IMPACT OF EXPORT FINANCING ON NIGERIA EXPORT SECTORS
This study is motivated by a desire to examine the impact of export financing on Nigeria export sector. In light of the empirical review and other discussions, a number of questions arose as to whether there is a significant relationship between export financing and growth in Nigerias export sector, as well as to ascertain whether export sector impacted significantly on the growth of Nigerian economy. Using the Ordinary Least Square (OLS) regression technique with the aid of computer software, the empirical findings revealed among other things that there exist a significant relationship between export financing and growth in Nigerias export sector. Recommendations where however made by the researcher.
Every country realizes the importance of economic growth to become the developed country. The extremely complex process of economic growth is dependent upon a large number of variables such as trade and price fluctuation, political ups and downs, economic factors and capital accumulation etc. Export-led growth hypothesis describes that growth in exports of country is an important factor to the economic growth of the Country. The hypothesis amplifies that overall growth of economies does not only depend upon increase in labor and capital stock, but also on growth in exports.
The competitiveness in global market leads to production of innovative product and making able the local producers in meeting competition in global market. The contribution of various countries in the global trade state highly significant relation between two variables, expansion in exports and growth in economic activity. Many studies confirm that there is a powerful relation between said variables. In developing countries, the promotion of export is a source to fill the disproportionate gap in the external sector. The experience of china during the 1980s and 1990s intend to support that openness to trade is a method for achieving efficient growth (Findlay & Watson, 1996). During the 1980’s and 1990’s many American countries attempt to privatize their trade strategy in the direction of more oriented strategy. To build more efficient use of limited resources and increased export opportunities, some of the squabbles for more privatized trade policy were allied to increase the competition in international market.
Export marketing can be described as a nation’s economic facilitator, as it facilitates transactions between a country’s productive sector and its international consumer need/demand. It is the critical link in effectively utilizing the production resources of one country to the economic well-being and growth of both the importing and exporting countries. It has also been argued that export marketing and by extension marketing, might by itself go far toward changing the entire economic tone of the existing system, without necessarily changing the methods of production, distribution, population, or of income. What is needed in most developing countries’ (like Nigeria) growth to make economic development realistic and meaningful is to engage in effective export marketing and marketing in general (Opara, B. C. 2010).
The developmental role of exporting can be appreciated from the fact that it earns foreign exchange, increase firms’ sales/profit, lower production cost, create employment, earn international recognition n, enhance reputation, and improve living standard of both the exporting and importing firms/nations.
Panagariya (1995), in a study of Chinas exporting strategy, remarked that, export is a key to high GDP growth rates. The critical economic difficulty faced by Nigeria as a result of oil glut or price fluctuation in the world market stimulated several search for alternative to oil as a sustainer of economic development since the 1980s, hence the need for export marketing as a viable alternative to oil (crude petroleum).
STATEMENT OF RESEARCH PROBLEM
Much is expected from the government to provide basic social and infrastructural facilities to assist the financing of export trade. Nigeria’s economic terrain is varying with focus being concentrated on the big firms which are constantly down-sizing. People that fall in the exporting category have frequently accused the banks of providing funding to only their cronies and favoured companies.
Against this backdrop, the following research questions are raised:
Is there a significant relationship between export financing and growth in export sector in Nigeria?
Has export sector impacted significantly on the growth of Nigerian economy?
OBJECTIVES OF STUDY
The research main objective is to empirically investigate the impact of export financing in the export sector in Nigeria. The specific objectives are:
To examine the relationship between export financing and growth in Nigeria export sector.
To ascertain the impact of export financing on Nigerian economy growth.
HYPOTHESIS OF THE STUDY
The following hypotheses have been formulated to serve as a base for this research;
Ho: There is no significant relationship between export financing and growth in Nigeria export sector.
H1: There is significant relationship between export financing and growth in Nigeria export sector.
Ho: Export financing has no significant impact on economy growth of Nigeria.
H1: Export financing has significant impact on Nigerian economy growth.
SCOPE OF THE STUDY
This study is undertaken to empirically investigate impact of financing export in Nigeria. In term of time series, a period of thirty years is used (i.e. 1980 to 2010) It is hoped that this will help to achieve the stated objective of the study.
SIGNIFICANCE OF THE STUDY
This research work on its conclusion, together with whatever solution or findings that may arise, will prove useful to some particular group of persons or otherwise for various reasons in accordance with their varying needs.
Stakeholders: This study will be important and beneficial to stakeholders of an organization to know the essence of financing export in Nigeria.
The Government: It will acquaint the government of the importance of export sector in Nigeria and how it should be properly managed.
The public: This study will help to restore the lost confidence of the public as regard financing export sector in Nigeria.
Academic/future researcher: Both academic and other future researchers in this similar subject matter will find it a useful source of learning and research.