2022 Archive
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Title: EFFECT OF FOREIGN EXCHANGE AND INTEREST RATES ON ECONOMIC GROWTH IN NIGERIA.pdf Author: Oluwatoyosi Tolulope Olurin, Comfort Omowunmi Akande & Abolade Francis Akintola Abstract: Abstract The study investigated effects of foreign exchange and interest rates on economic growth in Nigeria from 1991 to 2020 (periods of regulation and deregulation in Nigeria). Secondary data used for the study were sourced from Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics (NBS). Ordinary Least Square (OLS) regression technique was used to analyze the data used for the study. Empirical result indicated that foreign exchange rate had a positive and insignificant impact on economic growth in Nigeria, while interest rate had a positive and significant impact on economic growth in Nigeria within the period covered by the study. The findings from this study also showed that both the foreign exchange and interest rates explained about 97% of the variation in the Nigerian economic growth. The study therefore recommends that high dependence on import needs to be discouraged in order to reduce the pressure on foreign exchange. Government should also create conducive environment and infrastructural facilities that will attract foreign direct investment (FDI) into export-oriented sector that will earn foreign exchange for the country. Lastly, the study recommends that monetary authorities should design and implement interest rate policies that will promote and stimulate economic growth. Keywords: Foreign exchange rate, interest rate, monetary policy, gross domestic product (GDP), economic growth. View |
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Title: PUBLIC EXPENDITURE, INCOME DISTRIBUTION AND ECONOMIC GROWTH NEXUS IN NIGERIA.pdf Author: Mgbemena, I. B., Ifionu, E.P. & Ogunbiyi, S. S. Abstract: Abstract The debate on the level of social inclusion and income inequality is becoming severe globally. That social and political crises are on the rise is unarguable and whether this is a product of widening income inequality is a subject of investigation. Therefore, the study examined the Implication of fiscal policy on economic development in Nigeria between 1981 to 2020. A model was developed in which economic growth (proxied as growth rate of gross domestic product) is expressed as a function of public recurrent and capital expenditure as moderated by income distribution (represented using the Gini coefficient). The econometric techniques of Augmented Dickey Fuller test, Co-integration test, Error Correction model estimation, and the dynamic partial correlation analysis. Income inequality had a dampening effect on the efficacy of public expenditure on economic growth which shows that the expenditure patterns are highly skewed towards increasing inequality in the economy. Besides, the study recommends to the Nigerian governments to enhance gross domestic investment and regulatory quality and reduce government consumption policies to improve their countries’ economic growth. Keywords: Expenditure, Inequality, Economic Growth, Capital Expenditure, Recurrent Expenditure. View |
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Title: AN INVESTIGATION OF IMPACT OF IJARAH (LEASE) FINANCING ON NON-INTEREST BANK’.pdf Author: Ajagbe, Surajdeen Tunde PhD, Bello, Modinat Damilola & Usman, Taofeek Bolaji Abstract: Abstract Commercial banks and Non-Interest banks have a similar business of providing loans/financing to those in need and generating a return (interest and profits respectively) from these activities. The study examined the impact of Ijarah (lease) financing on non-interest bank performance in Nigeria. Jaiz Bank Plc was used as a case study because it is the first non-interest bank in Nigeria. Secondary data were sourced from annual reports and accounts of Jaiz bank from the period of 2012 -2021. The study employs descriptive statistics, variance inflation factors and multiple regression techniques in analyzing the data extracted; the analysis was done with the aid of the E-VIEW statistical tool. The study revealed that Ijarah financing and CPI have a negative and significant effect on return on asset, while there is a positive relationship between operating expenses and total assets on return on asset. Also, there is a negative relationship between GDP and return on asset and GDP did not have a significant relationship with return on asset. The result shows that all variables positively affect the return on asset except GDP that have an insignificant relationship with the return on asset. The R2 squared which measures the overall goodness of fit of the regression shows the value of 99%, which indicates that the model is fit. The findings of this study show that Ijarah financing did not have a significant impact on Return on assets. This is because it is just one of the many Islamic modes of financing, the increase or decrease did not have an impact on the profitability of the firm. But this is a very good mode of financing which will be beneficial to the customers in making their life easier and making the standard of living bearable. Keywords: Ijarah, Leasing, Financing, Gross Domestic Product and Return on Assets View |
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Title: MONETARY POLICY AND INFLATION CONTROL IN NIGERIA..pdf Author: Davies, N., Ifionu, E.P. & Ogunbiyi, S. S. Abstract: Abstract The study investigated the nexus between monetary policy and inflationary phenomenon in Nigeria. An historical data sourced from the Apex bank of Nigeria is used in this study and it covers the periods 1980 to 2020. The study selected six indices of Monetary Policy and they include Money Supply, Cash Reserve ratio, Monetary Policy rate, Liquidity ratio, Exchange rate, Treasury bill rate while Inflation rate is the explained variable. Due to the mixed stationary nature of the data, we employed the ARDL methodology alongside various diagnostic tests. It was found that of the six measures of MP indicated in the study, only one (Treasury bill rate) significantly respond to inflationary pressure in Nigeria. The study thus concludes that in the Nigerian context, monetary policy variables had no significant impact on inflation. As such, we recommend that to bring inflation under control, government needs to pay attention to other matters heating up the economy. Keywords: Money Supply, Cash Reserve ratio, Monetary Policy rate, Liquidity ratio, Exchange rate, Inflation rate, Auto Regressive Distributed Lag (ARDL). View |
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Title: ASSET QUALITY AND PROFITABILITY OF COMMERCIAL BANKS EVIDENCE FROM NIGERIA.pdf Author: Lucky Anyike Lucky And Nwosi, Anele Andrew Abstract: Abstract This study examined the relationship between asset quality and the profitability of the fifteen (15) quoted commercial banks in Nigeria from 1980 – 2013. The objective was to investigate the relationship between CAMELS criteria for asset quality and the profitability performance of Nigerian commercial banks. Secondary data were sourced from annual reports of the quoted commercial banks. Return on Investment (ROI) was modeled as the function of percentage of non-performing loans to Total Loans (NPL/TL), percentage of Non- performing Loans to Total Customers’ Deposit (NPL//TCD), percentage of Loan Loss Provision to Total Loans (LLP/TL) and percentage of Loan Loss Provision to Total Asset (LLP/TA). Multiple regressions with econometric view statistical package were used as data analysis method. The Ordinary Least Square properties of Augmented Dickey Fuller Test, Co-integration and Granger Causality test were employed to determine the short and long –run relationship between the dependent and the independent variables. Findings from the regression result proved that percentage of non-performing loans to Total Loans and percentage of non- performing Loans to Total Customers’ Deposit have positive relationship with Return on Investment while percentage of Loan Loss Provision to Total Loans and percentage of Loan Loss Provision to Total Asset have negative relationship with Return on Investment of the commercial banks. The Unit Root test shows stationarity of the variables in order of 1(1), the co-integration reveal long run relationship between the variables while the granger causality reveals no causal relationship among the variables. The model summary proved that the independent variables can explain 65.5% variation on the dependent variables while the F-statistics of 12.508477 and the probability of 0.000008 proved that the model is significant. The study concludes that there is significant relationship between asset quality and the profitability of the commercial banks. It recommends that bank lending environment should be well examined before and after credit and the regulatory authorities should ensure sound bank lending environment to avoid the incidence of non-performing loans to enhance the profitability of commercial banks in Nigeria. Keywords: Asset Quality, Commercial banks, Profitability View |
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Title: STOCK PRICE DETERMINATION IN THE NIGERIAN STOCK EXCHANGE MARKET 2005-2010.pdf Author: Sule, Magaji, Ismaila Daddy Abubakar & Tahir, Hussaini Mairiga Abstract: Abstract Stock price index and market capitalization were seen to have crashed during the wake of the recent financial meltdown. This research investigates the determinants of stock price volatility in Nigeria. Multiple regression and vector auto regression (VAR) models were utilized to measure the response of stock price to prior price level, capital gain, information, excess demand, and quantity of stock traded using data on daily transaction, covering the period 2005 to 2010. Prior price level and capital gain were found as the overriding factors in stock price determination. However, shocks to stock price account for the largest variation in the future value of stock price. Accordingly, both regulators and companies are urged to stop frequent alteration of prevailing stock price by allowing the market forces to determine the prices while systematically preventing the market against negative external and internal forces. Keywords: Stock price index, market capitalization, financial meltdown, Vector autoregressive (VAR) models, stock price determination. View |
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Title: LIQUIDITY RISK MANAGEMENT AND CORPORATE VALUE IN THE NIGERIA MANUFACTURING INDUSTRY AN INSTRUMENTAL VARIABLE REGRESSION APPROACH.pdf Author: Chike, Chinwe Blessing & Christopher C. Ebere Abstract: Abstract This research paper investigated the relationship between liquidity risk management and the corporate value of manufacturing companies in Nigeria. The research sourced for data (using the content analysis technique) from the audited annual financial statements of a sample of 27 listed manufacturing companies. Liquidity risk management was measured using the defensive interval ratio (DIR) and quick asset (QAR) ratios adopted by the companies while book to market (BTM) value was used to measure corporate value. The instrumental variable regression (IVR) was applied through the two stage least squares (TSLS) technique for data analysis. Cash and near cash assets (CAS); accounts receivable (REC); and accounts payable (PAY) were included in the model as instrumental variables. Findings of the research revealed that while defensive interval ratio (DIR) had a positive and statistically significant relationship with corporate value quick asset ratio (QAR) had negative and non-significant relationship with corporate value. From the findings of the research, it is concluded that the use of liquidity risk a management strategies and methods have varying effects and contributions to corporate value of manufacturing companies in Nigeria. However, this depends on the method adopted and the intensity of application of such methods. The research thus recommends that business organisations must first understand the structure of their liquidity inflows and outflows in order to determine the optimal method that would be suitable for individual organisation. It is also suggested that corporations conduct continual review of their liquidity levels and risk management techniques in order to determine the optimal methods. Keywords: Corporate value, Liquidity Risk Management, Book to Market Ratio, Quick Ratio, Defensive Interval Ratio. View |
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Title: AUDIT COMMITTEE INDEPENDENCE, MEETING FREQUENCY, ATTENDANCE AND FINANCIAL REPORTING QUALITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA.pdf Author: Dr. Koholga Ormin & Mal. Babangida Ibrahim Tuta Abstract: Abstract Audit committee is a statutorily corporate governance mechanism introduced to curb financial reporting manipulation therefore enhanced the quality of financial reports. However, the effectiveness of the audit committee is dependent on its attributes. This paper examines the influence of the audit committee attributes of independence, meeting frequency and attendance on the financial reporting quality of listed deposit money banks in Nigeria. Data was generated from the annual reports and accounts of six purposively sampled banks during the period 2003 to 2012. The data was analyzed using Pearson correlation statistics and OLS regression. The results show that audit committee independence has negative and significant influence on financial reporting quality of listed deposit money banks in Nigeria. While, audit committee meeting frequency and attendance has positive and significant influence on financial reporting quality of listed deposit money banks in Nigeria. The paper recommends that the Central Bank of Nigeria should step up monitoring the appointment of persons into audit committees and amend the provision of having shareholders and directors on audit committee to all members being independent Non-Executive Directors (NEDs), increase the minimum number of meetings from three to at least four, and regulate for the replacement of any member who is absent at meetings more than once in a year. Keywords: Audit committee, independence, meeting frequency, attendance, financial reporting quality. View |
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Title: ASSET COMPOSITION AND FIRM STABILITY-A PANEL STUDY OF SELECTED MANUFACTURING FIRMS AND CONGLOMERATES IN NIGERIA.pdf Author: Moneke Patricia A., Nonye Stella Agubata (Ph.D), Frankline C.S.A OKEKE (Ph.D) & Ofor, Theresa Nkechi (Ph.D) Abstract: This study examines the impact of asset structure on financial stability of manufacturing firms in Nigeria. Panel data set covering the period from 2011-2021were collected from a sample of 37 manufacturing firms listed on the Nigeria Exchange Group. The interest variables include Altman Z score (a proxy for corporate financial stability), while Property, Plants and Equipment, Current asset, Intangible assets and Financial asset were the proxies for Assets Structure. After the necessary pre-estimation test to ensure that the estimated model output was robust and valid for policy purposes, the Hausman test was further applied to enhance precision in selecting either the fixed effect or random effect. Based on the Hausman test, fixed effect regression output was found to be most appropriate hence, the fixed effect regression results for the two models was adopted. Accordingly, the first model equation revealed that Current asset (CAST) and Leverage (LVG) impacted significantly on Corporate stability (COPS) of manufacturing firms in Nigeria while Financial Assets (FAST) and Intangible Assets (INTA) had no significant impact on corporate stability of same firms. Furthermore, the result of equation (2) revealed that Property, Plant and Equipment (PPE) and leverage (LVG) impacted significantly on Corporate Stability of manufacturing firms. While LVG improved COPS, PPE deteriorated COPS. In conclusion the manufacturing firms in Nigeria are in the gray area-tilting to financial distress, as revealed by the average Altman z score of 1.3. However, these firms can rebuild/strategize by increasing Corporate financial stability and prevent bankruptcy through increasing their Current Assets and reducing leverage. Thus, the current study has unraveled the influence of assets structure (composition) on corporate stability of manufacturing firms in Nigeria. Keywords: Asset Composition, Corporate Stability, Bankruptcy and Hausman Test. View |