Nigeria ranks 63rd worldwide and fifth in Africa in services’ output. Low power and telecom density has crippled the growth of this sector.
Since undergoing severe distress in the mid-1990s, Nigeria’s banking sector has witnessed significant growth over the last few years as new banks enter the financial market. Harsh monetary policies implemented by the Central Bank of Nigeria to absorb excess Naira liquidity in the economy has made
life more difficult for banks, some of whom engage in currency arbitrage (round-tripping) activities that generally fall outside legal banking mechanisms.
Private sector-led economic growth remains stymied by the high cost of doing business in Nigeria, including the need to duplicate essential infrastructure, the threat of crime and associated need for security counter measures, the lack of effective due process, and nontransparent economic decisionmaking, especially in government contracting.
As of 2007, 29% of Nigerians in urban areas did not own bank accounts. While corrupt practices are endemic, they are generally less flagrant than during military rule, and there are signs of improvement. Meanwhile, since 1999 the Nigerian Stock Exchange has enjoyed strong performance, although equity as a means to foster corporate growth remains underutilized by Nigeria’s private sector.
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