Nigeria may allow bank investment

Nigeria's central bank has indicated that it is prepared to lift a ban on foreign ownership of its banks.

Restricting outside investment was "not a sustainable policy" the Bank's new governor Lamido Sanusi has said.

Most international banks left Nigeria in the 1970s after military rulers imposed a law part-nationalising banks.

Although there has liberalisation in the sector, only Standard Chartered and Citigroup have re-established large operations in the country.

'Skills'

Currently the central bank must approve the acquisition of more than 5% of a Nigerian bank by a foreign firm.

Mr Sanusi said that the previous governor had also imposed a rule that no foreign bank could own more than 10% of a Nigerian one, but that this was "unnecessary" and should change.

Encouraging outside investment is part of a wider plan to shore-up confidence in the country's financial system which had suffered losses during the collapse of local stock markets last year.

"We do need the capital to come in, we do need the skills on...risk management and secondly at this time we may need to recapitalise banks.

"What you want to do is open up all the possibilities," Mr Sanusi said, adding that there was no timeframe for easing the restrictions.

Earlier, in an interview with the Financial Times he said that Nigeria wanted to "try to encourage the foreign banks that are coming, not just with money, but with management and systems, to come in and acquire".

"Why wouldn't I be comfortable with a bank owned by Barclays, of HSBC or China Construction Bank who I know?" he added.