FOREIGN EXCHANGE FINANCING IN AN IMPORT ORIENTED ECONOMY A CASE STUDY OF UNIVERSAL TRUST BANK, (UTB) OF NIGERIA LIMITED (1994-1997)
FOREIGN EXCHANGE FINANCING IN AN IMPORT ORIENTED ECONOMY A CASE STUDY OF UNIVERSAL TRUST BANK, (UTB) OF NIGERIA LIMITED (1994-1997)
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Date
1998-08
Authors
IDOWU, Oladipupo Olusola
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Abstract
Foreign Exchange is the international money widely acceptable for settlement of
goods and services between various countries of the world. It thus functions as a
medium of exchange and a unit of account at international level.
Finance is the backbone of international trade. Financing of such goods may be in form
of payments of Cash, Overdrafts, Tenor, Reimbursement Bill, or Documentary
Acceptance Credit to suppliers of the goods, through banks and financial institutions.
Foreign Exchange financing is thus very essential to an import oriented economy like
Nigeria.
This research work sought to :
. Determine the roles of Bank in granting foreign exchange to importers of goods
and services through the official transaction,
(ii) Determine other sources of foreign exchange available to importers.
.Make recommendations aimed at minimizing the problems facing
the banks and the importers within the Nigerian economy .
The Researcher has established the following facts based on the exercises carried out.
.Official transactions account for less than 50% of payments in foreign exchange
for goods and services imported into the Nigerian economy.
. Importers sought other avenues viz:parallel market, bureau de change,
Domiciliary external or off-shore accounts to pay for goods and services
imported into the Nigerian economy .
Some limitations to the research exercise were noted, for example, the poor
response of some companies to the questionnaire administered was not very
encouraging.
The researcher preferred some recommendations aimed at solving the acute
shortage of foreign exchange in financing imports into the economy, viz:-
(i) Development of industrial base through completion of steel projects and
petrochemicals would reduce the volume of imports into the country and thus
make foreign exchange available through official transactions to pay the bills for
the essential goods and services imported into the Nigerian economy.
(ii) Reduction of bottlenecks in the operation of Foreign Currency Domiciliary
Accounts (FCDA) would make foreign exchange more readily available through
official means and thus, make payments of imports to Nigeria less cumbersome
and disturbing to manufacturers and other business organizations in future.
Description
A THESIS IN THE DEPARTMENT OF BUSINESS ADMINISTRATION
SUBMITTED TO THE SCHOOL OF POSTGRADUATE STUDIES IN
PARTIAL
FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF
MASTERS IN BUSINESS ADMINISTRATION
AHMADU BELLO UNIVERSITY
ZARIA
BY
IDOWU, OLADIPUPO OLUSOLA
AUGUST 1998
Keywords
FOREIGN,, EXCHANGE,, INANCING,, IMPORT,, CASE STUDY,, TRUST BANK,, NIGERIA, LIMITED (1994-1997)