The Role of Banks in Industrial Development of Nigeria

Introduction

1.1 Background Of The Study

Nigeria since the oil boom in the early 70’s has been a victim of a monolithic economy and since then has been enjoying the so called ‘Petro Naira’ without adequately evolving a sound policy that will keep the nation’s economy in a firm foundation for steady growth. Though the country recognized the importance of Industrialization as far back as 1964, yet when the ‘Petro Naira’ started flowing in, they were blindfolded as to ignore the importance of establishing industries to ensure a diversified economy. Now the ‘Petro Naira’ is no more, and the future outlook is bleak, the need for a diversified economy became the subject matter of many governmental policies and actions. This leads us to one of the ways for solving this problem and that is industrialization.

Apart from ensuring a diversified economy, industrialization also accelerates the economic development of a country; infact the basic premise is that if a country wishes to accelerate the overall rate of economic development, the country must have manufacturing production rising much faster than the overall rate of growth of the G.N.P. and this has to be reflected in an increasingly dominating role of manufacturing industry in the total economy.

Also, industrialization 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.

1.2 Statement Of The Problem

Banks supposed to have contributed immensely to the industrial development of Nigeria in various aspects. But the unawareness of the industrialists on the role of banks in industrial development pose a serious problem to the industrial development of Nigeria. The number of industrialists that make use of the services of the banks in their various firms is limited.

Again, most industrialists are not aware of the duties and responsibilities of the banks in the overall growth of their firms. The poor industrial knowledge of these industrialists help to compound the general problems of industrial development of which bank services can be gainfully employed for the purpose of solving them.

It has been noticed that the level of banks industrial financing has been very poor compared with what is obtain in industrialized nations.

This study will analyse in details the role of banks in industrial development of Nigeria.

1.3 Objective Of The Study

For a meaningful and adequate performance of banks to be achieved in industrial development of Nigeria. The researcher is set to achieve the following objectives:

1. To ascertain the need for Banks involvement in industrialization.
2. To point out the roles of banks in industrial development.
3. To evaluate the level of banks industrial financing in Nigeria
4. To make recommendations based on the findings of the study.

1.4 Significance Of The Study

The study stressed that to achieve a meaningful industrial development, emphasis must be placed, on industrisation which is an aspect of economic diversification. The country is most likely to benefit from this study as follows:

1. Apart from ensuring a diversified economy, industrialization also accelerates the economic development of the country.
2. Industrialization ensures export expansion and import contraction and also stimulates foreign exchange earnings, international recognition and provision of employment opportunities for the citizens.
3. Industrialization helps in stabilizing the Nation’s economy and ultimately improves the standard of living of the citizens.