THE EVOLUTION AND CHALLENGES OF BANKING IN NIGERIA, 1959-1998: A REVIEW OF BANK FAILURES AND LESSONS LEARNED

Abstract

The banking industry is no doubt an important live wire in the smooth running of economic activities and the driving of socioeconomic development. The alarming rate of bank failures in Nigeria, a country yearning for socioeconomic development, therefore calls for concern. Little wonder it has raised serious concerns among stakeholders. This paper therefore attempts a historical analysis of the causes and effects of bank failures in Nigeria and, more importantly, the lessons the country can learn from them in order to build a stronger banking industry and accelerate development. Adopting a historical methodology, which involves a qualitative analysis of primary and secondary source materials related to a chosen time period, the paper argues that from the rubble of bank failures, valuable lessons can be harnessed if greater attention is paid to the hard lessons that can be gleaned from such failures. The study finds that the causes of bank failure are largely man-made, pointing mainly to managerial failure, and that the lessons they offer have, to a large extent, been neglected.