Financial intermediation – the process of matching savers with borrowers – is a primary function of the banking sector. Intermediation channels excess funds towards productive uses, spreading the risk across a bank’s entire depositor base so no single saver bears the losses in the event of a loan default. However, in Nigeria intermediation is...
A primary issue affecting Nigeria’s economy in recent years has been the decline in foreign reserves, particularly the shortage of US dollars, which have been hit by low oil prices. This slump in the price of oil has caused major complications for the Nigerian economy as a whole, particularly given the increasingly high demand for imports...
While Nigeria’s economy remains largely cash-based, there has been an increased focus since 2012 on reducing inefficient cash transactions. According to the Central Bank of Nigeria (CBN), an excess of currency in circulation has hindered plans to stabilise prices. In addition, the costs associated with currency sorting, cash management,...
With many competing firms offering a robust suite of product offerings and related services, the insurance market in Nigeria is vibrant and growing. Like many sectors across Africa, however, domestic insurers often lack the capacity to underwrite the majority of risks stemming from the main drivers of the economy. Nigeria’s primary revenue generators – oil and gas, and the mining sector –...
Given the difficulties experienced by Nigeria’s economy in 2016, every sector grappled with challenges, and capital markets were no exception. From external pressures such as low oil prices and US interest rate shifts, to internal factors such as depreciation and slowing oil production, investors in Nigeria had to account for a range of risks. These factors had a clear impact on inflows. In...
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