The Financial System in Nigeria
The Financial System in Nigeria: An Overview of Banking Sector Reforms
The Financial System in Nigeria: An Overview of Banking Sector Reforms E. J. Ofanson (Ph.D)1 O. M. Aigbokhaevbolo (Ph.D)2 G. O. Enabulu3
Abstract
The paper overviews the banking sector reforms within the framework of the Nigerian Financial System. A theoretical approach was adopted although empirical evidence was presented in some cases. It was clear that developments in the banking sub-sector of the Nigerian financial system have contributed to some extent in promoting economic growth and development in the country. However, the operations of some of these institutions were characterized by inefficiency and ineffectiveness. It was also found that the challenges facing the regulatory authorities in promoting a sound, stable and efficient banking system are enormous. Indeed, the adoption of financial sector reform as an element of the Structural Adjustment Programme (SAP) has to a considerable extent, helped to reduce or eliminate most of the institutional rigidities and administrative controls that had hindered the efficiency and effectiveness of the system, in achieving the nation’s growth and development objectives. In particular, the deregulation of the financial sector has stimulated competition and enhanced efficiency in resource allocation. Specifically some of the major achievements include: increase in the number of operating bank branches; improved service delivery and products innovation; improved approach to monetary management; improved payments system. Given that the challenges facing the regulatory authorities in promoting a sound, stable and efficient financial system are enormous it requires the strengthening of each institution’s regulatory framework and capacity as well as maintaining effective coordination of various regulatory efforts to avoid conflict of roles and duplication of efforts.
Introduction
Financial systems, all over the world, play fundamental roles in the
The Financial System in Nigeria: An Overview of Banking Sector Reforms E. J. Ofanson (Ph.D)1 O. M. Aigbokhaevbolo (Ph.D)2 G. O. Enabulu3
Abstract
The paper overviews the banking sector reforms within the framework of the Nigerian Financial System. A theoretical approach was adopted although empirical evidence was presented in some cases. It was clear that developments in the banking sub-sector of the Nigerian financial system have contributed to some extent in promoting economic growth and development in the country. However, the operations of some of these institutions were characterized by inefficiency and ineffectiveness. It was also found that the challenges facing the regulatory authorities in promoting a sound, stable and efficient banking system are enormous. Indeed, the adoption of financial sector reform as an element of the Structural Adjustment Programme (SAP) has to a considerable extent, helped to reduce or eliminate most of the institutional rigidities and administrative controls that had hindered the efficiency and effectiveness of the system, in achieving the nation’s growth and development objectives. In particular, the deregulation of the financial sector has stimulated competition and enhanced efficiency in resource allocation. Specifically some of the major achievements include: increase in the number of operating bank branches; improved service delivery and products innovation; improved approach to monetary management; improved payments system. Given that the challenges facing the regulatory authorities in promoting a sound, stable and efficient financial system are enormous it requires the strengthening of each institution’s regulatory framework and capacity as well as maintaining effective coordination of various regulatory efforts to avoid conflict of roles and duplication of efforts.
Introduction
Financial systems, all over the world, play fundamental roles in the
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