Nigeria's financial system

The present work is divided into thirteen chapters. The first three chapters serve as an introduction to the subject proper by outlining the trends in the economy, 1960-1979: in Output and Prices (chapter one), the Structure and Size of the Nigerian Financial System (chapter two) and in Money and Banking Policies (chapter three). These three chap ters, in my view, are needed for a clear understanding of problems and issues that generate the growth and evolution of institutions which are discussed in subsequent chapters.

Chapter four on the Interest Rate Structure could be treated as a part of chapter three; I have made it a separate chapter because the empirical argument of that chapter is important in itself; it shows how deficient it is as a tool of monetary policy in our type of economy. Chapter five deals with the evolution, growth and structure of commer cial banking in Nigeria. It is a long chapter because it offers a concise history of commercial banking including an account of the history of indigenous banking which, as far as we are aware, is not available in that detail else. Merchant banking which is relatively new in Nigeria, is covered in chapter six.

For most Nigerian students, development banking conjures up an institution like the Nigerian Industrial Development Bank, established only in 1964. But the history of development banking in Nigeria goes back to the 1940s. Chapter seven provides the history and evolution of development banking and analyses the operations of the major institu tions: NIDB, NBCI, NNDC, NAB, etc.

Chapter eight groups savings type institutions under one head: insurance companies, savings banks, provident funds etc. Their con tribution is seen to be much less significant than in other countries but their potential for growth is promising. Chapter nine takes up the financial public sector. It is important also for students of public finance as it defines the role of the public sector not only as a mobiliser and as a user of funds but also in the management of the public debt in which the Treasury shares some responsibility with the Central Bank.

The Capital Market is covered in chapter ten which is concerned with the finance of the corporate sector. There are no comprehensive studies elsewhere of the capital market in Nigeria: this chapter therefore goes into the history and growth of the main institutions: the Stock Exchange, the Securities and Exchange Commission and the fixed interest securities market. In the analysis, the emphasis is on the possibilities for the growth of a secondary market in securities. Chapter eleven, on the other hand, deals with the problems of financing the non-corporate sector, particularly problems of financing agriculture (notably peasant agriculture), small-scale business and industry and housing, particularly residential housing.

Chapter twelve traces the evolution of the Central Bank, its relation [11:26 am, 03/05/2022] ?: ship with the Ministry of Finance, its functions and status as the Monetary Authority, I had to be as brief as possible in this chapter because I knew, even as I was writing this chapter, that the Central Bank was bringing out a book on its own history as part of its twentieth anniversary celebrations in June 1979. Finally, Chapter thirteen takes an I overview of what has been written, in the form of an epilogue. It looks forward to the future in the 1980s. The data have been organised to provide a series going back to 1970 and terminating, wherever possible, in 1979.

This book should appeal to a wide variety of interests; no other work offers at once a history of the major constituent elements of the financial system. There are monographs on individual sets of institutions but nowhere else, as far as I know, are all of them treated together as part of a system. The historian of the financial system will therefore find this volume a help to further research. Second, there is a unity of theme that runs through the volume. The institutions were set up ad hoc to serve particular needs; the approach in this volume is to highlight the values around which the institutions were established. The student of economics, banking, finance, the public sector-all will find in this volume materials and sections that should inspire each of them to further study. The policy maker will find in this handmaid: the analysis of the trends in the data would serve as a guide to an understanding of the developments over time, volume an invaluable particularly in a country that is changing as rapidly as Nigeria in the 1970s. The book will be found useful by teacher and student alike in the universities, polytechnics and colleges, and by the financial administrator and man ager in Government and business.

The subject of finance and money is ordinarily complicated. I have tried to gear the level of discourse to make the book as readable as possible by the non-specialist without losing the interest of the specialist. I have tried to simplify the technical aspects of the subject and to offer an analysis that can be readily understood by the general reader
[11:27 am, 03/05/2022] ?: The present work is divided into thirteen chapters. The first three chapters serve as an introduction to the subject proper by outlining the trends in the economy, 1960-1979: in Output and Prices (chapter one), the Structure and Size of the Nigerian Financial System (chapter two) and in Money and Banking Policies (chapter three). These three chap ters, in my view, are needed for a clear understanding of problems and issues that generate the growth and evolution of institutions which are discussed in subsequent chapters.