Impact of Capital Flow on Employment Rate in Nigeria (2005-2017)

Impact of Capital Flow on Employment Rate in Nigeria (2005-2017)

INTRODUCTION

BACKGROUND OF THE STUDY

The issue of unemployment constitutes one of the fundamental problem facing developing economies. Hence, the center point of many government policies seek to address the issue of unemployment. Consequently, the aim of policies enhancing capital inflow is to facilitate the growth of production and business activities so as to create opportunities of   employment to the unemployed. According to James Chen (2018), capital flows refer to the movement of money for the purpose of investment, trade or business production, including the flow of capital within corporations in the form of investment capital, capital spending on operations and research and development (R&D). On a larger scale, a government directs capital flows from tax receipts into programs and operations and through trade with other nations and currencies. Individual investors direct savings and investment capital into securities, such as stocks, bonds and mutual funds. Different sets of capital flows that are often studied, such as asset-class movements, venture capital, mutual fund flows, capital spending budgets and the federal budget. Capital Flow Categories   are measured as capital flows between cash, stocks, bonds and other financial instruments, while venture capital shifts in regards to investments being placed in startup businesses. Mutual fund flows track the net cash additions or withdrawals from broad classes of funds. Capital-spending budgets are examined at the corporate level to monitor growth plans, while federal budgets follow government spending plans. The maximizing benefits of foreign direct investment for the host economy could be enormous including technological skill transfer, capital formation support, aid to competitive business environment, enhancement to boast international trade integration, etc. These benefits could in turn promote our key economic sectors such as petroleum, mining, manufacturing, agriculture, transportation, communication, construction, etc. which are the elements for achieving high rate of employment and economic growth and development. The study seeks to appraise the impact of capital flow on employment rate in Nigeria (2005-2017).

STATEMENT OF THE PROBLEM

In Nigeria, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. The unemployment rate is defined as the percentage of unemployed workers in the total labor force. Workers are considered unemployed if they currently do not work, despite the fact that they are able and willing to do so. Nigerian economy is in a critical condition that needs improvement. The unemployment rate is still high, economic growth rate is low, etc. As a debate, due to Nigeria’s less availability of capital, low level of industrialization, high rate unemployment, etc still persist many analysts are of the opinion that capital inflow could be a pivot channel to the growth of the Nigerian economy. The problem confronting the study is to appraise the impact of capital flow on employment rate in Nigeria (2005-2017).

OBJECTIVES OF THE STUDY

The Main Objective of the study is to appraise the impact of capital flow on employment rate in Nigeria (2005-2017); The specific objectives include:

1 To determine the level of capital flow in Nigeria.

2 To determine the employment rate level in Nigeria.

3 To determine the impact of capital flow on employment rate in Nigeria (2005-2017).

RESEARCH QUESTIONS

1 What is the level of capital flow in Nigeria?

2 What is the employment rate level in Nigeria?

3 What is the impact of capital flow on employment rate in Nigeria between 2005-2017?

STATEMENT OF THE HYPOTHESIS

The statement of the hypothesis for the study is stated in Null as follows

HO    The employment rate level in the Nigeria is low.

Ho    The impact of capital flow on employment rate in Nigeria between 2005-2017 is low.

SIGNIFICANCE OF THE STUDY

The study addresses the impact of capital flow on employment rate in Nigeria between 2005-2017. The evaluation shall provide the necessary data required for policy formulation and implementation by government challenges to stimulate the economy.

LIMITATION OF THE STUDY

The study was confronted with logistics and geographical factor.

DEFINITION OF TERMS

EMPLOYMENT RATE DEFINED

This is the percentage of the labor force that is employed and also constitute one of the economic indicators that economists examine to help understand the state of the economy.

UNEMPLOYMENT RATE DEFINED

This constitutes the number of people actively looking for a job as a percentage of the labour force. The unemployment rate is defined as the percentage of unemployed workers in the total labor force. Workers are considered unemployed if they currently do not work, despite the fact that they are able and willing to do so.

TOTAL LABOUR FORCE DEFINED

This consists of all employed and unemployed people within an economy.