Premium Essay

Capital Market and Manufacturing Sector Financing in Nigeria

In: Business and Management

Submitted By fifosky
Words 5321
Pages 22
Ewa, Efa Okoi

Department of Business Management
University of Calabar, Nigeria

This paper discusses mainly the role of the capital market in financing the manufacturing sector in Nigeria. The discussion centered on the state of the Nigerian manufacturers, background, challenges and the imperatives of the capital market meeting the financial and investment challenges of the sector in the face of recent economic reforms and increasing competition posed by globalization. The study sought to determine the extent to which the Nigerian capital market contributes to the development of manufacturing industries. An attempt was made to highlight government intervention in funding the sector and the reality of the country’s manufacturing sector. The study revealed that the Nigerian manufacturing sector has been on the decline owing mainly to government reliance on the oil industry, the decaying infrastructural facilities in the country and non-access to investment fund by local manufacturers. The study concluded that the capital market, despite the problems and challenges it may faced, is a veritable tool in the growth and development drive of the country’s manufacturing sector.

1. Introduction
The manufacturing sectors in any country of world rely on medium and long-term fund to carry out its productive activities. Equity capital alone is never adequate and external sources of funds are usually sought. Such needed funds are not available in the money market; The capital market is where such funds are sourced. Nigeria, like other economies of the world has her own capital market. The growth and development of the capital market in Nigeria can be traced to 1946 with the floating of N600,000 worth of government stocks. However, an organized market for the…...

Similar Documents

Premium Essay

Capital Market

...A PROJECT ON CAPITAL MARKET GUIDE CERTIFICATE It is hereby certified that the project report on “CAPITAL MARKET”, being submitted by Shelly jumba student of the degree of Master of Business Administration (3rd Sem) of CT Institute of Management and Information Technology, Jalandhar which affiliated to Punjab Technical University, Jalandhar is an original work carried out successfully under my guidance and supervision and that no part of this project has been submitted for any other degree/ diploma. The sincerely efforts put in during the course of investigation is hereby acknowledged. Project guide Miss Shivani jagneja Lect. CTIM& IT DECLARATION This project entitled Empirical Study on “CAPITAL MARKET” is submitted in partial fulfilment of the requirement for the award of degree of master of business administration of Punjab technical university, Jalandhar. .This research work has been done only for MBA only and none of this research work has been submitted for any other degree. The assistance and help during the execution of the project has been fully acknowledged. PREFACE The successful completion of this project was a unique experience for us because by visiting many place and interacting various person, I achieved a better knowledge about this project. The experience which I gained by doing this project was essential at this turning point of my carrier this project is being submitted which content detailed analysis of the research under taken by......

Words: 16886 - Pages: 68

Free Essay

Manufacturing Sector

...INDIAN MANUFACTURING: OVERVIEW AND PROSPECTS ........................................................................................................................ CONTENTS 1. 1.1 1.2 1.3 2. 2.1 2.2 3. INDIAN MANUFACTURING SECTOR: AN OVERVIEW ......................................................... 5 Role of manufacturing in the Indian economy................................................................... 5 The sub-sectors that stand out in India's manufacturing sector .................................... 6 Manufacturing sector's recent growth spurt: Clues from IIP.......................................... 7 TAPPING THE GLOBAL MARKET ........................................................................................... 9 India's growing manufacturing exports .............................................................................. 9 The main export markets: US, Western Europe, and the Middle East ............................ 12 INCREASING COMPETITIVENESS OF INDIAN MANUFACTURING .................................... 13 3.1 3.2 3.3 Sector has an edge in the global arena ............................................................................. 13 Encouraging research and fostering innovation .............................................................. 15 Government support for developing a skilled workforce ................................................ 17 4. CURRENT TRENDS IN INDIAN MANUFACTURING ............................................

Words: 1581 - Pages: 7

Premium Essay

Capital Market

...CONTEXT 1.0 Introduction Capital Market mainly refers to the Stock and Share market of the country. When banking system cannot totally meet up the need for funds to the market economy, capital market stands up to supplement it. Companies and the government can raise funds for long-term investments via the capital market. The capital market includes the stock market, the bond market, and the primary market. Securities trading on organized capital markets are monitored by the government; new issues are approved by authorities of financial supervision and monitored by participating banks. Thus, organized capital markets are able to guarantee sound investment opportunities. This paper reveals the various aspects of the Capital Market in Bangladesh. 1.1 Objectives Capital market, being an essential element of today’s economy, demands an intensive and special attention. The objective of this study is to look into every aspect of Bangladesh capital market and identify its various pros and cons along with some recommendations to overcome the existing problems. The specific objectives of this study are: To give an overall idea about the capital market-its structures, functions, importance, etc. To identify the current situations of our capital market of Bangladesh. To compare the relative conditions of Bangladesh capital market to other countries of the world. To sort out the problems associated with our capital market. To suggest some practicable solutions to these......

Words: 10549 - Pages: 43

Premium Essay

Term Paper on the Role of Lease Financing in the Capital Market Development

...TERM PAPER ON THE ROLE OF LEASE FINANCING IN THE CAPITAL MARKET DEVELOPMENT TERM PAPER ON “The Role Of Lease Financing In The Capital Market Development” Supervisor: - Mrs. Afsana Yesmin Lecturer Faculty of Business Studies Premier University Chittagong. Submitted by: - Priyanka Das ID# 0613111771 Program: BBA Faculty of Business Studies Major in Finance Premier University, Chittagong Faculty of Business Studies Submitted in partial fulfillment of the requirement for the Bachelor of Business Administration Submission Date: 28th November, 2011 Letter of Transmission Date: 28th November 2011 To The Supervisor Faculty of Business Studies Premier University, Chittagong. Subject: Submission of term paper Sir, It is indeed a great pleasure for me to be able to hand over the result of my hardship of the report on “the role of lease financing in the capital market development”. I take the opportunity to thank you very much for your kind cooperation, supervision and suggestion in preparing this report. I have enjoyed the whole program with great spirit and enthusiasm. I fervently hope that you will find this report worth reading. I hope you will accept my report. Yours sincerely, Priyanka Das ID: - 0613111771 Program:-BBA Major in Finance ACKNOWLEDGEMENT I have the pleasure to express my gratitude to the Almighty God, who has......

Words: 768 - Pages: 4

Premium Essay

Capital Market

...Capital market is one of the most important segments of the Indian financial system. It is the market available to the companies for meeting their requirements of the long-term funds. It refers to all the facilities and the institutional arrangements for borrowing and lending funds. In other words, it is concerned with the raising of money capital for purposes of making long-term investments. The market consists of a number of individuals and institutions (including the Government) that canalise the supply and demand for long -term capital and claims on it. The demand for long term capital comes predominantly from private sector manufacturing industries, agriculture sector, trade and the Government agencies. While, the supply of funds for the capital market comes largely from individual and corporate savings, banks, insurance companies, specialised financing agencies and the surplus of Governments. The Indian capital market is broadly divided into the gilt-edged market and the industrial securities market. ▪ The gilt-edged market refers to the market for Government and semi-government securities, backed by the Reserve Bank of India (RBI). Government securities are tradeable debt instruments issued by the Government for meeting its financial requirements. The term gilt-edged means 'of the best quality'. This is because the Government securities do not suffer from risk of default and are highly liquid (as they can be easily sold in the market at their current price). The......

Words: 1847 - Pages: 8

Premium Essay

Power Sector Reform and Nigeria Development

...The Effect of Nigeria Power Sector Reform on Private Sector Investment ONOWA SIMON OWOICHO BENUE STATE UNIVERSITY, MAKURDI Abstract Electricity generation, transmission, and distribution are a ubiquitous and integral part of any modern economy. Aside from providing households with all the conveniences of electric power, a modern and reliable electricity sector contributes to efficient overall economic production and plays an important role in determining Nigeria’s competitive advantage. But in addition to its role of providing a source of energy, the electricity sector also contributes to lifting overall Nigerian economic activity and employment through its capital investments in electricity infrastructure. This report assesses the economic impact of Nigerian power sector reform on private sector investment. The methodology used allowed us to calculate economic multipliers—rules of thumb that link new investment in the sector to overall economic activity. The economic multipliers are valuable for planning because they link each dollar of additional investment by the industry to a given dollar value of overall economic output, job creation, and tax revenues. Moreover, this report links the occupational requirements of these increases to capital spending—highlighting the number of workers and skills to put in place future electricity generation, transmission, and distribution capacity. 1 Introduction The availability of reliable Electric Power to the homes and......

Words: 4096 - Pages: 17

Free Essay

Capital Market on Manufacturing Sector

...DATES: * Certificates in Seamanship, Regional Maritime University Accra Ghana 2008 * Certificate in Health Safety and Environmental Management in Oil & Gas. 2008 * Proficiency Certificate in Nigeria Institute of Management (NIM) 2007 * Diploma Certificate in Computer Appreciation. 2007 * Bachelor’s Degree; B.Sc Industrial Chemistry – Abia State University, Uturu. 2005 * Senior Secondary School Certificate – Community Secondary School Ogbodu – Aba, Enugu State. 1997 * General Certificate in Education 1998 * First School Leaving Certificate - Primary School Ogbodu Aba. 1991 WORKING EXPERIENCE: ESTABLISHMENT: Federal University of Technology Yola. DESIGNATION: Corp Member Lecturer. 2007-2008. ESTABLISHMENT: Standard Chartered Bank Plc. DESIGNATION: Marketer. 2008 ESTABLISHMENT: Lagos School of Aviation DESIGNATION: Lecturer. 2008 – 2011 ESTABLISHMENT: Chivita Ltd DESIGNATION: Sales Executive. 2011 ESTABLISHMENT: Petromarine Control & Consultancy Services Ltd DESIGNATION: Laboratory Chemist. 2011 – 2013 PUBLICATIONS: Level of Polycyclic Aromatic Hydrocarbons (PAHs). A case study of smoked fish. Sold in Mushin Market Lagos. Bioaccumulation of Heavy Metals in flora & fauna Found in Bayelsa State. HOBBIES: Research, Teaching and Reading. REFEREES: REV. FR. MELITUS IDOGWU Tel No: 08181720558/......

Words: 317 - Pages: 2

Premium Essay

Global Recession, Oil Sector and Economic Growth in Nigeria

...Volume 01 Issue 06 GLOBAL RECESSION, OIL SECTOR AND ECONOMIC GROWTH IN NIGERIA. BY S. O. OLADIPO ( Department of Economics and Accounting Bells University of Technology, Ota. E-mail address: AND PROF. J. O. FABAYO Department of Economics, Obafemi Awolowo University, Ile-Ife ABSTRACT This study investigates global recession and the oil sector, based on its effects on economic growth in Nigeria. No doubt the global economy has been experiencing some disturbances. Major economies of the world have been affected and so has the major sectors of these economies especially the ones that has a direct bearing with international trade been affected. The oil sector particularly has been one of the hit. For a country like Nigeria whose international trade is majorly in oil, the effect has become an issue. Empirical analysis using the Ordinary Least Square (OLS) reveals that there was a negative relationship between GDP and oil produced (domestic consumption and export) which is significant at 5% lever of significance i.e. (P < 0.05). The result also showed that there exists decline in the oil sector due to the global recession despite all measures given by government to curb it effects. It was Jan 2012 recommended that the federal government needs to deregulate the sector for efficient performance, and also come up with more rigorous policies that will reduce this effects on the real sector most especially the oil sector whose contribute the largest portion......

Words: 5684 - Pages: 23

Premium Essay

Business Financing and the Capital Structure

...the best advice I could give with regards to raising capital for the business. The main sources for raising capital are through debt and equity. “Debt financing means borrowing money from an outside source with the promise of paying back the borrowed amount, plus the agreed-upon interest, at a later date.” (Palermo, 2014) One of the advantages of debt financing is that the lender does not receive on ownership share to the business because after the debt is paid, there are no more obligations to the lender. Therefore it preserves ownership. Debt financing can be done for small or large businesses and it comes through loans from commercial banks or through organizations like the SBA (Small Business Administration) loan programs. There are disadvantages to this type of financing especially for the businesses that don’t do well and still has the obligation to pay the loan. Instead of all the profits going back into the business, part of it will have to be used to repay the loan. It does not matter if the company is doing well or not, the debt will still have to be repaid monthly or whenever it is due. “Carrying too much debt is a problem because it increases the perceived risk associated with businesses, making them unattractive to investors and thus reducing their ability to raise additional capital in the future.” (Hillstrom, n.d.) Equity is another option my client can take when it comes to raising capital. Equity financing involves the sale of ownership interest......

Words: 1067 - Pages: 5

Premium Essay

Recent Banking Sector Reform in Nigeria–Implications for Employees

...By: Mr. Feyi Oluwaremi (B.Sc, MBA, FCA) Lecturer, Accounting Department Osun State University, Okuku Campus, Osun State. Nigeria, Africa CURRENT BANK CRISIS AND CBN’s INTERVENTIONS In June 2009, Nigerian Central Bank Governor Sanusi Lamido Sanusi took office. He certainly had an intuitive feeling about how deeply distressed his nation's banking sector was. Foreign risk management analysts had been issuing warnings about Nigerian banks and their toxic assets since January, 2009 and oil prices were down — always a harbinger of hard times coming for Africa's top oil producer. The current bank crisis emanated from greed and destructive capitalism of infinitesimal populace orchestrated by unguided bank reform of the then CBN Governor, Professor Charle Soludo. This position is succinctly narrated by the analysts and scholars as follows: According to Nigerian business journalist, Dayo Coker(2010): “It was simply greed and destructive capitalism.” He continued: “There was a chance to make millions and people seized it. The regulators failed the people.” Long before they failed the people, however, Nigeria's regulators inspired them with a plan to overhaul their convoluted banking system, and open Nigerian finance to the world. In 2005, then-Central Bank Governor Chukwuma Soludo whittled down Nigeria's 89 small-scale banks to a handy 25. The new banks born of Soludo's consolidation were bigger, broader in scope and had much more credit to lend —...

Words: 5336 - Pages: 22

Premium Essay

Erp in Manufacturing Sector

...ERP IN MANUFACTURING SECTOR Group :6 Anubhav Chaturvedi (15) Anirudh Mishra (36) Amol Singh (57) Rohit Patil (60) INTRODUCTION ERP systems have traditionally been used by capital-intensive industries such as manufacturing, Services etc. Manufacturing firms are facing new challenges and in order to stay competitive many manufacturing operations require to be regularly updated with the Information Technology solutions. The manufacturing sector is one of the main economic activities in most of the nations. The most important aspect to characterize IT adoption is the industry and its specific characteristics rather than the country the firms belong to. Different industries have different operating characteristics and environments, and the factors related to ERP use may differ accordingly. Given the complexity of manufacturing firms, we then decide which aspects of a firm influence the use of technological innovations. Most of the manufacturing companies rely on ERP software to manage the entire range of business activities from CRM, manufacturing inventory and processes, accounting software, manufacturing planning, purchasing, quality, and more. For implementing ERP in any manufacturing industry the research objectives revolve around the following parameters(Mainly cost and quality measurement) * To identify whether there is significant difference in performance measures like cost and quality in industries with well defined IT system and industries with not such......

Words: 2952 - Pages: 12

Premium Essay

Strengthening the Manufacturing Sector

...Strengthening the manufacturing sector | | For India to become a solid manufacturing hub, we need land for industrial development. | | | Consider the stakes. India, the second largest populous country and the fourth largest economy that accounts for 4.6 percent of the world's gross domestic product, had manufacturing registering only 16 per cent share of its GDP since the 1980s. Nothing could be more expedient than a national manufacturing policy (NMP) – approved recently by the Union cabinet – that targets hiking up the share to 25 per cent by 2022, hoping to build national investment and manufacturing zones (NIMZ) with state-of-the-art facilities. The bottomline would surely be the generation of 100 million jobs over 10 years. India is now one of the top 10 industrial nations of the world with a 1.5 per cent share in manufacturing value added (MVA), according to the International Yearbook of Industrial Statistics 2011 report. Ironically, in 2007, India’s exports were only 1 per cent of the world’s total despite its low labour costs and large population. With the US, Japan and China occupying the top three slots, India ranks 12th (according to Global Insight and the ‘Financial Times’) in the pecking order of manufacturing nations. That manufacturing – rightly considered as the main engine for economic growth and creation of wealth – suffered attention deficit for so long could both be an outcome of misplaced focus and systemic failure. It is more evident......

Words: 867 - Pages: 4

Premium Essay

Capital Market

...(Sale Act) was enacted in 2—6 and facilitates the sale of MPL. On 26 March 2014, the Australian Government accounted its intention to sell MPL by IPO. The main purpose of Medibank Private’s IPO is to raise capital for the corporation. The firm will raise a large amount of equity funds when the IPO occurs. Market Creation A major reason for Medibank Private to go public is that the management hopes that their shares will rise in value after the IPO, and normally it would be easier to raise debt funds after being listed as well. Employee Retention The other aspect is that the management might hope to retain key employees by providing share options as part of their benefits. Due to the value of shares increasing, these may come with restrictions that they may not be sold for between one and three years after the IPO. Improvement of liquidity Furthermore, the liquidity would be improved for investor enter and exit after IPO. Especially for short-term investors, such as the liquidity is important to plan out their exit strategy. Competitive advantages and Financing Opportunities The IPO enables a company to raise funds in order to increase its asset base. It gives Medibank Private competitive advantages to against other similarly sized companies in this industrial sector, such as (BUPA). Also, it would be easier to raise debt, and the cost is much lower than contracting debt to fund growth. Improvement of reputation With the public exposure provided by IPO, the......

Words: 296 - Pages: 2

Premium Essay

Working Capital Financing and Credit Appraisal

...I. EXECUTIVE SUMMARY The project brings out various aspects of working capital management and the means to get it financed from banks. It starts with explanation of the concept of working capital, description of working capital cycle, management and financing of working capital. This is supplemented by a brief explanation of the working capital financing of M/s Paras Organics Private Limited. It should be noted that business transactions are generally carried on credit with a number of days elapsing subsequent to the sale being affected for realization of sale proceeds. While part of the raw materials may be purchased on credit, the business would still need to pay its employees, meet manufacturing and selling expenses such as wages, power, suppliers, transportation and communication and the balance of its raw material purchases. Working capital refers to the source of financing required by business on a continual basis for meeting these needs. The faster a business expands, the more cash it will need for working capital investment. The cheapest and best sources of cash exist as working capital right within the business. Sound management of working capital will generate cash which will improve profits and reduce risks. The cost of providing credit to customers and holding inventories can represent substantial proportion of the total profits of a firm. The investment in raw materials, work-in-progress, finished goods and receivables often varies a great deal during the...

Words: 11598 - Pages: 47

Premium Essay

The Capital Market

...An overview of Bangladesh Capital Market: Fraudulent Practice An overview of Bangladesh Capital Market: Fraudulent Practice Prepared for Barrister M. Zillur Rahman Lecturer, Legal Environment of Business Institute of Business Administration (IBA) University of Dhaka Prepared by Ashraful Islam Dipankar Ghosh Roll: 18 Roll: 36 MBA 45E INSTITUTE OF BUSINESS ADMINISTRATION University of Dhaka Date: January 07, 2012 i An overview of Bangladesh Capital Market: Fraudulent Practice January 07, 2012 Barrister M. Zillur Rahman Lecturer Institute of Business Administration University of Dhaka Dear Sir: Subject: Submission of the term paper “An overview of Bangladesh Capital Market: Fraudulent Practice.” We are pleased to present you our term paper “An overview of Bangladesh Capital Market: Fraudulent Practice.” We have extensively enjoyed working on this topic. It has been a very interesting and informative experience for us. While working on this report we have learnt about capital market in Bangladesh. Due to the fraudulence practice in Bangladesh capital market several people has suffered a great loss. We believe this through study on the capital market of Bangladesh will help us immensely in our future life when we will involved more with our capital market. We hope our effort will meet the level of your expectations. Your guidelines and advice have been very effective and helped us a lot to complete our report. In case of any further query, please feel...

Words: 5713 - Pages: 23