Banking & Financial Sector: FROM FRAGMENTATION TO GLOBAL COMPETITIVENESS

By Chuka Okeagu (Finance & Money Market Correspondent)

Nigeria's financial sector has undergone repeated reform. The SAP-era liberalisation increased the number of banks dramatically, followed by distress and consolidation.

The banking-consolidation programme under the Obasanjo administration later produced stronger capitalised banks.

The CBN's history records the transformation from a highly controlled financial system to one using market-oriented monetary instruments, including the Open-Market Operations (OMO).

Nigeria now possesses banks capable of operating across Africa and a rapidly expanding fintech sector. Yet financial inclusion remains incomplete.

Bank credit to productive small businesses remains a challenge, while high interest rates can discourage investment. Going forward, the nation's financial system must therefore increasingly finance production rather than merely government borrowing and consumption. NNL.