THE ROLE OF DEVELOPMENT BANK IN THE PROMOTION OF EXPORT IN NIGERIA (THE NIEGRIA EXPORT – IMPORT IN NIGERIA “NEXIM”)
1.1 BACKGROUND OF THE STUDY
Despite the risk inherent in exporting, it’s most obvious advantage is the additional sales and profit which are generated. Exports more often than not reflect production beyond what is required for domestic consumption in a situation where a deliberate policy to produce solely for export is not pursed, Ahmed (1995). In addition, an exporting economic will benefit from increased optional utilization of productive capacity. These benefits eventually transform into better living condition of the people, since foreign exchange earned would contribute to meting their need fro some essential goods and services.
Whether in a develop or a developing economic exports constitutes a dynamic factor in economic growth and development. It does not only serve has a catalyst or an important engine of growth, it is also a great source of stimulation to other sector of the economic (spill over effect).
In almost all the developed or developing countries the export sector has always been the major driving force, propelling the growth of the economy by moving all the other sectors among with it by generating the required foreign exchange, providing the where-withal for the financing of development inputs such as machinery, spare part, industrial raw materials and equipment and technology for the efficient functioning of the industries. Export sector dictates the pace of growth and development to the extent that development inputs are not often available locally, particularly in the developing counties, the earnings of the foreign exchange through exports to procure them, become indispensable. In other words the growth and indeed development of any economic can be seriously impaired by the monavailbility or lack of foreign exchange resources.
It is the recognition of the crucial role which exports play in the growth process that most countries of the world today strive to promote its vigorous growth countries in which the export sector play a leading role in their development include South Korea and Mauritius.
1.2 JUSTIFICATION OF THE STUDY
For instance non oil; export accounted fro 99.3 percent of total export in 1960 and only a mere 2.7 percent in 1985. Diversification of exports had thus because a very obvious goal that has to be achieved by any serious export promotion strategy. This will however lead us to many problem militating against export promotion in Nigeria in including shortage of credit illiteracy, lack of awareness and inadequate knowledge of export market among others.
The justification of the study will be shown in the specialized means and ways by which NEXIM Bank is playing a leading role for only first your of its operation, it accounted fro over 60 percent of the credit to the export sector (as compared to the total credit from the sum of all financial institution). Therefore to say the heart, it will only be imperative that a full appraised of NEXIM Bank activities since inception in January 1991 be carried out. The justification of this study will be based on the impetus, hope or decision which the introduction of NEXIM Bank sought to achieve and is already achieving in the promotion of exports based on the evaluation of the policy trust which was outlined as its inception.
The study will finally seek to see how policies like the rediscounting and refinancing facility (RRF) Stock Facility (SF), Foreign Import Facility (FIF) among other facilities including Risk-bearing Facility will go a long way in making credit available for express using bank intermediaries.
1.3 PROBLEM STATEMENT
Current problem of the export sector in Nigeria are indeed numerous while some of the these predate the structural adjustment programme (SAP) others are incidental to SAP, learning in mind that under SAP a sizable percentage of export operation were privatized.
Also while some of these problem are external to the country for example an increasingly competitive and protectionist would others are strictly speaking within the country and have influenced the articulation of the never role which NEXIM Bank has sought to achieve in promoting and developing exports (especially non-oils exports).
They include the following:
- Shortage of credit
- Low literacy level
- lack of awareness
- Inadequate understand of international market and complete absence of risk bearing facilities.
1.4 OBJECTIVE OF THE STUDY
The main objective of this study is to emphasize the role of development bank in the production of export in Nigeria economy.
1.5 RESEARCH METHODOLOGY
For the purpose of this project, primary and secondary data collection method shall be used in the primary method we shall make use of questionnaire and also experts in the filed shall interviewed in gathering valuable facts for the project.
Secondary data collection shall mainly be literature which composed of textbooks, journal and some institutions publication like institute of charted banker of Nigeria to embrace the information.
1.6 LIMITATION OF THE STUDY
This research work is limited by the following constraints.
Firstly, transportation problem due to the distance between Osun State and Lagos State we were unable to get the needed facts at the right time.
Also, the problem of finance is another constraint of the research work to further find more acts from other banks.
Lastly, the customers United Bank for Africa plc, Oosgbo branch are not ready to cooperate as expected and this lose more problem the research.