CHAPTER ONE

INTRODUCTION

1.1      BACKGROUND OF THE STUDY

Many countries in the world today have at one time or the other been caught up in what some authors term "export dilemma". Almost instinctively, they therefore recognize the aviate need to develop their export base. One of the periodic publication of the GATT (General Arrangement Tariffs and Trade) National of export promotion techniques often reviews the activities and strategies of various nations to revitalize exports. It is not a surprise that almost all the advanced industrial nations of the world today had to go through a formalize, constant and programme of export promotion. However, we find for example in this race, such developed countries like Australia, Belgium, Canada, Italy, United Kingdom and U.S.A. etc. Recently, some less developed countries like Nigeria, Togo, Turkey and India etc have decided to follow suit.

Developing countries have realised the importance of industrialization, this explains why they now endeavour to promote industrial developments through direct public and private investment in export business and alsocreate favourable industrial climate. This entire development programme lays emphasis on industrialization as one of the goal of development.

1.2      STATEMENT OF THE PROBLEM

With the content of the Nigerian economic imbrogho, many export business concerns, especially those engaged in export of manufactured products, processed agricultural food items and industrial products has been passing through traumatic experience in terms of initial capitalization and continuous financing. Many exporting firms has been forced into untimely extinction. Those which still manage do rear their heads are bedecked with a host of government policy restriction. The deregulation FOREX market resulting in the highest liquidity in the Nigerian economy, the absence of effective policy for conbverti9ng easily converted debt instruments into each in the Nigerian financial system.

The unwillingness of the CENTRAL BANK        to discount instruments before their actual maturities, the unpreparedness of Nigerian banks to fund long-term projects because they cannot always ensure themselves of continued liquidity on the period prior to the maturity of the loans and the general syndrome of capital flight resulting from the risk avoidance attitude of private investors all combined to slim down the chances of obtaining easy and quick financial instruments. Sequel to such bottlenecks in the financial system of the country, the development of new venture is fraught with host of teething capital problems to the extent that a large number of them remain only on the drawing board without enjoying the benefits of commencement and continued existence.

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