(a) Describe five ways by which commercial banks aid international trade (b) State and explain five functions of the Nigerian Export Promotion Council

Answer Details

(a) Ways commercial banks aid international trade

• Provision of foreign exchange: Banks buy and sell foreign currencies, enabling importers to pay foreign suppliers and exporters to receive payment in usable currency.
• Documentary letters of credit: A bank guarantees payment to the exporter on presentation of the shipping documents, giving both buyer and seller confidence to trade.
• Bills of exchange and acceptance: Banks accept, discount and collect bills of exchange, allowing exporters to obtain immediate cash and giving importers time to pay.
• Transfer of funds: Through telegraphic and electronic transfers, banks move money quickly and safely between countries to settle international debts.
• Provision of trade information and status enquiries: Banks supply information on the creditworthiness of overseas customers and on market conditions abroad, reducing the risk of trading with strangers.

(b) Functions of the Nigerian Export Promotion Council (NEPC)

The NEPC is the government agency established to promote the development and diversification of non-oil exports.

• Promotion of non-oil exports: It encourages the production and export of non-oil products in order to diversify the country's export base and earn more foreign exchange.
• Provision of information and advice: It supplies exporters with information on foreign markets, prices, buyers and export procedures.
• Organising trade fairs and missions: It arranges international trade fairs, exhibitions and trade missions to showcase Nigerian products and find buyers abroad.
• Training of exporters: It conducts seminars, workshops and training programmes to build the capacity and competence of exporters.
• Administering export incentives: It administers export grants, incentives and schemes that reduce the cost and risk of exporting for Nigerian firms.