Nigeria ranks 63rd worldwide and fifth in Africa in services' output. Low power and telecom density has crippled the growth of this sector.
Since undergoing severe distress in the mid-1990s, Nigeria's banking sector
has witnessed significant growth over the last few years as new banks enter the
financial market. Harsh monetary policies implemented by the Central Bank of
Nigeria to absorb excess Naira liquidity in the economy has made
life more
difficult for banks, some of whom engage in currency arbitrage (round-tripping)
activities that generally fall outside legal banking mechanisms.
Private
sector-led economic growth remains stymied by the high cost of doing business
in Nigeria, including the need to duplicate essential infrastructure, the
threat of crime and associated need for security counter measures, the lack of
effective due process, and nontransparent economic decisionmaking, especially
in government contracting.
As of 2007, 29% of Nigerians in urban areas did not
own bank accounts. While corrupt practices are endemic, they are generally less
flagrant than during military rule, and there are signs of improvement.
Meanwhile, since 1999 the Nigerian Stock Exchange has enjoyed strong
performance, although equity as a means to foster corporate growth remains
underutilized by Nigeria's private sector.