Vanguard reported today that there is a daily increase in capital flight due to the unattractive fixed deposit interest rates to neighbouring countries. wheras nigerian banks offer 3% neighbouring banks like banks in Ghana offer 14%. This is a fallout of the ongoing reforms. Nairanders kindly express your views on this development as it affects the nigerian economy.

@poster,
I read it too in the papers.
Is a very serious issue with all this abracadabra by sanusi.
If banks in Ghana can be offering 14% i see no reason why people should not move their cash out of Nigeria.

Na wa ooooo,.
I really dont know where this country is heading to.
May God help us.

Until we wake up and face the fact, banking in nigeria will remain shaky.

@poster,
I read it too in the papers.
Is a very serious issue with all this abracadabra by sanusi.
If banks in Ghana can be offering 14% i see no reason why people should not move their cash out of Nigeria.

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If a bank in Nigeria offered you 14% APR on your deposit, at what rate will the bank loan out your deposit to businesses to make money? High interest rates are not always good for the economy. The banks that were offereing those high interest rates were engaging in highly speculative and risky investments in order to earn decent ROI. This was what led to the bubble economy in Nigeria that has now exploded.

It is almost impossible to find a retail bank in the U.S that will pay more than 2% on fixed deposit unless you are investing a couple of millions for a lengthy period. Short term speculative investments are not often good for an economy. Boom and bust cycle.

@jazzsoul,
Fixed deposit rates in Nigerian banks for a very long time has been btw 10 to 20% depending on the amount for a very long time.