THE ON-GOING BANKING SECTOR REFORM ON THE NIGERIAN ECONOMY



In this paper, we have examined the probable impact of the on-going banking sector reform on the Nigerian economy. In the process, we drew attention to the challenges facing operators in the banking industry that need to be addressed for the industry to make desired contributions to the orderly growth of the economy. These challenges encompass those of unethical and unprofessional behaviour, poor corporate governance practices, weak capital base, and over-dependence on public sector deposits.


From the analysis, it is clear that the consolidation programme will impact positively on the economy for a number of reasons. First, the development is expected to have long-term beneficial effects on the level of employment considering that it will facilitate enhanced production in diverse sectors of the economy. The reform programme will also redefine the nature of competition in the banking industry such that each institution will have no choice but to assign priority to its capacity to deliver superior value to its clients, since this is what will ultimately make the difference between losers and winners. By denying banks access to public sector deposits, the reform will make it imperative for them to shift focus to those market segments that were largely unbanked and untapped hitherto. Furthermore, it is envisaged that the consolidation programme will have salutary effects on corporate governance practices in the industry.

In concluding this discussion, it is important to reiterate that the realization of these outcomes would depend on the effective implementation of the programme. In particular, it would depend on how the banks that have embraced mergers and acquisition handle the post integration challenges that will face them. Where these issues are not properly handled, the anticipated synergy may become elusive.

BIBLIOGRAPHY
Central Bank of Nigeria, Annual Report and Statement of Accounts, (various issues)
Nigeria Deposit Insurance Corporation, Annual Report and Statement of Accounts, (various issued)
Mckinnon, R. I. (1973), Money and Capital in Economic Development
Washington, D.C.: The Brookings Institution.
Oboh, G. A. T. (2005), Selected Essays On Contemporary Issues In The Nigerian Banking System. Ibadan: University Press Plc.
Share on Google Plus

Declaimer - MARTINS LIBRARY

The publications and/or documents on this website are provided for general information purposes only. Your use of any of these sample documents is subjected to your own decision NB: Join our Social Media Network on Google Plus | Facebook | Twitter | Linkedin

READ RECENT UPDATES HERE