1.0 Introduction
1.1 Background of the Study
The development role of exporting can be appreciated from the fact role of exporting foreign exchange increase firms sale or profit , lowers production cost, creates employment, earns international recognition, enhances reputation and improves living standard of both exporting and importing firms or nations' co-operation 2009.
The importance of export to a nation's economics development and growth cannot be over emphasized, export is a catalyst necessary for the overall development of an economy labour start 2005.
The primary objective of export promotion and hence financing in any economy activities. If follows, therefore that export policies should be directed to the sector in which the impact of an increase in export demand will be both desirable and large. It is a source of foreign exchange earning since trade transaction among nations are settled in foreign exchange.
Furthermore, a will development export sector will provide employment opportunity of the people with the attendance reduction in social cost of unemployment earning from export will reduce the strains on the balance of payment position and even improve it. A rewarding export drive can turn under developing economy into a prosperous economy. Export help in increasing the level of aggregate economic activities through its multiples effects on the level of national income (Usman and Salam I, 2008).
However, sustained development export sector can only be achieved through adequate funding and provision of capital. The impressive role of commercial banks is therefore brought into fore. Commercial banks access large deposit savings makes tem significance in financing export sector. In most developed and developing countries government export policies are directed at making sure export sectors are adequately financed in order that more foreign earning will be enjoyed.
The tribalism is that export financing holds the act in economic development a growth of any nation an has accentuated the importance of this business portfolio especially in the financing sector. Indeed much available financing of export by the appropriate institutional such a/s the commercial banks will have great impact on the commercial banks will have great impact on the economy of the economy of the country.
Over the years, the CBN has made effort through its policies to stimulate the growth of the export sector especially the non oil export. The commercial banks have been the arrow heart to achieving this.
This is because commercial banks occupy a strategic position in the financial system of may country. CBN ( 2008) report shows that in 2005 commercial banks credit to export sector receive a credit of N127, 273.6 and N97,787.3 million in 2007 and 2008 respectively.
1.2 Statement of the Problem
Nigeria has over the years received earnings from the export sector however. The continued unimpressive performance of the non- oil sector and the vulnerability of the external sector. Thus dictate the urgent need for as re-appraisal of the thrust and contents of the development policies and commitments of commercial banks to financing this sector, the adversity of the fluctuation in oil prices has in no small measure skilled the development efforts of various governments.
This has made the Nigerian economy to swing from the boom oil era, as exemplified by the bought economy of the period with massive infrastructural development and the Udoji award followed by the world oil market since only led to the neglect of the non oil export productive base.
The need to correct the existing structural/ distortions and put the economic on the sustainable growth is therefore compelling, even as commercial banks in Nigeria are expected to change from their bureaucratic bottle neck and conversation action in financing the no oil sector.
The question of the expected role of the banks to develop both the oil and non oil export sector comes to bear. This calls for new thought and initiative in essence of this project study.
1.3 Objectives of the Study
The objective of the study is as follows:
- To examine profile of the export sector in Nigeria.
- To examine the role of commercial in export financing.
- To evaluate the impact to commercial banks credit on the growth of export sector.
- To highlight various ways of financing options available to the export sector.
- To investigate the extent of the contribution of the export sector to the Nigerian economy.
- The identify the factors that is responsible for the under-development of the export sector.
1.4 Research Questions
The research questions to examined in this study are as follows:
- What is the structure of the Nigeria's export sector since 2011.
- What efforts have the commercial banks made in financing the export sector in Nigeria?
- What efforts has the government made to revamp the on oil export in Nigeria?
- What impact does export sector gave to the economic growth of Nigeria?
- What factors are responsible for the underdevelopment of the export sector?
1.5 Scope of the Study
The study will attempt to test the following hypothesis in its quest to successful conclusion.
- There is no significant relationship between bank funding and the growth of the export sector.
- There is no significant relationship between exports earnings and Nigeria foreign reserves.
1.6 Significance of the Study
The significance of the study is as follows:
- It would provide an economic assessment of the performance on Nigerian's export sector in relation to the gross domestic products.
- The study will identify role of commercial banks hence played in the development of the export. This will assist government draft more effective policies.
- Successful conclusion of the study will enable the government and apex bank authorities formulate policies that will enhance the activities of commercial banks in financing the export sector.
- An attempt will also be made to enlightened the government on the need to diversify the economy and ensure the development of the non oil sector export.
- It is also contribute to existing literatures on export financing by commercial banks.
1.7 Limitation of the Study
The study was limited due to certain factors such as:
- Lack of finances to adequately carry out the research.
- Lack of sufficient time to enrich investigation into the subject matter.
- The distance of first bank and Union bank is far from my institution.
- During research work, I noticed that some staff refused to give me accurate information.
1.8 Definition of Terms
Capital:
Money or property owned on used in business by a sole proprietor or corporation to produce wealth.
Commercial Banks:
an organization offering services which specify in accepting all forms of deposits for on ward tending to borrowers.
Export:
sending goods to another country for sale.
Economy:
The operation of the country's industry of agricultural trade and money supply, which together determine the state of the economic life that observed.
Economic Growth:
Is used in relation to capital formulation G.D.P contribution to the productive capacity of the economy.
Fund:
A sum of money for a special purpose.
Finance:
Money to support an enterprise.
Money:
A medium of exchange that function as the unit of account and a store of value.
Import:
Goals and services purchased from another country.
Document Credit:
Undertaking to pay a specified amount to a named party upon fulfillment of state condition.
Service:
Any activity or benefit that one party can offer to another that intangible or tangible and does not result in the transfer of ownership of any physical object.
Balanced of Payment:
The account out a country's transaction with outside world.
Market:
The arena in which buyers and sellers meet to exchange items of value.
International Trade:
Transaction between country and other.
Financial Institution:
An institution banking monetary value of recording in monetary transaction.
Exchange Rate:
The Price of one's currency in terms of another.
Interest Rate:
The amount charged for a loan usually expressed as the percentage of the some borrowed.
Foreign Exchange:
The currencies of foreign countries.
Bill of Exchange:
An unconditional order in writing addressed by one person ( the drawer) to another and signed by the person given it, requiring the drawee to pay on demand or at fixed determined future.
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