The Financial System in Nigeria

6376 WordsNov 28, 201226 Pages
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…show more content…
It is against this background, that besides the introduction other parts of the paper are structured as follows. Next to the introduction, the paper takes a look at the structure and development of the Nigerian financial system before explaining the role of the financial system in the Nigerian economy. Next to this is the section that addresses the history of banking reforms in Nigeria and the nature of the reforms. The last part concludes the paper after a critical look at development implications of banking sector reforms. The Structure and Development of the Nigerian Financial System A financial system is a conglomerate of institutions, markets, instruments and operators that interact to provide such financial services as resource mobilization and allocation, financial intermediation and facilitation of foreign exchange transactions. The Nigerian financial system can be categorized into 2 AAU JMS Vol. 1, No. 1, December 2010. The Financial System in Nigeria: An Overview of Banking Sector Reforms formal (money and capital market institutions) and informal (local money lenders, the thrifts and savings associations and so on) groups. In general the Nigerian financial system comprises the regulatory/supervisory authorities, banks and non-bank financial institutions. By the end of 2006, the system comprised Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), the Securities and Exchange Commission (SEC), the
Open Document