The Nigerian financial system over the years has played a crucial role in boosting the economy of Nigeria. The Nigerian financial system does this by improving resources mobilization within the economy.
The system has not just mobilizes resources, but it makes sure resources mobilized, are mobilized efficiently, as well as, making sure that efficient mobilization of resources within the economy is sustained.
Besides mobilization of resources, and making sure that resources mobilized are done efficiently and as well, sustained, the Nigerian financial system is also charged with the responsibility of allocating financial resources in the economy.
Very interestingly, structures for the proper management of liquidity for financial instruments and assets are provided for by the Nigerian financial system.
Since I am looking at the functions of the Nigerian financial system in this article, I will be considering the 1976 report on the Nigerian financial system.
The report has clearly spelled out functions of the Nigerian financial system. Hence functions of the Nigerian financial system!
What Are The Functions Of The Nigerian Financial System?
By virtue of 1976 report on the Nigerian system system, the system was charged with the responsibility of undertaking some of the functions, I will be explaining in this article, and here are there.
Facilitates Effective Economic Management
The Nigerian financial system functions include that of facilitating the management of the Nigerian economy. Driving Nigerian economy prudently is very vital, if Nigeria must excel as a nation.
And so, to drive the Nigerian economy, the Nigerian financial system has to ensure that the economy is well driven by managing the economy effectively.
The Nigerian financial system does not only manage the Nigerian economy, it must make sure that the management of the economy is done efficiently and effectively in order to actualize the government’s goals and as well meet the yearnings of the Nigerian citizens.
Provision Of Non Inflationary Support To The Economy
Here we can see another function of the Nigerian financial system, in the area of providing to the Nigerian economy non inflationary support.
This is very important and necessary, since inflation hammered the growth of any economy. Therefore, one of the ways to ensure economic stability in the country is to make provision that will bring about non inflationary support to the Nigerian economy, and in achieving this, it is therefore, the function of the Nigerian financial system to provide this support by making the Nigerian economy non inflationary.
Mobilization Of Savings And Efficient Channeling
Mobilization of savings and efficient channelling of these savings remained one of the functions of the Nigerian financial system.
It is one thing to mobilize savings within the Nigerian economy, and it is another thing to mobilize prudently in order to achieve greater mobilization of savings, as well as, achieve effective and efficient channelling of these savings.
Therefore, it remains part of the functions of the Nigerian financial system to ensure that greater mobilization of savings does not only achieved but the effective and efficient channelling of these savings are achieved too.
Ensures The Availability Of Funds:
Ensuing availability of funds is yet another functions of the Nigerian financial system. Whenever there is no circulation of funds within the economy, there is bound to be negative impact on the economy.
Therefore, one of the vital functions of the Nigerian financial system is to make sure that there is sufficient or availability of funds within the economy.
By so doing, no viable economic project would be frustrated or abandoned, just because there is no funds. To avoid this, it is therefore, the function of the Nigerian financial system to make funds available.
Insulates Nigerian Economy From Vicissitudes Of International Economy
Very importantly, the Nigerian economy need to be insulated from the vicissitudes of other western world economy.
This is important, since it can cause irregular changes of the Nigerian economy or cause economic fluctuations. Such changes do not encouraged healthy economy, and is bound to negatively impact on the Nigerian economy..
To avoid this unhealthy situation for the Nigerian economy, the Nigerian financial system is expected to make sure that, the country’s economy is insulated as much as possible from the vicissitudes of foreign economy in order to protect the Nigerian economy and prevent the economy from vicissitudes of international and foreign economic scenes.
Sustains Indigenization Of The Economy
Another function of the Nigerian financial system is about the sustenance of the indigenization of the economy. The indigenization of the Nigerian economy need to be effectively sustained, which suggested that, the ownership, and the control, as well as the effective management of the economy be encouraged.
This responsibility falls under the function of the Nigerian financial system. The Nigerian financial system also went as far as assisting in making sure that the rural sector achieved significant transformation.
The Nigerian financial system also assist in making sure that, there is achievement of greater integration and grester linkages in industry and agriculture and commerce.
Enhances Productive Process In The Economy
The Nigerian financial system has also guaranteed there is adequate or sufficient stock of money for the purpose of enhancement of the productive process in the Nigerian economy.
The reason there is enough stock of money in the system has made available by the Nigerian financial system is to bring about monetary balance and economic stability in the system. This of course, is another function of Nigerian financial system in its view to boost Nigerian economy.
Provision Of Necessary Environment For Policies Implementation
Another point to be considered as one of the functions of the Nigerian financial system is that of providing the necessary environment for the purpose of implementing different policies of government such that will drive Nigerian economy to its viable height.
These economic policies are expected to not only serve a great deal of purpose, but to also achieve economic indexes, such as the non-inflationary growth, and exchange rate stability, and balance of payment equilibrium, and foreign exchange management, as well as, the high levels of employment among others.
The functions of the Nigerian financial system explained above convey the role played enormously by the Nigerian financial system towards the development of Nigerian economy.
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