Table
of contents
Preliminary
Title page
Declaration - - - - - - - - - - i
Certification - - - - - - - - - ii
Dedication - - - - - - - - - - iii
Acknowledgement - - - - - - - - - iv
Abstract - - - - - - - - - - v
Table of content - - - - - - - - - vi
List of tables - - - - - - - - - - vii
List of Figure - - - - - - - - - viii
CHAPTER ONE: INTRODUCTION
1.1 Background to the study - - - - - - - 1
1.2 Statement of the research Problem - - - - - 2
1.3 Research Question - - - - - - 2
1.4 Objectives of the study - - - - - - - 3
1.5 Statement of Research Hypothesis - - - - - 4
1.6 Significance of the Study - - - - - - - 4
1.6.1 Theoretical Significance - - - - - - - 4
1.6.2 Practical Significance - - - - - - - 4
1.7 Scope of the study - - - - - - - - 5
1.7.1 Geographical Organizational scope - - - - - - 5
1.7.2 Time scope - - - - - - - - - 5
1.8 Definition of Terms - - - - - - - 5
1.9 Background of the Case Study - - - - - - 7
1.10 Plan/organization of the study - - - - - 8
1.11 Summary - - - - - - - - 8
CHAPTER TWO: LITERATURE REVIEW
2.0 Introduction - - - - - - - - 9
2.1 Definition and impotence of balance of
payment - - - - 9
2.1.1
Theory of balance of payment - - - - - 10
2.2
Concept and structure of balance of payment - - - - 11
2.3
Balance of payment accounts - - - - - - 12
2.4
Balance Of Trade and Balance of Payment - - - - - 14
2.5
Foreign trade - - - - - - - - 1
2.6
Terms of trade - - - - - - - - 17
2.7
Balance of Payment Equilibrium - - - - - - 18
2.8
Balance of payment Disequilibrium - - - - - - 18
2.9
Balance of payment problem - - - - - - - 22
2.10
Measures for correct deficit in balance of payment - - - 23
2.11
Ways of achieving of favorable balance of payment - - - - 25
2.11.1
Boosts of production - - - - - - - 26
2.11.2
Import restriction - - - - - - - 26
2.11.3
Balance control - - - - - - - 26
2.11.4
Stimulating export - - - - - - - - 26
2.11.5
Devaluation - - - - - - - - - 27
2.11.6
Quantitative measure- - - - - - - - 27
2.11.7
Exportation promotion - - - - - - - 27
2.11.9
Tariffs - - - - - - - - - 27
2.11.10
direct control - - - - - - - - 27
2.11.11
Improve balance of payment - - - - - - 28
2.11.12
Subsides - - - - - - - - - 28
2.11.13
Self Sufficiency argument - - - - - - - 28
2.11.10
Protection of in fact Industries - - - - - 28
2.12
Impact of Nigeria balance of payment on the economy - - - 28
2.13
Import and export - - - - - - - - 39
2.14
The role of central bank of Nigeria on import and export - - 29
2.15
Summary - - - - - - - - - 31
CHAPTER THREE: Research methodology
3.1 Introduction - - - - - - - - - 32
3.2 Research design - - - - - - - - 32
3.3 Population of the study - - - - - - - 33
3.4
sample and sampling technique - - - - - 33
3.4.1
Sample size - - - - - - - - 33
3.4.2
Sampling techniques - - - - - - - 34
3.5
Method of data collection - - - - - - 34
3.5.1
Primary Data - - - - - - - - 34
3.5.2
Instrument for data collection - - - - - - 34
3.5.3
Administration of Instruments - - - - - - 35
3.5.4
Description of Questionnaire - - - - - - 35
3.5.5
Secondary Data - - - - - - - - 35
3.6
Variable and measurement - - - - - - - 36
3.7
Method of data analysis - - - - - - - 36
3.7.1
No inferential Techniques - - - - - - - 36
3.7.2 Inferential technique - - - - - - - - 37
3.8
Summary - - - - - - - - - 37
CHAPTER
FOUR: Data Presentation, Analysis And Interpretation
4.1
Introduction - - - - - - - - - 38
4.2
Response from Questionnaire - - - - - - - 38
4.3
Demographic profile of the Respondents - - - - - 39
4.4
Descriptive statistics - - - - - - - - 40
4.5
Test of Hypothesis - - - - - - - 47
4.6 Discussion of Results - - - - - - - 52
4.7 Summary - - - - - - - - - - 53
CHAPTER
FIVE
SUMMARY,
CONSLUSION AND RECOMMENDATIONS
5.1 Introduction - - - - - - - - - 54
5.2 Summary of Findings - - - - - - - 54
5.3 Conclusion - - - - - - - - - 55
5.4 Recommendation - - - - - - - - 55
5.5 Limitation - - - - - - - - - 56
5.6 Suggestion for further study - - - - - - 56
List of Tables
Table
4.2.1 Questionnaires Administered and Returned - - - - 38
Table
4.3.1: Sex - - - - - - - - - 39
Table
4.3.2: Age range - - - - - - - - 39
Table
4.3.3: Category of staff - - - - - - - 40
Table
4.3.4 Department - - - - - - - - 40
Table
4.4.1 There is favorable balance of payment in the Nigeria economy - 40
Table
4.4.2: Effective measures have been put in place to correct unfavorable balance
of payment. - - - - - - - - - - 41
Table
4.4.3: The rate of inflation in Nigeria
economy has affected the balance of payment position - - - - - - - - - 41
Table
4:4:4 Excessive importations of goods and services leads to unfavorable balance
of payment position in the Nigeria economy - - - - 42
Table
4:4:5: the balance of payment position on the Nigeria economy is effective -42
Table
4.4.6: there is balance of payment dis-equilibrium on the Nigeria economy - 43
Table
4.4.7: Balance of payment has a Negative impact on the Nigeria Economy - 43
Table
4.4.8: The excessive exportation of goods and services ensures favorable
balance of payment - - - - - - - - -- 43
Table
4.4.9 favorable balance of payment position contributes to the development of
the Nigerian economy - - - - - - - - 44
Table
4.4.10 The Central bank of Nigeria (CBN) has made an effort towards the
achievement of favorable balance of payment in the Nigeria economy - 44
Table
4.4.11: Monetary policy is a tool used by Central bank of Nigeria (CBN) to
correct unfavorable balance of Payment. - - - - - - 45
Table
4.4.12 there is deficit balance of payment on the Nigeria economy as a result
of a countries increase in National income. - - - - - 45
Table
4.4.13: The balance of payment equilibrium arise when the credit and debit side
totals of the balance of payment balance - - - - - 46
Table
4.4.14 Devaluation is an effective means for solving balance of payment
problem. - - - - - - - - - 46
Table
4.4.15 an economy has s surplus in the balance of payment position due to
adequate patronage of homemade goals. - - - -- - 47
Table 4.5.1
Observed frequency - - - - - - - 48
Table
4.5.2: Expected frequency table - - - - - - 49
Table
4.5.3 Computation of Chi-square - - - - - - 49
Table
4.5.4: Observed frequency table of Question 2, question 7 and question 11. -50
Table 4.5.5: expected frequency table - - - - - 51
CHAPTER ONE
INTRODUCTION
1.1
Background
to the study
No nation is
self-sufficient with goods and services, so there is need for exchange of goods
and services between countries. A balance of payment is a comprehensive
statement of income and expenditure involved in foreign trade.
Balance of payment is the
method by which countries, monitors all international monetary transactions at
a specific period of time. All trades conducted by both the private and public
sectors are accounted for in the balance of payment in order to determine how
much money is going in and out of the country.
The balance of payment
accounts of a country records the receipts and payments of the residents of the
country in their transactions with the residents of other countries.
There are three (3)
components of balance of payments which are current, capital and monetary
movement (financial) account. Capital account is made up of short term. It
shows the actual transfers of capital or money to other countries, in the form
of investment, loans and grant. On the other hand, current account covers both
the transaction relating exchange of goods and services and receipts and
payment for visible and invisible trade. The financial account records how a
deficit in current account and capital account is settled or how the surplus in
these two accounts is exhausted for
countries to achieve favorable balance of payment between imports and exports,
when the value of export exceed that of import, the country is said to have a
favorable balance of payment. But when import exceeds exports, the country is
said to have unfavorable balance of payment.
Government use favorable
balance of payment for improving and re-adjusting the countries standard of
living, most developing countries are struggling to maintain a favorable balance
of payment position so as to ensure good economic growth and development in the
country.
1.2
Statement
of the Research Problem
The balances of payment
position of a country are faced with some problems which lead to unfavorable
balance of payment. Some of the problems could be as a result of economic,
political and social factors. The economic factor could be as a result of
developmental activities, because developing countries depend on developed
nations for supply of machines, technology and other equipment. This leads to
increased levels of impacts another one is high rate of inflation, when there
is inflation in the domestic economy, foreign goods becomes relatively cheaper
as compared to domestic goods, others are import of services, change in demand etc
political instability, political instability may lead to large capital outflows
and reduce the inflows of foreign funds then, creating disequilibrium in the
balance of payment, social factor, causes changes in tastes, preferences,
fashionand trends, an unfavorable change for the domestic goods leads to defeat
in the BOP. Also, they are faced with problems of appropriate measures to
achieve a favorable balance of payment in the economy.
1.3
Research
Question
This work is guided by
the following research questions:
1. To
what extent does the Nigerian balance of payment import on the economy?
2. How
does the impact of the Nigerian balance of payment affects the Nigeria economy?
3. What
is the position considered favorable to the Nigeria to assess balance of
payment?
1.4
Objectives
of the Study
The general objectives of
the study have examined the impact of the Nigeria balance of payment position
in the economic: these specific objectives are:
1. To
correct unfavorable balance of payment
2. To
know how to increase export and access to the import of balance of payment in
the economic
3. To
correct deficit balance of payment
1.5
Statement
of Research Hypothesis
For the purpose of this research work, the
following hypothesis were formulated to aid the researcher:
i.
HO: There is no balance of payment
dis-equilibrium in the Nigeria economy.
ii.
HO: There is no significant measures of
reducing unfavorable balance of payment
1.6
Significance
of the Study
The significance of the
study is to examine the impact of the Nigeria balance of payment position on
the Nigeria economy. The question here is that of what importance is the
balance of payment is to inform the government authorities about the
international economic position of decisions on monetary and fiscal policies,
foreign exchange phenomena.
According to MC Seth;
balance of payment position is an important index which reflects the true
economic position of a country and whether its currency is rising or falling in
its extend value.
1.6.1
Theoretical
Significance
To the researcher, the
researcher, the research is a result of the need of findout the impact of
balance of payment position on the Nigeria economy. Hence, the study will
helpto ascertain the impact of the Nigeria balance of payment position on the
Nigeria economy, it will also contribute to existing literature on the topic,
it will also be of use to prospective researchers.
1.6.2
Practical
Significance
This study is imperative
as it well create great awareness to the apex bank as well as the management of
the economy. Practical significance is measured by effect size, effect size is
about the extent which the research hypothesis is true or the degree to which
the findings here Is practical significance in context of the study population,
reducing inflation, import of payment. The study will help to identify home
effective the use of such those measures can help in the coordination and
implementation of economic policies to achieve maximum efficiency.
1.7
Scope
of the study
The study is limited to
the impact of the balance of payment position on the Nigeria economy. The
researcher intends to study data by the central bank of Nigeria and other
source such as journal, new magazines.
1.7.1
Geographical/Organizational
Scope
The organizational scope
of the study is limited to central bank of Nigeria, Bauchi Branch
1.7.2
Time
scope
The time of this project
is cross section which is meant to be for a short period of time. The
researcher will restrict himself/herself to information provided from 2011 to
2016.
1.8
Definition
of terms
Terms used in this context/text is well
simplified for easy understanding to all categories of users. The following are
some of the terms mentioned:
i.
Balance
of payment: Balance of payment is a systematic statistical
record of the economic transactions between residents of one country and those
of the rest of the world during a given period of time usually one year.
ii.
Capital
account: These account records transactions related to
movements of long term and short term capital.
iii.
Equilibrium:
this is a situation whereby market supply and demand balance each other and as
a result, prices become stable.
iv.
Disequilibrium:
This is a situation in which things are not stable or certain, prevent market
equilibrium from being reached or cause the market to fall out of balance. This
can be a short term by product of a change in variable factors or a result of
long term structured imbalances.
v.
Balance
of trade: The balance of trade is the difference between a
country’s imports and exports.
vi.
Trade
deficit: A trade deficit occurs when a country’s buys or
imports more goods from other countries then it sells or exports.
vii.
Trade
surplus: A trade surplus occurs when a country sells more
than it buys from foreign markets.
viii.
Import:
refers to an item coming inside a country from any other country. Import means
expenses to a country.
ix.
Exports:
refers to an item going out of the country to any other country of the word.
Exports earn money for a country.
x.
Central
bank of Nigeria (CBN): The central Bank of Nigeria
formulates and implements different monetary policy towards ensuring monetary
stability of the economy. It is also the supreme monetary authority in Nigeria.
It is also the lender of last resort, it issues the Nigeria naira and also
maintains foreign currency reserves and is charged with maintaining monetary
stability.
1.9
Background
of the case study
The central Bank of
Nigeria is the apex bank regulating the entire financial system of the nation.
It was established by the central bank of Nigeria (CBN) act 1958 and commercial
operation on 12thJuly, 1959 among its primary functions:
-
The bank promotes monetary stability and a
sound financial system
-
The bank act as banker and financial
adviser to the federal government.
-
The bank also acts as lender of last
resort to the bank
-
The bank also encourages the growth and
development of financial institution
-
The bank also maintains external reserves
of the country
-
Also, insurance of currency which serve as
the country legal tender. Central Bank of Nigeria is the only institution that
can issue currency in Nigeria. No other bank or legal entity can print bank
notes. The bank also sets the bank notes into nominal values. To print nominal
values, it uses top security devices to print bank notes and create design
difficult to copy.
The
central bank of Nigeria is responsible for the promotion of the financial
markets. These money market can be mobilize short-term and long-term funds. The
financial market are also very controversial in Nigeria.
The
Central bank of Nigeria serve as a judge between Nigeria banks and their
clients. The bank has a public complaints desk in the head office and its every
branch. If banks are found to be unfair with customers, the CBN can start
investigations towards, this bank. If the investigations find that the
complaints are reasonable, the CBN can impose sanctions.
1.10
Plan/Organization
of the case study
This is to show the
structure, outlooks and pattern of the research study. However, the study
contains or consists of five chapters and are as follows:
Chapter one consist of
the background of the study, the statement of the research problems, the
objectives of the study, the research question, the scope of the study,
definition of terms and significance of the study etc.
Chapter two shall present
the literature review of the subject matter.
Chapter three is the
methodology. The chapter contains research design, population of the study
sample and sampling techniques, sample size, sample techniques, method of data
collection and method of data analysis etc.
Chapter four is the data
presentation and interpretation and analysis it consists of response from
questionnaire, demographic profile of respondents, descriptive statistic, testing
of hypothesis and discussion of result and summary.
Chapter five is the final
chapter of the research study which contain recommendation, summary of finding
and conclusion.
1.11
Summary
The research work is
carried out in order to outline the contribution and the importance of
favorable balance of payment on the Nigeria economy.
The research approach in
chapter one consist of comprehensive attempt towards elaborating on the
research topic in which to cover the subject matter.
However, the researcher
identify the research problem which is the favorable balance of payment and
come up with a goal he wanted to achieve on his research study, in line with
study, the researcher discovered balance of payment is beneficial the
appropriate authority who are the policy makers. Balance of payment is
important to importers to importers and exporters by creating favorable market
condition.
In addition, it shows the
revenue and payment of the country from international economic transaction
within a specific period usually one year.
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