DETERMINANT OF IMPORT IN NIGERIA

CHAPTER ONE

INTRODUCTION

• Background of the study

An import is a commodity brought into a territory, especially across a national border, from an external source. Importation and exportation are the defining financial transactions of international trade. An import in the receiving country is an export from the sending country. In international trade, the exportation and importation of goods are limited by import quotas and mandates from custom authority. The importing and exporting countries may impose a tariff (tax) on the goods. In addition, the exportation and importation of goods are subject to trade agreements between the importing and exporting countries. Import consists of transactions in goods and services to a resident of a country from non-residents. The exact definition of imports in national income accounts includes and excludes specific border cases. A general view of imports in national income accounts is given below. An import of a commodity occurs when there is a change of ownership from non-resident to a resident; the does not necessarily mean that the commodity in question physically crosses the frontier. However, in specific cases, national accounts impute changes of ownership even though in legal terms no change of ownership takes place. For example, cross frontier financial leasing, cross border deliveries between affiliates of the same enterprise, commodities cross the border for significant processing to order or repaid. Also smuggled goods must be included in the import measurement. Imports of services comprise all services rendered by non-residents to residents. In national income accounts, any direct purchases by residents outside the economic territory of a country are recorded as imports of services, therefore all expenditure by tourists in the economic boundary of another country are considered part of the imports of services. Also international flows of illegal services must be included. Basically, there are two types of import, which include:

1. Industrial and consumer goods.
2. Intermediate goods and services.

Industrial goods are made up of machinery, manufacturing plants and materials, and any other commodity or component used by other industries or firms. They are based on the demand for consumer goods that they may help to produce. They are classified as either production goods or support goods. Production goods are used in the production of final consumer goods, while support goods are, in general, used as inputs or raw materials to produce consumer goods. They are derived demand because they are demanded to produce consumer products.

Consumer goods are ready for consumption and satisfaction of human wants, such as clothing or food. Consumer goods are not used in the production of other goods. They are tangible commodities that are produced to satisfy the wants of the buyer. Consumer goods are classified as durable goods, non-durable goods, or consumer services.

Durable goods have a significant lifespan of three years or more. The consumption of a durable good is spread out over time the entire life of the good, which causes demand for maintenance and upkeep. Bicycles, furniture, and cars are examples of durable consumer goods.

Non-durable goods are goods that are purchased for immediate consumption or use, and they have a lifespan that is less than three years. Beverages, food and clothing are examples of non-durable consumer goods.

Consumer services are intangible services or products that are produced and consumed at the same time. Car washes and hair cuts are good examples of consumer services.

Intermediate goods or producer goods or semi-finished products are goods, such as partly finished goods, used in the production of other goods including final goods. They are used either for resale or for further production in the same year. They are generally purchased by one by one production unit from another production unit. They also have derived demand as their demand depends on demand for final goods. The value of intermediate goods is merged with the value of final goods. In the production process, intermediate goods either become part of the final goods, or are changed beyond recognition in the process. Examples include sugar when used as an input or ingredient in other food production, steel used in the production of many other goods, such as bicycles, car engines, plant, ply wood, pipe and tube, and ancillary parts, purchases of trucks, vehicles, aircraft, etc by government for military purposes to produce defense services.

• STATEMENT OF THE PROBLEM

The growth of imports is attributable to several factors. These include the need to pursue economic development, the expansion in crude oil export that considerably raised foreign exchange earnings and the over-valuation of the local currency, which artificially cheapened imports in preference to local production. The astronomical expansion of domestic demand is a key factor as well; during this period goods were in short supply. It is in view of this that the researcher intends to investigate the determinants of import in Nigeria.

• OBJECTIVE OF THE STUDY

The main objective of the study is to ascertain the determinant of import in Nigeria. But for the successful completion of the study; the researcher intend to achieve the following sub-objective

1. To ascertain the factors that determines importation in Nigeria
2. To ascertain the effect of import on the economic growth of Nigeria.

• To ascertain if there is any relationship between importation and economic growth in Nigeria.

1. To proffer solution
2. To proffer solution to the identified problems
   • RESEARCH HYPOTHESES

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀: importation does not have any significant effect on the economic growth of Nigeria.

H₁: importation does have a significant effect on the economic growth of Nigeria

H₀: there is no significant relationship between importation and economic growth in Nigeria.

H₂: there is a significant relationship between importation and economic growth in Nigeria.

• SIGNIFICANT OF THE STUDY

it is believed that at the completion of the study, the findings will be of great importance to the federal ministry of commerce as the study seek to enumerate the merit and the demerit of import to the growth of Nigerian economy, the study will also be of great importance to the federal ministry of trade and commerce as the study seek to enumerate the

of trade and commerce as the study seek to enumerate the role of importation on the growth and development of Nigeria economy, The study will also be of importance to researchers who intend to embark on study in similar topic as the study will serve as a reference point to the researcher.

• SCOPE AND LIMITATION OF THE STUDY

The scope of the study covers determinant of import in Nigeria, but in the cause of the researcher encounters some constrain which limited the scope of the study;

(a) Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.

(b) Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

(c) Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover

1.7 DEFINITION OF TERMS

Import

An import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions.

Economic growth

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP, usually in per capita terms.

Tax

A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or a legal entity) by a state or the functional equivalent of a state in order to fund various public expenditures

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding.  Chapter five gives summary, conclusion, and recommendations made of the study

Related Project Topics :