IMPACT OF TAX REVENUE ON ECONOMIC DEVELOPMENT IN NIGERIA

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study

Tax revenue is one of the major sources of government income and an important instrument of fiscal policy. Through taxation, governments mobilise financial resources required to provide public services, construct infrastructure, maintain security, support education and healthcare, and implement programmes intended to improve the welfare of citizens. In developing economies such as Nigeria, where the demand for public infrastructure and social services remains substantial, the ability of government to generate and utilise tax revenue effectively is particularly important.

Economic development is a broad concept that goes beyond an increase in the total value of goods and services produced within a country. While economic growth is commonly measured by changes in gross domestic product (GDP), economic development also considers improvements in living standards, employment opportunities, access to education and healthcare, infrastructure, income distribution and the general welfare of the population. Consequently, an increase in government revenue or GDP does not automatically mean that citizens are experiencing meaningful improvements in their quality of life. The extent to which public resources are translated into productive investment and accessible social services is equally important.

Tax revenue refers to the compulsory payments collected by government from individuals, businesses and other taxable entities under applicable laws. Unlike loans, taxes generally do not create a direct repayment obligation for the government. They provide a source of public finance that can support recurrent expenditure and long-term development programmes. The Organisation for Economic Co-operation and Development, the African Union Commission and the African Tax Administration Forum (OECD/AUC/ATAF, 2025) explain that tax revenue represents an important component of government revenue and assess its contribution to national economies using the tax-to-GDP ratio. This ratio measures tax revenue relative to the size of an economy and provides an indication of the government's capacity to mobilise domestic resources.

In Nigeria, taxation has become increasingly important as governments seek to reduce excessive dependence on revenue sources that may fluctuate considerably, particularly crude oil. Although oil revenue has historically contributed significantly to public finance, changes in international oil prices, production levels and global energy conditions can affect government income. A broader and more effective tax system can help provide a more stable source of revenue, support fiscal planning and reduce vulnerability to external economic shocks.

Nigeria's tax collection performance, however, has historically presented challenges. According to OECD/AUC/ATAF (2025), Nigeria's tax-to-GDP ratio increased from 7.9% in 2022 to 8.2% in 2023. The corresponding average for the 38 African countries covered in the report was 16.1%. The figures indicate that Nigeria's tax revenue relative to the size of its economy remained below the reported African average during the period. The comparison also suggests that there may be opportunities to strengthen domestic revenue mobilisation through improved tax administration, broader compliance and more effective management of the tax system.

Several types of taxes contribute to public revenue in Nigeria. These include company income tax, personal income tax, value-added tax, capital gains tax, withholding tax, petroleum-related taxes and applicable customs and excise duties. Each tax category has different implications for government revenue, business activity, household income and consumption. Company income tax, for example, provides revenue from taxable corporate profits, while personal income tax contributes to public finance through the taxation of eligible individual earnings. Value-added tax is associated with taxable consumption and transactions, while customs and excise duties apply to specified imports and goods under the relevant legal framework.

The relative contribution of these taxes can influence the government's ability to finance development programmes. OECD/AUC/ATAF (2025) reported that corporate income tax accounted for the largest share of Nigeria's tax revenue in 2023, at 44%, while value-added taxes contributed 19%. These figures demonstrate the importance of examining both the overall level of tax revenue and the contributions of individual tax categories. They also highlight the need to consider whether revenue mobilisation is sufficiently diversified to support sustainable public finance.

The relationship between taxation and economic development can be understood through the government's ability to convert collected revenue into productive public expenditure. Revenue generated from taxes may finance roads, bridges, electricity infrastructure, schools, hospitals, water supply, agricultural development, security and other public goods. Such investments can reduce the cost of doing business, improve workers' productivity, expand access to essential services and encourage private-sector investment. For example, improved road networks can reduce transportation costs for farmers and traders, while better electricity supply can help businesses operate more efficiently. Similarly, investments in education and healthcare can strengthen human capital and improve the long-term productive capacity of the economy.

Tax revenue can also support employment creation and poverty reduction when it is allocated to effective public programmes. Government spending on infrastructure may generate direct employment during construction and create additional economic opportunities for suppliers, transport operators and small businesses. Investments in education and healthcare can improve citizens' capabilities and increase their opportunities to participate in productive economic activities. However, these outcomes depend on the quality of public expenditure, the effectiveness of project implementation and the extent to which the benefits reach the intended beneficiaries.

Despite these potential benefits, taxation can also impose costs on households and businesses. Excessive or poorly designed tax burdens may reduce disposable income, increase the cost of production, discourage investment or encourage informal economic activities. Multiple taxation, complicated compliance procedures and uncertainty about tax obligations may create additional difficulties for small businesses. For this reason, the objective of tax policy should not simply be to collect more revenue, but to establish a fair, efficient and predictable system that can mobilise adequate resources without unnecessarily discouraging productive economic activities.

The effectiveness of tax revenue in promoting economic development also depends on the efficiency of tax administration. Tax evasion, tax avoidance that is contrary to applicable law, weak enforcement, inaccurate records and inadequate institutional capacity can reduce the revenue available to government. Where taxpayers have limited confidence in public institutions or believe that revenue is not being used responsibly, voluntary compliance may also be weakened. Transparent administration, appropriate use of technology, taxpayer education, fair enforcement and effective public accountability can therefore help improve compliance and strengthen public confidence in the tax system.

Recent empirical studies have examined the relationship between tax revenue and economic growth in Nigeria, although their findings are not entirely uniform. Akintola et al. (2022) investigated the effect of tax revenue on economic development using Nigerian time-series data. Their study examined company income tax, petroleum profit tax, value-added tax, and customs and excise duties in relation to GDP. The authors reported a significant combined relationship between the selected tax revenue variables and GDP, while the estimated effects of individual components differed in statistical significance. Their findings indicate the importance of examining individual tax categories rather than assuming that all taxes contribute equally to economic outcomes.

Osamor et al. (2023) also investigated tax revenue and economic growth in Nigeria using quarterly data covering 2011–2020. The study examined petroleum profit tax, company income tax, value-added tax, and customs and excise duties. Its findings indicated positive but statistically insignificant effects of the selected tax components on economic growth within the model used. The authors recommended stronger tax audits and measures to reduce tax evasion and avoidance. The difference between these findings and those reported by Akintola et al. (2022) demonstrates that the estimated relationship between taxation and economic performance may depend on the study period, variables, data and analytical methods employed.

More recent evidence also provides insight into the wider meaning of economic development. Olayinka et al. (2025) examined the relationship between tax revenue and sustainable economic development in Nigeria over the period 2015–2024. Their study considered company income tax, capital gains tax, value-added tax and withholding tax in relation to GDP, per capita income and the Human Development Index. The authors reported positive and significant effects of the selected tax components on GDP and per capita income, but statistically insignificant effects on the Human Development Index. This distinction is important because it suggests that improvements in economic output and average income do not necessarily translate into measurable improvements in broader human development indicators over the same period.

Nigeria's tax policy environment has also undergone significant changes. The federal government's tax reform framework introduced the Tax Acts of 2025, including the Nigeria Tax Act, 2025, and the Nigeria Tax Administration Act, 2025. According to the Federal Ministry of Finance (2026), the new framework took effect from 1 January 2026 under the applicable commencement provisions. The reforms form part of efforts to improve tax administration, clarify obligations, strengthen compliance and modernise the country's revenue system. Their longer-term contribution to economic development will depend on implementation, institutional capacity, compliance behaviour and the effective use of revenue collected.

The available evidence therefore indicates that tax revenue is potentially important to Nigeria's economic development, but its contribution cannot be assessed solely by examining how much government collects. It is also necessary to consider the relationship between different tax categories and economic indicators, as well as the role of public expenditure and institutional effectiveness. A government may increase revenue without achieving corresponding improvements in citizens' welfare if resources are poorly allocated, development projects are delayed or public funds are mismanaged.

Against this background, the present study focuses on the impact of tax revenue on economic development in Nigeria. It seeks to examine the relationship between selected tax revenue components and indicators of economic performance and development. The study will consider GDP, per capita income and, where reliable and comparable data are available, selected human development indicators. By examining these relationships, the study is expected to contribute to a clearer understanding of the extent to which tax revenue can support sustainable economic development in Nigeria.

1.2 Statement of the Problem

Economic development remains a major policy concern in Nigeria. Despite the country's natural resources, entrepreneurial potential and large domestic market, many citizens continue to face challenges associated with unemployment, poverty, inadequate infrastructure and uneven access to essential social services. Governments require adequate and reliable financial resources to address these problems through public investment and social programmes. Tax revenue is therefore an important potential source of funding for national development.

However, the capacity of taxation to support development depends on the government's ability to collect revenue efficiently, distribute the tax burden fairly and utilise public funds productively. Where tax collection is weakened by non-compliance, inadequate administrative capacity, poor record-keeping or a narrow effective tax base, the revenue available for public investment may be insufficient to meet development needs. At the same time, excessive compliance costs and poorly coordinated tax practices can impose additional burdens on businesses and households.

The issue is not simply whether Nigeria collects tax revenue, but whether the revenue generated contributes meaningfully to economic development. Increased tax receipts may improve the government's capacity to finance infrastructure and social services, but the actual outcome depends on the effectiveness of public expenditure and the broader economic environment. For example, additional revenue may have limited developmental impact if it is absorbed by inefficient spending, administrative waste or projects that do not adequately address public needs.

Previous empirical studies have produced differing findings concerning the relationship between tax revenue and economic growth in Nigeria. Akintola et al. (2022) reported a significant combined effect of selected tax revenue components on GDP, while Osamor et al. (2023) found that the selected tax components had positive but statistically insignificant effects on economic growth during their study period. Olayinka et al. (2025) further reported that tax revenue components had significant positive relationships with GDP and per capita income, but statistically insignificant effects on the Human Development Index. These findings suggest that the relationship between tax revenue and development may differ according to the indicator examined, the period covered and the method of analysis.

A further concern is that economic growth and economic development are not identical. GDP may increase without corresponding improvements in employment, income distribution, healthcare, education or living standards. Consequently, a study that examines only GDP may provide an incomplete understanding of the developmental implications of tax revenue. There is a need to consider appropriate economic and human development indicators where the available data permit meaningful analysis.

In addition, Nigeria's evolving tax policy framework makes it important to understand how revenue mobilisation relates to broader development objectives. The implementation of the Tax Acts of 2025 from January 2026 creates a changing institutional context for tax administration and compliance. Although the long-term effects of these reforms cannot yet be conclusively established, they reinforce the importance of effective tax administration, transparency and the productive use of public revenue.

The central problem addressed by this study is the need to establish the impact of tax revenue on economic development in Nigeria. Specifically, the study will investigate the relationship between selected tax revenue components and relevant indicators of economic development, with attention to the distinction between economic growth and broader improvements in human welfare. The findings are expected to provide evidence that may assist policymakers, revenue authorities, researchers and other stakeholders in understanding how tax revenue can be mobilised and utilised to support sustainable national development.

1.3 Aim and Objectives of the Study

1.3.1 Aim of the Study

The main aim of this study is to examine the impact of tax revenue on economic development in Nigeria.

1.3.2 Specific Objectives

The specific objectives are to:

1. Examine the impact of company income tax revenue on economic development in Nigeria.

2. Determine the impact of value-added tax revenue on economic development in Nigeria.

3. Assess the impact of personal income tax revenue on economic development in Nigeria.

4. Investigate the impact of petroleum-related tax revenue on economic development in Nigeria.

5. Examine the relationship between aggregate tax revenue and per capita income in Nigeria.

6. Determine the relationship between tax revenue and selected human development indicators in Nigeria, subject to the availability of reliable data.

1.4 Research Questions

The study will be guided by the following research questions:

1. What impact does company income tax revenue have on economic development in Nigeria?

2. How does value-added tax revenue affect economic development in Nigeria?

3. What impact does personal income tax revenue have on economic development in Nigeria?

4. How does petroleum-related tax revenue affect economic development in Nigeria?

5. What relationship exists between aggregate tax revenue and per capita income in Nigeria?

6. What relationship exists between tax revenue and selected human development indicators in Nigeria?

1.5 Research Hypotheses

The following null hypotheses will guide the statistical analysis of the study:

H₀₁: Company income tax revenue has no statistically significant impact on economic development in Nigeria.

H₀₂: Value-added tax revenue has no statistically significant impact on economic development in Nigeria.

H₀₃: Personal income tax revenue has no statistically significant impact on economic development in Nigeria.

H₀₄: Petroleum-related tax revenue has no statistically significant impact on economic development in Nigeria.

H₀₅: Aggregate tax revenue has no statistically significant relationship with per capita income in Nigeria.

H₀₆: Tax revenue has no statistically significant relationship with selected human development indicators in Nigeria.

These hypotheses will be tested at the 5% level of significance, subject to the selected research design, the availability of data and the suitability of the statistical techniques employed.

1.6 Significance of the Study

The study is expected to be useful to government institutions, tax authorities, policymakers, researchers, students, businesses and the general public.

1.6.1 Government and Policymakers

The findings may assist policymakers in understanding the relationship between tax revenue and economic development. The study may provide evidence to guide decisions concerning revenue mobilisation, tax policy design, public expenditure priorities and strategies for reducing dependence on volatile revenue sources. It may also highlight the importance of linking revenue generation with measurable improvements in citizens' welfare.

1.6.2 Federal and State Tax Authorities

The study may be useful to tax administration institutions responsible for assessing, collecting and enforcing applicable tax obligations. The findings may help identify the importance of improving taxpayer education, strengthening compliance mechanisms, reducing unlawful evasion and making tax administration more transparent and efficient.

1.6.3 Economic Planners and Development Agencies

Economic planners and development agencies may use the findings to better understand the relationship between domestic revenue mobilisation and development indicators. The study may contribute to discussions about how public resources can be allocated to infrastructure, education, healthcare, agriculture, employment programmes and other productive activities.

1.6.4 Businesses and Investors

The study may help businesses and investors understand the relationship between taxation, public revenue and the wider economic environment. Effective and predictable tax administration can support planning, while productive public investment can improve infrastructure and the conditions under which businesses operate. The study may also encourage discussions about balancing revenue needs with the need to maintain a supportive environment for private-sector activity.

1.6.5 Researchers and Students

The study will contribute to the literature on taxation, public finance and economic development in Nigeria. It may serve as a reference for students and researchers undertaking further studies in accounting, economics, finance, public administration and related disciplines. It may also provide a foundation for subsequent research examining specific tax categories or development indicators.

1.6.6 The General Public

The study may improve public understanding of the role of taxation in financing public services and development programmes. By highlighting the connection between revenue mobilisation, public expenditure and welfare outcomes, it may encourage informed discussion about tax compliance, public accountability and the responsible use of government resources.

1.7 Scope of the Study

The study will examine the impact of tax revenue on economic development in Nigeria.

Content scope: The study will focus on selected tax revenue components, including company income tax, value-added tax, personal income tax and petroleum-related tax revenue. Aggregate tax revenue may also be examined. The dependent variable, economic development, will be assessed using suitable indicators such as gross domestic product, per capita income and selected human development indicators, depending on data availability and the final analytical framework.

Geographical scope: The study will cover Nigeria at the national level. It will rely on national-level secondary data rather than data from a single state or local government area.

Time scope: The period of analysis will be determined by the availability, consistency and comparability of data obtained from relevant official sources. A period such as 2010–2024 may be considered for a historical analysis, provided that sufficiently complete data are available for the selected variables. The final period should be specified in the research methodology and applied consistently across the data series.

Data scope: The study will primarily use secondary data from relevant institutions, including the Central Bank of Nigeria, the National Bureau of Statistics, the Nigeria Revenue Service and the World Bank. Other credible official publications may be consulted where necessary.

The conclusions will be limited by the coverage and quality of the data and the statistical methods used. The study will distinguish between evidence of statistical association and evidence of causation.

1.8 Limitations of the Study

The study may encounter several limitations.

First, some tax revenue and development data may be reported using different accounting periods, definitions or measurement methods. This may require careful harmonisation before analysis.

Second, economic development is multidimensional. Although GDP and per capita income are useful indicators, they cannot independently capture every aspect of social welfare, income distribution, environmental sustainability or access to essential services. The availability of consistent human development data may also limit the range of indicators that can be examined.

Third, Nigeria's economic performance is influenced by several factors beyond tax revenue. These include oil prices, inflation, exchange-rate movements, government expenditure, public debt, investment, trade, population growth and political conditions. Failure to account for relevant factors may affect the interpretation of estimated relationships.

Fourth, changes in tax policy and administrative arrangements may influence the comparability of data over time. The transition to the Tax Acts of 2025 from January 2026 is an example of an institutional change that may affect how tax data are classified or reported. The implications of such changes will need to be considered when selecting the study period.

To reduce these limitations, the researcher will prioritise credible official sources, use consistent definitions, document any adjustments made to the data and apply appropriate statistical methods. The interpretation of results will also acknowledge the limitations of the selected indicators and the possibility that other economic factors may influence the observed relationships.

1.9 Operational Definition of Terms

Tax revenue: Compulsory payments collected by government from individuals, businesses and other taxable entities under applicable tax laws.

Company income tax: Tax imposed on taxable profits of companies in accordance with the relevant tax legislation.

Value-added tax (VAT): A consumption-related tax applied to taxable supplies of goods and services under the applicable legal framework.

Personal income tax: Tax imposed on the taxable income of individuals under the relevant tax legislation.

Petroleum-related tax revenue: Revenue derived from applicable taxes associated with petroleum-sector activities, as defined under the tax laws relevant to the study period.

Aggregate tax revenue: The total tax revenue collected from the selected tax categories or the broader tax system, depending on the definition adopted for the study.

Economic growth: An increase in the volume of goods and services produced in an economy over a specified period, commonly measured using real gross domestic product.

Economic development: A broader process of improving economic opportunities, productive capacity, living standards, infrastructure, access to essential services and human welfare.

Gross domestic product (GDP): The total monetary value of final goods and services produced within a country's geographical boundaries during a specified period.

Per capita income: An average income measure calculated by dividing a defined income or output measure by the population. The precise measure used in the study will be specified in the methodology.

Human Development Index (HDI): A composite indicator of human development that considers health, education and standard of living through the methodology established by the United Nations Development Programme.

Tax compliance: The extent to which taxpayers meet their applicable tax registration, filing, reporting and payment obligations.

Tax administration: The institutional and operational processes involved in taxpayer registration, assessment, collection, enforcement, taxpayer services and the management of tax obligations.

1.10 Organisation of the Study

The study will be organised into five chapters.

Chapter One: Introduction. This chapter presents the background to the study, statement of the problem, aim and objectives, research questions, research hypotheses, significance, scope, limitations and operational definitions.

Chapter Two: Literature Review. This chapter will review the conceptual, theoretical and empirical literature relating to tax revenue and economic development. It will also discuss the relevant theoretical framework and identify the research gap.

Chapter Three: Research Methodology. This chapter will explain the research design, sources of secondary data, study period, variables and their measurements, model specification, data analysis techniques and procedures for evaluating the reliability of the results.

Chapter Four: Data Presentation, Analysis and Discussion. This chapter will present and analyse the collected secondary data, report the results of the statistical tests and discuss the findings in relation to the research questions, hypotheses and existing literature.

Chapter Five: Summary, Conclusion and Recommendations. This chapter will summarise the findings, draw conclusions, provide recommendations for improving tax revenue mobilisation and its contribution to economic development, and suggest areas for further research.

REFERENCES

Akintola, S. K., Omotola, A. A., Oyinbodunmi, B. M., & Akinyemi, E. K. (2022). Effect of tax revenues on the economic development of Nigeria. Journal of Economics, Management and Trade, 28(4), 47–61. https://doi.org/10.9734/jemt/2022/v28i430404

Federal Ministry of Finance. (2026, June 18). Federal government issues transition guidelines for Tax Acts 2025. https://finance.gov.ng/ministry/federal-government-issues-transition-guidelines-for-tax-acts-2025/

Organisation for Economic Co-operation and Development, African Union Commission, & African Tax Administration Forum. (2025). Revenue statistics in Africa 2025. OECD Publishing. https://doi.org/10.1787/8d3bf3af-en

Osamor, I., Omoregbee, G., Ajasa-Adeoye, F., & Olumuyiwa-Loko, J. (2023). Tax revenue and economic growth: Empirical evidence from Nigeria. Journal of Economics and Behavioral Studies, 15(1[J]), 15–26. https://doi.org/10.22610/jebs.v15i1(J).3355

Olayinka, O. H., Phebean, A. R., & Chris, M. Y. (2025). Tax revenue and sustainable economic development in Nigeria (2015–2024). Kashere Journal of Accounting and Finance, 5(2), 27–37. https://kajaf.com.ng/index.php/kajaf/article/view/72

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THE EFFECT OF LABOUR UNION ON THE ECONOMIC DEVELOPMENT

THE EFFECT OF LABOUR UNION ON THE ECONOMIC DEVELOPMENT

(A CASE STUDY OF NIGERIA LABOUR CONGRESS)

ABSTRACT

The main purpose of this study is to examine the Effect of Labour Union on the Economic Development on Nigeria Labour Congress. To this end the project is divided into five chapters. Chapter once introduce the topic to highlight the importance and objectives of this study and delineate the scope of the study and historical background of the study area. Chapter two deals with the background, concept of the study, defines labour union, highlight the effect of labour union in an organization and labour management conflict. It also gives a review of the failure and achievement of labour in Nigeria, settlement of labour and made references. Chapter three discusses the design of the study, research population, sample size and techniques, sources of data collection and research instrument used. It also shows the method of data analysis and the distribution and collection of questionnaire. Chapter four treats data presentation, analysis, testing of hypothesis and summary of finding. Finally chapter five consider some facts and finally ends with the conclusion, recommendation, bibliography and appendix.

RELEVANCE OF ENTREPRENEURSHIP TO THE ECONOMICS DEVELOPMENT OF NIGERIA

 RELEVANCE OF ENTREPRENEURSHIP TO THE ECONOMICS DEVELOPMENT OF NIGERIA

Entrepreneurship’s role for the development and well-being of society has also been recognized by academic researchers and policymakers (Bosma, Wennekers, & Amorós, 2011). Entrepreneurship has assumed a proactive approach to tackle the ever-changing business environment of the 21st century, building sustainable development in the country, supporting the economic growth of countries, creating new job opportunities for young graduates, and societal well-being. Keeping in view its significance, developed countries and under-developed countries have shifted their focus towards entrepreneurship (Bosma, 2011; GEM, 2013; Volkmann, 2009).

 

Petrin (1994) discusses the importance of seeing the link between individual entrepreneurial aspirations and societal goals because all genuine entrepreneurship is social, with the entrepreneur aiming to provide a service or good that can capture a share of the market or even create a new market. This argument can be made even more forcefully within the context of entrepreneurship and rural development where the creation of rural enterprises can create employment, reduce poverty and reduce the need for social support. Hence, the motivations of the people who start new businesses should not be unusually highly individualistic or focused solely on self-fulfillment (Benjamin-Schonberger, 2010).

 

The motivation for entrepreneurs in starting new businesses should transcend the improvement of their standard of living, the presence of an individual personal plan and the attainment of higher social status and respect, and rather drive at helping the general society.

 

On its part, ethnic identification of sociological enterprise tries to explain entrepreneurship as a process where the individual’s sociological back-ground is one of the decisive “push” factors in becoming an entrepreneur (Reynolds, 1991). This is because individuals draw their values from the ethnic group they are associated with and are mostly influenced by such groups e.g. family, co-workers or broader groups such as occupational groups among whom they draw inspirations and experience.

 

Young entrepreneurs can achieve their individual or collective visions through concrete actions.

 

Entrepreneurship has the potential to create youth employment and integrate the youth into the economic mainstream while addressing some of the socio-psychological and delinquency problems that arise from joblessness (Chigunta, 2002; Curtain, 2001). Youth enterprises provide marginalized youth with a sense of ‘meaning’ and ‘belonging’, shape their identity and encourage others to treat and accept them as equal members of society and also promotes innovation and resilience as they are encouraged to find new solutions, ideas and methods of doing things through experience-based learning (OECD, 2001; White & Kenyon, 2000 cited in Chigunta, 2002). This requires the youth to be resourceful, have initiative, imagination, enthusiasm, dash, ambition, energy, vitality, boldness and courage (Schnurr & Newing, 1997:2 cited in Chigunta, 2002) in order to fight global youth unemployment. It is estimated that youth unemployment constitutes 47 percent (88 Million) of global unemployment, making the youth vulnerable to social exclusion (ILO, 2005a).

 

Globally, self-employment is an important source of employment, livelihoods and economic dynamism (OECD, 2001). Effective youth entrepreneurship education prepares young people to be responsible, enterprising individuals who become entrepreneurial thinkers and contribute to economic development and sustainable communities (Chigunta, 2002). One important thing is that young entrepreneurs gain a sense of accomplishment that comes from knowing that they did something useful with little or no supervision (Johanson & Vahlne, 2003) and is the greatest reason to raise a young entrepreneur.

 

REFERENCES

Esomonu B.N (1998). The state of entrepreneurship education in Nigeria.

Fajana, S. (2000) Functioning of the Nigeria labor market, Lagos labonfin and company.

Idehen M, (2008). Infrastructure is the biggest challenge to business in Nigeria.

Igbo, B. C (2006). Understanding Entrepreneur Business. Nsukka, Fulladu Publishers.

Kanothi RN, (2009). The dynamics of entrepreneurship in ICT: case of mobilize phones downstream service in Kenya

Kuratka DF (2009). Introduction of Entrepreneurship. 8th ed. Australia: South Western.

Morphy R (2008). Nigeria: youth unemployment, poverty –a time bomb for country. Leadership, Wednesday, 27, August.

National planning commission (2005). National Economic Empowerment and Development Strategy (NEEDS). Reprinted by CBN.

Okafor E.E (2011) youth unemployment and implications for security and stability of democracy in Nigeria.

Onyebueke and Ochongo, (2002). Entrepreneurship and economic development Enugu: precision printers and publishers.

Ossai, (2008).” Entrepreneurs and Entrepreneurship in Nigeria” Lagos: Gold Land Business Co. Ltd.

Rami L. Adeleke (2010): Using Entrepreneurship development and corporate social responsibility as strategies for conflict resolution in the Niger-Delta region in Nigeria (A paper presented at the 43th Annual SPE International Conference in Tinupa-Calabar)

Salami CGE (2011) Entrepreneurship interventionism and challenges of youth unemployment in Nigeria. Global journal of management and business research volume II Issues 7 version 10 July 2011.

Schumpeter, P (1994). Tough times Never last but tough people do.

Youth unemployment in Nigeria: Some implication for the third Millennium. Global J. Soc. Sci. 2 (1): 21-26.

 

Adeyemo, S.A. (2003). Studies of the effects of aptitude, instructional leadership styles and  learning; Environment on student’s achievement in physics. Doctoral Thesis, University of Lagos; Nigeria

Das, R.C. (2006). Science Teaching in Schools, Sterling publishers private limited, New Delhi-110020.

Federal Ministry of Education (FME, 1981): National Policy on Education (revised), Lagos, Federal Government press.

Kilby, P. (1971). Hunting the Heffalump in P KILBY ed. Entrepreneurship and Economic  Development. pp:1-40. New York: The free press

Hisrich, Richard D. & Peters, Michael P., (2002). Entrepreneurship. Boston:McGraw-Hill/Irwin.

Kilby, P. (1971). Hunting the Heffalump in P KILBY ed. Entrepreneurship and Economic Development. pp:1-40. New York: The free press.

Olagunju, Y.A. (2004). Entrepreneurship Small Scale Business Enterprises Development in Nigeria. Ibadan University Press Plc.

Rae, D. (2007). Entrepreneurship; from Opportunity to Action. New York: Palgrave, Macmillan.

 

THE IMPACT OF BANKING TO THE ECONOMIC DEVELOPMENT OF NIGERIA

THE IMPACT OF BANKING TO THE ECONOMIC DEVELOPMENT OF NIGERIA

A CASE STUDY OF UNITED BANK FOR AFRICA (UBA) NASARAWA BRANCH

ABSTRACT

The study is designed to examine the impact of banking on the economic development of Nigeria. Concept of this project work will give an appraisal of the strategies that will serve as an improvement to the economic sector. The various chapter of this will pave way for the researcher to understand whether banking has a positive impact in Nigeria economic development. The complexity of the banking activities coupled with challenging nature of the program require for banking reforms in the area of capital investment evaluation of credit facilities and other industrials development. The efficiency and Effectiveness with present technological advancement will encourage positive output towards accomplishment buoyant economic.

CHAPTER ONE

1.0 INTRODUCTION
The history of Banking in Nigeria started back in 1892 with Eider Dempster company which engage itself in the business of moving coins around the country, later that year African banking cooperation was found which provide services to elder Dempster company failure of the bank led to the formation of bank of British West African, but between 1929 – 1951 lead the establishment of indigenous bank and even more today where a lot of them have collapsed as result of mis-management, under capitalization among the factors.

Bank have crucial role to play in a nation’s quest economic development. They serve as major institutional mechanism for mobilizing resources from surplus unit of the economy and channeling these to deficit unit through credit expansion. According to Usman (1997) Bank occupy center stage in the effect of accelerating of both local and foreign resources for investment purpose”. In any economy, the financial system is the hub of productive activity, as it perform the vital of financial intermediation. It is the primary provider of payment services and fulcrum of monetary policy implementation.

As cited by Dicko (2005) the neo-classical production theory identified capital and labour among others as critical factor determining growth in output. But in developing countries with abundance of cheap labour, capital is very scare and expensive. The financial institution by providing the much need capital for output the growth fill an important gap in the development process”.

It could also be emphasized that there have been significant contribution by past economist such as Devidson (1994) and Mishy (1975), following the seminal work of Melemon (1973) and Shaw (1973). They emphasis that financial system does matter in facilitating economic development under a liberalized and reformed environment. Dikleo (2005) is of the opinion that the concept of development and growth has universally transformed to a wider phenomenon. Some 50 years ago it focused on economic variable only.

Today it encompasses indicator (HDI) have replaced the tradition per capital income’ as indicators of development”. The main thrust of his project is to identify whether the financial system and the banking system in particular has been able to social economic roles of equitable wealth creation.

1.1 BACKGROUND OF THE STUDY
This project centers on the role of Banking and Finance in the development of Nigeria economy with particular reference to united bank of African (UBA) Nasarawa Branch.

The project will give a highlight on the development of banking an Nigeria and laid down emphasis on the different kinds of Banking and their various function of the effect the economy.

Nigeria has a vital growing market in African and has a recent years acquire important role in the world economy with a population of 120 billion (appropriately) people which endorsed with the fast and largely untapped natural resource with petroleum being the major foreign exchange earner. Nigeria banking system evolved it increasing assisted in resources mobilization for economic development prior to the establishment of the central bank of Nigeria in march 1958 operate as rudimentary banking system tailored to need of British government, had been as existence in the Nigeria.

Banking has contributed immensely to the Nigeria economy, it has provided services of employment opportunities and services to the massesd on the businessman, client and the government from to time. There are various bank that can be classified or mention e.g. Central Bank, Universal Bank Merchant bank and Mortgage bank etc. the universal bank can be identified by the services they render such as saving bill of document and act as an agent to the customer, granting of loans, import and export financing. The universal bank institution in Nigeria can be classified into two major groups. These are purely indigenous bank owned 100% and minority foreign interest.

However, prospect is therefore aimed at high the impact of the universal bank in the economic development of our great nation (Nigeria) by appraising their performance.

The introduction will not be complete without recognizing the apex of the banking industry that is the central bank of Nigeria (CBN) which is charged the responsibility of maintaining the monetary standard and sound financial structure with objective of creating approximately environment for economic growth and development.

1.2 STATEMENT OF RESEARCH PROBLEMS
The impact of bank services especially universal bank cannot be over emphasize. The main reason for this research work is to discover the problem militating against their operation, these problem have to be consider with the aim of giving relevant suggestion for improvement, the problem there among other things included.

Bank include those of poor record keeping, poor account system, embezzlement, fraudulent practice, poor organization planning control and loan portfolio management, problem of competition, the market for banking service is not homogenous its differentiation by preferential to the characterized of client or customer and by the traditional to which banking houses are accustomed.

1.3 OBJECTIVE OF THE STUDY
The objective of this study are:
i. To investigate the manner through which united bank for Africa plc, Nasarawa branch make credit facilities available to their customers.

ii. To find out the response of customer to various credit facilities and their disposal.

iii. To explore other means of financial assistance available to industries if any. It seek to discuss the role impact and implication of the policies and strategies of the government and stages of government and the Central Bank of Nigeria (CBN).

1.4 RESEARCH QUESTION
This is done to enable the researcher to gather information about his finding and to enable him solve the problems which his is faced with and this will be done through:

1. How does the management of commercial bank strike on effective administration of the bank, profitability and liquidity activities?
2. What are the serious consequence of a long term illiquidity problem.

4. What motivated you to open the account tick the appropriate answer

5. Have you ever had a transaction with united bank for Africa plc Nasarawa apart from those mentioned in question?

1.5 RESEARCH HYPOTHESIS
The following hypothesis is becomes relevant in this study.
1. H0: does the nature of Universal Banking in Nigeria affect the economy development

H1: The nature of the universal Banking in Nigeria does not affect the economy development.
2. H0: The banking service does not have a role to play in the economy development

H1: The banking service have a role to play in the economy development
3. H0: Does banking sector been able to develop the economy in Nasarawa state.

H1: Banking sector has been able to develop the economy in Nasarawa state play in the economic development?

1.6 SIGNIFICANCE OF THE STUDY
The research is significant to business and to Universal bank, the government and any person intending to invest in Universal bank to also help investor both in public and private sector of the economy. To specific roles played by Universal bank in the development of economic which may include bank facilities and consultancy among others. It may enable the general public to realize the role and importance of universal bank toward economic development. The study will also enable utilize polytechnic who may want to know the role of banks.

1.7 SCOPE OF THE STUDY
The scope of the study is to look into impact of the universal bank in an economy as well as the way universal bank in Nigeria carry on their business in respect of development. It will however look at their agricultural financial scheme. This project goes further to look into problem facing universal bank and suggestion ways of improvement, the history of universal bank from 18-92-2000 will be looked into.

1.8 DEFINITION OF TERMS
Bank: A bank is a financial institution owned by the shareholder, the public or the government. These money and other valuable thing are kept. They give loans and overdraft to their client and perform other related universal activities to them.

Banking Services: The banking act of 1969 define banking or banking business as “The business of receiving monies from outside source as deposit irrespective of the payment of interest and granting a money loan and acceptance of credit or the purchase or bill and cheque. The purchase and sale of securities for account or other measuring of the obligation to require claims in respect of loan prior to their maturity or the assumption of guaranties and other warrantee for others.

Ceiling of Credit: This is the limit beyond which bank are not allowed to exceed in their lending policy usually given by central bank of Nigeria.

Customer: Account to legal decision by Lord Daley on great western Railway versus London and countey Bank in (1901) defined a customer as any person who as some sort of any account either deposit or current account or some relation with a banker”. Some of the required to be customer must be a major (not an intact or minor) not an insane person and he or she must have been bared by any court of law.

Overdraft: These are usually terms facilities design to improve export working capital as well as reduced problem.

Capital: Refers to money raised to start business or money invested in business.
Saving: Refers to money ledged or kept within a bank for safety purpose and interest is calculated and payable to the customers.
Bank Note: Refers to a price of paper money with value printed on it.
Negotiable of Bill: This is meant that bank purchase an outward bill for collection drawn by export or importer abroad such purchase would be made before the bill or remitted. Abroad for collection.
Letter of Credit: A bank at the instance of foreign buyer can authorized a Nigeria bank through an oversea bank to the importer have complaint of inadequate fund to finance the export to the oversea budget.
Loan syndication: It is a system whereby some one or more banking (financial institution) jointly arranged a loan for a client for a specific project.

Bank Distress: This occurs when a bank is unable to meet up with or honour its current maturity financial obligation as they fall due for payment. This is also called technological insolvency and it donate only lack of liquidity.

Debt Factoring: This involves turning over the responsibilities for collecting a for debt to a specialized institution. It is an outright sole of debt to a financial company from cash to be realized for any immediate use if could be with or without resources.

Collateral Security: These are pledge or guarantee made or shown to the banks to secure a loan from the bank as supplement to some more marketable asset which include building, plant machinery, motor vehicle, when customer failed to redeem this pledge.

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