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Periodical article | Leiden University catalogue | WorldCat |
Title: | Underdeveloping Nigeria through reregulation: will community banks survive? |
Author: | Seibel, Hans Dieter |
Year: | 1994 |
Periodical: | Internationales Afrikaforum |
Volume: | 30 |
Issue: | 2 |
Pages: | 191-196 |
Language: | English |
Geographic term: | Nigeria |
Subjects: | banking monetary policy economic policy financial policy |
Abstract: | Until 1986, the financial system of Nigeria was tightly regulated, with exchange and interest rates fixed by the government. In 1986, the government deregulated the financial system and introduced, in collaboration with the IMF and the World Bank, a structural adjustment programme (SAP). However, the government failed to keep its budget under control, and structural reforms were only half-heartedly carried out. In January 1994, the military government cancelled deregulation. The results of reregulation evident in February 1994 were disastrous. Hundreds of 'Bureaux de Change' were wiped out overnight, banks lost their hitherto highly profitable foreign exchange business, and resource mobilization dropped. The number of banks in distress goes up almost by the day. Only the community banks, which were excluded from foreign exchange transactions, seem to be exempt. Community banks are an institutional innovation which evolved during the deregulation period and represent the ultimate stage in linkage banking: self-help groups linked to banks through ownership. A case study of such a bank is included in the paper. Bibliogr. |