The Role of Merchant Banks in Financing and Promoting Non-oil Export in Nigeria
– The Role of Merchant Banks in Financing and Promoting Non-oil Export in Nigeria –
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ABSTRACT
The economic situation in Nigeria have led to shift in emphasis on nonoil export as a way of boosting foreign exchange earnings as well as the diversification of the Nigeria economy. This have become important because of the deficiency in foreign exchange caused by fluctuations in oil prices and the Niger Delta issues which have led to drop in government revenue.
Unfortunately, Merchant banks whose primary role is the provision of credit have been found wanting as regards granting of credit to the non-oil export sector. This limited availability of fund by Merchant banks to these non-oil export sectors have slowed down that sectors’ contribution to Nigeria’s Gross National Product.
Therefore, this research intends to examine the contribution of Merchant Banks to financing the non-oil export sector; to determine whether Merchants’ loans and advances to the non-oil exports sector has positive impact on Nigeria’s Gross National Product as well as ascertaining the proportion of Merchant Bank’ total deposit mobilized to loan and advances to the non-oil sector.
The research adopted the descriptive survey approach and a sample of six Merchant Banks was randomly selected. Questionnaires were distributed to targeted respondents and the data collated was analysed using the Pearson Moment Correlations and the t-test was employed in testing the significance that existed between the variable under study.
TABLE OF CONTENTS
Certification- – – — – – – – – i
Dedication- – – – — – – – – – ii
Acknowledgment- – – — – — – – – iii
Abstract – – – – – – – – – – iv
CHAPTER ONE
1.1 Introduction== = = = = = = = 1
1.2 research hypothesis= = = = = = = 5
1.3 Purpose of study= = = = = = = = 6
1.4 Significance of the study== = = = = = 7
1.5 Scope of the study= = = = = = = 8
References= = = = = = = = = 9
CHAPTER TWO Literature Review
2.0 Background= = = = = = = = 10
2.1 Merchant Banking= = = = = = = 11
2.2 Evolution and development of merchant bank in Nigeria= 14
2.3 Retaining the current distinction between commercial
and merchant banks= = = = = = = 18
2.4 Banking services = = = = = = 21
2.4.1 Corporate finance services= = = = = = 24
2.5 Export financing in Nigeria= = = = = = 27
2.6 The rational, benefits and problems of granting export credit= 31
2.6.1 Benefits of granting export credit= = = = = 31
2.6.2 Problems of granting export credit= = = = = 32
2.7 Nature of Non-oil export in Nigeria = = = = = 33
2.8 The role of Non-Exports= = = = = = 36
2.9 Export promotion strategies and policies in Nigeria = = 37
2.9.1 Export promotion incentive= = = = = = 39
2.9.2 Tax of export free zone enterprises= = = = = 45
2.9.3 Institutional support= = = = = = = 45
2.9.4 Nigerian export promotion council (NEPC)= = = 46
2.9.5 Nigeria export-imports bank = = = = = = 47
2.10 Factors affecting merchant banks finance of Non-oil
export in Nigeria= = = = = = = = 49
2.11 The major problem constraining merchant banks effort
towards financing non-oil export includes the following = 49
References = = = = = = = = = 56
CHAPTER THREE: Research Design and Methodology
3.0 Background= = = = = = = = 57
3.1 Research design= = = = = = = = 57
3.2 Population= = = = = = = = = 59
3.3 Sample size and sampling procedure= = = = 59
3.4 data collection methods = = = = = = 59
3.5 Data analysis technique = = = = = = 61
References = = = = = == = = = 63
CHAPTER FOUR
4.1 Data presentation and analysis = = = = = 64
4.2 Analysis of data= = = = = = = = 64
4.3 Test of hypothesis = = = = = = = 71
CHAPTER FIVE
5.0 Discussion, conclusion and recommendation= = = 78
5.1 Discussion of findings= = = = = = = 78
5.2 Conclusion = = = = = = = = 83
5.3 Recommendation= = = = = = = 84
Bibliography = = = = = = = = 86
Questionnaires= = = = = = = = = 88
INTRODUCTION
A buoyant economy is largely on its transaction. This transaction is what most undeveloped countries depend on for foreign exchange earnings. Nigeria’s non-oil export in the 60s (sixties) constituted the major source of foreign exchange earnings the ‘oil boom’ of the 70s changed the major source of foreign exchange earnings to crude oil. According to Oke, (1990:23) by 1980 the oil sector which accounted for 22 percent of Government revenue and over 96 percent of export earnings.
This crude oil become the single dominating export product which resulted in the partial neglect of the non-oil export. The economic downturn in the early 80’s resulted in a drastic reduction in earnings from oil export and recent developments, especially the dwindling revenue from this sector, there has been a rekindled interest in the preferred sector agriculture and manufacturing are prominent. In other words, diversifying into non-oil export will be a veritable approach.
In line with this view, Oshopitan, (1989:11) contents that “The vagaries of fortunes have resulted in a very significant decline of external receipts from about U.S$26 billion in 1980 to about U.S12 billion in each of 1980 and 1985 and 1985 and further to only about U.S$65 billion in each of 1987 and 1988. Indeed, the emphasis now is on value added non-oil export so as to maximize foreign exchange therefore”. Owing to this fact, the need to reduce the dependence of the economy on oil has become inevitable.
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