Banks · Act I — The Expatriate Era

Modern banking arrived in Nigeria as a freight service for British trading houses. In 1892 the Liverpool shipping magnate Alfred Lewis Jones, chairman of Elder Dempster & Co., opened the African Banking Corporation in Lagos to handle the silver coin his steamers were importing to pay for palm oil. Two years later the venture was reorganised as the Bank of British West Africa (BBWA) under Royal Charter — the institution that, after a hundred years of name changes (Bank of West Africa → Standard Bank of West Africa → Standard Bank Nigeria → First Bank of Nigeria in 1979), still trades today as First Bank, the country's oldest. Its head office, the cream-and-balustrade building on Marina, was for fifty years the closest thing colonial Lagos had to a financial district.

For twenty-five years BBWA was a monopoly. Then in 1917 the Colonial Bank opened in Lagos to compete; in 1925 Barclays absorbed it and rebranded as Barclays Bank (Dominion, Colonial & Overseas) — the future Union Bank of Nigeria (renamed 1979). A third arrival, the Dutch-French British and French Bank for Commerce and Industry, opened in 1948 and became United Bank for Africa in 1961. These three — First, Union, UBA — were the entire formal banking system Nigeria inherited at independence, and all three were branches of London houses whose head offices, share registers and credit committees sat in EC2.

The expatriate banks did three things and refused to do a fourth. They financed produce exporters (the John Holts, UACs and CFAOs), they remitted civil-service salaries to London, and they issued the West African Pound on behalf of the WACB. What they would not do was lend to African traders. Branch managers operated under a written instruction that loans to 'natives' required head-office approval in London — a procedural wall that in practice meant no. By 1930 fewer than 2% of all credit extended in Nigeria reached African hands. That refusal — documented in the 1948 Paton Inquiry and never seriously denied — is the credit vacuum the first indigenous banks would rush to fill, and then perish in.

The numbers, on the eve of indigenous banking (1929): three expatriate banks, twelve branches between them (eight in Lagos), zero African directors, zero African branch managers. Total deposits: roughly £4.2 million, of which less than £80,000 was lent to African borrowers. A banking system existed in Nigeria. It simply did not bank Nigerians.