Measuring competition in the Nigerian banking sector

Abstract

This paper investigates the impact of banking sector consolidation on competition in the Nigerian banking sector. The study evaluates the degree of competition using H-statistic proposed by Panzar and Rosse (1987), and bank level data from Bankscope to measure the degree of competition before and after consolidation in the Nigerian banking sector. It was concluded that while consolidation marginally improved competition, more needs to be done to further improve competition in the sector. This finding suggests that policy makers should continue to provide level playing field for all participants while simultaneously working to promote stability concerns to support private sector activities and economic growth in the country.