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Change and consolidation in the Nigerian banking industry: an exploration of two key Central Bank of Nigeria objectives.

Okafor, Chuma Emmanuel


Chuma Emmanuel Okafor


Ken Russell


In an attempt to correct economic shortfalls, authorities in Nigeria deployed consolidation as the main policy instrument in the 2004-2006 reform of the banking industry. The Central Bank of Nigeria drew lessons from similar challenges faced by Malaysian and Indonesian authorities. Nigerian banks were given an 18 month window, to achieve an increased minimum capital base of N25 billion. To survive, banks could either raise the new requirements on their own or engage in mergers or acquisitions. The process of consolidation resulted in the reduction of banks from 89 to 24 and the emergence of three categories of banks namely: Stand alone, Common ownership, and Common interest banks. Primarily, this study examines change management practices of senior bank managers directly involved in implementing consolidation in Nigeria, and the impact of consolidation on credit availability to the private sector. Aggregate secondary data on the Nigerian banking industry from 2001-2009 were analysed and used to inform in-depth semi-structured interviews with thirteen senior bank managers and a respected independent financial analyst. Mixed methods were used to conduct further analysis. A conceptual framework was developed through an extension of Pettigrews 1988 model, while a modified Berger et al. 1998 model was deployed to test credit availability. Findings indicate that most aspects of organisational change were successful, but a lot more needs to be done to improve cultural integration and employee motivation. The successes achieved by Nigerian banks, resulted in higher levels of credit being made available to the private sector. There is, however, scope for further improvement to be made. For example, senior bank managers should deploy a more holistic approach to planned change, and there should be an improved collaborative approach between the government and private sector which could help enhance alternative credit delivery channels such as micro finance firms, venture capitalists and business angels.


OKAFOR, C.E. 2012. Change and consolidation in the Nigerian banking industry: an exploration of two key Central Bank of Nigeria objectives. Robert Gordon University, DBA thesis.

Thesis Type Thesis
Deposit Date Jul 11, 2012
Publicly Available Date Jul 11, 2012
Public URL
Award Date Feb 29, 2012


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