the telecommunications industry all over the world is
very rapid as one innovation replaces another in a mater of weeks. A major
breakthrough is the wireless telephone system which comes in either fixed
wireless lines or the global system for mobile communication (GSM) (Wojuade
2005). However, this section of the seminar tries to review related works of
different scholars which are relev out to the topic of study (that is,
“Telecommunication”). Automatic Number identification is a feature of telephone
intelligent Network services which permits subscribers to display or capture
the telephone number and geographical position of the calling parties when you
are called, the number of the caller is shown on the receivers Mobile phones.
The receiver has to decide either to answer the call or not.
The
journey to success in Nigeria telecommunication milieu has been long and
tortuous. Telecommunication facilities in, Nigeria were first establish 1886 by
the colonial administration. At independence in 1969, with a population of roughly 40 million p people. The country by
then only had 18,724 phone lines for use. (J.O. Ajiboye 2007). This translated
to a tele –densityt about 0. 5 telephone couper per 1,000 people. Between 1960 and 1985, the
telecommunication sector consisted of the department of posts and telecom (pst)
in charge of the internal network and a limit ed liability company, the
Nigerian External telecommunication (NET) limited responsible for the external
telecommunication provide the getway to the outside world.
REFERENCES
"MTN".
Mtnonline.com. Retrieved 10 November 2013.
"Africa.airtel".
Ng.airtel.com. Retrieved 10 November 2013.
"Glo
Mobile". Gloworld.com. Retrieved 10 November 2013.
Portal
Service. "Etisalat Nigeria". Etisalat.com.ng. Retrieved 10 November
2013.
http://www.ncc.gov.ng/sim-registration/about-simreg.html[dead
link]
"Nigeria
- Key Statistics, Telecom Market and Regulatory Overviews", BuddeComm, 12
December 2013. Retrieved 22 February 2014.
Calculated
using penetration rate and population data from "Countries and Areas
Ranked by Population: 2012", Population data, International Programs, U.S.
Census Bureau, retrieved 26 June 2013
"Percentage
of Individuals using the Internet 2000-2012", International
Telecommunications Union (Geneva), June 2013, retrieved 22 June 2013
"Fixed
(wired)-broadband subscriptions per 100 inhabitants 2012", Dynamic Report,
ITU ITC EYE, International Telecommunication Union. Retrieved on 29 June 2013.
WEBSITE
www.martinslibrary.blogspot.com