Government financial liberalisation policy and the development of private sector in Nigeria: Issues and challenges
This paper assesses the impact of Nigeria's financial liberalisation policy for fostering private sector development. Relevant data relating to the influence of the policy on macroeconomic performance and private sector development were obtained from primary and secondary sources. The analyses were descriptive and quantitative in perspective. The findings provided insights on the overall impact of financial liberalisation policy on the private sector. Surprisingly, credits to private sector were not found to have a positive impact on economic growth in Nigeria. This implies that credits to private sector were used for commerce (buying and selling), or diverted to some unproductive ventures, rather than production activities, or at least too small to positively impact on economic growth. However, poor infrastructure, high level of corruption, political and economic instability and high cost of funds were found to have constrained the contribution of the private sector to economic development. The policy implication is that the private sector in Nigeria could only be a positive force for growth, if the government would sincerely provide the needed conducive environment and the private sector efficiently utilises banks' credits for industrial development. This study will assist policy makers in fine-tuning their liberalisation policy and the private sector to adopt a value re-orientation approach to enhance the performance of the economy, especially in developing countries.