Project Materials

ROLE OF NIGERIA EXPORT PROMOTION COUNCIL IN INTERNATIONAL PURCHASING

ABSTRACT

International purchasing is one of the primary ways a country interacts with other countries. It not only fosters or strengthens relationships with these countries, but it also helps a country’s economy grow. International purchasing is not an individual endeavour. A nation must establish a committee or council to organise and monitor international purchasing. This is why in Nigeria, the government established the Nigerian Export Promotion Council to oversee overseas purchases. They are responsible for: a. promoting the development and diversification of Nigeria’s export trade. b. Publish and respond to commercial enquiries. c. Organising trade exhibitions to expose exporters to the international market. d. Organising a forum to discuss and enlighten NEPC Despite being tasked with these obligations, they face challenges that make their work difficult, leading some to assume that they are irrelevant. With this in mind, the purpose of this research is to demonstrate that NEPC plays an effective and relevant role, as well as to propose solutions that may assist NEPC in improving the service it provides. This will allow them to fulfil their roles more successfully and relevantly.

Chapter one

INTRODUCTION

1.1 Background of the Study

Purchasing is an extremely significant action in all aspects of life. Individuals, cooperative entities, manufacturing organisations, and so on all engage in purchasing, which requires careful consideration. Most manufacturing organisations and cooperative bodies engage in international purchasing and are guided by rules and regulations governing buying and selling overseas.

This study will focus on the role of the Nigeria Export Promotion Council in international purchasing. The export promotion council is primarily concerned with the actions of the world market as they relate to Nigeria as an entity.

This body will be viewed from the perspective of the consumer and how the activities effect international purchasing. The council was founded in 1979 by the federal military government under Decree No. 72 of 1979.

It is guided by some rules and regulations that exporters must follow, as well as existing rules that exporters must comply to. These laws also have an impact on purchasers because what is available in the market is what they have the opportunity to purchase from the foreign market for their businesses.

1.2 Statement of the Problem

This study came from the issues faced by exporters in this nation. The researcher is interested in determining the causes of infrastructural bottlenecks such as an inadequate road/rail network and postal services, as well as an insufficient and unreliable supply of power, water, and telecommunications.

Bureaucratic and policy hurdles in government administration include regulation control, application procedures, and public agency cooperation. Inadequate or poor internal fundraising to manage the council.

1.3 GOALS OF THE STUDY

The paper examines the role of the Nigerian Export Promotion Council in foreign purchasing. The purpose is to:

a. Lead the development of appropriate export incentives and actively promote the country’s export policies and programmes.

b. Determine how effective international purchasing may be achieved with the council’s aid.

c. Coordinate and monitor export promotion initiatives throughout the country.

d. Determine to what extent the council has had a favourable influence on international purchasing.

e. Provide information on the growth and diversification of Nigeria’s export trade, as well as how purchasing has responded to the existing council’s laws and regulations.

f. To help promote the growth of the country’s export-oriented sectors.

1.4 SCOPE OF THE STUDY.

This study was conducted at the Nigeria Export Promotion Council in Aba-Abia state. Data and information were collected from managers and supervisors.

This research work has no goal of covering all aspects of NEPC and their methods of functioning, which would be outside the scope of this study.

Since its start, the NEPC exporting system has made a significant contribution to the export of Nigerian export promotion council commodities.

In this study, we will look at the effectiveness of exporting in NEPC, find alternate routes of exporting, and emphasise its importance in the marketability of the Nigeria Export Promotion Council.

1.5 RESEARCH QUESTION.

1) To what extent does Nigeria’s Export Promotion Council promote international purchasing?

2) Will financial incentives given to exporters boost foreign purchasing?

3) How do seminars, workshops, and other promotional activities organised by the Nigerian Export Promotion Council help exporters increase international purchasing?

4) What are the most likely hurdles for exporters receiving financial incentives?

5) Has the formation of the Nigerian Export Promotion Council benefited overseas buyers in Nigeria?

1.6 Research Hypothesis

The hypothesis is tested in order to establish an adequate opinion and draw conclusions about whether the data is accepted or rejected.

Hypothesis I.

Ho: A fully effective Nigerian Export Promotion Council will not lead to increased overseas purchasing.

H1: A fully effective Nigerian export promotion council will lead to increased overseas purchasing.

1.7 Significance of the Study

The function of the Nigerian Export Promotion Council in international purchasing is a “very” important problem because the council’s activities have an impact on the global market.

The study of the council’s function in purchasing will provide individuals participating in international buying with additional information on how to deal with this council, ensuring successful and efficient purchasing.

Another aspect of the study’s significance is that the findings could be used by future researchers who are researching the council’s role in purchasing.

1.8 Limitations of the Study

The most significant limitation discovered during the study was the difficulty of meeting with managers, supervisors, and employees due to their tight schedules and methods of operation.

Even when an audience was provided, managers were hesitant to divulge information for fear of it reaching their competitors, and employees were concerned that releasing information would result in them losing their jobs or being punished.

Finally, due to the financial concerns of being a student researcher, this study focused on material from the Nigeria Export Promotion Council, the polytechnic library, and the internet.

1.9 Definition of Terms

Some of the main terms used in the write-up include the following:

1) EXPORTATION: This refers to the procedure of selling things overseas.

2) EXPORT DEVELOPMENT FUND: As part of the incentives package, the federal government established a special fund to provide financial support to exporting enterprises to pay some of their initial fees and charges.

3) EXPORT CREDIT GUARANTEE AND INSURANCE SCHEME: This protects exporters from the risk of nonpayment by international purchasers or importers.

4) EXPORT EXPANSION GRANT FUND: The fund’s purpose is to provide cash incentives to exporters who have exported a minimum of N1,500,000 in semi-manufactured or manufactured goods / materials in order to encourage them to increase their volume or quantity of exports to overseas markets, diversify their product types, or expand their market coverage.

5) DUTY DRAW BACK / SUPERVISION SCHEME: This is a mechanism in which an exporter receives a refund of import duties on raw materials used in the manufacture of items intended for export.

6) EXPORT ADJUSTMENT SCHEME FUND: This is a supplemental export subsidy that compensates exporters for excessive production costs due to infrastructural shortcomings. Pioneer designation is granted to manufacturers who export at least 50% of their annual business.

7) TAX RELIEF ON INTEREST INCOME: Interest earned from bank loans for export activity is tax-free.

8) CAPITAL ASSETS DEPRECIATION ALLOWANCES: This is a 5% annual capital allowance on plant and machinery for manufacturing exporters who export at least half of their annual business.

9) SHORT-TERM BILL DISCOUNTING: This program allows exporters of any product to discount their bills of exchange and promissory notes with their banks to enhance liquidity.

10) EXPORT HOUSE: A house in any corporation or organisation that is not a manufacturer and whose primary function is to handle or finance a specific local export and/or international trade on behalf of the principal manufacturer.

11) BILL OF LADING: This is an important document for the movement of commodities. It is an acknowledgement of the receipt of items for shipment. The bill has been standardised, and carriers are accountable for producing the right bill; nevertheless, in reality, it is typically written by the shipper and signed by both shippers and carrier’s agents.

12) PRO-FORMA INVOICE: This is a form of quote sent by the exporter to a possible buyer (importer) to aid the importer in obtaining an import licence, if necessary, to bring in the products, as well as a foreign exchange permit from the importer’s country.

The documents include information such as the date, the consignee’s name, the amount and description of the products, package markings and measures, the cost of the items, packaging, transportation freights, insurance premium terms of sale, and payment terms.

13) SUPPLIER’S ORIGINAL INVOICE: This document is often issued by the supplier or exporter to the buyer or importer. It displays a list of products purchased by the importer and shipped by the exporter or seller, together with the pricing at which payment must be made.

Other information seen on this invoice includes the seller’s name and address, the weight of the products, insurance charges, packaging and handling expenses, and other terms of the agreement.

14) CUSTOM BILL OF ENTRY: This document is required for all imports into the country and is used to clear commodities at ports when all exchange control regulations have been completed, including certification by NAFDAC, SON, and others.

This document is provided by the Board of Customs and indicates that the items or materials shown on the face of the documents entered the nation and satisfied all permissible standards after being certified by competent agencies.

15) CERTIFICATE OF ORIGIN: This is a document that specifies the country of origin for goods purchased by the buyer or exported by the provider.

It is often completed by the supplier or seller and may need to be authenticated by a chamber of commerce or another authorised authority in the exporter’s or seller’s country.

16) IMPORT permits: These permits are often issued by the federal government of Nigeria or another federation for items brought into the federation.

17) FORM “M”: This is a vital paperwork from the importer. It is commonly referred to as the importers’ document. It is required when an importer applies for the acquisition of foreign currency and serves as a control mechanism. This paper is guided by the Federal Republic of Nigeria Foreign Exchange Control Act of 1962.

18) EXPORT QUOTATION: It is critical that the exporter (seller) understands that overseas purchasing requires a significant amount of distance and time. Thus, the exporter must ensure that he is quoting exactly what the importer (foreign consumer) requests.

19) EXPORT LICENSE: Before sending a quotation to a possible foreign importer, the exporter must first determine whether what he is quoting for is exportable or not.

It should be noted that the export of some strategic items may be forbidden in certain countries, and exporters must also understand if such goods require an export licence or not.

20) COUNTER PURCHASE: This is a reciprocal purchasing relationship. It occurs when a company agrees to buy back a specific amount of materials from a country to whom a transaction has been made.

21) QUOTAS: These are devices used by the government, directly or through its agencies, to limit the amount or quantity of goods and services that international buyers and sellers can bring into and out of the country for economic or political purposes.

22) LICENSING: A licence is a document that authorises an individual or organisation to accomplish something or complete an assignment within a specific system and time frame.

In terms of international purchasing, it is an official license granted to an organisation by the government or its agencies to export or import goods or services.

23) BILL OF EXCHANGE: This is a common practice in international purchasing to establish a legal obligation to pay a sum of money and to provide a handy mechanism for giving or receiving a term of credit.

24) PROMISSORY NOTE: This is a promise to pay made and drawn out by a buyer (the document’s author) in favour of the seller, who is the payee or beneficiary.

25) INCOTERMS: Incoterms are described as the method of delivery of goods by exporters/suppliers, indicating what charges are included in the price, and defining the responsibilities of the parties to the contract of sale for insurance, shipping, and packaging.