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This project work has critically highlighted the compact of the Role of Banks in International Trade in Nigeria, the problems affecting the Role of Banks in International Trade in Nigeria have been identified, and how they can be controlled is also included in the study, as are ways to solve them. To facilitate comprehension and deduction, the work is divided into chapters.

The first chapter covers the introduction, background, problem description, purpose / objective of the study, significance of the study, limitations of the study, and definition of words. The second chapter includes a review of related literature, international commerce, roles, risk factors in international trade, significant problems, major trade restrictions, and international trade problems.

This chapter also discusses the significance of international trade and some of the challenges surrounding Nigeria’s international trade dilemma. The third chapter discusses research design and methodology, data source, data location, and data gathering method.

The fourth chapter is a summary of discovery where we summarise everything in this project. Chapter five analyses the flaws and suggests some viable points (s) that can also help the industry’s image.


The purpose of this project write-up, “The role of Banks in International Trade,” is to produce a guide that is sufficiently informative in scope to fulfil the requirement for Banks, Economist in International Trade.

Among the important topics covered are whether there are various relationships, the role of banks in international trade in Nigeria, the nature of international economics, international trade, the difference between international trade and internal trade, and the problems that international trade faces in the banking sector.


Nigeria has been involved in international trade since before and even after our country was colonised by the British. However, it was clearly stated during the British Colonialist, which was referred to as legitimate trade in the 15th century.

This lasted until 1960, when Nigeria gained independence. This meant that Nigeria was no longer solely under the supervision of the British government. Since then, legitimate trade to Nigerians has been transformed into international trade, with banks playing an important role.

Nigeria has been enjoying Nigeria and across the country since the early 1970s oil boom. Its economy is diversifying.

Apart from international trade, and as a result of climatic factors, Nigeria requires international trade to diversify and accelerate the country’s economic development.

International trade ensures export expansion and import contraction, as well as stimulating foreign exchange earnings, international recognition, and the creation of job opportunities for the world’s growing population.

International trade is synonymous with the production of goods and services to benefit domestic trade. Thus, we have financial institutions, the food processing export/import trade, sugar, tobacco export/import commerce, and the petroleum export trade. As a result, international trade, also known as external trade, is defined as trade between two or more countries.

Example. Trade between Nigeria and the United States, as well as Ghana, India, the United Kingdom, and Japan, is referred to as bilateral trade, but trade between several countries is referred to as multilateral trade.

The exchange of products and services within a country is not considered international trade. Home or internal trade refers to the exchange of products and services among citizens of the same country. For example, all trading activities that occur within Nigeria in a domestic or internal commerce.

External commerce is formed to stabilise a country’s economy and way of living.

External commerce has been proven beyond question to be extremely crucial for a nation’s survival; therefore, it is imperative that we clearly demonstrate how banks may be used to grow these trades. In doing so, we will confine our research to short and long-term scale institutions that are critical to the economy.

According to the central bank credit rules, a short-term scale institution is any service organisation with an annual business turnover of less than N500,000.00 (five hundred thousand naira).

There is no definition for long-term scale institutions because they did not receive direct attention from the CBN.

The different services provided by banks for the maintenance of international trade in the country demonstrate the role of banks in the development of Nigerian international trade.

These services include providing financing for these exporters/importers in the form of loans, such as short-term, medium-term, and long-term loans, which the traders can utilise to finance their business objectives.

Banks also offer overdraft arrangements, which are required to fund a company’s operating capital.

An overdraft is an agreement in which banks allow their customers to overdraw their accounts up to a credit position at the end of the period, whereas short term loans are loans issued for one to five years. Then, medium and long term loans are issued for periods ranging from five to ten years, even ten years.

Apart from providing loans and overdraft services, banks could also play additional roles in the development of international trade in Nigeria. These responsibilities include professional advice, the opening of documentary letters of credit (L/CS), bills for collection and negotiation/open account and bills of exchange,

foreign exchange such as traveller cheques and foreign currencies, information on trade and exchange restrictions, collection and transfer of funds status inquiries, and, most importantly, determining the actual external funds required by an export/import borrower. Acceptances of such services aid in the growth or expansion of international trade.

It is not a stretch to say that international commerce exporters and importers have their own banking issues that must be addressed in order for international trade to thrive. These challenges include corruption in banking parastatals, obtaining money from, and operational issues that are dictated by the Nigerian environment and society.

The irrational problem of labour requirement and the bad knowledge of trade across these external traders aid to compound the general challenges of international trade development of which bank services can be gainfully used for the goal of solving them.

In addition to the challenges, there is a loss of confidence among the members or cooperators of the trade.

The most serious of these issues is the problem of unstable political contradictions.

These issues must be completely eradicated by the government and society in order to ensure the continued growth of this important sector of the economy’s business.

It has been observed that the level of bank institution funding has been significantly lower than that gained in developed countries such as America (USA), Germany, and a few others.

The Central Bank of Nigeria (CBN) should strengthen its moral suasion strategy in order to persuade these institutions, particularly commercial banks, to enhance their financing of exporter/importer members.

Though commercial banks borrow short from their deposits, commercial banks that declare excess profits at the end of each year should expand a lending pattern for medium and long term loans without negatively affecting their liquidity ratios.

International traders should be encouraged to invest prudently with bank funds, and a strong, solid, firm, and concrete basis should be established for the country’s international development.


Nigerian banks play an important part in the country’s international trade. Nigerian banks have a number of established institutions that contribute to the growth of international trade.

Commercial banks, merchant banks, and development banks are among the banking instruments that play an important role in external trade and have branches throughout Nigerian states.

The above banks’ contribution to international trade has been satisfactory. The majority of importers and exporters dance to the tune of these banks.

Why are these banks so appealing to society and the world as a whole? Is the bank’s success due to its efforts in its operations?

Why do importers and exporters prefer it over other types of financing?


1. Determine whether or not commercial banks have a role in international trade in Nigeria.

2. To find out if merchant banks have any role in foreign trade in Nigeria.

3. To find out if development banks have any role in foreign trade in Nigeria.

4. To find out if commercial banks have any role in international trade.

5. Determine whether people’s banks play any role in foreign trade in Nigeria.


1. What function do commercial banks play in international trade?

2. What is the role of merchant banks in international trade?

3. What role do development banks play in international trade?

4. What is the role of community banks in international trade?

5. What function do people’s bank play in international trade?


It is presumed that the secondary data acquired in this study is correct and credible.

The approach and method adopted is correct and dependable.


Coverage area Banks’ participation in foreign trade in Nigeria. In Nigeria, banks contribute to international trade.

Why is international commerce important in Nigeria?

The benefits of international trade in Nigeria.


Today, the government parastatals, financial sectors, and society are all working together to improve international trade development and the expansion of the Nigerian economy.

The research study will be extremely beneficial to financial sectors, importers/exporters, and society in general in terms of increasing the efficacy of their businesses, which will transform the society. In addition, the study will determine the census and problems of banks’ roles in foreign trade in Nigeria, and should be used as a corrective step as a result.

As a result of this inquiry, banks and society will be aware of their weak points and will readily embrace measures targeted at improving their commercial effectiveness.

The government will be able to implement the appropriate measures to help society meet its commercial objectives or goals.


(a) International Trade: As the Author describes,

Norbert M Ile describes international trade or external trade as “a trade between two or more countries; it is the exchange of goods and services between two or more countries” in his published test “Economics of business studies” (1999, P. 278).

(a) Banking Institution: A bank is defined as

any organisation that deals with money. It is a debt dealer, but debt has a correlate to wealth, therefore a bank can be defined as a liquefier of wealth.

b) Role: It is defined as “actors in a play; individuals

task or obligation in undertaking.

(d) Foreign Exchange: This is the procedure by which one country swaps its goods and services for those of another country.

(e) Overdraft: An overdraft is a mechanism in which a consumer draws more money than he has to his credit in a bank.

(f) Economy: A system of controlling and managing a society’s money, goods, and other resources.

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