High capital flight has  been identified as one of the major setbacks affecting the economic stability of Nigeria, as most banks are heavily financed by their foreign counterparts.

 Dean, Faculty of Management Sciences, University of Port Harcourt, Dr C. O Ofurum, made the observation in his paper titled “Strategies of Corporate Survival In A Global Recession,” presented at a seminar penultimate Friday at Protea Hotel, Port Harcourt.

He explained that the financial meltdown in developed economies triggered the exodus of foreign funds from our banks. This withdrawal of funds by foreign investors created an imbalance in our financial system and the result is what we are experiencing in our banks.

According to him, it is important to note that our banking system today is full of high non-performing loans, hence only very few banks can be said to be safe and healthy. The high capital flight is a serous problem as most of the banks are heavily financed by their foreign counterparts. We thanked God for steps taken by the Central Bank of Nigeria, otherwise, this capital flight in banks would have crippled the economy, and if not checked, liquidation of most banks”, he noted.

The university don advised Nigerian and African private-sector leaders to continue to learn and adhere to market discipline, noting that Nigerian banks are responding to the challenges as some of them have started to adopt the International Financial Reporting Standard to remove the lid on the country’s fast growing banking sector.

He warned that “we all understand the implication of further bank failure in this country. If it happens again, investors would forever lose confidence in our financial system”.