what are the causes of bank distress in nigeria from 1982-2005?
- fozioLv 61 decade agoFavorite Answer
The petroleum-rich Nigerian economy, long hobbled by political instability, corruption, and poor macroeconomic management, is undergoing substantial economic reform under the new civilian administration. Nigeria's former military rulers failed to diversify the economy away from overdependence on the capital-intensive oil sector, which provides 20% of GDP, 95% of foreign exchange earnings, and about 65% of budgetary revenues. The largely subsistence agricultural sector has not kept up with rapid population growth, and Nigeria, once a large net exporter of food, now must import food. In 2000, Nigeria is likely to receive a debt-restructuring deal with the Paris Club and a $1 billion loan from the IMF, both contingent on economic reforms.
Since undergoing severe distress in the mid-1990s, Nigeria's banking sector has witnessed significant growth over the last few years as new banks enter the financial market. Harsh monetary policies implemented by the Central Bank of Nigeria to absorb excess Naira liquidity in the economy has made life more difficult for banks, some of whom engage in currency arbitrage (round-tripping) activities that generally fall outside legal banking mechanisms
- 1 decade ago
the answer is simply fraud, corruption, inadequate of record keeping and economic instability.