Nigeria

Financial Innovation and Financial Performance of Nigerian Listed Deposit Money Banks: Evidence from Panel Data Modeling (Published)

This study examined the impact of financial innovation on the financial performance of Deposit Money Banks (DMBs) in Nigeria, utilizing secondary data from 2008 to 2023. This data was sourced from the banks’ annual financial statements and the Nigerian Exchange Group Factbook. Nine banks with international authorization were purposively selected for the study. Financial innovations in the banking sector include automated teller machines (ATMs), point of sale (POS) terminals, internet banking (WEB), and mobile money payments (MOB) transactions, while return on assets (ROA) and return on equity (ROE) were used as measures of bank financial performance. Panel data models were designed and estimated using the Feasible Generalized Least Squares (FGLS) regression technique. The findings indicated that financial innovations positively influenced the banks’ financial performance. However, while ATM and POS transactions significantly impacted the banks’ ROA and ROE, WEB and MOB transactions had no significant impact on the financial performance of the deposit money banks.

Keywords: Deposit Money Banks, Financial Innovation, Nigeria, Return on Asset, Return on Equity, panel data modeling

Environmental Stewardship and Financial Risk Disclosure Industrial Goods Companies in Nigeria (Published)

This study examined the effect of environmental stewardship on financial risk disclosure of listed industrial goods firms in Nigeria. The specific objectives include; to examine the effect of water protection stewardship on financial risk disclosure of listed industrial goods firms in Nigeria; to evaluate how air protection stewardship affect the quality of financial risk disclosure of listed industrial goods firms in Nigeria and to assess the effect of Land protection stewardship on financial risk disclosure of listed industrial goods firms in Nigeria. The study used ex-post facto research design. Findings revealed that; there is a negative and significant relationship between air protection stewardship and the financial risk disclosure of industrial goods companies in Nigeria; there is a positive impact of water protection disclosures stewardship on the financial risk disclosure of industrial goods companies in Nigeria and the result of the analysis showed a beta coefficient of 0.072 for land protection stewardship disclosure. This implies that 7.2% of the variation in financial risk disclosure in the industrial goods companies is accounted for by land protection stewardship disclosures. Based on the findings of the study, it was concluded that the effect of environmental stewardship on financial risk disclosure of the industrial goods companies in Nigeria is significant. Based on the findings of the study, the following recommendations were made; the management of the industrial goods companies should disclose their water protection stewardship activities in their financial statement. This will boast the confidence of all stakeholders in the industrial goods sector; the amount of disclosures on the land protection stewardship activities of the firms should be increased as this will increase the financial risk disclosure of the selected industrial goods firms and the companies should put in place adequate cost control mechanism to ensure air protection stewardship cost does not significantly deplete the financial risk disclosure of the industrial goods firms in Nigeria.

Keywords: Nigeria, environmental stewardship, financial risk disclosure, industrial goods companies

Promoting Global Partnerships for Sustainable Economic Growth in Nigeria: The Nexus Between Sustainable Development Goal 17 and Goal 8 (Published)

This study examines the impact of external debt, foreign direct investment (FDI), and official development assistance (ODA) on Gross Domestic Product Per Capita Growth (GDPPCG) in Nigeria. Using econometric analysis based on annual data from relevant sources, including World Bank and IMF databases, the study employs ARDL regression models to assess the relationships between these financial inflows and economic growth indicators. The findings highlight the significant effect of external debt on GDPPCG, underscoring the importance of prudent fiscal management and sustainable debt practices to direct resources towards productive investments. Conversely, FDI and ODA exhibit non-significant impacts, suggesting challenges in maximizing their contributions to sustainable economic development due to infrastructure deficiencies, regulatory complexities, and governance inefficiencies in Nigeria. Policy recommendations emphasize enhancing debt sustainability through transparent financial governance and strategic investment in infrastructure and human capital. Improving the investment climate for FDI by streamlining bureaucratic processes and offering sector-specific incentives is crucial. Similarly, optimizing the effectiveness of ODA involves aligning aid with national development priorities and strengthening institutional capacities for aid coordination.

Keywords: External Debt, Foreign Direct Investment (FDI), Gross Domestic Product Per Capita Growth (GDPPCG), Nigeria, Official Development Assistance (ODA), Sustainable Development Goals (SDGs), economic growth

Tax Revenue Generation and Economic Growth: A Pre and Post Treasury Single Account Implementation in Nigeria (Published)

This study examines the relationship between tax revenue generation and economic growth in Nigeria before and after the implementation of the Treasury Single Account (TSA). The TSA, introduced in 2012 and fully implemented in 2015, aimed to consolidate all government revenues into a single account at the Central Bank of Nigeria to enhance transparency, accountability, and financial management. The study focuses on key tax types—Value Added Tax (VAT) and Company Income Tax (CIT)—and their correlations with economic growth, measured by Gross Domestic Product (GDP) growth rates. Prior to the TSA implementation, weak correlations were observed between tax revenues and GDP growth. However, post-TSA, there emerged positive correlations, indicating improvements in tax collection and administration. VAT exhibited a weak positive relationship with GDP growth, while CIT showed a strong positive correlation, underscoring the impact of better tax practices on economic development. Additionally, custom and excise duties demonstrated a moderate positive correlation with GDP growth, suggesting enhanced revenue generation from trade-related taxes. The findings highlight the effectiveness of the TSA in improving tax revenue generation and its positive impact on Nigeria’s economic growth. The study recommends that policymakers enhance VAT compliance, optimize CIT collection, and streamline customs procedures to further stimulate economic growth. These measures can ensure that the gains from TSA implementation are maximized, contributing to sustainable economic development in Nigeria.

Keywords: Government Revenue, Nigeria, Treasury Single Account (TSA), company income tax (CIT), economic growth, tax revenue generation, value added tax (VAT)

Effect of Increasing Government Debt Profile on Economic Prosperity of Nigeria (Published)

The study aimed at assessing the effect of increasing government debt profile on economic prosperity of Nigeria. Specifically, the study examined the extent that Gross Domestic Product (GDP) was affected, during the period of study, by rising domestic debt, external debt, and cost of borrowing in Nigeria. The data for analysis were sourced principally from CBN Bulletins and Debt Management Office. The null hypotheses that domestic debt, external debt, and cost of borrowing do not significantly affect Gross Domestic Product, were tested through a multiple regression analysis. The findings indicate that Domestic Debt has a positive and significant effect on Gross Domestic Product in Nigeria with coefficient of 1.005965 and p-value of 0.0000. Furthermore, the external debt stock reveals a negative and non-significant effect on Gross Domestic Product with coefficient of -0.083963 and p-value of 0.5909, while Cost of Borrowing exposes a positive and non-significant effect on Gross Domestic Product in Nigeria with coefficient of 0.038835 and p-value of 0.7589. The R-squared (Coefficient of Determination) indicates that 98% of the variations in Gross Domestic Product in Nigeria could be explained by changes in Domestic Debt, External Debt and Cost of Borrowing. The implication of the findings is that economic prosperity is facilitated by Domestic Borrowing while External Borrowing must be avoided where possible because of its’ negative effect on GDP. In addition, the effect of Cost of Borrowing on GDP is purely dependent on the appropriateness of use of borrowed fund. The study recommended that government should first explore internal sources of fund whenever borrowing is unavoidable in preference to foreign/external sources, reduce or avoid external borrowing and properly apply the borrowed fund for its economy to prosper.

Keywords: External Debt, Gross Domestic Product, Nigeria, cost of borrowing, economic prosperity, internal debt

Corporate Governance Practices and Performance of Deposit Money Banks in Nigeria (Published)

Performance of deposit money banks in Nigeria. The specific objective of the study was to critically appraise the relationship between size of board of directors, composition of board members, frequency of board meetings and return on assets of deposit money banks in Nigeria. The data were sourced through secondary sources from annual reports and accounts of sampled deposit money banks in Nigeria. The stated Null Hypotheses were tested through data analysis by using the correlation analysis as analytical tool. The research findings reveal that board size has a positive and strong relationship with return on assets while board composition has a positive but moderately strong association with return on assets. Furthermore, frequency of board meetings has a negative and very weak relationship with return on assets of deposit money banks in Nigeria. The implication of the findings is that increased board size could result in the improvement of financial performance of deposit money banks. The research found that such increase in number of members of the board will generate the desired outcome if it centers on independent nonexecutive directors with wealth of corporate governance experience, sound and profitable contacts, good and relevant education. The negative relationship with frequency of board meetings implies that banks should begin to trim down on number of board meetings as research has found that frequent meetings signal a crisis or distress situation with perceptions of going concern issues and bank failure. The study recommends that new independent non-executive professionals with critical governance and management attributes could be introduced into the board to improve the quality of decisions, earnings and general performance. Frequency of Board Meetings should be reduced to save cost and time while virtual meetings should be called more often than physical meetings as distance is no longer a barrier.

 

Keywords: Banks’, Board Composition, Board Meetings, Board size, Financial Performance, Nigeria, Return on Assets

Social Costs, Crude Oil Theft and Social Audit: The Case of Niger Delta Region of Nigeria (Published)

Crude oil theft in Nigeria has attained dimensions hitherto unimaginable. Monthly losses to government is said to be over one billion Dollars. Attendant social cost of crude oil theft which includes environment pollution, health and living condition of the people of the Niger Delta high. The Nigerian Federal Government has tried a number of options to ensure peaceful environment but not much has been achieved. Social audit which involves partnership between the operators in the Niger Delta region, the federal Government and the Communities in the region has been successful in creating harmonious relationships in places where they are deployed. It is concluded that it will assist in ending or at least significantly reducing the level of crude oil theft and its impact in the Niger Delta region. It is recommended that steps be taken to enforce it the oil producing communities.

 

Keywords: Niger Delta Region, Nigeria, crude oil theft, social audit, social costs

Risk Management Committee Gender and Likelihood of Financial Distress of Listed Deposit Money Banks in Nigeria (Published)

This study explores the effect of risk management committee gender diversity on the likelihood of financial distress among listed deposit money banks in Nigeria. The study utilizes the Nigerian Code of Corporate Governance 2018 as an instrumental variable to address endogeneity concerns related to the self-selection of gender diversity on the risk management committee. The dependent variable is the likelihood of financial distress, while the independent variable is the gender composition of the risk management committee. The sample size consists of 12 listed deposit money banks, and the data covers the period from 2017 to 2021. The analysis employs a two-stage regression analysis technique. The findings of this study reveal a significant positive effect of risk management committee gender on the likelihood of financial distress among listed deposit money banks in Nigeria. This suggests that a higher representation of a particular gender in the risk management committee is associated with an increased likelihood of financial distress. The results have important implications for policymakers, regulators, and banking institutions in Nigeria. The study highlights the need to consider gender diversity in risk management committees as a potential driver of financial distress. The findings call for proactive measures to promote a more balanced gender representation and inclusion in corporate decision-making processes within the banking sector. The findings emphasize the significance of gender diversity in risk management practices and provide valuable insights for stakeholders seeking to enhance risk assessment and mitigate the occurrence of financial distress in the banking sector.

Keywords: Banks’, Financial Distress, Gender diversity, Nigeria, Risk Management

Fluctuating Exchange Rate and Nigeria’s Economic Growth: A Time Series Assessment of Over Three Decades’ Experience Using Interest Rate and Inflation Rates as Control Variables (Published)

This study examined the empirical investigation of the effect of fluctuating exchange rate on Nigeria’s economy from 1986 to 2021. The specific objective is to determine the combined effects of exchange rate, inflation, interest rate on gross domestic product and the individual effect of exchange rate, inflation, interest rate on the gross domestic product. The data were obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics. The regression analysis to provide meaning to the research through which the following findings were made; this study depicts on exchange rate, inflation rate, and interest rate contribution to gross domestic product. The consequences of this examination have demonstrated that exchange rate, inflation rate, and interest rate are serious determinants of gross domestic product in the Nigerian Economic Growth. The factors (exchange rate, inflation rate and interest rate) when presented synonymously, have performed well regarding economic growth. The finding suggested that exchange rate, inflation rate and interest rate are determinants of gross domestic product. A practical assessment of these dimensions revealed that exchange rate, inflation rate and interest rate were effectively stabilized and they will achieve a greater significant benefit in terms of gross domestic product. The result shows that, the higher stability of exchange rate, inflation rate and interest rate the higher the possibility of gross domestic product of Nigeria, which will definitely have positive significant impact on economic growth of Nigeria.

Keywords: Exchange Rate, Inflation Rate, Interest Rate, Nigeria, economic growth, fluctuating exchange rate

Unauthorized Withdrawal from ATM/POS: Compounding Customers’ Nightmares in the Banking Sector of Nigeria (Published)

In recent times, a lot of bank customers have experienced a sudden disappearance of funds in their bank accounts and this has been a source of concern to the stakeholders in the banking sector of Nigeria. These are unauthorized transactions which occur without the consent or authorization from the customers. The unauthorized transactions may be in the form of illegal or unauthorized withdrawals by criminals or indiscriminate or multiple deductions or debits by the banks claiming to be ATM/POS transaction charges. In some cases, the entire life savings of a customer may be siphoned without any trace of the source of the illegal withdrawals. This paper examines these cases of unauthorized transactions in the accounts of bank customers and argues that appropriate steps should be taken by the banks to prevent unauthorized transactions in the customers’ accounts rather than rely an exemption clause which may not avail them when they are negligent. The paper concludes that the customers also have a role to play to guard against unauthorized withdrawals in their accounts, and recommends among others, that any customer who discovers any unauthorized transaction in his or her account should immediately report to the bank for appropriate action to be taken.

Keywords: ATM/POS, Banking Sector, Nigeria, customers’ nightmares, unauthorized withdrawal