TABLE OF CONTENTS
Pages
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
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
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 earning.
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 has 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. To revive the weak base, the government introduced and
provided general incentives to boost the non-oil sector of the economy which is
the basis for growth and development.
These
measures were mainly trade export stimulation, incentives e.g. the
establishment of Nigeria Export Promotion Council (1976) charged with the
responsibility of identifying the country’s export potentials and the
collection and dissemination of information on a continuous basis Gbosi,
(1995:21).
Similarly,
in a bid to effect diversification the structural adjustment programme (SAP)
was introduced in 1986. The primary objectives of SAP include the following: To
reduce the excessive dependence of the economy on crude petroleum as a major
foreign exchange earner. To enhance self reliance: to reduce the excessive
dependence of the economy on crude petroleum as a major foreign exchange
earner. Okigbo (1981:13).
Undoubtedly,
one of the topical issues of our economic management experience is the apparent
failure of the policy package to push the non-oil export sector in right
direction.
To
improve the situation, various decrees were promulgated-export incentives a
package in incentives which may help the non-oil sector to earn reasonable
foreign exchange for the country.
These
decrees were designed to assist merchant banks and some other financial
institution in providing finance for the stimulation of domestic production for
export. It also gave legal backing for re-financing and rediscounting
facilities crated by the Central Bank of Nigeria to provide pre-shipment and
post finance in respect of non-oil export.
Furthermore,
Nigeria Export Import Bank (NEXIM 1991) was established to help exporter obtain
reliable information on the potentials of the market and assist in
under-writing export risk.
Nigeria
Export Import Bank’s role include bank activities like trade finance, project
finance, treasury operations, export advisory services, market information and
market risk guarantee Gbosi (1995:23).
However,
research has it that irrespective of all these effort, the growth in non-oil
export earnings has not been very significant, although there has been
remarkable increase in export.
This
situation is however being redress with the implementation of Structural Adjustment
programme which has inspired the participation of many banks and other
specialized institutions from private and public sector. At present this role
is played by Government, banks and non-banking institutions. Practically, in
order to restore stability to the nation’s economy the non-oil sector need to
be activated through adequate funding or credit delivery. In this
re-capitalization process, the role of financial institutions such as
commercial banks development banks and most importantly the activities of the
merchant banks cannot be over emphasized.
Unfortunately,
the inadequate contributions of Merchant Banks Finance (loans and advances) to
the non-oil export sector has hindered the increase in volume of non-oil
export, similarly the limited availability of funds to Merchant Banks in
financing non-oil export and the slow increase in volume of non-oil exports has
resulted to a decline in the contribution of the sector to gross domestic
product. Another identified problem is the inability to ascertain the
proportion of total deposit mobilized by Merchant Banks that is granted as
loans and advances to the non-oil sector. The neglect of this sector (non-oil
export) has affected foreign exchange earning from the sector and even resulted
to a slow growth and development of our economy.
RESEARCH QUESTIONS
This
research will attempt to answer the following question in order to enhance the
effective realization of the set objectives. To what extent do Merchant Banks’
loans and advance contribute to increase in the volume of non-oil export?
Does
the volume of non-oil export have any significant impact on the gross domestic
product?
What
proportion of total deposit mobilized by merchant bank is granted as loan and
advances to non-oil exports?
What
is the contribution to non-oil exports to Gross National Product?
1.2 RESEARCH
HYPOTHESIS
To
carry out this study the following hypotheses are stated:
Ho1: There is no positive and significant
relationship between merchant banks loans and advances to the non-oil export in
Nigeria.
HA1: There is a positive and significant
relationship between merchant banks loans and advances to the non-oil exports
and the volume of non-oil export in Nigeria.
Ho11: There is a significant relationship between the
gross domestic product (GDP) and volume of non-oil export.
Ho111: There is no significant relationship
between total deposit mobilized by merchant banks and loan and advances granted
to non-oil export in Nigeria.
HA
111: There is a
significant relationship between total deposit mobilized by merchant banks and
loan and advances granted to non-oil export in Nigeria.
Ho
IV: There is no significant relationship
between non-oil export and gross national product.
HA1V: There is a significant relationship
between non-oil export and gross national product.
1.3 PURPOSE
OF STUDY
The
primary objective of this study is to access the contribution of Merchant banks
financing and promotional activities to increase in volume of non-oil exports
and the subsequent contribution of this sector to gross domestic product in
Nigeria other secondary objective are:
To
determine whether merchant banks loans and advances too non-oil export has
enough positive impact to the volume of non-oil export.
To
ascertaining a reasonable proportion of total deposit mobilized by merchant
bank is granted as loans and advances to non-oil export and finally,
To determine the contribution of non-oil export to gross national product.
THE ROLE OF MERCHANT BANKS IN FINANCING AND PROMOTING NON OIL EXPORT IN NIGERIA
