Challenges of Foreign Banks in Nigeria Essay Example

is even left in the hands of the private sector through organised bodies as it is the case in the UK through the Financial Service Authority (FSA). The FSA regulates both prudential aspect and conducts of business.

It is funded by industry levy and governs by a board of overseers. This board of overseers are mostly people in the financial sector not necessarily in government Llewellyn (2000).

Conclusion

For any economy to measure to international standard there must be the presence of some foreign banks, the Nigerian economy has witnessed such presence. However, a number of these banks tends to vary from time to time and from region to region. The analysis of the research has brought out the challenges being faced by foreign banks in Nigeria.

Corruption and irregular government policies seem to be the major problem. In emerging economies like Nigeria, the government plays an active role as they are known to be the highest spenders.Over the years, various government policies have affected the operation of the banks. There is need for consistency in government regulation and approving system. Finally, the political climate must be conducive because it affects the economic climate. When the political system is stable, more foreign investors will be willing to come into the country ,moreover, this will lead to better technology, better competition and assist in sanitising the Nigerian financial sector .

Recommendation

The time has come to reap from the aggressive promotional measures which the recent government have embarked upon, in wooing the foreign investors into the country. This will help Nigeria to keep abreast of the latest occurrences the world over and reap the benefits there from, that is, the government has

come up with a roadmap for expansion of banks in Nigeria and incentives such as tax holidays, for foreign investors. (Nwandu 2005) Federal government should continue to put in place the needed infrastructural facilities to support potential investors.Less cumbersome bureaucratic procedures in government ministries or agencies will help in checking the problems that prospective investor would go through for them to have the correct information The researcher is also of the opinion that the foreign investors are not very keen in investing in the training or education of their employees from the onset.

They will rather tap from their already acquired skills. This idea will need to change; these banks will need to be interested in training and upgrading its staff. The government should also have to invest in the power of its citizensThe government of these countries should have the political will to implement its policies to the latter and should give the private sector the free hand to participate in the formulation and implementation of these polices with little interference from the government. Nigeria and most emerging economies are seen as corrupt economies and the foreign investor looks at the country with great suspicion.

It is therefore necessary to establish a system that is transparent, accountable and incorrupt. Corruption makes the system less efficient.It also causes distortion in the destination of the investment and in the nature of the activity to which the investment is directed. The researcher is also of the view that accountability is a major tool for fighting corruption and the following will help in reducing corruption: a free press; an independent judiciary; an inquiring and active parliament,; lively academic; active trade

union and active professional bodies . There should be checks and balances to ensure that the basic accountability necessary for economic growth is maintained.

Good economic policies make positive impact on investment flow in the capital market.Stability of good policies in essence, strengthens investor’s confidence, and stimulates participation in it. Indeed, good and stable policies encourage the return of flight capital. Policies aimed at reducing inflation to a tolerable level and the strengthening of local currency, amongst others, are beneficial as investors are usually concerned about high rate of inflation which reduces investment value, while depreciating local currency rate.

More Nigerians should invest in the economy to boost the confidence of foreign investors and instil confidence in the minds of alien entrepreneurs.

References

1. Agbor, M. B. (2000): “Fundamentals of Business Statistics’’ Bendona and Associate, Lagos. Ahmed, F, Arezki, R., and Nobert, F. , (2007): The composition of capital flow to South Africa; Journal on international Development vol 19 Iss2.
2. Ajibola, B., (1988): “Legal protection in Protection of Foreign Investment in Nigeria”. A paper Presented on Nigeria’s Investment Promotion Policies Giant Strides Vol. 2
3. Alicia Garcia H., and Danial Nana S., (2003): Determine and Impact of Financial sector FDI to Emerging Economies; A Home Country Perspective.
4. Aremu J. A (1997): CBN Research Department Seminar Paper No. 4
5. Belot T. J. and Weigel D. R (1992): “Programs in Industrial Countries to Promotion Foreign Direct Investment in Developing Countries” Foreign Investment Advisory Service Occasional paper 3.
6. Beran Allan and Estrin Saul(2000),The Determination of Foreign Direct Investment in Transition Economies, Working paper No 342
7. Blaxter L;Hughes,C and Tight,M;(2002):How to Resaerch,2nd Edition,Open University Press Buckingham,UK
8. Bryman A and Bell E (2003): Business Research
   

Methods, Oxford University Press, England.

A (1988): “The Historical Survey and Development of Foreign Investment Policies in Nigeria: 1960 – 1987” A paper presented on Nigeria, Investment Promotion Policies. Giant Stride Vol. 2