TABLE OF CONTENT:
CHAPTER ONE
1.1.Background of the Study
1.2.Objective of the Study
1.3.Methodology of the Study
1.4.Hypothesis of the study
1.5.Scope and Limitation of the Study
CHAPTER TWO
Literature Review
CHAPTERTHREE
3.1. Research Design/Methodology
3.2. Sources of Data, Primary and Secondary Location Data.
CHAPTERFOUR
Summary and findings
CHAPTER FIVE
5.1. Recommendation
5.2. Conclusion
5.3. Bibliography
ABSTRACT:
This paper attempts to investigate the analysis of the determinants of FDI in Nigeria
The first chapter gives a background of the study. Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation.
The objective of the study is to evaluate the determinants of FDI in Nigeria. It also goes to evaluate the impacts of FDI on the economy
In the empirical analysis of the impact of foreign trade as an engine of growth in Nigeria, the method used is the Ordinary Least Square(OLS) regression techniques. The data used in this analysis are the Gross Domestic Product (GDP) and foreign investment flow.The data for different variables were compiled for a period(1986 – 2010)
CHAPTER ONE:
1.1 . Background Of The Study
Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation. In a simple world of two factors, labour and capital, it is often presumed that low-income countries have abundant labour but less capital. This situation arises owing to shortage of domestic savings in these countries, which places constraint on capital formation and hence growth.
Even where domestic inputs in addition to labour, are readily available and hence no problem of input supply, increased production may be limited by scarcity of imported inputs upon which production processes in low-income countries are based. International capital flows (ICFs) readily become an important means of helping developing countries to overcome their capital shortage problem. One of the components of international capital flows is foreign Direct investment (FDI).
Other components are:
Official flows from bilateral sources (e.g developed and OPEC
countries) and multilateral sources(such as the World Bank and its two affiliates: the International Development Association(IDA),and the International Finance Corporation(IFC),on concessional and non-concessional terms.
Commercial bank loans including export credits.
Economic theory suggests that capital will move from countries where it is abundant to countries where it is scarce. This pattern of movement will be informed by the returns on new investment opportunities, which are considered higher where capital is limited. The resultant capital relocation will boost investment in the recipient country and as Summers 2000 suggests, brings enormous social benefits. Underlying this theory is the premise that returns to capital decrease as more machinery is installed and new structures are built, although in practice this is not always or even generally true.
With the advent of the third millennium, the peace of globalization has continued to accelerate. The areas of International trade and finance have been pushed by many factors including accelerated privatization and economic liberalization in almost every country in the world.
One important economic consequence of globalization for developing countries has been the massive and unprecedented inflows of Foreign Direct Capital during the final decades of the 20th century. Indeed during the last decade of the last century,private capital flows wrested primacy place from public flows,seizing the pre-eminent position as the source of foreign investment and development finance for developing countries. According to Weitz and Lijane(1998)
“While official flows totaled $56 billion in 1990,compared to $44 billion private flows by 1996,public flows had declined to $41 billion and private flows grew to $244 billion”(1998: p.4)
UNCTAD figures show that in 1997,FDI inflows amounted to $400billion and in 1998 reached an unprecedented level of $440 billion. Mallampally and sauvant(1999,p.3)
Although FDI have become more widely dispersed among recipient countries inrecent years, the distribution is still skewed with Asia receiving the lion’s share of FDI flows going to developing countries and Africa receiving very little. According to Mallampally and Sauvant, “Among developing countries,though the distribution of world FDI inflows is uneven. In 1997 for example, developing Asia received 22%; Latin America and the Caribbean,14% and Africa 1%”. Mallampally and Sauvant (1999p.35)
Another perspective in the skewness of the distribution is obtained when it is realized that in 1995, 81% of global FDI flows to developing countries went to 12 countries while 89% of all portfolio flows went to almost the same dozen countries. Weitz and Lijane (1998;p.13)
Clearly,therefore the challenge to attract more inflows for investment in development projects has become acute in Sub-saharan Africa where only a small proportion of new inflows have gone. Note, the needs of developing countries particularly those in Sub-Saharan Africa has sharply increased in recent years due to the accelerating process of globalization. According to Weitz and Lijane(1998p.6): “Opening up a country requires investment for connecting the necessary infrastructure-roads, telecommunication, power plants, financial system. Given the low incomes and low savings in many African countries, the investment-savings gap has widen and there is little hope of closing it without the active involvement of the private sector-both domestic and foreign. Thus, increasingly, in order to finance the investment gap,it is becoming imperative to attract foreign investment
There is an emerging consensus that a conductive macro-economic policy environment is not only a desideration but is in fact a sine qua non for attracting substantial amounts of foreign investment inflow in a liberalization and globalizing world economy. Nigeria needs a massive inflow of foreign investment in order to transform its economy,upgrade dilapidated infrastructure and plug on to the electronic age of computers and the internet. An absolute pre-requisite for success is the design and implementation of policies and measures that would make the policy environment investment friendly.
1.2. OBJECTIVES OF THE STUDY:
The study specifically seeks to;
- To evaluate the determinants of foreign direct investment
in Nigeria.
- To trace the impact of foreign direct investment in Nigeria
1.3. METHODOLOGY OF THE STUDY:
The source of collection of data for this study will be secondary source such as Central Bank Of Nigeria(CBN) publications and statistical bulletin. The ordinary least square regression technique will be used to analyse the impact of the exogenous variables on the endogenous variables of the model.
HYPOTHESIS OF THE STUDY:
To carry out this study, the following hypothesis would be formulated:
H.0(Null Hypothesis): That Nigeria’s foreign direct investment inflow has no significant impact on the development of the Nigeria economy.
H.1 (Alternative Hypothesis):That foreign direct investment inflow has a significant impact on the development of the Nigeria economy.
1.5 . Scope and Limitation of the study:
The primary objective of this paper is to find the main determinants of foreign direct investments in Nigeria. In the process,a special effort is made to analyse the nexus between policy environment and foreign direct investment inflow in Nigeria,and explain the pattern of foreign investment flows
The study will basically cover a period of 24years(1986-2010). This study is limited to the determinants of foreign investment in Nigeria. A major constraint of the study is the short time needed to complete the study,and problem of consistent and accurate data.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#3000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: AN EVALUATION OF THE DETERMINANTS OF FOREIGN DIRECT INVESTMENTS IN NIGERIA
TABLE OF CONTENT:
CHAPTER ONE
1.1.Background of the Study
1.2.Objective of the Study
1.3.Methodology of the Study
1.4.Hypothesis of the study
1.5.Scope and Limitation of the Study
CHAPTER TWO
Literature Review
CHAPTERTHREE
3.1. Research Design/Methodology
3.2. Sources of Data, Primary and Secondary Location Data.
CHAPTERFOUR
Summary and findings
CHAPTER FIVE
5.1. Recommendation
5.2. Conclusion
5.3. Bibliography
ABSTRACT:
This paper attempts to investigate the analysis of the determinants of FDI in Nigeria
The first chapter gives a background of the study. Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation.
The objective of the study is to evaluate the determinants of FDI in Nigeria. It also goes to evaluate the impacts of FDI on the economy
In the empirical analysis of the impact of foreign trade as an engine of growth in Nigeria, the method used is the Ordinary Least Square(OLS) regression techniques. The data used in this analysis are the Gross Domestic Product (GDP) and foreign investment flow.The data for different variables were compiled for a period(1986 – 2010)
CHAPTER ONE:
1.1 . Background Of The Study
Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation. In a simple world of two factors, labour and capital, it is often presumed that low-income countries have abundant labour but less capital. This situation arises owing to shortage of domestic savings in these countries, which places constraint on capital formation and hence growth.
Even where domestic inputs in addition to labour, are readily available and hence no problem of input supply, increased production may be limited by scarcity of imported inputs upon which production processes in low-income countries are based. International capital flows (ICFs) readily become an important means of helping developing countries to overcome their capital shortage problem. One of the components of international capital flows is foreign Direct investment (FDI).
Other components are:
Official flows from bilateral sources (e.g developed and OPEC
countries) and multilateral sources(such as the World Bank and its two affiliates: the International Development Association(IDA),and the International Finance Corporation(IFC),on concessional and non-concessional terms.
Commercial bank loans including export credits.
Economic theory suggests that capital will move from countries where it is abundant to countries where it is scarce. This pattern of movement will be informed by the returns on new investment opportunities, which are considered higher where capital is limited. The resultant capital relocation will boost investment in the recipient country and as Summers 2000 suggests, brings enormous social benefits. Underlying this theory is the premise that returns to capital decrease as more machinery is installed and new structures are built, although in practice this is not always or even generally true.
With the advent of the third millennium, the peace of globalization has continued to accelerate. The areas of International trade and finance have been pushed by many factors including accelerated privatization and economic liberalization in almost every country in the world.
One important economic consequence of globalization for developing countries has been the massive and unprecedented inflows of Foreign Direct Capital during the final decades of the 20th century. Indeed during the last decade of the last century,private capital flows wrested primacy place from public flows,seizing the pre-eminent position as the source of foreign investment and development finance for developing countries. According to Weitz and Lijane(1998)
“While official flows totaled $56 billion in 1990,compared to $44 billion private flows by 1996,public flows had declined to $41 billion and private flows grew to $244 billion”(1998: p.4)
UNCTAD figures show that in 1997,FDI inflows amounted to $400billion and in 1998 reached an unprecedented level of $440 billion. Mallampally and sauvant(1999,p.3)
Although FDI have become more widely dispersed among recipient countries inrecent years, the distribution is still skewed with Asia receiving the lion’s share of FDI flows going to developing countries and Africa receiving very little. According to Mallampally and Sauvant, “Among developing countries,though the distribution of world FDI inflows is uneven. In 1997 for example, developing Asia received 22%; Latin America and the Caribbean,14% and Africa 1%”. Mallampally and Sauvant (1999p.35)
Another perspective in the skewness of the distribution is obtained when it is realized that in 1995, 81% of global FDI flows to developing countries went to 12 countries while 89% of all portfolio flows went to almost the same dozen countries. Weitz and Lijane (1998;p.13)
Clearly,therefore the challenge to attract more inflows for investment in development projects has become acute in Sub-saharan Africa where only a small proportion of new inflows have gone. Note, the needs of developing countries particularly those in Sub-Saharan Africa has sharply increased in recent years due to the accelerating process of globalization. According to Weitz and Lijane(1998p.6): “Opening up a country requires investment for connecting the necessary infrastructure-roads, telecommunication, power plants, financial system. Given the low incomes and low savings in many African countries, the investment-savings gap has widen and there is little hope of closing it without the active involvement of the private sector-both domestic and foreign. Thus, increasingly, in order to finance the investment gap,it is becoming imperative to attract foreign investment
There is an emerging consensus that a conductive macro-economic policy environment is not only a desideration but is in fact a sine qua non for attracting substantial amounts of foreign investment inflow in a liberalization and globalizing world economy. Nigeria needs a massive inflow of foreign investment in order to transform its economy,upgrade dilapidated infrastructure and plug on to the electronic age of computers and the internet. An absolute pre-requisite for success is the design and implementation of policies and measures that would make the policy environment investment friendly.
1.2. OBJECTIVES OF THE STUDY:
The study specifically seeks to;
- To evaluate the determinants of foreign direct investment
in Nigeria.
- To trace the impact of foreign direct investment in Nigeria
1.3. METHODOLOGY OF THE STUDY:
The source of collection of data for this study will be secondary source such as Central Bank Of Nigeria(CBN) publications and statistical bulletin. The ordinary least square regression technique will be used to analyse the impact of the exogenous variables on the endogenous variables of the model.
HYPOTHESIS OF THE STUDY:
To carry out this study, the following hypothesis would be formulated:
H.0(Null Hypothesis): That Nigeria’s foreign direct investment inflow has no significant impact on the development of the Nigeria economy.
H.1 (Alternative Hypothesis):That foreign direct investment inflow has a significant impact on the development of the Nigeria economy.
1.5 . Scope and Limitation of the study:
The primary objective of this paper is to find the main determinants of foreign direct investments in Nigeria. In the process,a special effort is made to analyse the nexus between policy environment and foreign direct investment inflow in Nigeria,and explain the pattern of foreign investment flows
The study will basically cover a period of 24years(1986-2010). This study is limited to the determinants of foreign investment in Nigeria. A major constraint of the study is the short time needed to complete the study,and problem of consistent and accurate data.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#3000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: AN EVALUATION OF THE DETERMINANTS OF FOREIGN DIRECT INVESTMENTS IN NIGERIA
TABLE OF CONTENT:
CHAPTER ONE
1.1.Background of the Study
1.2.Objective of the Study
1.3.Methodology of the Study
1.4.Hypothesis of the study
1.5.Scope and Limitation of the Study
CHAPTER TWO
Literature Review
CHAPTERTHREE
3.1. Research Design/Methodology
3.2. Sources of Data, Primary and Secondary Location Data.
CHAPTERFOUR
Summary and findings
CHAPTER FIVE
5.1. Recommendation
5.2. Conclusion
5.3. Bibliography
ABSTRACT:
This paper attempts to investigate the analysis of the determinants of FDI in Nigeria
The first chapter gives a background of the study. Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation.
The objective of the study is to evaluate the determinants of FDI in Nigeria. It also goes to evaluate the impacts of FDI on the economy
In the empirical analysis of the impact of foreign trade as an engine of growth in Nigeria, the method used is the Ordinary Least Square(OLS) regression techniques. The data used in this analysis are the Gross Domestic Product (GDP) and foreign investment flow.The data for different variables were compiled for a period(1986 – 2010)
CHAPTER ONE:
1.1 . Background Of The Study
Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation. In a simple world of two factors, labour and capital, it is often presumed that low-income countries have abundant labour but less capital. This situation arises owing to shortage of domestic savings in these countries, which places constraint on capital formation and hence growth.
Even where domestic inputs in addition to labour, are readily available and hence no problem of input supply, increased production may be limited by scarcity of imported inputs upon which production processes in low-income countries are based. International capital flows (ICFs) readily become an important means of helping developing countries to overcome their capital shortage problem. One of the components of international capital flows is foreign Direct investment (FDI).
Other components are:
Official flows from bilateral sources (e.g developed and OPEC
countries) and multilateral sources(such as the World Bank and its two affiliates: the International Development Association(IDA),and the International Finance Corporation(IFC),on concessional and non-concessional terms.
Commercial bank loans including export credits.
Economic theory suggests that capital will move from countries where it is abundant to countries where it is scarce. This pattern of movement will be informed by the returns on new investment opportunities, which are considered higher where capital is limited. The resultant capital relocation will boost investment in the recipient country and as Summers 2000 suggests, brings enormous social benefits. Underlying this theory is the premise that returns to capital decrease as more machinery is installed and new structures are built, although in practice this is not always or even generally true.
With the advent of the third millennium, the peace of globalization has continued to accelerate. The areas of International trade and finance have been pushed by many factors including accelerated privatization and economic liberalization in almost every country in the world.
One important economic consequence of globalization for developing countries has been the massive and unprecedented inflows of Foreign Direct Capital during the final decades of the 20th century. Indeed during the last decade of the last century,private capital flows wrested primacy place from public flows,seizing the pre-eminent position as the source of foreign investment and development finance for developing countries. According to Weitz and Lijane(1998)
“While official flows totaled $56 billion in 1990,compared to $44 billion private flows by 1996,public flows had declined to $41 billion and private flows grew to $244 billion”(1998: p.4)
UNCTAD figures show that in 1997,FDI inflows amounted to $400billion and in 1998 reached an unprecedented level of $440 billion. Mallampally and sauvant(1999,p.3)
Although FDI have become more widely dispersed among recipient countries inrecent years, the distribution is still skewed with Asia receiving the lion’s share of FDI flows going to developing countries and Africa receiving very little. According to Mallampally and Sauvant, “Among developing countries,though the distribution of world FDI inflows is uneven. In 1997 for example, developing Asia received 22%; Latin America and the Caribbean,14% and Africa 1%”. Mallampally and Sauvant (1999p.35)
Another perspective in the skewness of the distribution is obtained when it is realized that in 1995, 81% of global FDI flows to developing countries went to 12 countries while 89% of all portfolio flows went to almost the same dozen countries. Weitz and Lijane (1998;p.13)
Clearly,therefore the challenge to attract more inflows for investment in development projects has become acute in Sub-saharan Africa where only a small proportion of new inflows have gone. Note, the needs of developing countries particularly those in Sub-Saharan Africa has sharply increased in recent years due to the accelerating process of globalization. According to Weitz and Lijane(1998p.6): “Opening up a country requires investment for connecting the necessary infrastructure-roads, telecommunication, power plants, financial system. Given the low incomes and low savings in many African countries, the investment-savings gap has widen and there is little hope of closing it without the active involvement of the private sector-both domestic and foreign. Thus, increasingly, in order to finance the investment gap,it is becoming imperative to attract foreign investment
There is an emerging consensus that a conductive macro-economic policy environment is not only a desideration but is in fact a sine qua non for attracting substantial amounts of foreign investment inflow in a liberalization and globalizing world economy. Nigeria needs a massive inflow of foreign investment in order to transform its economy,upgrade dilapidated infrastructure and plug on to the electronic age of computers and the internet. An absolute pre-requisite for success is the design and implementation of policies and measures that would make the policy environment investment friendly.
1.2. OBJECTIVES OF THE STUDY:
The study specifically seeks to;
- To evaluate the determinants of foreign direct investment
in Nigeria.
- To trace the impact of foreign direct investment in Nigeria
1.3. METHODOLOGY OF THE STUDY:
The source of collection of data for this study will be secondary source such as Central Bank Of Nigeria(CBN) publications and statistical bulletin. The ordinary least square regression technique will be used to analyse the impact of the exogenous variables on the endogenous variables of the model.
HYPOTHESIS OF THE STUDY:
To carry out this study, the following hypothesis would be formulated:
H.0(Null Hypothesis): That Nigeria’s foreign direct investment inflow has no significant impact on the development of the Nigeria economy.
H.1 (Alternative Hypothesis):That foreign direct investment inflow has a significant impact on the development of the Nigeria economy.
1.5 . Scope and Limitation of the study:
The primary objective of this paper is to find the main determinants of foreign direct investments in Nigeria. In the process,a special effort is made to analyse the nexus between policy environment and foreign direct investment inflow in Nigeria,and explain the pattern of foreign investment flows
The study will basically cover a period of 24years(1986-2010). This study is limited to the determinants of foreign investment in Nigeria. A major constraint of the study is the short time needed to complete the study,and problem of consistent and accurate data.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#10000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: AN EVALUATION OF THE DETERMINANTS OF FOREIGN DIRECT INVESTMENTS IN NIGERIA
TABLE OF CONTENT:
CHAPTER ONE
1.1.Background of the Study
1.2.Objective of the Study
1.3.Methodology of the Study
1.4.Hypothesis of the study
1.5.Scope and Limitation of the Study
CHAPTER TWO
Literature Review
CHAPTERTHREE
3.1. Research Design/Methodology
3.2. Sources of Data, Primary and Secondary Location Data.
CHAPTERFOUR
Summary and findings
CHAPTER FIVE
5.1. Recommendation
5.2. Conclusion
5.3. Bibliography
ABSTRACT:
This paper attempts to investigate the analysis of the determinants of FDI in Nigeria
The first chapter gives a background of the study. Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation.
The objective of the study is to evaluate the determinants of FDI in Nigeria. It also goes to evaluate the impacts of FDI on the economy
In the empirical analysis of the impact of foreign trade as an engine of growth in Nigeria, the method used is the Ordinary Least Square(OLS) regression techniques. The data used in this analysis are the Gross Domestic Product (GDP) and foreign investment flow.The data for different variables were compiled for a period(1986 – 2010)
CHAPTER ONE:
1.1 . Background Of The Study
Growth in neoclassical theory is brought about by increases in the quantity of factors of production and in the efficiency of their allocation. In a simple world of two factors, labour and capital, it is often presumed that low-income countries have abundant labour but less capital. This situation arises owing to shortage of domestic savings in these countries, which places constraint on capital formation and hence growth.
Even where domestic inputs in addition to labour, are readily available and hence no problem of input supply, increased production may be limited by scarcity of imported inputs upon which production processes in low-income countries are based. International capital flows (ICFs) readily become an important means of helping developing countries to overcome their capital shortage problem. One of the components of international capital flows is foreign Direct investment (FDI).
Other components are:
Official flows from bilateral sources (e.g developed and OPEC
countries) and multilateral sources(such as the World Bank and its two affiliates: the International Development Association(IDA),and the International Finance Corporation(IFC),on concessional and non-concessional terms.
Commercial bank loans including export credits.
Economic theory suggests that capital will move from countries where it is abundant to countries where it is scarce. This pattern of movement will be informed by the returns on new investment opportunities, which are considered higher where capital is limited. The resultant capital relocation will boost investment in the recipient country and as Summers 2000 suggests, brings enormous social benefits. Underlying this theory is the premise that returns to capital decrease as more machinery is installed and new structures are built, although in practice this is not always or even generally true.
With the advent of the third millennium, the peace of globalization has continued to accelerate. The areas of International trade and finance have been pushed by many factors including accelerated privatization and economic liberalization in almost every country in the world.
One important economic consequence of globalization for developing countries has been the massive and unprecedented inflows of Foreign Direct Capital during the final decades of the 20th century. Indeed during the last decade of the last century,private capital flows wrested primacy place from public flows,seizing the pre-eminent position as the source of foreign investment and development finance for developing countries. According to Weitz and Lijane(1998)
“While official flows totaled $56 billion in 1990,compared to $44 billion private flows by 1996,public flows had declined to $41 billion and private flows grew to $244 billion”(1998: p.4)
UNCTAD figures show that in 1997,FDI inflows amounted to $400billion and in 1998 reached an unprecedented level of $440 billion. Mallampally and sauvant(1999,p.3)
Although FDI have become more widely dispersed among recipient countries inrecent years, the distribution is still skewed with Asia receiving the lion’s share of FDI flows going to developing countries and Africa receiving very little. According to Mallampally and Sauvant, “Among developing countries,though the distribution of world FDI inflows is uneven. In 1997 for example, developing Asia received 22%; Latin America and the Caribbean,14% and Africa 1%”. Mallampally and Sauvant (1999p.35)
Another perspective in the skewness of the distribution is obtained when it is realized that in 1995, 81% of global FDI flows to developing countries went to 12 countries while 89% of all portfolio flows went to almost the same dozen countries. Weitz and Lijane (1998;p.13)
Clearly,therefore the challenge to attract more inflows for investment in development projects has become acute in Sub-saharan Africa where only a small proportion of new inflows have gone. Note, the needs of developing countries particularly those in Sub-Saharan Africa has sharply increased in recent years due to the accelerating process of globalization. According to Weitz and Lijane(1998p.6): “Opening up a country requires investment for connecting the necessary infrastructure-roads, telecommunication, power plants, financial system. Given the low incomes and low savings in many African countries, the investment-savings gap has widen and there is little hope of closing it without the active involvement of the private sector-both domestic and foreign. Thus, increasingly, in order to finance the investment gap,it is becoming imperative to attract foreign investment
There is an emerging consensus that a conductive macro-economic policy environment is not only a desideration but is in fact a sine qua non for attracting substantial amounts of foreign investment inflow in a liberalization and globalizing world economy. Nigeria needs a massive inflow of foreign investment in order to transform its economy,upgrade dilapidated infrastructure and plug on to the electronic age of computers and the internet. An absolute pre-requisite for success is the design and implementation of policies and measures that would make the policy environment investment friendly.
1.2. OBJECTIVES OF THE STUDY:
The study specifically seeks to;
- To evaluate the determinants of foreign direct investment
in Nigeria.
- To trace the impact of foreign direct investment in Nigeria
1.3. METHODOLOGY OF THE STUDY:
The source of collection of data for this study will be secondary source such as Central Bank Of Nigeria(CBN) publications and statistical bulletin. The ordinary least square regression technique will be used to analyse the impact of the exogenous variables on the endogenous variables of the model.
HYPOTHESIS OF THE STUDY:
To carry out this study, the following hypothesis would be formulated:
H.0(Null Hypothesis): That Nigeria’s foreign direct investment inflow has no significant impact on the development of the Nigeria economy.
H.1 (Alternative Hypothesis):That foreign direct investment inflow has a significant impact on the development of the Nigeria economy.
1.5 . Scope and Limitation of the study:
The primary objective of this paper is to find the main determinants of foreign direct investments in Nigeria. In the process,a special effort is made to analyse the nexus between policy environment and foreign direct investment inflow in Nigeria,and explain the pattern of foreign investment flows
The study will basically cover a period of 24years(1986-2010). This study is limited to the determinants of foreign investment in Nigeria. A major constraint of the study is the short time needed to complete the study,and problem of consistent and accurate data.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
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No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: AN EVALUATION OF THE DETERMINANTS OF FOREIGN DIRECT INVESTMENTS IN NIGERIA
ABSTRACT
This work “Evaluating the impact of Bank Distress on the profit growth of commercial banks” has the objective of showing the effect of distress on the profit growth of commercial banks. The causes of bank distress in Nigeria and the possible prevention strategies or failure resolution options of bank distress. The review of related literature was done to give an in depth knowledge of the topic to the researchers. Both primary and secondary sources of data were used by the researchers.
Simple statistical tools like T-test, least square (B) and tables were used to analyse the data collected. The following findings were made; Banks made lower profit during distress period and higher profit during distress period and higher profit after distress period. Meanwhile, banks generally made lower profit during distress period. We recommended that the supervisory arsenals to ensure minimum distress with little or no effect when it occurs.
TABLE OF CONTENT
Title page ii
Approval page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of Content vii
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Statement of the problem 5
1.3 Purpose/Objectives of the study 5
1.4 Research Questions 6
1.5 Research Hypothesis 6
1.6 Significance of the Study 7
1.7 Scope, Limitations and Delimitations 7
1.8 Definitions of Terms 8
CHAPTER TWO
2.0 Review of Related Literature 10
2.1 Definition of Distress in Banking Industry 10
2.2 Symptoms of Distressed Banks in Nigeria 14
2.3 Causes of Banking Distress 16
2.3.1 Capital Inadequacy 18
2.3.2 Inept Management 19
2.3.3 Ownership Structure/Political
Interference in Management of Banks 20
2.4 Distress Management and Failure Resolution Option 21
2.5 The Role of Banks in an Economic System 30
Reference 33
CHAPTER THREE
3.0 Research Design and Methodology 35
3.1 Research Design 35
3.2 Area of Study 36
3.3 Population 36
3.4 Sample and Sampling Techniques 37
3.5 Instruments of Data Collection 37
3.6 Methods of Data Presentation 38
3.7 Methods of Data Analysis 38
Reference 40
CHAPTER FOUR
4.0 Data Presentation and Analysis 41
4.1 Graphical Illustration of Banks Profit 43
CHAPTER FIVE
5.0 Findings, Recommendation and Conclusion 54
5.1 Findings 54
5.2 Recommendation 56
5.3 Conclusion 58
Bibliography 59
Appendix 61
PROPOSAL
The topic “Evaluating the Impact of Bank Distress on the profit Growth of Commercial Bank, (A case study of selected Commercial banks)
The Topic “Evaluating the impact of Bank Distress on the Profit Growth of Commercial Banks” is posed to appraise the effect of distress on the profit growth of commercial banks. It measures the way in which distress affects the profit of commercial banks negatively or otherwise.
For effective execution of this work a ten year profit trend of some selected banks will be evaluated. This ten year profit will cover the period of distress and after distress for a proper appraisal of the work.
Meanwhile the profit of these banks will be collected using a primary data source (Annual Report) and secondary sources of information and there primary data will be analysed using the most appropriate statistical tools for an accurate result.
However, there will also be a formulation of hypothesis which is based on the known negative implication of distress. Though, this hypothesis and also there will be a formulation of research questions which will be sample in relative to the objective of the work for the best result.
After all, an inference will be drawn based on the outcome of our statistical test. Based on the results obtained in our tests there will be a recommendation thereof.
The distress in a bank made the banks to have lower profit during distress period and higher profit after distress permit, meanwhile, generally, banks made lower profit during distress period, due to the insufficient cover of losses from the profit generate internally was unable to generate internally positive capital.
The bank or some banks also experience illiquidity or insolvency, this is resulting in a situation whereby the banks could no longer met its liabilities and all there brings about illiquid. These is also insolvent in the bank when the value of its realizable assets is less than the total value of its liabilities.
Furthermore, the inability of a financial institutions to bridge its primary obligation of creating credit and loss of liquidity or the liability of the bank to turn assets into cash to meet any abnormal demand for cash by their customers.
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
In any modern economy, the efficient production and exchange of goods and services requires money and bank is the instrument for affecting it. The last few years have been both traumatic and revolutionary for the banking industry. The industry produced the largest number of technically insolvent and under capitalized banks. The magnitude of distress in the nation’s banking industry reached on unprecedented level making it an issue of concern to the government, the regulatory authority, the bankers and the general public.
The Nigeria banking scene was characterized by changes designed to promote banking in the country. The changes may be categorized into phases, but due to the nature of our work we will consider two phases: namely, the era of laissez-fair banking (1894-1952), the era of limited banking regulator (1952-1958). During the first phase, banking industry was monopolized by foreign banks, principally the African banking corporation which was the precursor of the (BBWA) British Bank for West African the present First Bank of Nigeria the Barclays bank DCO (Dominion Colonial and Overseas) the present day Union banks, and the British an French Bank, the for-runner of the present United Bank for Africa. Although discrimination against Nigerians by these banks led to the establishment of some indigenous banks which unfortunately offers litter or no competition to the foreign banks essentially because of their weak capital base or poor managerial capacity. Consequently, all but three of the indigenous banks failed. The survived includes the National Bank of Nigeria established in 1933, the Agbomagbe Bank (now Wema Bank) established 1945 and the Africa Continental Bank 1947.
A commission of inquiry headed by G.D. patron set up in 1948 to investigate the business of banking in Nigeria. Their report led to the enactment of the first banking legislation in Nigeria, the banking ordinance of 1952. The 1952 ordinance laid down the standard and procedure for the conduct of banking business by prescribing the mandatory minimum capital requirement for banks both expatiates and indigenous banks at the tune of ∑100,000 and ∑12,500 respectively and it also introduced regulations to check bank failure. However, all the indigenous bank established in the country during this period also all failed. The bank failures of this era were attributed largely to the monopolistic structure of the banking industry, which allowed the foreign banks to enjoy exclusive patronage from British firms. The indigenous banks that survived was able to make it because of the support they got from their state government.
The distress phenomenon in Nigeria banking industry is of recent origin. The manifestation became discernable with some policy shocks starting in 1988 with the Central Bank of Nigeria (CBN) directive to banks that naira backing for foreign exchange application be lodged with CBN. Thus was followed in 1989 by another directive requiring public sector deposits to be transferred to CBN. These two directives exposed the precious liquidity position of some banks and the distress they have subterraneous harbored. What was thought to be a temporary liquidity problem for few banks soon caught up with a lot more banks.
It is important to stress in this work that banking system was already in distress by the time NDIC was established. By them, about 7 (seven) banks were known to be technically insolvent. The government at that time, did not embark upon a clearing exercise that would have removed from the system that distressed institutions because it was feared that such an action would lead to loss of public confidence and flight of foreign capital more so there was no deposit insurance institution to expeditiously manage such bank closures. The NDIC was nevertheless required to insure all banks. That means that the corporation has been involved in managing distressed banks even before it could settle down and minister enough resources for this important task.
The intermediating role of banks and their relevance both in the transmission of monetary policies and in the payment system underscore their importance as well as the problem that bank distress at the prevailing dimension in our economy could precipitate. Arising from their intermediation banks generate financial resources ad put these at the disposal of deficit economic growth in the form of increased employment of otherwise idle resources and this in turn leads to increase output. Therefore, an industry wide insolvency of banks, such as the one experienced in Nigeria, should be expected to retard the economy’s rate of capital formation, reduce its level of employment and output, and ultimately the pace of economic growth.
1.2 STATEMENT OF THE PROBLEM
A serious problem posed by widespred distress among banks is the threat to banking habit and the development of an efficient payment mechanism. The loss of confidence, the after math of the distress that hit the banking sector forced several business to take ferver risks by taking back their fund to well established safe havens dominated by older generation banks.
This research wok is therefore concerned with “Evaluating the impact of bank distress on the profit growth existing of commercial banks. Using ( A vase study of selected Commercial banks).
1.3 PURPOSE/OBJECTIVE OF THE STUDY
The main purpose/objective of this study is to have an overview of the effect of bank distress on the profit growth of commercial banks. Investigate into the reasons for bank failure in Nigeria.
Other objectives include:
- To evaluate the causes of bank distress in Nigeria. To find out the impact.
- To find out the possible prevention strategies or failure resolution options of bank distress.
1.4 RESEARCH QUESTIONS
(1) What are the causes of bank distress?
(2) What is the impact of bank distress?
(3) What is the profit growth rate of existing commercial bank during distress.
(4) What are the effects of bank distress?
(5) What are the possible solution options to this phenomenon in the banking scene?
1.5 RESEARCH HYPOTHESIS
H1: Distress has no effect on the average profit of commercial
bank
Ho: Distress has effect on the average profit of commercial
banks.
1.6 SIGNIFICANCE OF THE STUDY
This research project will be of importance of the following persons –
- New generation banks, which may wish to know the implication of banks distress in the banking industry and how to restore the confidence of the customers and uphold efficient payment mechanism.
- Nigeria deposit insurance corporation: The work could be of immense help to NDIC in the area of distress management and prevention strategies. And also in the area of failure resolution option in banking industry.
- Students who may wish to know the extent of distress in the banking industry and the trend of distress as it affect the modern banking will also benefit from this work.
1.8 SCOPE, LIMITATIONS AND DELIMITATIONS:
While the banking impact distress in Nigeria will theoretically serve as the population of study. The project is designed to appraise the impact of bank distress on the profit growth of Union Bank of Nigeria Plc, First Bank of Nigeria, United Bank for Africa and Guarantee Trust Bank. It will also analyse the trend of these banks profit within a period of 10 years (1992-2001).
1.8 DEFINITION OF TERMS
What is Distress? It can be defined as an extreme suffering caused by lack of money or a state of danger, calamity and misfortunate acute poverty.
What is an Evaluation? This can also be defined as form of idea or judgment of something and also to work out something in numerical value.
What is Impact? This can be define as a strong effect or impression to bank. It is also a situation whereby something will be to be press closely or firmly together.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#3000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: EVALUATING THE IMPACT OF BANK DISTRESS ON THE PROFIT GROWTH OF EXISTING COMMERCIAL BANKS (A CASE STUDY OF SELECTED COMMERCIAL BANKS)
ABSTRACT
This work “Evaluating the impact of Bank Distress on the profit growth of commercial banks” has the objective of showing the effect of distress on the profit growth of commercial banks. The causes of bank distress in Nigeria and the possible prevention strategies or failure resolution options of bank distress. The review of related literature was done to give an in depth knowledge of the topic to the researchers. Both primary and secondary sources of data were used by the researchers.
Simple statistical tools like T-test, least square (B) and tables were used to analyse the data collected. The following findings were made; Banks made lower profit during distress period and higher profit during distress period and higher profit after distress period. Meanwhile, banks generally made lower profit during distress period. We recommended that the supervisory arsenals to ensure minimum distress with little or no effect when it occurs.
TABLE OF CONTENT
Title page ii
Approval page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of Content vii
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Statement of the problem 5
1.3 Purpose/Objectives of the study 5
1.4 Research Questions 6
1.5 Research Hypothesis 6
1.6 Significance of the Study 7
1.7 Scope, Limitations and Delimitations 7
1.8 Definitions of Terms 8
CHAPTER TWO
2.0 Review of Related Literature 10
2.1 Definition of Distress in Banking Industry 10
2.2 Symptoms of Distressed Banks in Nigeria 14
2.3 Causes of Banking Distress 16
2.3.1 Capital Inadequacy 18
2.3.2 Inept Management 19
2.3.3 Ownership Structure/Political
Interference in Management of Banks 20
2.4 Distress Management and Failure Resolution Option 21
2.5 The Role of Banks in an Economic System 30
Reference 33
CHAPTER THREE
3.0 Research Design and Methodology 35
3.1 Research Design 35
3.2 Area of Study 36
3.3 Population 36
3.4 Sample and Sampling Techniques 37
3.5 Instruments of Data Collection 37
3.6 Methods of Data Presentation 38
3.7 Methods of Data Analysis 38
Reference 40
CHAPTER FOUR
4.0 Data Presentation and Analysis 41
4.1 Graphical Illustration of Banks Profit 43
CHAPTER FIVE
5.0 Findings, Recommendation and Conclusion 54
5.1 Findings 54
5.2 Recommendation 56
5.3 Conclusion 58
Bibliography 59
Appendix 61
PROPOSAL
The topic “Evaluating the Impact of Bank Distress on the profit Growth of Commercial Bank, (A case study of selected Commercial banks)
The Topic “Evaluating the impact of Bank Distress on the Profit Growth of Commercial Banks” is posed to appraise the effect of distress on the profit growth of commercial banks. It measures the way in which distress affects the profit of commercial banks negatively or otherwise.
For effective execution of this work a ten year profit trend of some selected banks will be evaluated. This ten year profit will cover the period of distress and after distress for a proper appraisal of the work.
Meanwhile the profit of these banks will be collected using a primary data source (Annual Report) and secondary sources of information and there primary data will be analysed using the most appropriate statistical tools for an accurate result.
However, there will also be a formulation of hypothesis which is based on the known negative implication of distress. Though, this hypothesis and also there will be a formulation of research questions which will be sample in relative to the objective of the work for the best result.
After all, an inference will be drawn based on the outcome of our statistical test. Based on the results obtained in our tests there will be a recommendation thereof.
The distress in a bank made the banks to have lower profit during distress period and higher profit after distress permit, meanwhile, generally, banks made lower profit during distress period, due to the insufficient cover of losses from the profit generate internally was unable to generate internally positive capital.
The bank or some banks also experience illiquidity or insolvency, this is resulting in a situation whereby the banks could no longer met its liabilities and all there brings about illiquid. These is also insolvent in the bank when the value of its realizable assets is less than the total value of its liabilities.
Furthermore, the inability of a financial institutions to bridge its primary obligation of creating credit and loss of liquidity or the liability of the bank to turn assets into cash to meet any abnormal demand for cash by their customers.
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
In any modern economy, the efficient production and exchange of goods and services requires money and bank is the instrument for affecting it. The last few years have been both traumatic and revolutionary for the banking industry. The industry produced the largest number of technically insolvent and under capitalized banks. The magnitude of distress in the nation’s banking industry reached on unprecedented level making it an issue of concern to the government, the regulatory authority, the bankers and the general public.
The Nigeria banking scene was characterized by changes designed to promote banking in the country. The changes may be categorized into phases, but due to the nature of our work we will consider two phases: namely, the era of laissez-fair banking (1894-1952), the era of limited banking regulator (1952-1958). During the first phase, banking industry was monopolized by foreign banks, principally the African banking corporation which was the precursor of the (BBWA) British Bank for West African the present First Bank of Nigeria the Barclays bank DCO (Dominion Colonial and Overseas) the present day Union banks, and the British an French Bank, the for-runner of the present United Bank for Africa. Although discrimination against Nigerians by these banks led to the establishment of some indigenous banks which unfortunately offers litter or no competition to the foreign banks essentially because of their weak capital base or poor managerial capacity. Consequently, all but three of the indigenous banks failed. The survived includes the National Bank of Nigeria established in 1933, the Agbomagbe Bank (now Wema Bank) established 1945 and the Africa Continental Bank 1947.
A commission of inquiry headed by G.D. patron set up in 1948 to investigate the business of banking in Nigeria. Their report led to the enactment of the first banking legislation in Nigeria, the banking ordinance of 1952. The 1952 ordinance laid down the standard and procedure for the conduct of banking business by prescribing the mandatory minimum capital requirement for banks both expatiates and indigenous banks at the tune of ∑100,000 and ∑12,500 respectively and it also introduced regulations to check bank failure. However, all the indigenous bank established in the country during this period also all failed. The bank failures of this era were attributed largely to the monopolistic structure of the banking industry, which allowed the foreign banks to enjoy exclusive patronage from British firms. The indigenous banks that survived was able to make it because of the support they got from their state government.
The distress phenomenon in Nigeria banking industry is of recent origin. The manifestation became discernable with some policy shocks starting in 1988 with the Central Bank of Nigeria (CBN) directive to banks that naira backing for foreign exchange application be lodged with CBN. Thus was followed in 1989 by another directive requiring public sector deposits to be transferred to CBN. These two directives exposed the precious liquidity position of some banks and the distress they have subterraneous harbored. What was thought to be a temporary liquidity problem for few banks soon caught up with a lot more banks.
It is important to stress in this work that banking system was already in distress by the time NDIC was established. By them, about 7 (seven) banks were known to be technically insolvent. The government at that time, did not embark upon a clearing exercise that would have removed from the system that distressed institutions because it was feared that such an action would lead to loss of public confidence and flight of foreign capital more so there was no deposit insurance institution to expeditiously manage such bank closures. The NDIC was nevertheless required to insure all banks. That means that the corporation has been involved in managing distressed banks even before it could settle down and minister enough resources for this important task.
The intermediating role of banks and their relevance both in the transmission of monetary policies and in the payment system underscore their importance as well as the problem that bank distress at the prevailing dimension in our economy could precipitate. Arising from their intermediation banks generate financial resources ad put these at the disposal of deficit economic growth in the form of increased employment of otherwise idle resources and this in turn leads to increase output. Therefore, an industry wide insolvency of banks, such as the one experienced in Nigeria, should be expected to retard the economy’s rate of capital formation, reduce its level of employment and output, and ultimately the pace of economic growth.
1.2 STATEMENT OF THE PROBLEM
A serious problem posed by widespred distress among banks is the threat to banking habit and the development of an efficient payment mechanism. The loss of confidence, the after math of the distress that hit the banking sector forced several business to take ferver risks by taking back their fund to well established safe havens dominated by older generation banks.
This research wok is therefore concerned with “Evaluating the impact of bank distress on the profit growth existing of commercial banks. Using ( A vase study of selected Commercial banks).
1.3 PURPOSE/OBJECTIVE OF THE STUDY
The main purpose/objective of this study is to have an overview of the effect of bank distress on the profit growth of commercial banks. Investigate into the reasons for bank failure in Nigeria.
Other objectives include:
- To evaluate the causes of bank distress in Nigeria. To find out the impact.
- To find out the possible prevention strategies or failure resolution options of bank distress.
1.4 RESEARCH QUESTIONS
(1) What are the causes of bank distress?
(2) What is the impact of bank distress?
(3) What is the profit growth rate of existing commercial bank during distress.
(4) What are the effects of bank distress?
(5) What are the possible solution options to this phenomenon in the banking scene?
1.5 RESEARCH HYPOTHESIS
H1: Distress has no effect on the average profit of commercial
bank
Ho: Distress has effect on the average profit of commercial
banks.
1.6 SIGNIFICANCE OF THE STUDY
This research project will be of importance of the following persons –
- New generation banks, which may wish to know the implication of banks distress in the banking industry and how to restore the confidence of the customers and uphold efficient payment mechanism.
- Nigeria deposit insurance corporation: The work could be of immense help to NDIC in the area of distress management and prevention strategies. And also in the area of failure resolution option in banking industry.
- Students who may wish to know the extent of distress in the banking industry and the trend of distress as it affect the modern banking will also benefit from this work.
1.8 SCOPE, LIMITATIONS AND DELIMITATIONS:
While the banking impact distress in Nigeria will theoretically serve as the population of study. The project is designed to appraise the impact of bank distress on the profit growth of Union Bank of Nigeria Plc, First Bank of Nigeria, United Bank for Africa and Guarantee Trust Bank. It will also analyse the trend of these banks profit within a period of 10 years (1992-2001).
1.8 DEFINITION OF TERMS
What is Distress? It can be defined as an extreme suffering caused by lack of money or a state of danger, calamity and misfortunate acute poverty.
What is an Evaluation? This can also be defined as form of idea or judgment of something and also to work out something in numerical value.
What is Impact? This can be define as a strong effect or impression to bank. It is also a situation whereby something will be to be press closely or firmly together.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#10000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: EVALUATING THE IMPACT OF BANK DISTRESS ON THE PROFIT GROWTH OF EXISTING COMMERCIAL BANKS (A CASE STUDY OF SELECTED COMMERCIAL BANKS)
ABSTRACT
This work “Evaluating the impact of Bank Distress on the profit growth of commercial banks” has the objective of showing the effect of distress on the profit growth of commercial banks. The causes of bank distress in Nigeria and the possible prevention strategies or failure resolution options of bank distress. The review of related literature was done to give an in depth knowledge of the topic to the researchers. Both primary and secondary sources of data were used by the researchers.
Simple statistical tools like T-test, least square (B) and tables were used to analyse the data collected. The following findings were made; Banks made lower profit during distress period and higher profit during distress period and higher profit after distress period. Meanwhile, banks generally made lower profit during distress period. We recommended that the supervisory arsenals to ensure minimum distress with little or no effect when it occurs.
TABLE OF CONTENT
Title page ii
Approval page iii
Dedication iv
Acknowledgement v
Abstract vi
Table of Content vii
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Statement of the problem 5
1.3 Purpose/Objectives of the study 5
1.4 Research Questions 6
1.5 Research Hypothesis 6
1.6 Significance of the Study 7
1.7 Scope, Limitations and Delimitations 7
1.8 Definitions of Terms 8
CHAPTER TWO
2.0 Review of Related Literature 10
2.1 Definition of Distress in Banking Industry 10
2.2 Symptoms of Distressed Banks in Nigeria 14
2.3 Causes of Banking Distress 16
2.3.1 Capital Inadequacy 18
2.3.2 Inept Management 19
2.3.3 Ownership Structure/Political
Interference in Management of Banks 20
2.4 Distress Management and Failure Resolution Option 21
2.5 The Role of Banks in an Economic System 30
Reference 33
CHAPTER THREE
3.0 Research Design and Methodology 35
3.1 Research Design 35
3.2 Area of Study 36
3.3 Population 36
3.4 Sample and Sampling Techniques 37
3.5 Instruments of Data Collection 37
3.6 Methods of Data Presentation 38
3.7 Methods of Data Analysis 38
Reference 40
CHAPTER FOUR
4.0 Data Presentation and Analysis 41
4.1 Graphical Illustration of Banks Profit 43
CHAPTER FIVE
5.0 Findings, Recommendation and Conclusion 54
5.1 Findings 54
5.2 Recommendation 56
5.3 Conclusion 58
Bibliography 59
Appendix 61
PROPOSAL
The topic “Evaluating the Impact of Bank Distress on the profit Growth of Commercial Bank, (A case study of selected Commercial banks)
The Topic “Evaluating the impact of Bank Distress on the Profit Growth of Commercial Banks” is posed to appraise the effect of distress on the profit growth of commercial banks. It measures the way in which distress affects the profit of commercial banks negatively or otherwise.
For effective execution of this work a ten year profit trend of some selected banks will be evaluated. This ten year profit will cover the period of distress and after distress for a proper appraisal of the work.
Meanwhile the profit of these banks will be collected using a primary data source (Annual Report) and secondary sources of information and there primary data will be analysed using the most appropriate statistical tools for an accurate result.
However, there will also be a formulation of hypothesis which is based on the known negative implication of distress. Though, this hypothesis and also there will be a formulation of research questions which will be sample in relative to the objective of the work for the best result.
After all, an inference will be drawn based on the outcome of our statistical test. Based on the results obtained in our tests there will be a recommendation thereof.
The distress in a bank made the banks to have lower profit during distress period and higher profit after distress permit, meanwhile, generally, banks made lower profit during distress period, due to the insufficient cover of losses from the profit generate internally was unable to generate internally positive capital.
The bank or some banks also experience illiquidity or insolvency, this is resulting in a situation whereby the banks could no longer met its liabilities and all there brings about illiquid. These is also insolvent in the bank when the value of its realizable assets is less than the total value of its liabilities.
Furthermore, the inability of a financial institutions to bridge its primary obligation of creating credit and loss of liquidity or the liability of the bank to turn assets into cash to meet any abnormal demand for cash by their customers.
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
In any modern economy, the efficient production and exchange of goods and services requires money and bank is the instrument for affecting it. The last few years have been both traumatic and revolutionary for the banking industry. The industry produced the largest number of technically insolvent and under capitalized banks. The magnitude of distress in the nation’s banking industry reached on unprecedented level making it an issue of concern to the government, the regulatory authority, the bankers and the general public.
The Nigeria banking scene was characterized by changes designed to promote banking in the country. The changes may be categorized into phases, but due to the nature of our work we will consider two phases: namely, the era of laissez-fair banking (1894-1952), the era of limited banking regulator (1952-1958). During the first phase, banking industry was monopolized by foreign banks, principally the African banking corporation which was the precursor of the (BBWA) British Bank for West African the present First Bank of Nigeria the Barclays bank DCO (Dominion Colonial and Overseas) the present day Union banks, and the British an French Bank, the for-runner of the present United Bank for Africa. Although discrimination against Nigerians by these banks led to the establishment of some indigenous banks which unfortunately offers litter or no competition to the foreign banks essentially because of their weak capital base or poor managerial capacity. Consequently, all but three of the indigenous banks failed. The survived includes the National Bank of Nigeria established in 1933, the Agbomagbe Bank (now Wema Bank) established 1945 and the Africa Continental Bank 1947.
A commission of inquiry headed by G.D. patron set up in 1948 to investigate the business of banking in Nigeria. Their report led to the enactment of the first banking legislation in Nigeria, the banking ordinance of 1952. The 1952 ordinance laid down the standard and procedure for the conduct of banking business by prescribing the mandatory minimum capital requirement for banks both expatiates and indigenous banks at the tune of ∑100,000 and ∑12,500 respectively and it also introduced regulations to check bank failure. However, all the indigenous bank established in the country during this period also all failed. The bank failures of this era were attributed largely to the monopolistic structure of the banking industry, which allowed the foreign banks to enjoy exclusive patronage from British firms. The indigenous banks that survived was able to make it because of the support they got from their state government.
The distress phenomenon in Nigeria banking industry is of recent origin. The manifestation became discernable with some policy shocks starting in 1988 with the Central Bank of Nigeria (CBN) directive to banks that naira backing for foreign exchange application be lodged with CBN. Thus was followed in 1989 by another directive requiring public sector deposits to be transferred to CBN. These two directives exposed the precious liquidity position of some banks and the distress they have subterraneous harbored. What was thought to be a temporary liquidity problem for few banks soon caught up with a lot more banks.
It is important to stress in this work that banking system was already in distress by the time NDIC was established. By them, about 7 (seven) banks were known to be technically insolvent. The government at that time, did not embark upon a clearing exercise that would have removed from the system that distressed institutions because it was feared that such an action would lead to loss of public confidence and flight of foreign capital more so there was no deposit insurance institution to expeditiously manage such bank closures. The NDIC was nevertheless required to insure all banks. That means that the corporation has been involved in managing distressed banks even before it could settle down and minister enough resources for this important task.
The intermediating role of banks and their relevance both in the transmission of monetary policies and in the payment system underscore their importance as well as the problem that bank distress at the prevailing dimension in our economy could precipitate. Arising from their intermediation banks generate financial resources ad put these at the disposal of deficit economic growth in the form of increased employment of otherwise idle resources and this in turn leads to increase output. Therefore, an industry wide insolvency of banks, such as the one experienced in Nigeria, should be expected to retard the economy’s rate of capital formation, reduce its level of employment and output, and ultimately the pace of economic growth.
1.2 STATEMENT OF THE PROBLEM
A serious problem posed by widespred distress among banks is the threat to banking habit and the development of an efficient payment mechanism. The loss of confidence, the after math of the distress that hit the banking sector forced several business to take ferver risks by taking back their fund to well established safe havens dominated by older generation banks.
This research wok is therefore concerned with “Evaluating the impact of bank distress on the profit growth existing of commercial banks. Using ( A vase study of selected Commercial banks).
1.3 PURPOSE/OBJECTIVE OF THE STUDY
The main purpose/objective of this study is to have an overview of the effect of bank distress on the profit growth of commercial banks. Investigate into the reasons for bank failure in Nigeria.
Other objectives include:
- To evaluate the causes of bank distress in Nigeria. To find out the impact.
- To find out the possible prevention strategies or failure resolution options of bank distress.
1.4 RESEARCH QUESTIONS
(1) What are the causes of bank distress?
(2) What is the impact of bank distress?
(3) What is the profit growth rate of existing commercial bank during distress.
(4) What are the effects of bank distress?
(5) What are the possible solution options to this phenomenon in the banking scene?
1.5 RESEARCH HYPOTHESIS
H1: Distress has no effect on the average profit of commercial
bank
Ho: Distress has effect on the average profit of commercial
banks.
1.6 SIGNIFICANCE OF THE STUDY
This research project will be of importance of the following persons –
- New generation banks, which may wish to know the implication of banks distress in the banking industry and how to restore the confidence of the customers and uphold efficient payment mechanism.
- Nigeria deposit insurance corporation: The work could be of immense help to NDIC in the area of distress management and prevention strategies. And also in the area of failure resolution option in banking industry.
- Students who may wish to know the extent of distress in the banking industry and the trend of distress as it affect the modern banking will also benefit from this work.
1.8 SCOPE, LIMITATIONS AND DELIMITATIONS:
While the banking impact distress in Nigeria will theoretically serve as the population of study. The project is designed to appraise the impact of bank distress on the profit growth of Union Bank of Nigeria Plc, First Bank of Nigeria, United Bank for Africa and Guarantee Trust Bank. It will also analyse the trend of these banks profit within a period of 10 years (1992-2001).
1.8 DEFINITION OF TERMS
What is Distress? It can be defined as an extreme suffering caused by lack of money or a state of danger, calamity and misfortunate acute poverty.
What is an Evaluation? This can also be defined as form of idea or judgment of something and also to work out something in numerical value.
What is Impact? This can be define as a strong effect or impression to bank. It is also a situation whereby something will be to be press closely or firmly together.
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Tags: EVALUATING THE IMPACT OF BANK DISTRESS ON THE PROFIT GROWTH OF EXISTING COMMERCIAL BANKS (A CASE STUDY OF SELECTED COMMERCIAL BANKS)
CHAPTER ONE
INTRODUCTION
Liquidity is crucial to the on-going viability of any bank as liquidity can have dramatic and rapid effects on even well capitalized banks.
When a crisis develops in a bank as a result of other problems such as deterioration in asset quality, the time available to the bank to address the problem will be determined by the liquidity therefore, the measurement and management of liquidity are amongst the most activities of banks.
1.4 BACKGROUND OF STUDY.
The term liquidity means the ease with which an asset
can be turned to cash with certainty Orjih John (1996:152).
Liquidity in banks can be defined as the capacity of the bank to meet promptly its current obligations that is its customers demand.
A bank is considered to be liquid when it has sufficient cash and other short term financial instruments like treasure bill, treasury certificate and call money in its portfolio together with the ability to raise funds quickly from other sources to enable it meet its payment obligation and other financial commitments in a timely.
How much liquidity to hold and in what form constantly disturbs bank management. Banks are also required to comply with the cash reserve requirements (CRR) set by the Central Bank of Nigeria (CBN).
During periods of expanding economic activities banks are frequently faced with attractive loan situations, which can only be met if banks maintain adequate liquidity.
In Nigeria, Banking activities are registered strictly by the banking act of 1969 was amended under the control of the central bank of Nigeria. As a result of these regulations the banks required to hold specific assets equal to certain other liability in liquid form. This is known as the cash reserve requirement (CRR), liquidity ratio and stabilization securities issued by the central bank.
STATEMENT OF PROBLEM.
The most profitable activity of a commercial banks is the lending of money by loan or overdraft but every time a bank increases its advances to customers it increases at the same time the amount that are likely to be withdrawn in cash. Most borrowers simply wish to be able to draw cheques up to the amount of their overdraft but some of them may want cash and in general a certain proportion of loans will be taken in cash. This banker is torn between two conflicting motives: On the one hand he would like to expand his loans in order to make more profit and on the other hand, he is anxious to hold sufficient cash so that he can at all times fulfill his obligations to pay cash on demand J.L Hanson (1970:37).
PURPOSE OF THE STUDY.
The impact of liquidity problem:- This is the purpose of this study to look at problems encountered by bank managers responsible for liquidity management.
It will also focus on guidelines set by the CBN and other regulatory body for the development of liquidity management in Nigeria banks.
Finally, the impact of liquidity problems will be looked at on how it affects profitability, loans and advances to customers of commercial banks and the Nigerian economy.
1.4 OBJECTIVES OF THE STUDY.
The objective of this study on the impact of liquidity problem is to find out.
1. If the CBN has enough policies or guidelines put in place to help the banks fight this problem.
- To find our banks for the correction of this problem.
- The overall impact of liquidity problems on loans and advances to customers of the commercial banks.
- To find out the liquidity problems in relation to customers deposit.
- The profitability of commercial banks in Nigeria.
1.5 RESEARCH QUESITIONS.
1. What is the impact of liquidity problems in the Nigerian banking industry?
By this we main how the effect of excess cash holding by banks in their vault affect their progress and equally how the non-holding of cash affect their transportation too. This effect could be negative in that making banks to give out loans and banks.
- How important is liquidity management?
Liquidity management is very essential in that liquidity transcends the individual bank, as a liquidity short fall in a single institution can have system-wide repercussions. Consequently, the analysis of liquidity requires bank managements to measure, not only liquidity positions of their banks, on an ongoing basis, like also to examine how finding requirements are likely to evolve under crisis scenarios.
3. WHAT IS THE RELATIONSHIP BETWEEN LIQUIDITY AND PROFITABILITY IN THE NIGERIAN BANKING INDUSTRY?
Both are interwoven in a particularly way in that in providing for liquidity one has to also check out ways of being profitable.
Liquidity is maintained by banks for the primary purpose of meeting depositors demand which will help this banks to have a good standing and reputation with the public. On the other hand banks are set up to make profit and their profitability portion is an index of measuring the performance of the bank. Which will also help them to meet up with their own financial obligations. Orjih John (1996:152-154).
SIGNIFICANCE OF THE STUDY.
The significance of this research work is aimed at getting relevant information and solutions to liquidity problems facing the banking sector in Nigeria.
The researcher hopes it will be of immense benefit to the following sectors.
- The banking sector in Nigeria especially bank managers involved in liquidity management.
- The government sector.
- The monetary and fiscal policy department of the central bank of Nigeria.
- Finally for countries facing similar problems.
1.7 SCOPE AND LIMITATIONS OF THE STUDY.
This research work is aimed to cover Nigeria banks such as the CBN, commercial banks, merchant banks etc.
The researcher was faced with certain problems, which mitigate this study like:
TIME CONSTRAINT:- As a student the researcher has little time to get all the data needed for the kind of study.
FINANCIAL CONSTRAINTS:- Lack of fund is the man problem. Due to little cash available researcher couldn’t go about to different places to source for data.
All this problem, not withstanding did not prevents the continuation of this research work.
1.8 DEFINITION OF TERMS
LIQUIDITY:- This is the ability of a bank to meet promptly, its current obligations. This simply means the capacity of the bank to meet its customers demand as and when due liquidity problem.
In this case a bank may be suffering from shortage of cash in its vault to meet its current obligations liquidity ratio:
It is the cash requirement held by banks as directed by CBN. It is the ratio above which banks may not raise its loans and advances relative to its liquid assets.
This is cash deposited by the customer to the bank, which can be withdrawn at anytime.
LOANS AND ADVANCES:-
These are by far the largest assets of the commercial banks. The lending system of the commercial banks can be in the form of loans and overdraft facilities. This is one of the major ways profit is made.
CASH:
This is the amount of notes and coins held in the strong room of all the head offices of banks and in other branches to meet customer’s demands for cash withdrawals. Cash reserve does not yield income. It is the most liquid of all the assets.
CALL MONEY:
Money at all is the shortest maturity instrument and it is the next liquid item after cash. It is an arrangement whereby banks borrow money from one another on overnight basis.
TREASURY BILL:
These are short-term instruments issued by the central bank of Nigeria to raise finance for the federal government, its maturity is usually for 91 days.
TREASURY CERTIFICATE:-
These are short-term instruments issued by the government with maturity period of one to two years.
MONETARY POLICY:
Defined by the CBN as the combination of measure designed to regulate the value, supply of money in an economy in consonance with the expected level of economics activity.
FISCAL POLICY:
Fiscal involves the use of government income and expenditure instruments to regulate the economy.
CASH RESERVE REQUIREMENTS;
This is the proportion of banks total deposits liabilities (Demand, Savings and Time Deposit), Certificate of deposit, promissory notes and other items held in cash balance with CBN.
TABLE OF CONTENT:
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Research Problem
1.3 Objectives of the Study
1.4 Significance of the Study
1.5 Research Questions
1.6 Research Hypothesis
1.7 Conceptual and Operational Definition
1.8 Assumptions
1.9 Limitations of the Study
CHAPTER TWO
LITERATURE REVIEW
2.1 Sources of Literature
2.2 The Review
2.3 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Method
3.2 Research Design
3.3 Research Sample
3.4 Measuring Instrument
3.5 Data Collection
3.6 Data Analysis
3.7 Expected Result
CHAPTER FOUR
DATA ANALYSIS AND RESULTS
4.1 Data Analysis
4.2 Results
4.3 Discussion
CHAPTER FIVE
SUMMARY AND RECOMMENDATIONS
5.1 Summary
5.2 Recommendations for Further Study
Bibliography
HOW TO GET THE FULL PROJECT WORK
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08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: EFFECTS OF ILLIQUIDITY ON BANKING SYSTEMS
CHAPTER ONE
INTRODUCTION:
Liquidity is crucial to the on-going viability of any bank as liquidity can have dramatic and rapid effects on even well capitalized banks.
When a crisis develops in a bank as a result of other problems such as deterioration in asset quality, the time available to the bank to address the problem will be determined by the liquidity therefore, the measurement and management of liquidity are amongst the most activities of banks.
1.4 BACKGROUND OF STUDY.
The term liquidity means the ease with which an asset
can be turned to cash with certainty Orjih John (1996:152).
Liquidity in banks can be defined as the capacity of the bank to meet promptly its current obligations that is its customers demand.
A bank is considered to be liquid when it has sufficient cash and other short term financial instruments like treasure bill, treasury certificate and call money in its portfolio together with the ability to raise funds quickly from other sources to enable it meet its payment obligation and other financial commitments in a timely.
How much liquidity to hold and in what form constantly disturbs bank management. Banks are also required to comply with the cash reserve requirements (CRR) set by the Central Bank of Nigeria (CBN).
During periods of expanding economic activities banks are frequently faced with attractive loan situations, which can only be met if banks maintain adequate liquidity.
In Nigeria, Banking activities are registered strictly by the banking act of 1969 was amended under the control of the central bank of Nigeria. As a result of these regulations the banks required to hold specific assets equal to certain other liability in liquid form. This is known as the cash reserve requirement (CRR), liquidity ratio and stabilization securities issued by the central bank.
STATEMENT OF PROBLEM.
The most profitable activity of a commercial banks is the lending of money by loan or overdraft but every time a bank increases its advances to customers it increases at the same time the amount that are likely to be withdrawn in cash. Most borrowers simply wish to be able to draw cheques up to the amount of their overdraft but some of them may want cash and in general a certain proportion of loans will be taken in cash. This banker is torn between two conflicting motives: On the one hand he would like to expand his loans in order to make more profit and on the other hand, he is anxious to hold sufficient cash so that he can at all times fulfill his obligations to pay cash on demand J.L Hanson (1970:37).
PURPOSE OF THE STUDY.
The impact of liquidity problem:- This is the purpose of this study to look at problems encountered by bank managers responsible for liquidity management.
It will also focus on guidelines set by the CBN and other regulatory body for the development of liquidity management in Nigeria banks.
Finally, the impact of liquidity problems will be looked at on how it affects profitability, loans and advances to customers of commercial banks and the Nigerian economy.
1.4 OBJECTIVES OF THE STUDY.
The objective of this study on the impact of liquidity problem is to find out.
1. If the CBN has enough policies or guidelines put in place to help the banks fight this problem.
- To find our banks for the correction of this problem.
- The overall impact of liquidity problems on loans and advances to customers of the commercial banks.
- To find out the liquidity problems in relation to customers deposit.
- The profitability of commercial banks in Nigeria.
1.5 RESEARCH QUESITIONS.
1. What is the impact of liquidity problems in the Nigerian banking industry?
By this we main how the effect of excess cash holding by banks in their vault affect their progress and equally how the non-holding of cash affect their transportation too. This effect could be negative in that making banks to give out loans and banks.
- How important is liquidity management?
Liquidity management is very essential in that liquidity transcends the individual bank, as a liquidity short fall in a single institution can have system-wide repercussions. Consequently, the analysis of liquidity requires bank managements to measure, not only liquidity positions of their banks, on an ongoing basis, like also to examine how finding requirements are likely to evolve under crisis scenarios.
3. WHAT IS THE RELATIONSHIP BETWEEN LIQUIDITY AND PROFITABILITY IN THE NIGERIAN BANKING INDUSTRY?
Both are interwoven in a particularly way in that in providing for liquidity one has to also check out ways of being profitable.
Liquidity is maintained by banks for the primary purpose of meeting depositors demand which will help this banks to have a good standing and reputation with the public. On the other hand banks are set up to make profit and their profitability portion is an index of measuring the performance of the bank. Which will also help them to meet up with their own financial obligations. Orjih John (1996:152-154).
SIGNIFICANCE OF THE STUDY.
The significance of this research work is aimed at getting relevant information and solutions to liquidity problems facing the banking sector in Nigeria.
The researcher hopes it will be of immense benefit to the following sectors.
- The banking sector in Nigeria especially bank managers involved in liquidity management.
- The government sector.
- The monetary and fiscal policy department of the central bank of Nigeria.
- Finally for countries facing similar problems.
1.7 SCOPE AND LIMITATIONS OF THE STUDY.
This research work is aimed to cover Nigeria banks such as the CBN, commercial banks, merchant banks etc.
The researcher was faced with certain problems, which mitigate this study like:
TIME CONSTRAINT:- As a student the researcher has little time to get all the data needed for the kind of study.
FINANCIAL CONSTRAINTS:- Lack of fund is the man problem. Due to little cash available researcher couldn’t go about to different places to source for data.
All this problem, not withstanding did not prevents the continuation of this research work.
1.8 DEFINITION OF TERMS
LIQUIDITY:- This is the ability of a bank to meet promptly, its current obligations. This simply means the capacity of the bank to meet its customers demand as and when due liquidity problem.
In this case a bank may be suffering from shortage of cash in its vault to meet its current obligations liquidity ratio:
It is the cash requirement held by banks as directed by CBN. It is the ratio above which banks may not raise its loans and advances relative to its liquid assets.
This is cash deposited by the customer to the bank, which can be withdrawn at anytime.
LOANS AND ADVANCES:-
These are by far the largest assets of the commercial banks. The lending system of the commercial banks can be in the form of loans and overdraft facilities. This is one of the major ways profit is made.
CASH:
This is the amount of notes and coins held in the strong room of all the head offices of banks and in other branches to meet customer’s demands for cash withdrawals. Cash reserve does not yield income. It is the most liquid of all the assets.
CALL MONEY:
Money at all is the shortest maturity instrument and it is the next liquid item after cash. It is an arrangement whereby banks borrow money from one another on overnight basis.
TREASURY BILL:
These are short-term instruments issued by the central bank of Nigeria to raise finance for the federal government, its maturity is usually for 91 days.
TREASURY CERTIFICATE:-
These are short-term instruments issued by the government with maturity period of one to two years.
MONETARY POLICY:
Defined by the CBN as the combination of measure designed to regulate the value, supply of money in an economy in consonance with the expected level of economics activity.
FISCAL POLICY:
Fiscal involves the use of government income and expenditure instruments to regulate the economy.
CASH RESERVE REQUIREMENTS;
This is the proportion of banks total deposits liabilities (Demand, Savings and Time Deposit), Certificate of deposit, promissory notes and other items held in cash balance with CBN.
TABLE OF CONTENT:
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Research Problem
1.3 Objectives of the Study
1.4 Significance of the Study
1.5 Research Questions
1.6 Research Hypothesis
1.7 Conceptual and Operational Definition
1.8 Assumptions
1.9 Limitations of the Study
CHAPTER TWO
LITERATURE REVIEW
2.1 Sources of Literature
2.2 The Review
2.3 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Method
3.2 Research Design
3.3 Research Sample
3.4 Measuring Instrument
3.5 Data Collection
3.6 Data Analysis
3.7 Expected Result
CHAPTER FOUR
DATA ANALYSIS AND RESULTS
4.1 Data Analysis
4.2 Results
4.3 Discussion
CHAPTER FIVE
SUMMARY AND RECOMMENDATIONS
5.1 Summary
5.2 Recommendations for Further Study
Bibliography
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#10000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
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Tags: EFFECTS OF ILLIQUIDITY ON BANKING SYSTEMS
CHAPTER ONE
INTRODUCTION:
Liquidity is crucial to the on-going viability of any bank as liquidity can have dramatic and rapid effects on even well capitalized banks.
When a crisis develops in a bank as a result of other problems such as deterioration in asset quality, the time available to the bank to address the problem will be determined by the liquidity therefore, the measurement and management of liquidity are amongst the most activities of banks.
1.4 BACKGROUND OF STUDY.
The term liquidity means the ease with which an asset
can be turned to cash with certainty Orjih John (1996:152).
Liquidity in banks can be defined as the capacity of the bank to meet promptly its current obligations that is its customers demand.
A bank is considered to be liquid when it has sufficient cash and other short term financial instruments like treasure bill, treasury certificate and call money in its portfolio together with the ability to raise funds quickly from other sources to enable it meet its payment obligation and other financial commitments in a timely.
How much liquidity to hold and in what form constantly disturbs bank management. Banks are also required to comply with the cash reserve requirements (CRR) set by the Central Bank of Nigeria (CBN).
During periods of expanding economic activities banks are frequently faced with attractive loan situations, which can only be met if banks maintain adequate liquidity.
In Nigeria, Banking activities are registered strictly by the banking act of 1969 was amended under the control of the central bank of Nigeria. As a result of these regulations the banks required to hold specific assets equal to certain other liability in liquid form. This is known as the cash reserve requirement (CRR), liquidity ratio and stabilization securities issued by the central bank.
STATEMENT OF PROBLEM.
The most profitable activity of a commercial banks is the lending of money by loan or overdraft but every time a bank increases its advances to customers it increases at the same time the amount that are likely to be withdrawn in cash. Most borrowers simply wish to be able to draw cheques up to the amount of their overdraft but some of them may want cash and in general a certain proportion of loans will be taken in cash. This banker is torn between two conflicting motives: On the one hand he would like to expand his loans in order to make more profit and on the other hand, he is anxious to hold sufficient cash so that he can at all times fulfill his obligations to pay cash on demand J.L Hanson (1970:37).
PURPOSE OF THE STUDY.
The impact of liquidity problem:- This is the purpose of this study to look at problems encountered by bank managers responsible for liquidity management.
It will also focus on guidelines set by the CBN and other regulatory body for the development of liquidity management in Nigeria banks.
Finally, the impact of liquidity problems will be looked at on how it affects profitability, loans and advances to customers of commercial banks and the Nigerian economy.
1.4 OBJECTIVES OF THE STUDY.
The objective of this study on the impact of liquidity problem is to find out.
1. If the CBN has enough policies or guidelines put in place to help the banks fight this problem.
- To find our banks for the correction of this problem.
- The overall impact of liquidity problems on loans and advances to customers of the commercial banks.
- To find out the liquidity problems in relation to customers deposit.
- The profitability of commercial banks in Nigeria.
1.5 RESEARCH QUESITIONS.
1. What is the impact of liquidity problems in the Nigerian banking industry?
By this we main how the effect of excess cash holding by banks in their vault affect their progress and equally how the non-holding of cash affect their transportation too. This effect could be negative in that making banks to give out loans and banks.
- How important is liquidity management?
Liquidity management is very essential in that liquidity transcends the individual bank, as a liquidity short fall in a single institution can have system-wide repercussions. Consequently, the analysis of liquidity requires bank managements to measure, not only liquidity positions of their banks, on an ongoing basis, like also to examine how finding requirements are likely to evolve under crisis scenarios.
3. WHAT IS THE RELATIONSHIP BETWEEN LIQUIDITY AND PROFITABILITY IN THE NIGERIAN BANKING INDUSTRY?
Both are interwoven in a particularly way in that in providing for liquidity one has to also check out ways of being profitable.
Liquidity is maintained by banks for the primary purpose of meeting depositors demand which will help this banks to have a good standing and reputation with the public. On the other hand banks are set up to make profit and their profitability portion is an index of measuring the performance of the bank. Which will also help them to meet up with their own financial obligations. Orjih John (1996:152-154).
SIGNIFICANCE OF THE STUDY.
The significance of this research work is aimed at getting relevant information and solutions to liquidity problems facing the banking sector in Nigeria.
The researcher hopes it will be of immense benefit to the following sectors.
- The banking sector in Nigeria especially bank managers involved in liquidity management.
- The government sector.
- The monetary and fiscal policy department of the central bank of Nigeria.
- Finally for countries facing similar problems.
1.7 SCOPE AND LIMITATIONS OF THE STUDY.
This research work is aimed to cover Nigeria banks such as the CBN, commercial banks, merchant banks etc.
The researcher was faced with certain problems, which mitigate this study like:
TIME CONSTRAINT:- As a student the researcher has little time to get all the data needed for the kind of study.
FINANCIAL CONSTRAINTS:- Lack of fund is the man problem. Due to little cash available researcher couldn’t go about to different places to source for data.
All this problem, not withstanding did not prevents the continuation of this research work.
1.8 DEFINITION OF TERMS
LIQUIDITY:- This is the ability of a bank to meet promptly, its current obligations. This simply means the capacity of the bank to meet its customers demand as and when due liquidity problem.
In this case a bank may be suffering from shortage of cash in its vault to meet its current obligations liquidity ratio:
It is the cash requirement held by banks as directed by CBN. It is the ratio above which banks may not raise its loans and advances relative to its liquid assets.
This is cash deposited by the customer to the bank, which can be withdrawn at anytime.
LOANS AND ADVANCES:-
These are by far the largest assets of the commercial banks. The lending system of the commercial banks can be in the form of loans and overdraft facilities. This is one of the major ways profit is made.
CASH:
This is the amount of notes and coins held in the strong room of all the head offices of banks and in other branches to meet customer’s demands for cash withdrawals. Cash reserve does not yield income. It is the most liquid of all the assets.
CALL MONEY:
Money at all is the shortest maturity instrument and it is the next liquid item after cash. It is an arrangement whereby banks borrow money from one another on overnight basis.
TREASURY BILL:
These are short-term instruments issued by the central bank of Nigeria to raise finance for the federal government, its maturity is usually for 91 days.
TREASURY CERTIFICATE:-
These are short-term instruments issued by the government with maturity period of one to two years.
MONETARY POLICY:
Defined by the CBN as the combination of measure designed to regulate the value, supply of money in an economy in consonance with the expected level of economics activity.
FISCAL POLICY:
Fiscal involves the use of government income and expenditure instruments to regulate the economy.
CASH RESERVE REQUIREMENTS;
This is the proportion of banks total deposits liabilities (Demand, Savings and Time Deposit), Certificate of deposit, promissory notes and other items held in cash balance with CBN.
TABLE OF CONTENT:
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Research Problem
1.3 Objectives of the Study
1.4 Significance of the Study
1.5 Research Questions
1.6 Research Hypothesis
1.7 Conceptual and Operational Definition
1.8 Assumptions
1.9 Limitations of the Study
CHAPTER TWO
LITERATURE REVIEW
2.1 Sources of Literature
2.2 The Review
2.3 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Method
3.2 Research Design
3.3 Research Sample
3.4 Measuring Instrument
3.5 Data Collection
3.6 Data Analysis
3.7 Expected Result
CHAPTER FOUR
DATA ANALYSIS AND RESULTS
4.1 Data Analysis
4.2 Results
4.3 Discussion
CHAPTER FIVE
SUMMARY AND RECOMMENDATIONS
5.1 Summary
5.2 Recommendations for Further Study
Bibliography
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Tags: EFFECTS OF ILLIQUIDITY ON BANKING SYSTEMS
