Balogun, Emmanuel Dele (2007): Banking sector reforms and the Nigerian economy: performance, pitfalls and future policy options.
Download (185kB) | Preview
This paper reviews the perspective of banking sector reforms since 1970 to date. It notes four eras of banking sector reforms in Nigeria, viz.: Pre-SAP (1970-85), the Post-SAP (1986-93), the Reforms Lethargy (1993-1998), Pre-Soludo (1999-2004) and Post-Soludo (2005-2006). Using both descriptive statistics and econometric methods, three sets of hypothesis were tested: firstly that each phase of reforms culminated in improved incentives; secondly that policy reforms which results in increased capitalization, exchange rate devaluation; interest rate restructuring and abolition of credit rationing may have had positive effects on real sector credit and thirdly that implicit incentives which accompany the reforms had salutary macroeconomic effects. The empirical results confirm that eras of pursuits of market reforms were characterized by improved incentives. However, these did not translate to increased credit purvey to the real sector. Also while growth was stifled in eras of control, the reforms era was associated with rise in inflationary pressures. Among the pitfalls of reforms identified by the study are faulty premise and wrong sequencing of reforms and a host of conflicts emanating from adopted theoretical models for reforms and above all, frequent reversals and/or non-sustainability of reforms. In concluding, the study notes the need to bolster reforms through the deliberate adoption of policies that would ensure convergence of domestic and international rates of return on financial markets investments.
|Item Type:||MPRA Paper|
|Institution:||University of Lagos, Nigeria, Department of Economics|
|Original Title:||Banking sector reforms and the Nigerian economy: performance, pitfalls and future policy options|
|Keywords:||Banking sector reforms; monetary policy; macroeconomic performance|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
|Depositing User:||Emmanuel Dele Balogun|
|Date Deposited:||03. Jul 2007|
|Last Modified:||07. Jan 2014 18:46|
Appleyard, D. R. and A. J. Field, JR, (1998). International Economics. © Irwin/McGraw-Hill Boston. Axel Leijonhufvud, 1968. On Keynesian Economics & the Economics of Keynes: A Study in Monetary Theory. Oxford University Press. ISBN 0-19-500948-7. Balogun, E. D. and M. F. Otu (1991); “Credit Policies and Agricultural Development in Nigeria”. CBN Economic and Financial Review, 29(2):pp. 138-155. Central Bank of Nigeria, Lagos, (1992). The Impact of Structural Adjustment Programme on Nigerian Agriculture and Rural Life. © 1992 CBN/NISER Central Bank of Nigeria, Lagos, (1993). Perspectives of Economic Policy Reforms in Nigeria. © 1993 CBN Chiber, R. and J. Wilton, (1986). “Macroeconomic Policies and Agricultural Performance in Developing Countries”. Finance & Development, 23(3):pp. 6-9. Jhinghan, M. L. (2003); Macroeconomic Theory, 11th Revised Edition. © M. L. Jhinghan, Delhi. Kates, Steven (1998). Say's Law and the Keynesian Revolution: How Macroeconomic Theory Lost its Way. Edward Elgard Publishing Limited. ISBN 978-1-85898-748-4. National Planning Commission (NPC), Nigeria (2004). The National Economic Empowerment and Development Strategy (NEEDS). © 2004, NPC, Nigeria. Nnanna, O. J. (2005); “Central Banking and Financial Sector Management in Nigeria: An Insider View” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 99-120. Ojo, J. A. T. (2005); “Central Banking and Financial Sector Management in Nigeria: An Outsider View” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 35-98. Omoruyi, S. E. (1991); “The Financial Sector in Africa: Overview and Reforms in Economic Adjustment Programmes. CBN Economic and Financial Review, 29(2):pp. 110-124. Ray, Anandarup, (1986). “Trade and Pricing Policies in World Agriculture”. Finance & Development, 23(3):pp. 2-5 Soludo, Charles C. (2007). “Macroeconomic, Monetary and Financial Sector Developments in Nigeria”. CBN website: www.cenbank.org. Tomori, S. (2005); “Macroeconomics and Monetary Policy: The Nigerian Experioence” in Fakiyesi, O. O. & S. O. Akano (Eds), Issues in Money, Finance and Economic Management in Nigeria (Essays in Honour of Professor Obasanmi Olakankpo), pp. 9-34. World Bank (1986). World Development Report. © 1986 World Bank, Washington.