Nigeria

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

Impact of Social Costs on Business Reputation Among Listed Firms in Nigeria: Structural Equation Modeling Approach (Published)

There are frequent disruptive developments in the contemporary business environment, which is chaotic. A restriction is the inability of an organisation to predict future performance with certainty. To improve company performance and develop their reputation, organisations must strike a balance between the economic (removal of societal costs) and non-economic (business reputation) sides of their operations. Consequently, this study examined how social costs impact the business reputation of listed companies in Nigeria. The study used survey research designs. The population was made up of 168 firms that were listed on the Nigerian Exchange Group as of December 31, 2022. To collect primary data, a standardised and verified questionnaire was used. For the analysis, a structural equation model was employed. The results of the first hypothesis refuted the findings of the initial hypothesis, which demonstrated a strong positive correlation between social costs and business reputation. The study yields a standardised estimate of 0.840 (t-value = 8.116, p 0.001), demonstrating that social costs significantly affect the reputations of listed firms. The second hypothesis postulates a positive relationship between innovation and a company’s reputation (standardised estimate = 0.547, t-value = 4.562, p 0.001). The relationship between business ethics and reputation is still negligible, with a standardised estimate of 0.116, a t-value of 0.669, and a p-value of 0.503. The study recommends that corporate managers work harder on social responsibility to boost the reputation of their businesses. Governmental agencies in Nigeria should set up a system encouraging companies to prioritise social responsibility projects.

Keywords: Nigeria, business reputation, listed firms, social costs

Cloud Accounting and the Quality of Financial Reports of Selected Banks in Nigeria (Published)

This study investigated the effect of cloud computing on the quality of financial reports in selected deposit money banks in Nigeria. Software as a service (Saas) and Infrastructure as a service (Iaas), were the cloud computing proxies employed to ascertain their effect on financial reporting quality. Financial reporting quality (FRQT) was measured in terms of qualitative characteristics of financial report as provided by IASB conceptual framework.  The research design adopted in this study was survey design because the data used was primary. The population of the study consisted of 450 respondents drawn from the ten different deposit money banks in Akwa Ibom State. However, the sample size of this study was 212 determined using Taro Yamane formula. Primary data were obtained through Likert 5-points structured questionnaire. In order to examine the cause-effect relationships between the dependent variable and independent variables as well as to test the formulated hypotheses, the study relied on a robust OLS regression analysis. The results obtained from the robust OLS regression analysis revealed that software has a statistically positive but insignificant effect on the financial reporting quality; infrastructure has a statistically positive and significant effect on the financial reporting quality. Thus, we concluded that cloud computing has significant effect on the financial reporting quality of deposit money banks in Nigeria. Based, on these findings, we recommended that banks should adopt cloud computing to accelerate innovation, drive business agility, streamline cost and most importantly increase the financial reporting quality.

 

Keywords: Financial reports, Nigeria, Quality, cloud accounting, selected banks

Audit Committee and Audit Report Lag: Moderating Role of Ownership Concentration of Listed Consumer Goods Firms in Nigeria (Published)

This study examines the moderating role of ownership concentration on the effect of audit characteristics on audit report lag of listed consumer goods firms in Nigeria. The ex-post facto research design was adopted, secondary data was extracted from annual reports and accounts of listed consumer goods firms in Nigeria. The population of the study is twenty-one (21) and the sample size consist of fifteen (15) for ten years (2012-2021). Six (6) companies were flitter out from the study due the technical suspension by NXG during the period of study. Census sample techniques were adopted. PCSEs regression model was employed as technique of data analysis. The findings of the study revealed that the Audit Committee Size (ACS) and Audit Committee Meeting have a positive and significant effect on Audit Report Lag (ARL). Also, the Audit Committee Financial Expertise (ACFE) revealed a positive and insignificant effect on Audit Report Lag (ARL), while the Audit Committee Independence is established to have a negative and insignificant effect on Audit Report Lag (ARL). However, with consideration of moderating role ownership concentration, the Audit Committee Size (ACS) and Audit Committee Meeting (ACM) is found to have significant negative effect on Audit Report Lag (ARL), while the Audit Committee Financial Expertise and Audit Committee Independence are found to have a positive and insignificant effect on Audit Report Lag (ARL). The study concludes that ownership concentration moderates the effect of audit committee on Audit Report Lag. The study recommended that the management of the study firms should continue to sustain the frequency of meetings and size or numbers of the committee in their respective audit committee since the two committee have been empirically proven to have significantly reduced the timeframe of reporting their financial reports.

Keywords: Audit Committee, Audit Report lag, Consumer goods firms, Nigeria, Ownership concentration

Effect of Prospect Factor and Herding Effect on Individual Investment Performance in Nigeria: Moderating Role of Financial Literacy (Published)

Investors exhibit irrational behavior when making an investment decision. The decision-making process itself is considered to be a cognitive process, as the investors have to make a decision based on various alternatives available to them. Prior studies had shown that the investors’ decision-making was adversely affected by the various behavioral factors. This study was carried forward to identify the moderating role of financial literacy (FL) on the effect of prospect factor (PF) and herding effect (HE) on investment performance. The population of study was 3,706 and the sample size was the active investors resident in Kaduna metropolitan within the first quarter of 2023. Thus, 460 structured questionnaires were administered and 349 were returned valid. A convenient sampling technique was adopted in this study, and a primary data was collected from the respondents using both the online Google form and self-administered questionnaire with the help of research assistants. A 7-point Likert-type scale ranging from ‘1’ “Extremely Agree” to ‘7’ “Extremely Disagree” was employed. Smart-PLS 4 and SPSS 20 version was used to analyses the data and explained the demographic characteristics of the individual respectively. Findings from this study revealed that prospect factor and financial literacy have positive and significant influence on individual investment performance, while the herding effect is found to have a negative and insignificant influence on individual investment performance. Furthermore, the moderating role of financial literacy revealed that prospect factor and herding effect have an insignificant negative effect on individual investment performance. The study recommends that individual investors should have high levels of financial literacy. It has been empirically proven that FL help investors make better investment decision, in addition to satisfaction in their investment performance. Also, the investors should maintain the use of prospect behavioral biases when making investment decision as it has improved investment performance.

Keywords: Financial literacy, Nigeria, herding effect, investment performance, prospect factor