Page 32 - Azerbaijan State University of Economics

Chibuike R. Oguanobi, Geraldine E. Nzeribe, Chukwunonso S. Ekesiobi: Export promotion
in Nigeria: has the impact of banking sector reforms been felt?

However, Nigeria exported goods worth €26,828 million to the rest of the
world in 2004 (see table 1). This grew by 30.4 percent in 2005, 31.3 percent in 2006,
6.4 percent in 2007 and 21.0 percent in 2008 before falling by 36.1 percent in 2009.
The country‟s export unimaginably grew by a staggering 54.7 percent in 2010. It
grew again by just 30.0 percent in 2011, 7.7 percent in 2012 before going down
twice again by 12.1 percent and 5.8 percent in 2013 and 2014 respectively.
During this period, Nigeria experienced a favourable balance of trade. Table 2
shows that with a total trade worth of €43,338 million in 2004, its trade balance was
€10,319. As total trade grew by 26.2 percent in 2005, trade balance grew by 47.9
percent. By 2006 when total trade grew by 26.6 percent, trade balance grew by 48.5
percent. In 2010 when total trade grew by36.9 percent from the 2009 figure of
€94,331 million, trade balance grew by 239.7 percent from the 2009 value of
€22,528 million. There were however negative growth of total trade between 2013
and 2014. In 2013, total trade fell by 5.0 percent from €125,796 million and fell
again by 2.3 percent in 2014 as the country‟s trade balance fell by 35.8 percent from
the €37,766 million of 2012 and further by 22.8 percent in 2014.

4. Banking sector reforms in Nigeria: a hint
In the quest to enhance the achievement of basic macroeconomic goals, the
Nigerian government in 2004 embarked on a reform (bank consolidation) aimed at
strengthening the country‟s banking sector. The reforms actually started with the
bank consolidation programme launched by the Professor Chukwuma Soludo led
Central Bank of Nigeria (CBN).
The policy thrust of the reform was to make the banks more viable and strong
enough to play crucial roles in driving development across all sectors of the
economy, including its export related industries. The consolidation exercise started
with raising the capital base of banks from N2 billion to a minimum of N25 billion
in shareholders‟ funds. During this period, there were a number of mergers and
acquisitions among Nigerian banks in order to meet this new capital requirement. By
the end of 2005, this exercise drastically reduced the number of banks from the 2004
figure of 89 to 25.
By 2009, the Lamido Sanusi led CBN advocated several reform programmes
still aimed at strengthening the country‟s banking sector. These programmes rest on
four broad pillars as follows:
a. enhancing the quality of banks.
b. establishing financial stability.
c. enabling healthy financial sector evolution.
d. ensuring that the financial sector contributes greatly to the real economy.

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