THE
ROLE OF BANKS IN INTERNATIONAL TRADE IN NIGERIA.
ABSTRACT
This project work has critically
highlighted the compact of the Role of Banks International Trade in Nigeria,
the problems affecting the Role in Banks in international trade in Nigeria have
been identified and how they can be controlled is also includes in the study
and ways to solve them are inductive in the study.
This study also examines the lapses
and recommends some viable points (s) that can also contribute to the image of
the industry.
TABLE OF CONTENTS
Title page:
—————————————————————-
Approval
page:
———————————————————————-
Dedication: —————————————————————————-
Acknowledgement: ——————————————————————
Abstract:
——————————————————————————–
Table
of contents: ——————————————————————–
CHAPTER
ONE
1.0
Introduction:
——————————————————————-
1.1 Background of the study: ————————————————–
1.2
Statement of problem: ——————————————————-
1.3
Objectives of the study: —————————————————–
1.4
Research question: ————————————————————
1.5
Assumption of the study: —————————————————
1.6
Scope of study: —————————————————————–
1.7
Significance of the study: —————————————————
1.8
Limitation of the study: ——————————————————-
1.9
Definition of terms: ————————————————————-
CHAPTER TWO
REVIEW
OF RELATED LITERATURE
2.0
The role of banks in international
trade in Nigeria: ———–
2.1 Definition of banks and international trade: ——————
2.2
Types of banks: ————————————————————–
2.3
Causes and problems of banks role
in international trade: ——
CHAPTER
THREE
RESEARCH
METHODOLOGY
3.0
Source of data: ———————————————————–
3.1 Location of data:
———————————————————
3.2
Method of data collection: ———————————————
3.3
Analysis of data: ———————————————————-
CHAPTER
FOUR
4.0
Findings: ———————————————————————
CHAPTER FIVE
5.1
Summary:
——————————————————————-
5.2
Conclusion:
——————————————————————
5.3
Suggestions for further research: ————————————-
Bibliography:
——————————————————
CHAPTER ONE
1.0
INTRODUCTION
This project writ – up, “The role of Banks
in international Trade”, is written to provide a guide sufficiently instructive
in scope to meet the need for Banks, Economist in International Trade.
Among the important topics examined are if
there are various relationship, role that exist between banks and international
trade in Nigeria, nature of international economics, international trade,
difference between international trade and internal trade, problems facing
international trade in the banks sector.
1.1 BACKGROUND OF THE
STUDY.
Nigeria before and
even since the British Colonialist of our country has been engaged in
international trade. But it was obviously spelt out during the British
Colonialist that was in the 15th century termed legitimate trade.
This was until 1960 during which Nigeria got
its independence. This means that, Nigeria was no longer controlled solely by
the dictates of the British Government Ever since then legitimate trade to the
Nigerian was changed to international trade of which Banks has a major role to
play in it.
Nigeria since the oil boom in the early 70’s
has been enjoying Nigeria and across the country. Diversifying its economy.
Apart fro international trade, and as a
result of climatic factors, Nigeria needs international trade to diversify,
accelerate its economic development in the country.
International trade ensures export expansion
and import contraction coupled with the fact that it stimulates foreign
exchange earnings, international recognition and the provision of employment
opportunities for the teeming population.
International trade is synonymous with the
production of goods and services for the benefit of trade across the country.
Thus we have the banking institution, the food processing export/import trade
and the sugar, tobacco export/import trade and that of petroleum export trade
is not left behind. Therefore, international trade or external trade is a trade
between two or more countries.
Example. Trade between Nigeria and USA as
well as Ghana, India, Britain, Japan etc. trade between two countries is called
bilateral trade, while trade between many countries is called multilateral
trade.
International trade does not mean the
exchange of goods and services within a country. The exchange of goods and
services among the people of the same country is called home or internal trade.
Example, all trading activities which take place within Nigeria in a home or
international trade.
External trade is established for the
purpose of stabilizing nation’s economy standard if living.
External trade has been proved beyond doubts
as very important for a nation’s survival therefore it is peevant that we
explicably manifest how the role of banks can be employed for the development
of these trade. In doing this, we will limit our study to short and long term
scale institutions which are very important to the economy.
Short term scale institutions ad defined by
the central bank credit guidelines is, any service enterprise whose annual
business turnover does not exceed N500,000.00 (five hundred thousand naira).
There is no definition for long term scale
institutions as these did not attract the direct emphasis of the CBN.
The role of banks in international trade
development of Nigeria, could be seen through the various services which these
banks provide for the sustenance of international trade in the country.
These services include the provision of
capital for these exporter/importers in the business inform of loans, such as
short term loans, medium and long term loans, which the traders could use to
finance their business goals.
The banks also provide overdraft facilities,
which are necessary to finance the working capital of the business.
An overdraft could be defined as an
arrangement whereby the banks allow their customers to over-draw his account up
to a credit position at the end of the period, while short term loans refer to
loans granted for periods between one to five years. Then medium and long term
loans are granted for periods between five to ten years, even ten years
respectively.
Apart from granting loans and over drafts
facilities, there are still other roles which banks could play in international
trade development in Nigeria. These roles include professional advice, opening
of documentary letters of credit (L/CS), bills for collection and
negotiation/open account and bills of exchange, foreign exchange example
travelers cheques and foreign currencies, information on trade and exchange
restrictions, collection and transfer of funds status enquires, etc. above all
the determination of the actual external funds required by an export/import
borrower. There are accepts of such services which help international trade
growth or expansion.
It is not for fetched that the
exporters/importers of international trade suffer their own bank problems,
which should be analyzed and solved to ensure international trade development.
These problems such as the problem of corruption in banking parastatals,
obtaining capital from and operational problems which are coursed by the
dictates of the Nigeria environment and society.
The irrational problem of manpower
requirement and the poor knowledge of trade across of these external traders
help to compound the general problems of international development of which
bank services can be gainfully employed for the purpose of solving them.
Addition to the problems is lost of trust
ship among the members or cooperators of the trade 4, 1, 9, problem among
members.
In all, these problems the worst is the
problems of unstable political contradictions.
These problems should be totally
exterminated by the government, and the society entirely to ensure the steady
growth of this important sector of the business of the economy.
It has been noticed that the level of banks
institutions financing has been vary poor compared with is obtained in
developed nations such as America (USA), Germany but few. The central bank of
Nigeria (C. B. N) should step up their moral suasion policy so as to make these
banks especially the commercial banks to increase the level of their financing
of exporter/importers members.
In increasing this level of their financing
emphasis should be placed on medium and long term loans to enable these traders
concretize their investments for better results in its outputs; though the
commercial banks borrow short from their deposits, the commercial banks who
also declare excess profits at the end of each year should expand a lading
pattern for medium and long terms loans without adversely affecting their
liquid ratios.
With the funds available from the banks,
international traders should be made to judiciously invest them and with other
important a sound, solid firm and concrete foundation must be laid for the
international development of the country.
1.2 STATEMENT OF PROBLEM
The Nigerian Banks plc is a pillar in the
roles contributed to international trade in Nigeria. The Nigerian banks have
various established institutions that enhance the growth of international
trade.
Commercial banks, merchant banks,
development banks, are one of the banks instrument that hold a vital role in
external trade and has been branched all over Nigerian states. The contribution
of the above banks to international trade has been a satisfactory type. Most
importers and exporters dances to tune of these banks.
Why has these very banks so appetizing to
the society and the world at large? Is the success as a result of the banks
efforts in it’s operations?
Why do importers/exporters prefer it to
other financing institutions?
1.3 OBJECTIVES OF THE STUDY
1.
To find out if commercial banks
play any role in international trade in Nigeria.
2.
To find out if merchant banks
play any role in international trade in Nigeria.
3.
To find out if development
banks play any role in international trade in Nigeria.
4.
To find out if commercial banks
play any role in international trade.
5.
And equally to find out if
people’s bank play any role in international trade in Nigeria.
1.4 RESEARCH QUESTION
1.
What role do commercial banks
play in international trade?
2.
What role do merchant banks
play in international trade?
3.
What role do development banks
play in international trade?
4.
What role do community banks
play in international trade?
5.
What role do people’s bank play
in international trade?
1.5 ASSUMPTION OF THE STUDY
It is assumed that in
this research the secondary data collected is correct and reliable.
The procedure and
method used is correct and reliable.
1.6 SCOPE OF STUDY
Area of coverage
The role of banks in
international trade in Nigeria .
Banks method of
contribution to international trade in Nigeria.
Why international
trade in Nigeria?
Advantages of
international trade in Nigeria.
1.7 SIGNIFICANCE OF THE
STUDY
Today, the government parastatals, banking sectors and the society
are all hands on deck to enhance the international trade development and growth
of Nigerians economy.
The research study
will be of high benefit to banking sectors, importers/exporters and to the
society in general to embark of the effectiveness of their business, which
inturn will change of the society. Also the study will determine the census and
problems of banks role in international trade in Nigeria and thereby should be
taken as a corrective measure.
Through this investigation, therefore, the
banks and the society will then know their weak points and willingly adopt
measure aimed at enhancing it’s business effectiveness.
The government will be in the position to
adopt the right strategies to enable the society achieve it’s business
expectations or goals.
1.8 LIMITATION OF THE
STUDY.
Limitation
encountered by the research work is finance and incorporation attitude of
respondent: – Some respondents were out rightly hostile and very impatience to
entertain genuine requests. There was also bureaucratic bottle – neck that some
official documents. However, these constraints did not destroy the ingredient
of this research.
1.9 DEFINITION OF TERMS.
(a) International
Trade: As described by the Author,
Norbert M Ile in his published test “Economics of business studies” (1999, P.
278) defines an international trade or external trade as “a trade between two
or more countries; it is the exchange of goods and services between two or more
countries”.
(b) Banking Institution: We can define a bank as any organization that handles people’s
money. It is a dealer in debts, but indebtedness has a correlation to wealth
and hence, a bank can be described as a liquefier of wealth.
(c) Role: It
is defined as “actors in a play; persons task or duty in undertaking.
(d) Foreign Exchange: This is a process by which a country exchanges it’s
goods/services to another country’s goods/services.
(e) Overdraft: This
is a system whereby a customer drawns more money then he has to his credit in a
bank.
(f) Economy: It
is a system of control and management of the money goods and other resources of
a society.
REFERENCE
CBN Briefs (1995), Research
Department June.
Emekekwue, Patrick, (1995), Commercial banking Kirishasa: African Bureau
of Educational Services.
Emekekwu (1995), Citing Coms (1995) Definition of Banking.
Alo Salmion (2001), “Screening of applicants for top posts begins”
Business times, Vol, 26 No. 26 June.