Some of the world’s largest banks are active in other parts of Africa. But they are either not present in Nigeria or have minimal activity in the country.
Privately owned Nigerian banks hold 94% of Nigerian banking assets. Only one other country in the world – Israel – has a higher share of ownership by local banks. The share of banking assets is the most reliable way to measure market power and competitive position.
But these theories don’t hold water in Nigeria. It is Africa’s largest and most populous country. It has the second largest financial sector in sub-Saharan Africa. And with annual average GDP growth since independence above 4%, Nigeria is on par with the fastest growing African economies. Its per capita GDP growth has been ahead of all except Egypt. Overall, Nigeria offers attractive opportunities for foreign banks.
Common explanations for the superior performance of local firms focus on government’s support via subsidies, taxes and the like. Less attention has been paid to government policies in shaping market structure and creating a competitive environment that is conducive to developing competitive strength. This study demonstrates how such regulation enables Nigerian banks to dominate the market and arrest the growth of foreign banks.
A liberal approach towards foreign entry, combined with firm regulation of local banks, spurred healthy competition and created constant pressure for improvement. This suggests the industry has been sufficiently fragmented to prevent strong market players from reducing incentives for capacity development. This fragmentation created competitive pressure that forced the banks to upgrade capability in order to survive and succeed.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Two killed in the Netherlands as truck rolls into street partyMany others injured as police say they are trying to determine why vehicle careered down dyke
Read more »
‘I live with my grown-up children – what’s so wrong with that?’With her third child about to leave the nest, our writer asks why cohabiting with our adult offspring is so looked down upon by modern society
Read more »
Liberty says falling house prices will push borrowers to non-banksLiberty’s CEO says borrowers with higher loan-to-value ratios may be pushed to non-banks as banks tighten loan standards.
Read more »
‘I thought they were trying to kill me’: Britney Spears breaks silence on conservatorshipBritney Spears has shed light on the “pure abuse” she experienced over her 13-year-long conservatorship, which ended last November, in a 22-minute audio message to her fans. msmegwatson
Read more »
‘I thought they were trying to kill me’: Britney Spears breaks silence on conservatorshipSpears posted an audio message via YouTube, reportedly turning down a lucrative tell-all interview with Oprah. But it’s since mysteriously been taken down.
Read more »
‘I thought they were trying to kill me’: Britney Spears breaks silence on conservatorshipSpears posted an audio message via YouTube, reportedly turning down a lucrative tell-all interview with Oprah. But it’s since mysteriously been taken down.
Read more »