Intervention Strategy, Banking Reengineering and Capital Formation in Nigeria

Abstract

Over the years, successive governments in Nigeria have not relented in advancing measures designed to boost capital formation in the economy. Prominent among these efforts is the commitment to upgrade critical socio-industrial amenities in order to bring about meaningful transformation of various parts of the country. Against this backdrop, this study adopts gross fixed capital formation as focal criterion variable. It encapsulates all production and distribution – oriented facilities in such core economic areas as transportation, communication, electricity, education, and industrial equipment manufacturing, among others. The provision of these critical effects in the right quantity and quality determines, to a large extent, separates thriving economies from merely surviving economies. For analytical purposes in this study, secondary data are drawn from the publications of the Central bank of Nigeria (CBN), National Bureau of Statistics (NBS) and Federal Ministry of Finance (FMF). The time series are utilized in testing three formulated hypotheses, through the statistical instrumentality of software package for social sciences (SPSS). The outcome fundamentally indicates that banking reform, the intervention strategy thrust, is significantly related to the dynamics of capital formation in the Nigerian economy. To this end, the ideals which make for structural viability, auspicious liquidity and sustainable functionality are strongly recommended to form the thrust of on-going systemic soundness advocacy. This is good for the repositioning of the financial sector in general and banking reengineering in particular. No economy can afford to showcase banks which are peripherally hale and intrinsically pale.

Keywords: Banking reform, Capital formation, Nigerian economy