CONTENT:1. Meaning and examples of economic institution.
The role of economic institution in Nigeria’s economy.
SUB-TOPIC 1:MEANING AND EXAMPLES OF ECONOMIC INSTITUTIONS
DEFINITION OF ECONOMIC INSTITUTIONS
Economic institutions are agencies responsible for the organization of a society’s resources and services.
Examples of economic institutions:
THE NIGERIAN STOCK EXCHANGE ( NSE)
SECURITIES AND EXCHANGE COMMISSION ( SEC)
INSURANCE COMPANIES E.G LIFE INSURANCE,HEALTH INSURANCE.
NIGERIAN DEPOSIT INSURANCE COORPORATION ( NDIC)
MARKETING INSTITUTIONS ETC
Banks are economic institutions that receive, keep and lend money at interest. They are the pivot around which a nations economy revolves.
Types of banks:
The types of banks operated in Nigeria to meet both private and corporate organizations’ needs include:
Central bank of Nigeria- a non-profit organization for government transactions
Federal savings bank
Agricultural credit banks
Merchant bank- for merchants and large scale traders
Industrial development banks
Mortgage banks for small and medium scale industries.
NIGERIAN STOCK EXCHANGE
It is an organized and essential part of the capital market where investors buy and sell stocks, shares, debentures etc.
The NSE was established through the act of parliament in 1960 and was then called Lagos Stock Exchange until 1977. It is situated in Lagos with its branches in Port Harcourt and Abuja, Ibadan, Kaduna, Kano and Onitsha.
Insurance is a system of providing compensation for the effect of losses. It operates on the principle of risk pooling.
A provision made by an individual or establishment to cushion the effect of future losses. Life, automobile, health, and property can be insured and the companies involved in insurance include: Goldlink insurance company, Africa alliance insurance companies, Lion of Africa insurance, reinsurance corporation of Nigeria, industrial and general insurance (IGI), NICON insurance corporation etc.
TYPES OF INSURANCE
Whole life insurance
Cash in transit insurance
Motor vehicle insurance
Credit insurance etc
SECURITIES AND EXCHANGE COMMISSION (SEC)
This is an economic institution which oversees, regulates, monitors and controls the activities on the capital market. It was established in 1979 to replace the Capital Issue Commission formed in 1973 by the federal government. Its scope covers all public limited liability companies or private limited liability companies.
NIGERIAN DEPOSIT INSURANCE CORPORATION (NDIC)
This is an economic institution established to protect bank deposit in order to enhance healthy banking system in Nigeria.
It is empowered to regulate, supervise and advice the insured banks. It also operates on a mechanism that all commercial banks, merchant banks and other financial institution receiving deposits must insure their deposits with the NDIC.it conducts periodic examination of bank records and banks’ activities and protects the interests of depositors.
We also have marketing institution, farming institution , manufacturing institutions etc
Mention 5 types of insurance
Define the term insurance
Mention any 6 examples of economic institution
Enumerate 5 types of banks
What is the full meaning of these acronyms
SUB TOPIC 2:ROLES OF ECONOMIC INSTITUTIONS IN NIGERIA’S
Role Of Banks
Banks issue cheques – this helps to enhance trade and travel
Lending money to the government, firms and private individuals.
Safe keeping of valuables
Banks play the role of payment agents.
The central bank controls the flow of cash in circulation
Banks, especially commercial banks act as executor of will
Banks buy and sell shares and stock to their customers
Roles of insurance companies
Insurance is very vital in the economy of Nigeria because of the following roles it plays:
It provides an avenue for businesses to keep going, even after liabilities are incurred.
It improves productivity of workers through group insurance policy, where workers are fully assured of a secured future.
It encourages international trade
It makes money/ fund available for investment, which invariable helps in developing the country’s economy.
Insurance encourages savings
Life assurance certificate can be used as collaterals for bank loans.
Roles of Nigerian Stock Exchange
The NSEhelps companies, government and investors to mobilize funds for projects execution.
It serves as a market where people can invest their money in of companies’ shares i.e. financial market investment.
It acts to promote the transfer of shares.
It provides the platform for government to mobilize funds through bond selling or gilt – edge securities in the stock market.
It assists investors to buy or sell old securities.
It helps individuals to transfer securities easily
Provides job opportunities for stock brokers, computer operators etc
It monitors the activities of quoted companies
Assist investors in the identification of thriving and viable companies
Aids selling and buying of stock, shares and debentures
ROLES OF SECURITIES AND EXCHANGE COMMISSION (SEC)
Helps to determine the allotment of securities.
It functions to regulate time, prices and quantity of securities issued.
Promotion of capital market development.
It monitors the transactions on the stock exchange in order to ensure fair play.
e) Registration of securities and participants.
GENERAL ROLES OF ECONOMIC INSTITUTION
They assist in determining how political decisions are made.
They provide the platform for the exchange of goods and services.
They ensure the continuous circulating and security of money.
They dictate the level of a country’s economic development
Provision of employment opportunities
They play the role of professional advisers.
Enhancement of industrial development.
They encourage industrial growth through provision of working capital
Economic institutions earn the country foreign exchange
They promote cultural exchange.
They encourage savings needed to boost the level of investment.
They provide the needed securities for commercial activities through insurance services.
All but one of these are examples of economic institutions
Banks (b) insurance companies (c) World Health Organization (d) securities and exchange commission
An organized and essential part of the capital market where share are sold and bought is known as (a) corporal market (b) the Nigerian Stock Exchange market (c) central bank (d) monopolistic market.
The role of insurance companies include all but one of these
Wasteful and uncourteous spending of national wealth (b) encouragement of international trade (c) encouragement of saving (d) improved workers productivity.
The full meaning of NDIC is
National Directorate of Immediate Cash
Nigeria Drug Improvement Commission
Nigeria’s Deposit In Canada
Nigerian Deposit Insurance Corporation
The economic institution that helps to determine the allotment of securities and promote capital market development is the _________
NDIC (b) SEC (c) NNPC (d) Insurance companies
Explain the role of marketing institution in Nigeria’ economy.
In five(5) sentences, mention the import of our lesson on ‘economic institution in Nigeria’(why do think we need to know about economic institution in Nigeria?).
Look up the meaning of these terms from your dictionary and write out the meanings:Debenture, Investor, Shareholder, Jobber and Broker
READING ASSIGNMENT: Readpages 96&97of Basis Social Studies for Junior Senior SecondarySchools. By Anikpo et al.