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ABOUT THE SPEAKER ALEX ALFRED O. ANEDO DEGREES ACQUIRED: N.C.E; BA.ED, M.A, PhD (African Culture & Civilization), DPM. (Chinese Culture) & M.A (Chinese Culture & Anthropology) In View LECTURER: Nnamdi Azikiwe University, Awka-Nigeria STUDENT: Xiamen University, P.R.C. Major states and cities where importers come from: 1. Anambra (Onitsha & Nnewi) 2. Abia (Aba) 3. Lagos (Lagos) NIGERIAN STORY FORMER BRITISH COLONY- INDEPENDENT IN 1960, OCTOBER IST. HAD UNDERGONE TURBULENT TIMES IN THE PAST AS A RESULT OF MILITARY CUES NOW A DEMOCRATIC NATION UNDER PRESIDENTIAL SYSTEM OF GOVERNMENT SINCE MAY 29TH , 1999 HAS 6 REGIONS, 36 STATES AND FEDERAL CAPITAL (ABUJA) NIGERIAN LANGUAGES OVER 600 LANGUAGE/CULTURAL GROUPS ALL NIGERIAN CULTURES ARE UNIQUE AND RECOGNIZED. HOWEVER, ONLY THREE MAJOR LANGUAGES: IGBO, HAUSA & YORUBA ARE RECOGNIZED ALONG ENGLISH THE MAJOR LANGUAGE GROUPS, IGBO(EAST), HAUSA(NORTH) & YORUBA(WEST). NIGERIAN ECONOMY AMONG THE RICH NATIONS IN AFRICA LARGEST PRODUCER OF PETROLEUM IN AFRICA & SIXTH IN THE WORLD HAS FERTILE LANDS PRODUCING TIMBER, PALM OIL, COCOA, RICE, CASSAVA, YAM & MANY OTHERS APART FROM ATLANTIC, HAS MANY RIVERS HENCE SEA FOODS NIGERIAN MARKETS • THESE PRODUCTS AND OTHERS ARE SOURCES FOR BIG MARKETS IN NIGERIA • THEREFORE EXPORTERS & IMPORTERS ABOUND IN VARIOUS CITIES SUCH AS ONITSHA, NNEWI, ABA (all in eastern part) and LAGOS in the West • HOWEVER, THESE IMPORTERS & EXPORTERS COULD NOT CARRY OUT THEIR LEGAL BUSINESSES ALONE WITHOUT BANKS B. THE LOCAL BANKS IN NIGERIA WERE NOT VERY EFFICIENT AND ALSO THEIR CAPACITY WAS LOW. SO, THE GOVERNMENT HAD TO DEPEND A LOT ON THE FOREIGN BANKS It has been seen as a paradox that despite the size of the economy, the country’s reserves are still deposited in foreign Banks due to the low capacity of the local Banks THROUGH FINANCIAL INTERMEDIATION, BANKS ARE SUPPOSED TO FACILITATE CAPITAL FORMATION AND PROMOTE ECONOMIC GROWTH BY OPERATING IN A SAFE AND SOUND MANNER. Weak corporate governance evidenced by high turn over in the Board and management staff, inaccurate reporting and non-compliance with regulatory requirements, late or non-publication of annual accounts that obviates the impact of market discipli ne in ensuring bank soundness; In the past, some financial institutions showed glaring inability to maintain an efficient flow of funds within the economic system. In as much as the minimum capital base requirement for banks was N2 billion, a lot of Banks still depended on deposits from the public sector. Many banks appeared to have abandoned their essential intermediation role of mobilizing savings and inculcating banking habit at the household and micro enterprise levels. Although the distribution among banks of public funds was not uniform, there were some banks whose dependency ratios were in excess of fifty percent. The implications were that the resource base of such banks became weak and volatile, rendering their operations highly vulnerable to the swings in government revenue, arising from the uncertainties of the international oil market. THE SHARP PRACTICES OF SOME BANKS TOGETHER WITH THE UNSOUNDNESS OF OTHERS LED TO A WIDE SPREAD OF FINANCIAL SECTOR DISTRESS AND LOSSES TO DEPOSITORS. Gross insider abuses, resulting in huge non-performing insider related credits; insolvency, as evidenced by negative capital adequacy ratios and shareholders funds that had been completely eroded by operating losses. THE PROBLEMS CONTINUED C. NIGERIA HAD BEEN SUFFERING FROM A WEAK CORPORATE GOVERNANCE AND INSOLVENCY FOR A LONG TIME. SO THE GOVERNMENT FAILED TO PROVIDE A SOUND BANKING SYSTEM. D. MOST OF THE BANKS IN THE COUNTRY DEPENDED UPON THE PUBLIC SECTOR DEPOSITS WHICH WAS LOWERING THEIR CAPITAL BASE. E. THE PUBLIC FUNDS HAD NOT BEEN DISTRIBUTED EQUALLY AMONG ALL THE BANKS. BANKING SECTOR REFORMS IN NIGERIA On Tuesday, 6th of July 2004, the new Governor of the Central Bank of Nigeria (CBN), Professor Charles C. Soludo made pronouncements on Banking sector reforms. . The first phase of the reforms is designed to ensure a diversified, strong and reliable banking sector, which will ensure the safety of depositors money, play active developmental roles in the Nigerian Economy and become competent and competitive players both in the African and global financial systems, while the second phase will involve encouraging the emergence of regional and specialized banks. SOME KEY ELEMENTS OF THE REFORMS INCLUDE THE FOLLOWING: 1. Requirement that the minimum capitalization for banks should be raised to a minimum of N25billion (approx $250million) from N2billion (approx $15million) with full compliance before the end of December 2005. Only banks that meet this requirement can hold public sector deposits and participate in the Dutch Auction System of buying and selling foreign exchange Consolidation of banking institutions through mergers and acquisition Phased withdrawal of public sector funds from banks. Adoption of a risk focused, and a rule based regulatory framework. Adoption of zero tolerance in the regulatory framework. The automation process for reporting of returns. Establishment of a hotline, confidential internet address for all Nigerians wishing to share any confidential information with the Governor of the CBN on the operations of any bank or the financial system. Strict enforcement for the contingency planning framework for systemic banking distress. Work towards the establishment of an Assets Management Company as an important element o f distress solution. Promotion and enforcement of dormant laws, especially those relating to the issuance of dud cheques, and the laws relating to the vicarious liabilities of the Board members of banks in cases of failings by the bank. Revision and updating of relevant laws and drafting of new ones to the effective operation of the banking system. Closer collaboration with the Economic and Financial Crimes Commission (EFCC) in the establishment of the Financial Intelligence Unit, and enforcement of the anti-money laundering and other economic crime measures. Greater transparency and accountability will be the hallmark of the system CONSOLIDATION OPTION The CBN has recognized that all over the world and given the internationalization of finance, size has become an important ingredient for success in the globalised world. The last few years have witnessed the creation of the world’s banking group through mergers and acquisitions. Flowing from this, the CBN has stipulated that the only legal modes of consolidation allowed are mergers and outright acquisition/takeovers. A mere group arrangement is not acceptable for the purpose of meeting the minimum capital base. This means that all banks that have other banks as subsidiaries or have common ownership are encouraged to merge. THE INCENTIVES The CBN has provided the following incentives for the Banks that consolidate or are able to achieve the required minimum capital base by 31 December 2005. Authorization to deal in foreign exchange Permission to take public sector deposits and recommendation to the fiscal authorities for the collection of public sector revenue Prospects of managing part of Nigeria’s external reserves, subject to prevailing guidelines. Tax incentives in the areas of capital allowances, company income tax and stamp duties. Reduction in transaction costs. Provision of team of experts to provide technical assistance to the Banks. Another very important incentive the CBN has provided is Amnesty For Past Misreporting . Banks are encouraged to be open in their negotiations by placing the actual value of their assets on table. Sanctions will not be imposed for any previous misreporting detected in the course of consolidation. However, if any of the parties to the consolidation is found after the consolidation exercise to have presented false or misleading information to the other parties and or the regulatory authorities, such party will bear the full legal and regulatory consequences of such misbehavior. IMPACT OF REFORM: Several banks were able to increase their capital base through this reform. By merging some banks the government established an efficient and disciplined banking system. Many local banks were emerged, therefore the Nigerian government had no need to depend on the foreign banks fully. In one word, it can be said that, through banking sector reform the government of Nigeria was able to move their economy forward. FURTHER MOVES FOR BETTER NIGERIAN BANKING Nigeria's banking sector is undergoing a series of changes aimed at overcoming the mistakes of the past. The European Investment Bank (EIB) is providing €240m to three Nigerian banks for infrastructure projects, in a move that it is hoped will bolster confidence in the country's banking system. CURING NIGERIA'S BANKING WOES Firing the chief executives responsible for mismanaging Nigeria's banks has been the first step to fixing the country's financial problems. Now the system is more transparent, Central Bank of Nigeria governor Lamido Sanusi is spelling out his vision for banking reform and stability LIST OF BANKS IN NIGERIA This is a list of commercial banks in Nigeria: Visit www.nigeriabusinessdesk.com to get the comprehensive list of Banks in Nigeria including their contact details: Access Bank Afribank Bank PHB Citibank Diamond Bank Ecobank LIST OF BANKS CONTINUED First Bank of Nigeria First City Monument Bank Fidelity Bank First Inland Bank Guaranty Trust Bank IBTC-Chartered Bank Intercontinental Bank Nigeria International Bank Oceanic Bank Skye Bank Spring Bank LIST

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