ABSTRACT
In all nations, the manufacturing sector is the life wire of economy of a nation development. Manufacturing is also a nation Describe as transformation of raw materials into finish goods which can export to other nations whereby earning or improving our foreign exchange reserve. The study investigated the impact of high bank lending rate on manufacturing sector of the Nigeria economy. The research discovered that there is no positive relationship between high cost of funds and capacity utilization. It also that the firms due to the high bank lending or repair obsolete machines or service it. Data for this study was collected through secondary sources. Which were from journals and textbooks. Based on findings of the researcher is able to study such as:
TABLE OF CONTENT
CHAPTER ONE
CHAPTER TWO
REVIEW OF RELATED LITERATURE 9
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY 22
CHAPTER FOUR
FINDING 25
CHAPTER FIVE
RECOMMENDATION AND CONCLUSION 27
CHAPTER ONE
INTRODUCTION
Over the year, Nigeria government has been making series of effort attaining a highly industrialized self-reliant economy. These efforts have been due to the obvious realization by the government of the important of industrialization in economic development of economy and so the importance of manufacturing sector of Nigerian economy cannot be over-emphasized. The sector only provides the finished good, which we need but for lack of which we look abroad foreign exchange through exportation of its products.
Before 1980 when oil (back gold) was first discovered in river state, agriculture was the major foreign exchange earner in Nigeria. But with the high oil production in the early 70’s. agriculture started losing important in the economy and since then up fill date the oil sector was remain the major foreign exchange earner for Nigeria. The oil boom of the early 70’s however contributed to a large extent to the growth of industries in the country. Certainly, it was after taken the post war era that the Nigerian government starts taken measures to boost. Agriculture as a supplement to the growth and development of the manufacturing industries as well as the economy. Important among these was the joint ownership of industries between the government and foreign firms. But perhaps the most significant of all was the indigenization principle introduce by Yakubu Gowon government in 1972. The concept was to exclusively reserve some business for Nigeria or increase their participation. But this policy was however, poorly managed as some foreigners used Nigeria as front in an effort to evade regulation.
One of the major ways through which manufacturing firm can be encouraged is through availability of finance for their operation. In Nigeria today finance seem to be or it’s the hardest thing to obtain as a result of several variables of which one of the most important is the ever-increasing rate of interest.
According to Nwachukwu (1993:20). This states of affairs is lamentable as manufacturing offers by for the best potential of the country. It was the potential for growth. It could be the fastest growing sector of the economy, but with problem that the ministry has to contend with the under capacity utilization, the counting is simply not read, to export and so it high time the industries, the government, the citizen in general developed a concentrated effort aimed at normalizing the pathetic state of affairs.
STATEMENT OF THE PROBLEM
One cannot be find various views regarding or concerning the impact of high banks lending rate on manufacturing firm.
The major task of this research in therefore a critical analysis of the impact of high banks lending rates to see how they have affected the manufacturing say sector.
OBJECTIVE/PURPOSE OF THE STUDY
The main objective the researcher decided to undertake thus works are:
I to ascertain on manufacturing industries.
Ii to appraise fund utilization by manufacturing sector.
Iii to suggest or maker recommendation armed at helping the manufacturing sector in obtaining funds at affordable interest rates to enhance their operation thereby enhancing development of the economy.
IV to evaluate the effectiveness rates and efficiency of funds with high lending rates.
V to investigate why banks are more interest on high lending rates.
VI to evaluate how high banks lending rate affected the production level of the manufacturing sector.
After completion, this study is expected to show the impact of high banks lending rates on the manufacturing sector, of the Nigeria economy.
I this study will enable the manufactures to fashion out means and devices of cautioning themselves against the effect of high bank lending rates.
II from the finding of this research, the government will be better placed to review its industrial policy as it pertains to finding of manufacturing production. For example it will make the federal government to seriously review all aspect of its monetary policy border on interest rates.
II the policy choices include deregulation of interest or use of market force to determine the rates and regulation of interest rates by putting a ceiling on interest again.
IV the significant of this study is also relevant to the research as, the shareholders, consumers and the general public. It will equally form an interesting price of work for professionals on the impact of high bank lending rates on manufacturing sector of the Nigerian economy.
The impact of high banks lend finding rate on manufacturing sector of the Nigeria economy is a vast subject. No attempt will be made to compile a detailed analysis of the subject into the few papers of this study. The area of study will however include effect of high banks lending rate and suggestion on helping the manufacturing sector in obtaining funds at affordable interest rates.
The idea of writing this work simultaneously with the researchers class work has really given a limited time to this study. The opportunity for the researcher to personally observe the impact of high banks lending manufacturing sector of the Nigeria economy will be very limited, thereby facing the researcher to rely mainly on the distribution of questionnaire and some personal interviews as a method of gathering information for this study.
Furthermore, reluctant of some respondent to give accurate of some demographic information for the fear of exposing their weakness never help matters much. All these brought together formed the limitation of the study.
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