If interest rates are so high in Nigeria , why don't we have more and more foreigners coming to invest their money in Nigerian banks ?


Cc grandstar

Omohayek

Blue3k

LordNietzeche

Ugosample

urahara:
If interest rates are so high in Nigeria , why don't we have more and more foreigners coming to invest their money in Nigerian banks ?


Cc grandstar

Omohayek

Blue3k

LordNietzeche

Ugosample

1. Real interest rates (i.e. after adjusting for inflation) aren't necessarily all that high.
2. Even to the extent that Nigerian interest rates remain positive after adjusting for inflation, there are also the tremendous difficulties associated with repatriating earning from Nigeria, thanks to the arcane, opaque and frankly nonsensical exchange-rate regime.
3. Finally, one must also account for quality of the borrowers, i.e. their risk of default. Here the factors to blame include Nigeria's poor record-keeping, its immature retail finance system (which mean most ordinary people have no credit history), slow and corrupt court system (which makes it hard to seek recourse against defaulters), and weak property-rights (e.g. the 1978 Land Use Decree which means no private individuals actually own their land outright). This land-ownership issue is by far the biggest obstacle to improving agricultural productivity, and no amount of border closures by Buhari will do anything to fix the problem.

Just fixing issue number 2 would be a gigantic step forward, but again there's not a prayer of it happening until Buhari's 8 wasted years are actually over, and even then crony capitalists like Dangote will do the utmost to exploit the "patriotic" ignorance of the masses against any change for the better. As for the Land Use Decree, no chance of anything happening on that one until all the oil in the south runs out ...

omohayek:


1. Real interest rates (i.e. after adjusting for inflation) aren't necessarily all that high.
2. Even to the extent that Nigerian interest rates remain positive after adjusting for inflation, there are also the tremendous difficulties associated with repatriating earning from Nigeria, thanks to the arcane, opaque and frankly nonsensical exchange-rate regime.
3. Finally, one must also account for quality of the borrowers, i.e. their risk of default. Here the factors to blame include Nigeria's poor record-keeping, its immature retail finance system (which mean most ordinary people have no credit history), slow and corrupt court system (which makes it hard to seek recourse against defaulters), and weak property-rights (e.g. the 1978 Land Use Decree which means no private individuals actually own their land outright). This land-ownership issue is by far the biggest obstacle to improving agricultural productivity, and no amount of border closures by Buhari will do anything to fix the problem.

Just fixing issue number 2 would be a gigantic step forward, but again there's not a prayer of it happening until Buhari's 8 wasted years are actually over, and even then crony capitalists like Dangote will do the utmost to exploit the "patriotic" ignorance of the masses against any change for the better. As for the Land Use Decree, no chance of anything happening on that one until all the oil in the south runs out ...

Brilliant !!!