In analyzing the management and financial performance of a Nigerian company- First Bank of Nigeria Plc, in the last three years covering year 2008 to 2010, this analysis intend to give a brief overview of the Nigerian economy during the period and with a focus on the banking sector generally but zeroed - in on the First Bank of Nigeria Plc performance during the period under review.
2. THE NIGERIAN ECONOMY
1. HISTORICAL ANTECEDENTS
The Nigerian economic structure is largely based on oil. This is in spite of the country’s great potentials in agriculture and solid minerals which were largely neglected and unexploited. Ironically the pre- and post- independence era of the country, Nigerian economy was robustly agricultural based and dependent until the discovery of the black – gold - oil, which seems to be the bane of development. Similarly, the Nigerian economy has stumbled for years due to political unrest, corruption and poor fiscal policies. However, since the restoration of the democracy and introduction of some economic reforms, the country is returning to growth at a fast pace.
The Nigerian economy is reported by the International Monetary Fund (IMF) as one of the most developed economies in Africa, projected as the second fastest growing economy in the world, with tremendous potentials to outperform other African economies in the near future. In the same vein, by the United Nations (UN) classification, Nigeria is a middle income nation with developed financial, communication and transport sectors. All these with its prime position as the second largest stock exchange market, the Nigerian is rated as one of the most developed economies in Africa.
2. THE STRUCTURE
Coincidentally, owing to the surge in the international oil prices, Nigeria managed an annual GDP of US $ 352.3 billion and 33rd in the world. The GDP structure was constituted by 33.4 for agriculture, 34.1 on industry and services 32.5 resulting in US $ 2, 400 per capita.
TABLE 1: STATISTICAL SNAPSHOT ON NIGERIAN ECONOMY
|(i) |Labour Force |47.33million | |(ii) |Labour in Agriculture |70 % | |(iii) |Budget Revenue |$ 10.49 billion | |(iv) |Budget Expenditure |$ 18.08 billion (2009 estimate) | |(v) |Industrial production growth rate |1.8 % (estimate) | |(vi) |Current Account balance |$ 9.394 billion (estimate) | |(vii) |Exports |$ 45.53 billion (estimate) | |(viii) |Foreign Exchange Reserves |$ 46.54 billion (December 2009 estimate) | |(ix) |External Debt |$ 9.689 billion (December 2009 estimate) |
Source: CIA – World Fact Book; CBN Briefs 2006 -2007 edition
3. THE BANE/CHALLENGES OF THE ECONOMY
Nigeria is the 12th largest producer of petroleum products in the world and on which its economic profile is central. The industry accounts for over 80 % of the GDP and 90 % of total exports. Unfortunately, the Nigerian economy lacks basic infrastructure and therefore makes it amorphous and vulnerable to the slightest shock...