Effect Of Government Export Promotion Policies On The Development Of Export Business In Nigeria (A Case Study Of The Nigerian Export Promotion Council)
The introduction of government export promotion policies in the development of the export business In Nigeria, which poses more or little threat do the export business in Nigeria. There are a lot of tasks ahead for the government of a country, but all the tasks are quite effective.
The introduction of the export promotion policies will have to experience some restrictions through the introduction of some policies. Many developer countries of the world go through this process and for this, many exporting firms now has been forced into untimely extinction. Those which still manage to rear their heads are bedecked with a host of government policy restrictions. The deregulation FOREX market resulting in the highest liquidity in the Nigeria economy, the absence of effective policy for converting easily converted debt instruments into each in the financial system. Banks can also assist this export promotion programme, either in short term loan or even in the case of technical know-how if required.
It is quite clear nowadays that the role of banks in international business and indeed export promotion is highly elastic. As one move along with this research work, chapter to chapter, all what we talk about will be revealed to you.
Table of Contents
- Table of Content
- 1.1 Brief History of the Nigerian Export Promotion Council (NEPC)
- 1.2 Conditions and responsibilities guiding the Nigerian Export Promotion Council (NEPC)
- 1.3 History of Firms in the Sample
- 1.4 Export History and Performance
- 1.5 Significance of the study
- 1.6 Statement of the Problem
- 1.7 Scope and Limitations of Study
- 1.8 Hypothesis
2.0 Literature Review
- 2.1 Literature Review
- 2.2 The role of the Central Bank and Special Banks
- 2.3 Policy Guidelines of Commercial/Merchant Bank
- 2.4 External factors Affecting export growth
- 2.5 Export Promotion Strategy
- 2.6 Central Bank of Nigeria (CBN) Financing
- 2.7 Role of Special Banks
- 2.8 Contribution of ECOWAS
- 2.9 Export Proceeds
- 2.10 Registration of Exporters
3.0 Research Methodology
- 3.1 A brief Outline of the Chapter
- 3.2 Re-statement of Research Questions Hypothesis
- 3.3 Test of Validity and Reliability
- 3.4 Procedure for Procession and Analyzing Collected Data
- 3.5 Limitations of the Methodology
4.0 Data Analysis
- 4.1 A Brief Introduction of the Chapter
- 4.2 Classification of response and data from primary source
- 4.3 Analysis of other relevant data
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation; for Further Studies
- Appendix – Questionnaire
1.1 Background of the Study
Many countries in the world today have at one time or the other been caught up in what some authors term “export dilemma”. Almost instinctively, they therefore recognize the aviate need to develop their export base. One of the periodic publication of the GATT (General Arrangement Tariffs and Trade) National of export promotion techniques often reviews the activities and strategies of various nations to revitalize exports. It is not a surprise that almost all the advanced industrial nations of the world today had to go through a formalize, constant and programme of export promotion. However, we find for example in this race, such developed countries like Australia, Belgium, Canada, Italy, United Kingdom and U.S.A. etc. Recently, some less developed countries like Nigeria, Togo, Turkey and India etc have decided to follow suit.
Developing countries have realised the importance of industrialization, this explains why they now endeavour to promote industrial developments through direct public and private investment in export business and alsocreate favourable industrial climate. This entire development programme lays emphasis on industrialization as one of the goal of development.
1.2 Statement of the Problem
With the content of the Nigerian economic, many export business concerns, especially those engaged in export of manufactured products, processed agricultural food items and industrial products has been passing through traumatic experience in terms of initial capitalization and continuous financing. Many exporting firms has been forced into untimely extinction. Those which still manage do rear their heads are bedecked with a host of government policy restriction. The deregulation FOREX market resulting in the highest liquidity in the Nigerian economy, the absence of effective policy for conbverti9ng easily converted debt instruments into each in the Nigerian financial system.
The unwillingness of the CENTRAL BANK to discount instruments before their actual maturities, the unpreparedness of Nigerian banks to fund long-term projects because they cannot always ensure themselves of continued liquidity on the period prior to the maturity of the loans and the general syndrome of capital flight resulting from the risk avoidance attitude of private investors all combined to slim down the chances of obtaining easy and quick financial instruments. Sequel to such bottlenecks in the financial system of the country, the development of new venture is fraught with host of teething capital problems to the extent that a large number of them remain only on the drawing board without enjoying the benefits of commencement and continued existence.
1.3 Objectives of the Study
The aim of this research work is to examine the Effect of Government Export Promotion Policies on the Development of Export Business in Nigeria.
The objectives of the research work include:
- To examine if the export promotion policies are favourable and encourage exporters.
- To investigate if the export promotion policies are been adhered to by exporters.
- Does the government export promotion policies have any effect on the development of export business in Nigeria
- To identify the external factors affecting the growth of export in Nigeria
1.4 Research Questions
Research questions are meant to generate possible answers to different aspects of the research problem and they should be clearly stated such that they act as guides in identification, collection and analysis of relevant data. In order to achieve the purpose of this research study, the study will attempt to provide answers to the following research questions.
- What are the effects of Government Export Promotion Policies towards the export business development in Nigeria?
- How have the exporters been coping with the economic realities on sourcing funds for their enterprises?
- How have the exporters been coping with the imposition of various policies on their business in the country?
- What measures has the government (if any) put in place from time do time to promote export business?
- Has there been improvement in economic situation to the benefit of exporters?
- What are the possible effects of the political transition programmes of the government administration policies on the economic situation and indeed, the financial matters of the nation?
- How does the government in particular now assist in export business?
1.5 Statement of Hypotheses
In order to arrive at logical conclusion and present valid suggestion, every research work seeks necessarily to provide concrete and genuine answer to certain research hypothesis. For the purpose of this study, the following hypotheses are postulated:
- H0: The Government Export Promotion Policies has no impact on the export business development in Nigeria
- H1: The Government Export Promotion Policies have impact on the export business development in Nigeria
- H0: Government has not put any significant measure in place to promote export business in Nigeria
- H1: Government has put significant measures in place to promote export business in Nigeria
- H0: Exporters have not been contributing progressively to the economic advancement of Nigeria
- H0: Exporters have been contributing progressively to the economic advancement of Nigeria
1.6 Significance of the Study
General Agreement on Tariffs and Trade (GATT) In 1978, declared the need for developing countries to expand their export. One of THE reasons as derived from the presidential budget broadcast (1996) is that it become a “sin quo non” that for Nigeria to charge the mono-product identity open up other sources of national income so as to increase her domestic and external debts, achieve a sustained economic and industrial growth, it has to be export oriented.
The experience of South Korea steaming from her all effort programmes of export development, speaks in favour of export promotion. South Korea rose from a backward and impoverished agricultural society of the 1950s to what it is today as an economic miracle and one of the most rapidly industrializing and aggressively export-oriented economy of today.
It is on this note, the researchers sees it imperative to embark on this study.
1.7 Scope and Limitations of the Study
This study tends to cover the specific but significant area of export promotion. The effect of government policies on development of export business in the country with special reference to Nigerian export promotion council (NEPC). The role of Central Bank of Nigeria (CBN), NEXIM bank and the financial houses will also be examined.
Sequel to the limited time at the disposal of the writer as well as the financial constraints which beclouded the research work, its scope has been necessarily limited to the careful study of a single financial institution which may not be fully representative of the broad exporting spectrum. It is however believed that exporting firms generally face the same kind of problems as they all operate within the same complex climate. It is pertinent to state however, that the findings, conclusion, suggestions and recommendations herein made are subject to further investigations by interest researchers.
1.8 Brief History of the Nigerian Export Promotion Council (NEPC)
The Nigerian Export Promotion Council (NEPC) was legally established through the Nigerian Export Promotion Decree No.26 of 1976 and was formally inaugurated in March 1977. After the Decree had gone through a series of amendment, the Nigerian Export Promotion Council Amendment Decree no 64 of 1992 was promulgated to enhance the performance of the council by minimizing bureaucratic bottlenecks and increasing autonomy in dealing with members of the organized private sector. NEPC has settled for a structure, which provides for the following Departments:
- Personnel and Administration;
- Finance and Supplies;
- Trade Information and Incentives;
- Product Development, and
- Market Development.
Summary, Conclusion and Recommendation
It could be deduced from the analysis of the previous chapter that Government Export Promotion Policies to an extent has impacted on the export business development in Nigeria. Also Government has put significant measures in place to promote export business in Nigeria. Exporters have been contributing progressively to the economic advancement of Nigeria. These results are obviously true from the secondary data which show that there is growth in the Nigeria export products year after year.
There is no doubt that banks are a formidable force do be reckoned within executive any report promotion programmed from the proceeding sections. It should be agreed that banks provide the drive, the lubricant and in same case, the technical know-how required. It is no more rhetorical however; we believe that there might be some short coming or inadequacies in the performance of their roles and which can be avoided consequently, in this conclusion section, we have identified the possible constraints of banks in discharging their roles at the same time, offered some policy options which implemented, can guarantee a more functional participation of banks in promoting the exports of a country.
Identified Role Constraints Greater Risk
Export trade and its promotional activities involved abroad. This is subject to much greater risks than domestic lending. Non-payment can easily arise due to one or all of the following:
- Ordinary commercial insolvency
- Some actions by a foreign government which makes transfer of foreign currency impossible e.g. war with the importers country.
On the assumption above, it is generally observed that the decision framework faced by banks is more complex and Involved problems and policy resolutions not ordinarily encountered on domestic lending.
Foreign lending is subject to more government pressures and influences. This is especially the case in countries where issuing of export and import license are in operation. Besides, sometimes government may issue directives which limit liberal participation of banks. For example, in November 1967, through the bank of England, government directed that banks should hold down most of their lending in sterling to the private sector and to borrowers abroad to this level then current others:
- The special problem of financial capital eg2iupment exports. This involves large capital requirements whose period of repayment may be much longer.
- The tendency for the international competition in export finance to accelerate.
Conclusion could be drawn from the analysis that government export promotion policies has great effect on the development of export business in Nigeria. Moreover the oil and gas is this major concentrated export product of Nigeria with less concern in other sector. Government can still play better role to improve the growth of export products.
5.3 Recommendation; For Further Studies
Banks can continue to be laudable instruments of promoting export trade without regard to time and space. The constraints on their continuous and effective functioning already identified, can be gotten rid of, this opening ways of renowned performance. We recommend the following options whose implementation would mean the relaxation of the desired state of bank roles:
- Government of exporting countries should provide basic and supplementary credit. Nigeria is just doing this with theestablishment of credit guarantee schemes commands greater confident to banks. Note that credit guarantees scheme under write the major part of any loss that banks may suffer on their advances to exporters.
- Internal organization of banks especially the foreign department and with the understanding of the increase role of banks in export promotion.
- Government guarantee or ensure foreign loans and investments made by banks, This might be to encourage banks to support financially any capital equipment export and such other projects requiring heavy finance.
- Establishment of special bank export/import banks with full operating powers in countries where they are non-existent at present. e. Researchers into the diverse areas of exports trade (by banks) e.g. on exportable product potential markets, individual country regulatory procedures.
- As far as possible, government control should be minimized. But where necessary, there should be compensation to banks on export policy directives that encroach on their free operations.
- Appropriate legislation to give legal backing to the exporter country policy measures on export promotion, and in which the bank permitted range of activities remuneration and other incidental matters are clearly specified.
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