Theory question 106
Foreign TradeCommerce 2 (answer any five questions)
(a) Describe five ways by which commercial banks aid international trade.
(b) State and explain five functions of the Nigerian Export Promotion Council.
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(a) Any five, described: issue letters of credit and documentary credits that guarantee payment to exporters; foreign exchange services – buying and selling foreign currencies; discounting and collecting bills of exchange; transferring money abroad (telegraphic and mail transfers, bank drafts); giving loans and advances to exporters and importers; providing status reports/trade references on foreign buyers; giving advice and information on foreign markets and regulations; acting as confirming houses and processing import/export documents (e.g. Form M).
(b) Any five, explained: promoting the development and diversification of Nigerian exports, especially non-oil exports; finding and providing information on export markets; organising and taking part in international trade fairs and exhibitions; administering export incentives (e.g. export expansion grant, duty drawback); advising government on export policy; training and advising exporters on standards, packaging and procedures; registering exporters; encouraging local production of exportable goods.
Describe how each bank service helps importers or exporters.