FINAL YEAR STUDENTS PROJECT - CHAPTER ONE [SAMPLE]

THE IMPACT OF  BANKING INDUSTRY ON THE ECONOMIC DEVELOPMENT IN NIGERIA (A CASE STUDY UNITY BANK PLC, ABUJA)

CHAPTER ONE

INTRODUCTION 

1.1      BACKGROUND OF THE STUDY

Ever since the introduction given by God to man to “Be fruitful and  multiply”  replenish and subdue the earth” man has alone a lot to pursue this injunction of subduing  the earth.  By this it entails among other things  the development of the world as a macro society for the overall good of man- economically, politically, socially and otherwise.

The wheel of change has been rolling on through the entire world transforming virgin lands deserts oceans and seas to the economic advantage of man.  Nigeria was unknown then.  The first step in the British acquisition of Nigeria was the  annexation of lagos in 1861  (ONWUBIKE 1973). It  marked the first major step taken by the  British government   in the 19^th century to acquire economic and political domination over the people of Nigeria.  A chattered company- the ROYAL NIGER COMPANY was administering the high land of Nigeria – North of Lokoja – on behalf of the British. The British government had declared a protectorate   over areas claimed by the company in 1887.  Then on  1^st  Jan. 1990,  it took Royal Niger company  and named it the Protectorate of Northern Nigeria with Lord Lugard as its first  high commissioner.  Floral Shaw- formal colonial correspondent of the  times on London who later became Lugard’s  wife named  this great political unit  Nigeria in 1900  (Onwuikeo,1973).  Finally, on 1^st Jan. 1914, Lugard became the first  governor- general of the colony and the protectorate of Northern Nigeria.  

Nigeria continued in this march toward development in every facet of life as a new emerging nation in the   West African region and by October 1960 she was granted political freedom and emancipation when she was granted independence.  To crown the whole stride, she was granted a republican status in 1963.

To grapple with the attendant problem as an emerging nation and satisfy its citizenry various development plans were launched to accelerate economic development so as to put Nigeria in the proper place among   the comity of nations.  The first development plans was slated to run from 1962 to 1968 but extended to 1970 on the account of the civil war.  It witnessed the construction of the Niger Dam project as well as the development   of roads,  lights, industries such as textile, rubber, and groundnut processing which used agricultural   crops ; the encouragement of agriculture in the form of  establishment of from institutions and granting of loans  (Anderson, 1976).

The second development plan (1970 – 1975) experienced a lot of problem. Recovery from civil war delayed the implementation of some projects. The funds that were anticipated were not forth coming and there was lack or technical partners needed to carry out some aspects of the plan.  The third development plan covered a period of five years (1975 – 1980). The principle long run objectives are too similar to those of the proceeding post independence plans.  The objectives are to make Nigeria.

1.               Argent and dynamic economy.

2.               A united strong and self reliant nation

3.               A just and egalitarian society

4.               A land bright and full of opportunities for all citizens.

5.               A free and democratic society.

A  90%  annual  rate of growth G.D.P was assumed for the plan period and the total capital investment was to be N30 billion.  The plan strategy was to utilize the country’s resources to develop the productive capacity of the economy.  The plan was revised upward in 1976 (Ojo, 1982).  Some of the highlights of this plan were Agriculture. N1.4m building of two oil   refineries at Warri.  The iron and steel industry which featured in the previous plans was to  be established at Ajeokuta in Kogi State.  A  total of N600 million  was allocated to the industrial sector.  Development of the infrastructure also took a large slide with a total of  N4000m being allocated. More roads were to come under the control of the federal government and a   modernization of the railways was planned.  The electricity capacity was to be extended to 1,500 meg watts with improvements also in its distribution all costing N 163m.  social service were not neglected ;   N2400m was budgeted for the armed forces.

The 4^th development plan equally followed suit to run from 1981- 1985- and described equally what development is all about.  Since development is multidimensional in definition to road thus:

True development must mean “the development of man- the unfolding and realization of his creative potentials enabling him to improve his material condition and living through the   use of resources available to him.  It is a process by which man’s personality is created organized and disciplined – which is the moving force behind socio - economic transformation of the society.

Most community leaders especially during the colonial times saw development as more of provision-colonial times saw  development as more of provision of schools health centers hospitals post offices hall,  churches mosques, good roads potable water electricity and telephone etc.   Ewuly (1996).  However in the post independence era, the development process came to put more emphasis on the development in the material conditions and living (of man) through production and productivity.

In spite all these development plans experimented in the past, Nigeria like other countries of the third world has continued to face two challenges of economic development.  The first challenge is the basic level need. To attain this need involved the problem of  harnessing the vast natural and human resources of  the country  so as to extend her national economic  muscle and thereby enable her to catch  up with  the rest of the civilized world in terms of living  standard.  (Okafor 1991)

The other challenge is the need to achieve qualitative economic   growth by attaining balance socio- economic development.  National development is balanced when it permeates all the social and geo-political strata of a nation and affects all sectors of the national economy.  The problem of economy development in Nigeria as in other developing countries is therefore not just that of getting the economy to run faster than the rest of the world’s economy, but to get the economy to run on both legs.  Nigeria economy has manifested symptoms of non-balanced economic development in various ways. This is evidence in the near total dependence on oil, non- diversification of the export    basket, the over emphasis on coerce (on –banking) to the determent of authentic (value added) manufacturing. It accounts for the litter to near total neglect of grass root development.

Fortunately Nigeria government has demonstrated unusual resolution and taken definite moves to   grapple the problem of non- balance development.  This  underscored by the various development projects like OFN- Operation Feed the Nation, the Agricultural  development project  (AOA)DFRRI, SAP (structural Agricultural program) which was designed primarily  to deal with fundamental economic problems generated  by years of fruitless effort at non- balance economic development.

While the policy component of SAP was relevant for this project was the impact of rural banking as it regards grassroots (economic development) through the establishment of community banks.  The  researcher wants to find out how far banking industry have contributed at  improving the economic situation of this country  - with particular interest in Unity Bank Plc, Abuja. A bank means an institution licensed to provide credit banking and other financial service to a designed “catchment” area   or community.

How Unity Bank Plc measured up to the basic terms in the definition of a bank?  Are they operating within the scope of functions of other banks?

ORGANOGRAMME OF UNITY BANK PLC, ABUJA

1.2       STATEMENT OF PROBLEM

Banks have been assessed as capable of unshaken the monoculture economy  of the  country by empowering the entire productive sector at the rural and urban levels therefore ensuring development across the    country.  Banks promote development  by providing effective banking services to the people - an instrument for inculcating proper banking habits  (saving and investment ) is for the urban and rural dwellers  to work towards increasing his/her per capita  income  and  therefore be able to contribute more effectively  toward the development of the area in which he/she lives.

When idea is conceived and placed on the drawing  board it appears rosy. But when it comes to practical implementation most of the bitterness and problem emerge.  

This study addresses the following problems.

1.                  Has  Unity Bank Plc, Abuja helped in economic development  of Nigeria?

2.                  If Unity Bank Plc measured up to the standard set for the banks by CBN?

3.                  The  essence of the introduction of the banking system.

4.                  The operational mechanism of collaterisation banks removed the issue of collaterisation of loan before any person can enjoy any so as to achieve the desired economic development .

1.3       PURPOSE OF THE STUDY

The purpose of this research work areas are as follows:

1.                  To find out the extent to which Unity Bank Plc has helped in the economic development of Nigeria

2.                  To know  if Unity Bank Plc, has measured up to the standard set for Banks by CBN

3.                  To know the essence of the introduction of the   banking system.

4.                  To find out the operational mechanism of collaterization bank removed the issue of collaterization of loans before any person can  enjoy any, so to achieve the desired economic   development

1.4       THE SCOPE OF THE STUDY

The scope of this research project boarders on  Unity Bank economic development  in Nigeria. Unity Bank Plc measurement of the standard  by the CBN essence of introducing banking     system and operational mechanism of collaterisation  bank removed so as to achieve the desired economic development.

1.5       RESEARCH QUESTIONS.

To solve the research  problem the investigator has asked the following question.

1.                  To what extent has Unity Bank Plc, Abuja helped in economic development

2.                  To what extent has Unity Bank Plc measured up to the  standard set for the banks by CBN?

3.                  What  is / are the essence of the introduction of banking system?

4.                  To what extent has the operational mechanism of collaterisation bank removed the issue of collaterisation of banks before any person can enjoy any so as to achieve the desire economic development?

1.6       RESEARCH HYPOTHESIS (NULL HYPOTHESIS)

H0.  There is no significant difference (p  < 0 . 05)between the mean perception of senior and junior staff of Unity Bank Plc with regards to the economic development  through community banks.

Ho. There   is no significant difference (p < 0.05) between the mean perception  of senior and junior staff of Unity Bank Plc with regard to whether the bank  measures up to the requirement or standard set by CBN.

Ho₃  There is no significant difference (p < 0.05) between the mean perception of senior and junior staff of Unity Bank Plc on the importance  / essence of community banking  system.

H0₄ There is no significant difference  (p < 0.05)  between  mean perception of senior and junior  staff of Unity Bank Plc with regards to how the banks deals with issues of colletarisation of loan.

1.7       THE SIGNIFICANCE OF THE STUDY

This study will be of immense benefit to urban and rural dwellers to sensitize them on the importance of  depositing their surplus  fund with the banks for safe keeping.  It is necessary to investigate and evaluate the functions for banks in their catchments areas.  This  will inform prospective customers of the service available at banks.

This study will be of immense help to small and medium scale  enterprises, business owners,   farmers etc. to invest their money and property on project  that would bring optimum  result.   It will also aid them if they want to borrow from banks.

To students researchers and those with curious and  inquiring minds, it will extend itself as a pedestal or substratum upon which expansionary and follow –up  study offering course on banking.  It will be added to the wealth of literature available for referencing.