What Nigerian Banks should do
The problem with nigerian banks is that it’s not clear how they are earning their money. A bank is supposed to invest in large capital projects, and earn large returns from these projects. I do not know that Nigerian banks are doing so. When there are banks that the directors are worth billions, then there is certainly something wrong. Banks are strongly tied in with the economy of a country, because they hold the money of most people - and this money is spread out among just a few institutions. Nigeria needs banks who earn their money by specialising in medium sized businesses - like 1m - 5m, other banks that specialise in construction projects, banks that specialise in real estate and so on. Banks should be building estates in Nigeria. I feel that Nigerian banks are not fulfilling the goals that they should be having to help with the economy.
At the same time, I do not advocate directly affecting any bank. Rather, I think that bank bail-out funds should be set aside by the federal Government, and part of these funds would be used to setup a bank, for example, that is responsible for a particular area (let’s say housing). Now, this bank is run by private individuals, and the charter of the bank limits it to dealing in the field of mortgages, property development and so on. Either it builds and owns, or it finances projects in that area. After a period of circa two years, where this government bank is strongly and strictly controlled by foreign auditing firms and the CBN, the bank is spun off and privatised completely via the stock market, earning the Government back it’s money that it invested in creating the bank.
