THE ROLE OF BANK EXPORT PROMOTION FOR ECONOMIC GROWTH

Introduction

1.1 Background Of The Study

The topic “the role of bank in export promotion for economic growth is about the major issues business export trend in Nigeria role of bank in the development and promotion of export table goods and services and the contribution of bank towards ultimate economic growth.

Export promotion as used here involve all those services provided by banking and non-banking sector to facilitate the promotion of goods and services outside the country.

Nigeria has delved great benefit from international trade foreign goods but capital and consumer good not produced in the country have been acquired and paid for form Nigeria’s export earnings.

George O Niyi market for Nigeria export goods national concord June 13 1986 p.6. The important of export promotion especially in Nigeria cannot be over emphasized after the discovering of oil in 1965 it gradual came to dominate the export sector., oil therefore become the single most important item of export. Figures released by the federal office of statistics show that export of all items form the country in the first half of 1995 had recorded about 316,38.49 billion out of this petroleum product amounted to 14,365.9 billion in percentage terms oil exports represented 90.5 percent while other item had a negligible 9.5 percent. As at 19 79 oil accounted for about barrel day at 20.10 dollar per barrel the economy was 96% dependent on oil revenue as her foreign exchange earner. But unfortunately the revenue from oil was never commensurably reflected either on the extent of the job creation and other preferred multiple or linkage on the economy soon the price of oil began to declare resulting form the American International Agency and other manipulation of the organization of petroleum exporting counties (OPEC)oil glut quota sales and continuous price decline because the other of the day within five year (1981-1986).

The price of oil fell form on all time high forty American dollars to an all time how eight American dollars. Banks plays a major role in payment for export. This means of export payment for export and general settlement of international transactions are.

1. The foreign bill exchange
2. The bank draft
3. Document and for credit for which is necessary to open a credit at a bank in the exporters country.
4. The telegraphic transfers which enable bank deposit to be transferred expeditiously form the importer bank.

Bank act as a major intermediary for all listed means of payment. The federal government of Nigeria adopted some specific measures to ensure for export promotion in Nigeria.

Some of these are

1. Refund to import duty paid a raw material used for production of commodities marked for the export market.
2. Refund of excise duty on domestic manufactures export.
3. Exemption form import license for raw materials required for export products.
4. Liberalization of import license of raw material required for export products.
5. Abolition of export prohibition as contained in finance act No 2 of 1981 except for commodities whose exportation was barred.
6. Introduction of export credit guarantee in insurance sinecure during the year 1986 the most recent incentive package for exporter includes.

Currency intention scheme:

Authority to retain foreign exchange earnings has been increased form 25% to 10% presently. The scheme enables the exporter to retain foreign proceeds in foreign exchange and allows part of the funds to be used in expenses related to export activities duly certified by the authorized dealers.

Export expansion grant:

This provides cash inducement of exporter who have exported a minimum or 50.000 (fifty thousand) worth of semi manufactured product to facilitate expansion diversification etc.

Tax relief in interest income:

This encourage bank to give out loans form export this programme. Interest income on loan for export activities shall be exempted form certain percentages tax.

Export development fund:

This gives financial assistances to exporter to lower part of initial expenses for export promotion activities.

A Duly draw back scheme:

Exporter shall on application to the duty draw back committees be entitled to 50% re-imbursement on import duty levies sub charge etc. paid in respect of all import duties including raw material used in export production.

In order to qualify for this facility the actual exportations of the product from the imported input must be computed with eighteen months form the data of importation of the imports.

In various economic development plans of Nigeria specifically three main objectives have been aimed at business.

1. Diversification of the composition to the export products especially those of agriculture as well as processed and manufactured goods.
2. Diversification of the friction of trade
3. Increase in the value of export procedures.

How these objectives has been achieved satisfactorily in any of the plan periods this is more reasons banking services are required and more encouragement in term of incentives must be given to the banks in order to stimulate their interest in export promotion specifically some of the problems attainable in the export sector as highlighted in the furth national development plan are as follows.

On the major export commodities coca performed better than anticipated. Some other crops such as groundnut oil failed out completely form the nation export list while many others like Timba Logs Plywood, plan Kernnel and groundnut cakes where shadows of there past performance. The perform of the marketing brand system of which hope had been placed to resuscitate the nation sagging agriculture exports seems to even made more pressing when it is realized that Nigeria is facing a decline in output or both her mineral and agricultural output.

Exports have been estimated that by the late 19905 Nigeria would not be able to export as much as oil as she does now because by then domestic consumption would have gone up between 1.5m to 1.9 barre is per day. Learning a reductive small quantity for export manufactured goods and still in their infancy and the output of the agriculture sector is still on the decline and meat importantly our central nervous system oil is facing the world oil glut crisis.

1.2 Statement Of The Problems

The country is currently testing he bitter pill of economic set back resulting form over reliance on one export commodity oil to country can achieve any meaningful economic prosperity by producing for home market alone and no highly developed country can maintain a high growth rate if it neglect export.

Export development and promotion I one of three factors of development through industrialization as it is currently practiced.

The other two facets are mini 9000 import substitution and will run out by the end of this decade it then because inevitable that our export potentials must be fully exported and that the bank role in export promotion must be discovered and fully practical zed.

1.3 Objective Of The Study

The objective of this study see out here to

1. Analysis the trend of export with Nigerian economy.
2. Point out the role of bank in export promotion and ultimate economic growth.
3. Present the prospects of Nigeria export within and outside African.
4. Make recommendation based on problem identified on how fully integrate the bank and bring them to participate fully in export promotion in Nigeria.

The study point out that to achieve a meaningful growth emphases must be laid on export promotion which is an expect of economic diversification it goes to reveal that bank have a lot of do in this area and that for the bank activities to be full exploited their must be increased awareness of their rules for the bank than selves potential exporter an of her agencies involved in the export business.

Also important to note is that there has to be a package of incentive form the federal government to attract the bank of he aspect of the economy the crux of the study is to stress that the banks which are of immense important in export business are doing little in this direction and to present a carefully adopted will revalued this poor situation.

1.4 Significance Of The Study

This research is quite significant given benefit of a good export promotion for economic growth export promotion helps to determine the role of bank in export business the role of this is an effective and efficient performance.

This research report will be of great benefit of the bank who will gam a lot the role or the export promotion is favourable on their own side the implication is a harmonious working environment synonymous with efficiently and effectiveness like wise the school as a whole and other export in the Nigeria economy will benefit it. And it is also significant because the finding and subsequent suggestions would as well be of great service problem diagnosed on this research.

1.5 Definition Of Terms

Economic growth:

This is a rapid and sustained rise in real output per head and attendant shifts in technological economic demographic characteristics of a society.

Economic development:

This is when an economy generates an improved material well-being and a conform ant reduction o elimination of inequality and unemployment with the given society.

Commercial bank:

These are banks that deal with acceptance and safe keeping of money and other valuables.