As in any other nation, the banking and financing system is a very important aspect when it comes to economic development. Before going into the subject, it is important to mention the fact that Nigeria is an emerging market and the banking system is a key factor towards a better life status.
The Central Bank of Nigeria
In the case of Nigeria, the main institution that controls the supply of the currency Nigerian naira is the Central Bank of Nigeria established in 1958 based on the CBN Act. The objectives of the Central Bank of Nigeria changed over time, but today due to the use of capitalization, the banking system has been improved and reclaimed its strength.
Further on, the recent improvements in the banking system are also the result of the increase in oil prices. It is known that Nigeria is a large oil trader of USA and by applying the right financial objectives the whole nation has something to win - but most importantly more chances towards a better life. The Central Bank of Nigeria enjoyed a great success during the last 2 years due to this trading agreement, as well as the Nigerian people.
Moreover, according to the results of the World Bank the Nigerian GDP almost doubled from 2005 until 2007, reaching $ 1.754 / capita in 2007. This is an important economic development achievement for an emerging market like Nigeria. Likewise, it is also a sign that Nigeria is effectively and efficiently using the available resources since it is the world's 12th largest petroleum producer.
Besides the petroleum industry, in Nigeria there is also a fast growing telecommunications market that competes at worldwide level with other important operators. In order to maximize the opportunities from the telecommunications sector, the Nigerian government is struggling to expand it to space communications since the nation has already its own space satellite.
The Best Nigerian Banks
Even if Nigeria is an emerging market, it offers a well-developed financial system contracting local and international financial institutions related to brokerage, insurance, investment but also financing.
In the past years, there were so many small banks available in Nigeria that these became vulnerable to fraud and other bank malpractices. Therefore, in order to provide more reliable financial services, the solution was to perform mergers. In this way, the number of banks available decreased, but the ones that remained had a better capitalization structure and were trustworthy. The current Nigerian banks are able to offer loans with longer terms as compared to before the mergers and this is an important aspect when it comes to financing the local projects.
Surprisingly or not, starting with 2006, the Nigerian financial sector enjoys success and worldwide recognition since many Nigerian banks have reached the list of the world's best 1000 banks. Having this in mind, the best Nigerian banks listed in this report are as follows:
- First Bank
- Zenith Bank
- Union Bank
- Guaranty Trust Bank
- Access Bank Plc
- Uniyed Bank for Africa
To sum up, from an economic and financial point of view Nigeria is rapidly approaching the middle income level and this will lead to a better living status and more investment projects through the nation.