Site Loader

Firstly, since independence in 1960, the Nigerian political system has been volatile, there have been 7 military coups, and this has made the investment climate unattractive because the nation appears insecure for the foreign investor. Secondly, they are too many arbitrary and sudden changes in government policies and regulations which have led to a great deal of uncertainty. Foreign banks are scared from funding any project with a long gestation period.

With this fear, most of these banks are now turning to major cash centres, that is, they are basically involved in deposits and disbursement of funds without getting involved in long term project financing. Thirdly corruption is endemic and has spread to every facet of the economy. It is widely prevalent in many government and public agencies and foreign banks believe that business operations may come to a halt if they is “no greasing of palms’’ Another major finding is that of weak legal system, the legal system has also has had its shortfall arising from the executive meddling in their affairs.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Those who contravened the laws are not easily brought to book, those involved in trade malpractice or breach of contractual agreements are not properly prosecuted to serve as a deterrent to others. Based on these, most foreign banks tend to be worried about validity and enforcement of contractual agreements. Foreign banks require healthy private sector that can earn reasonable rate of return in a stable economic environment, that is, when the private sector is healthy, this is a good indicator for the foreign investor that the economy is, stable, thriving and can be a good investment opportunity.

Government is too involved in the regulatory approvals . None 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). 5. 2 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 . 5. 3 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 citizens

The 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. REFERENCE 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. 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 Alicia Garcia H. , and Danial Nana S. , (2003): Determine and Impact of Financial sector FDI to Emerging Economies; A Home Country Perspective. Aremu J. A (1997): CBN Research Department Seminar Paper No. 4 Belot T. J. nd Weigel D. R (1992): “Programs in Industrial Countries to Promotion Foreign Direct Investment in Developing Countries” Foreign Investment Advisory Service Occasional paper 3. Beran Allan and Estrin Saul(2000),The Determination of Foreign Direct Investment in Transition Economies, Working paper No 342 Blaxter L;Hughes,C and Tight,M;(2002):How to Resaerch,2nd Edition,Open University Press Buckingham,UK Bryman A and Bell E (2003): Business Research Methods, Oxford University Press ,England . Caceres, J. , (2006): Developing a strategy for today’s emerging Market; Community Banker, 15,6 ABI/INFORM Global, Pg. 44.

Census 2007:Federal Republic of Nigeria official gazette, vol 94 no24 pg190. Carew, R. , (2007): In search of new Fortune, China’s Bank venture Abroad; Far Eastern Economic Review, 170,2 ABI/INFORM Global Pg 55. Central Bank of Nigeria (2000): Banking Supervision Annual Report, Central Bank of Nigeria P. 3b Central Bank of Nigeria (2002) Keynote Address Delivered by the Governor, Central Bank of Nigeria at the 14th Annual Bank conference. Chukumba Celestine, Oyewole samual and Manu Parbhaker (2007): Influence of Engineering and Technology on Banking and Capital Market in Developing Countries; The Business Review Cambridge Vol. . 1 ABI/INFORM global Pg 163. Chung Joanne (2007): Global investor eye new darling Nigeria is drawing big interest after its external debt and embarking on reform, financial Times London Pg 2 Clarke, George, Robert Cull, Maria Soledad Martinez Peria y Susana M. Sanchez (2001): “Foreign bank entry: Experience, implications for developing countries and agenda for further research. Document prepared for the el world Development Report 2002: Institutions for markets, World Bank, Washington, D. C. , United States. Claudio E.

V Bario and Renato Filosa (1994): The changing Borders of Banking, Trends and implications; BIS Economic Paper No. 43. Consulate general of the Federal Republic of Nigeria Johannesburg Nigeria (2007) on Nigeria Investment. http://www. nigeria. co. za/investment/index. htm. [Accessed:14 August, 2007] Collins, Jill and Hussey Roger(2003) Business Research, practical guide for undergraduate and postgraduate student,2ND edition, Palgrave Macmillan NY, USA Crockett Andrew (1997): Why is Financial Stability a goal of Public Policy Journal in Economic Review 4th Quarter BIS Annual Report 1996-1997.

Dalil Abubakar 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 Diana Farrell, Susan Lurd and Fabrica Morin (2006): How Financia System reform could benefit China. Available on Http://www. mckinseyquarterly. com/article 13/2/06. Dilips Das (2003): Evolving Financial market structure in Emerging Market Economies; Journal of Assets Management Vol. 4. 3; ABI/INFORM Global Pg. 131. Dilip K(2004)Financial Globalisation and the emerging market economies; Journal on Business and Economic ISBN 01415328764

Dino M (2007): Nigeria stable market wary of political shock insulated from global tremors, Lagos could suffer local damage; The Financial times London (UK) Pg 8 ISSN: 03071766 Domanski Dietrich (2005): Foreign Banks in Emerging Market Economies; Changing Player, changing Issue Bank of International Settlement (B IS) Quarterly Review 2005. Ellers, M. ; Haiss, P. ; Steiner K. , (2006); Foreign Investment, financial Services Economic growth Studies Emerging Market; Journal on Emerging Market Review ISSB 15660141. Emecheta Femi (2006): Excitement Mount as M&A Frenzy Prevails; African Business; Vol. 25, ABI/INFORM Global Pg 28. Enrica Detragiache and Poonam Gupta (2006): Foreign Bank in Emerging Market Crises: Evidence of Malaysia; Journal of Financial Stability Vol 2. 3 Pg 217-242. Ezeoha, A. , (2007): Structural effect of banking industry consolidation In Nigeria. A review Journal of banking regulation, ISSN: 17456452 Pg2. Available on (Http//www. palgravejournals. com/jbr/journal/v8/n2/fig-tab/235004. html 14/08/2007) Ezeoha, A. , (2005): Regulating internet Banking in Nigeria: Problems And Challenges Part 1”; Journal of Internet banking and Commerce vol. 10. 3.

Post Author: admin


I'm Tamara!

Would you like to get a custom essay? How about receiving a customized one?

Check it out