EXTERNAL TRADE FINANCING IN NIGERIA
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EXTERNAL TRADE FINANCING IN NIGERIA
EXTERNAL TRADE FINANCING IN NIGERIA: ABSTRACT
The primary goal of this study is to examine Nigeria’s external trade finances.
The study has been divided into five chapters for ease of reading and comprehension.
The first chapter focused on external trade financing in Nigeria, namely the federal government’s and commercial banks’ role in trade financing in Nigeria.
Other four four chapters were generated from chapter one I in order to confirm the finding recommendation and conclusion.
Nonetheless, from the federal government’s and commercial banks’ participation in external trade financing in Nigeria, more effort should be made to reduce the problems of external trade financing,
with less consideration given to agricultural export products, which earn a large or majority of our foreign exchange in the 1960s and 1970s.
Based on the data above, it is recommended that commercial banks play an important role in funding Nigeria’s external commerce.
EXTERNAL TRADE FINANCING IN NIGERIA, CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
For the past few years, it has been clear that the current civil administration is poised to see an improvement in the Nigerian economy’s foreign trade sector. This is intended to improve our country’s external reserves by raising export activity and reducing import transaction rates to a bare minimum.
This tendency is supported by different regulatory provisions and regulations, as well as incentives provided by the federal government to participate in the external trade sector,particularly the export industry.
The various levels of government’s interest is based on the necessity to replenish our foreign reserves, which were previously drained by imports that surged through the country during the oil boom era and the second republic.
There is also a need to revitalise the agriculture sector, which contributed significantly to our export profits previous to the oil period, because earnings derived from oil export can no longer be adequately predicted.
The purposes and objectives described above cannot be fulfilled without the adequate participation of financial institutions and intermediation,
particularly commercial banks; hence, many government policies are typically implemented in the country through that financial institution.
As a result, a tight monetary policy disadvantages one sector of the economy. There is also the matter of policy inauguration or legislation by the government, and their actual implementation by financial institutions commercial banks. This research will be limited to commercial banks,
which are the live wires of every government in the execution of monetary policies aimed at different sectors within the economy and the external trade sector, which is within the economy structure, so commercial banks’ participation is critical in the realisation of the above objective relating to the external trade sector.
The term finance refers to the provision of funds when and where they are needed for the execution of man’s economic activities. Taking the concept into account,
external trade finance will be the method of giving funds by various financial institutions, individuals, corporate organisations, and governments that engage in external trade activity.
This financing function manifests itself in various ways, and various instruments abound for the smooth facilitation of this financing activity, depending on whether we are concerned with import trade financing or export trade financing, both of which fall under external trade financing.
In order to complete the project. Work emphasis will be placed on historical research of developments in the economy’s import and export sectors over the last five years in order to establish how vibrant a form of funding is available for the sector’s smooth operation. This study will be conducted based on the nation’s economic requirements and ambitions during the relevant time periods.
1.2 STATEMENT OF THE PROBLEM
It has repeatedly been said that commercial banks, and indeed the entire banking industry in Nigeria, have a tepid approach towards external trade financing, and that their participation has been chronically inadequate over the years.
When they agree to participate, they limit their financing to a specific sector within that external trade sector, such as merchandise commerce, which is primarily short-term in nature.
In addition, commercial banks have been accused in recent years of denying financial services to medium-level import and export participants by refusing to offer individuals who are unable to handle loans of up to N50,000 loan facilities for a critical appraisal of their difficulties.
1.3 THE OBJECTIVE OF THE STUDY
The purpose of this research is to highlight anomalies in external trade finance. Then, using the research findings, promote some conclusion assertions in the country’s external trade financing efforts. And to recommend measures to reduce anomalies in Nigeria’s foreign trade finance.
1.4 THE SIGNIFICANCE OF THE STUDY
This research will be extremely beneficial to the following groups.
i. Foreign interest organisation
ii. The banking system, particularly commercial banks, must
The third category is the government sector.
iv. Business Organisations
v. Private enterprises in Nigeria that have internal and foreign trade funding
vi. Professor of Research
This will undoubtedly act as a secondary source of data for other researchers.
1.5 DEFINITION OF TERMS
Bank: There are two types of banks: central banks, which are technically a nationalised business owned and ultimately controlled by the government, and commercial banks, which accept deposits and provide the depositor with the funds requested.
External trade is trading between nations that occurs across national boundaries.
Financing is a procedure in which funds are provided when and where they are needed for the purpose of carrying out economic activity.
Imports are goods produced in one country that are purchased from other ones.
Export: When you export things manufactured in your country to other countries.
Commercial banks: These are financial institutions that are legally permitted to receive deposits, accept valuable properties for safekeeping, lend money at an agreed-upon interest rate, and, above all, lease adequately interested customers on demand and finally contract on their behalf.
Agriculture: This is a sector that deals with all aspects of agriculture, such as cattle farming, fisheries, forestry, imports and exports, and so on.
Financial institution: An institution that issues financial obligations like as demand deposits in order to get funds from the public unified bank for Africans.
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