Articles

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Open Access
EFFECT OF INWARD CAPITAL FLOWS ON FINANCIAL STABILITY IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2021-09-09) Ebire, Kolawole; Nwala, Maureen Nneka; Aza, Solomon Mangba
Capital outflows, if not properly managed, could result in instability of the financial system. This study, therefore, examines the effect of outward capital flows on financial stability in Nigeria, spanning over 2003:Q1 to 2019:Q4. The hypotheses were analysed using Error Correction Mechanism (ECM). The speed of adjustment to its long-run equilibrium was estimated at 10.2%. The findings showed that outward FD1 and other capital flows significantly affect financial stability in Nigeria. However, these effects are negative. In contrast, outward portfolio investment has a significant effect on financial stability in Nigeria. The analysis also showed that controlling for macroeconomic factors such as GDP and inflation rate does not significantly affect Nigeria's financial stability. Based on the findings, the study recommended that monetary authorities should adopt strict capital control measures to curb capital outflows such as outward FDI and other capital flows, which could distort the financial system and lead to instability.
Open Access
The Determinant of Equity Share Price and the Listed Deposit Money Banks in Nigeria
(Department of Accounting, Nasarawa State University Keffi, 2019-01-01) Godwin, Emmanuel Oyedokun; Olusegun, Adebawale Arotolu; Vincent, Harrison S.
In this study. the researcher examined the financial variables influencing the share price of listed deposit money banks in Nigeria. An ex-post facto research design was employed with the population consisting of all fifteen (15) listed deposit money banks on the Nigeria Stock Exchange (NSE), and a sample of twelve (12) listed deposit money banks on NSE was taken using filter criteria and judgmental sampling techniques. Secondary data used were sourced from the annual reports of the sampled banks and GTI Securities Ltd. for five years period from 2013- 2017. Ordinary Least Square (OLS) was used to analyze the data. The results of the multiple regression revealed that the dividend payout ratio and price-earnings ratio have a significant positive relationship with the share price. The results also showed that dividend yield has a significant negative association with share price; the book value per share has no meaningful relationship with the share price. This study recommends that the shareholders in the deposit money banks should be guided by industry financial ratios, especially the profitability measures ofprice-earnings ratio and dividend payout ratio, as they are critical factors in predicting share price behavior.
Open Access
EFFECT OF MONETARY POLICY ON THE PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2020-01-01) Gimba, John Toro; Vincent, Harrison S.; Oyedokun, Godwin Emmaneul
This study examines the effect of monetary policy on the performance of listed deposit money hanks in Nigeria from 2006-2018. The research design adopted for this study was ex post-facto research design. Panel time series data were extracted based on the variables used in the study. Net profit margin (NPM) as the dependent variable, while liquidity ratio (LQR), Interest Rate (INR), Loan to deposit ratio (LDR) and cash reserve ratio (CRR) as independent proxies to measure monetary policy. The findings show that monetary policy has significant effect on the performance of listed deposit money banks in Nigeria. Based on the result, it was concluded that liquidity ratio and loan to deposit are significant on net profit margin, likewise interest rate and cash reserve ratio were insignificant on net profit margin. Therefore, the effect of monetary policy on the Nigeria commercial banks as an engine for controlling inflation, unemployment etc is geared towards finding a positive and constructive role for the economy. Based on the findings, it was recommended that; the Central Bank of Nigeria should manage the monetary policy rate properly, with the recent increase of loan to deposit. Government should also employ other measures to control the loan to deposit and the monetary authorities should also minimize the 22.5 % Cash reserve ratio in order to influence the level of bank performance with capacity to raise a volume of funds and also reduce the liquidity ratio from 30% to 25% to prevent the banks from folding up.
Open Access
EFFECT OF FOREIGN CAPITAL INFLOW ON THE GROWTH OF MANUFACTURING SECTOR IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2022-10-10) Udenwa, Theresa A.; Vincent, Harrison S.; Gimba, John Toro
Nigeria as Africa’s most populous black nation remain underdeveloped, mainly due to shambolic manufacturing sector growth. Rising from problems of insecurity, corrupt practices, consumerism structure have made gains from capital inflows minimal. This anomaly has resulted in shortsighted policy formulation and attendant consequences. Given the prominence of this problem and the gap existing in literature this study examined the effect of foreign capital inflows on the growth of manufacturing sector in Nigeria. The paper adopts ex post facto research design. The study covered a period of thirty-five (35) years from 1986 to 2020. Data were collected from the world Bank and CBN statistical bulletin. The foreign capital inflow was represented by foreign direct investment, foreign portfolio, official development assistance and official remittances inflow while manufacturing sector growth was measured using log of manufacturing sector output growth. This study employed the two-step Engle and Granger estimation procedure and the Granger Causality to estimate parameters of the indices of manufacturing output growth and capital inflows to Nigeria. Findings revealed that foreign direct investment (FDI) and portfolio investment have a significant positive relationship with the manufacturing sector growth in Nigeria while official development assistance and official remittances inflow have insignificant effect on the growth of manufacturing sector. Findings also revealed unidirectional causality of foreign direct investment (FDI) and portfolio investment to the growth of manufacturing sector in Nigeria. Based on the findings, it was recommended that the Nigerian government should create an enabling environment to attract more capital inflow that could augment domestic resources with the sole aim of growing the manufacturing sector.
Open Access
Impact of Leverage on the Financial Performance of fisted Manufacturing Firms in Nigeria
(Department of Accounting, Nasarawa State University Keffi, 2018-12-12) Gimba, John Toro; Vincent, Harrison S.; Kwagga, John Favekwaggi
In the capital build-up of an entity, it is usual for firms to select from different sources of finance with which investment can be financed. This research therefore seeks to establish whether or not leverage has an impact on the financial performance of listed manufacturing industries in Nigeria. Samples of four industries listed in the Nigerian Stock Exchange out of a population offifteen listed manufacturing industries were selected for the purpose of this research. Descriptive as well as regression analysis were used to analyze the data collected from the annual audited financial statement of these firms. The independent variables employed in the research were Debt and Equity while the dependent variables were Return on Asset, and Return on Equity. Ratios were computed accordingly and entered into E-views software for analysis. Finding revealed that debt had negative and significant impact on the financial performance of listed manufacturing firms in Nigeria. Recommendations were made that managers of manufacturing firms should prioritize their sources of financing and ensure that minimum debt or optimal debt financing is employed in the capital structure.
Open Access
EFFECT OF GOVERNMENT AGRICULTURAL EXPENDITURE ON AGRICULTURAL PRODUCTIVITY IN NIGERIA
(Department of Accounting, Nasarawa State University Keffi, 2020-01-01) Vincent, Harrison S.; Efionayi, Prosper O.; Nathaniel, Gbadebo
Agricultural sector in Nigeria is the most sensitive and crucial sector that has a direct link with the well-being of all other sectors, thereby requires more financial attention. This study examines the effect of government agricultural expenditure on agricultural productivity in Nigeria. An ex-post facto research design was employed for this study. Secondary data were collected from Central Bank of Nigeria Statistical Bulletin for a period of twenty-one years spanning through 1999 to 2019. Employing the econometric methodology of the Johansen Cointegration and Vector Error Correction Model (VECM), the study established a long run relationship between the variables. The Ordinary Least Square (OLS) result shows that government expenditure in agriculture has significant effect on agricultural productivity in Nigeria. The study recommends that government should increase its expenditure in agriculture in order to contribute more to the Output (productivity) as against its current contribution in order to achieve the desire goal of food security in Nigeria.
Open Access
IMPACT OF BANK CREDITS ON AGRICULTURAL PRODUCTIVITY IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2020-01-20) Efionayi, Prosper O.; Vincent, Harrison S.; Kingsley, Nwaigwe O.
The study examined the impact of bank credits on agricultural productivity in Nigeria. The specific objectives of the study were to examine the impact of commercial banks' credits to agriculture on agricultural productivity in Nigeria; and evaluate the impact of microfinance banks' credits to agriculture on agricultural productivity in Nigeria. The study adopted ex-post-facto research design. Time series data were generated from Central Bank of Nigeria Statistical Bulletin from 1992 to 2018. Ordinary Least Square (OLS) was the method of analysis used to estimate the Multiple Linear Regression Model (MLRM) through E-Views computer software application. The other tools of data analysis used were descriptive statistics unit root test and co-integration test and VAR. The study found out that both commercial and microfinance banks' credits invested in agriculture were statistically significant with agricultural productivity in Nigeria. The study concluded that bank credits have significant impact on agricultural productivity in Nigeria. The study recommended that the significant impact of commercial and microfinance banks' credits invested in agriculture callf or more allocation of credit to the agricultural sector in Nigeria. This could be achieved by the Central Bank of Nigeria (CBN) cutting down on the interest rate changed on money borrowed by farmers for the purpose of boosting agricultural production.
Open Access
EFFECT OF SELECTED MACROECONOMIC VARIABLES ON BANK LENDING IN NIGERIA.
(Department of Accounting, Nasarawa State University Keffi, 2020-03-20) Vincent, Harrison S.; Gbadebo, Nathaniel; Gimba, John Toro
Bank lending in Nigeria can never be overemphasis as banks play a very crucial role in the development of evety economy. This study examines the impact of selected macroeconomic variables on bank lending in Nigeria. Secondary data were collectedfrom Central Bank of Nigeria Statistical Bulletin for period spanning through 2000 to 2018. Employing the econometric methodology of the Johansen Cointegration and Vector Error Correction Model (VECM), the study established a long run relationship among the variables. The Ordinary Least Square (OLS) result shows that exchange rate has no significant effect on banks' lending in Nigeria, while gross domestic product has significant effect on bank lending in Nigeria. Based the findings ofthis study and the conclusion derived, the study recommended that macroeconomic policy makers should adopt policy measures geared toward controlling the rising trend of exchange rate in Nigeria. While effort should be made by the managers of the economy toward restoring the Nigerian economy to the path of sustainable and inclusive growth with the view of aborting the harmful effect of loan curtailment on investment and economic growth in the long-run.
Open Access
EFFECT OF GOVERNMENT BORROWING ON ECONOMIC OUTPUT IN NIGERIA.
(Department of Banking and Finance, Nasarawa State University Keffi, 2020-01-02) Olaolu, Dele; Vincent, Harrison S.; Kingsley, Nwaigwe O.
This study examines the effect of government borrowing on economic output in Nigeria. Government borrowing was proxied by external debt(ED), Domestic debt (DD) and Total debt servicing (TDS) while Economic output was proxied by Gross Domestic Product (GDP). An ex post facto research design was employed for this study. Secondary data were collected from Central Bank of Nigeria Statistical Bulletin for twenty years period spanning through 2010 to 2019.Employing the econometric methodology of the Johansen Cointegration and Vector Error Correction Model (VECM), the study established a long run relationship among the variables. The Ordinary Least Square (OLS) result revealed that economic output is significantly influenced by external debt and Domestic debt while debt servicing does not significantly influenced economic output. It is recommended that Government and policy makers should carefully study the present state of the economy before deciding on measures through which deficit will be financed, maintain optimum level of external debt as it is one of the mechanisms for economic output and that all external debt should be effectively utilizedfor the purposef or which it was obtained. Debts should be contracted solely for economic reasons and not for social or political reasons. This is to avoid accumulation of debt stock overtime and prevent an obscuring of the motive behind debt servicing, hence investing this debt finance into capital investment that has the tendency to raise the overall output of the Nigeria economy.
Open Access
EFFECT OF FINANCIAL PERFORMANCE ON EQUITY SHARE PRICE OF QUOTED DEPOSIT MONEY BANKS IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2019-03-03) Ajah, Boniface Audu; Vincent, Harrison S.
The health of every firm can be ascertained through their financial performance, especially the banking sector, hence investors have keen eye on the banks that are performingf inancially. This study examined the effect offinancial performance on equity share price of quoted deposit money banks in Nigeria. An ex-post facto research design was employed for this study. The population of this study consists of all thirteen (13) listed deposit money banks on Nigerian Stock Exchange. A sample size of twelve (12) listed deposit money banks on the Nigerian Stock Exchange was taken. Secondary data were collected from annual reports of the sampled banks for ten years period from 2009-2018. In analyzing the data, Ordinary Least Square was used. The results of the multiple regressions revealed that return on asset and earnings per share have a significant effect on share price. While net profit margin had an insignificant effect on share price. The study recommends that the banks9 should improve more on their profitability which will increase both the net profit margin and return on asset for a better stock returns. Bank activities and operational efficiency that may lead to increase in bank profit should be evaluated.
Open Access
IMPACT OF CAPITAL MARKET ON ECONOMIC GROWTH IN NIGERIA
(Department of Banking and Finance, Nasarawa State University, Keffi., 2017-10-13) Akinnagbe, Orimisan
The capital market is a major driving force of economic growth and development of a nation. This means that the performance of the capital market is an impetus for economic growth and development. Nigeria is not left out in the desire to maximize the gains of the capital market to boost its economy. This research empirically examines the impact of the Nigerian Capital Market on the economy looking at 36 years period from 1981 to 2016. The study seeks to determine the trend of capital market over the years, examine the relationship between capital market and economic growth, and to proffer recommendations based on this research findings. The secondaiy data source was usedfor this study. The study adopted descriptive research design and estimated the empirical models using the Ordinary> Least Square (OLS) technique for the study. Economic growth was proxied by Real Gross Domestic Product (RGDP) while the capital market variables considered include: market capitalization (MCAP), total value traded ratio (VTR), turnover ratio (TOR) and foreign direct investment (FDI). The evidence from this study reveals that the activities in the capital market tend to impact positively on the economy. It was concluded and recommended that the government and regulatory authority should initiate policies and measures that would encourage more companies to access the market and boost investors' confidence in the running of Nigerian Capital Market so that it could contribute significantly to the growth of economy
Open Access
Impact of Non-Oil Exports on Nigeria’s Economic Growth
(Department of Banking and Finance, Nasarawa State University Keffi, 2019-03-03) Ahmed, Mahmoud A.; Gimba, John Toro; Vincent, Harrison S.
Nigeria's economy which was highly dependent on agriculture was transformed to one highly dependent on oil due to the oil boom of 1970s and turned Nigerian economy into a mono culture economy depending on oil revenue for her income. The oil prices fluctuate in the international market and any shock in oil prices will negatively affect her income and economic policies with the consequences of having negative impact on her economic growth. This paper addressed the problem by investigating the impact of non-oil export on Nigeria's economic growth, employing a secondary data from the publications of CBN annual reports of non-oil export and GDP from the period of the study 1988 to 2016, applying simple list square regression analysis on SPSS software, using analysis of variance (ANOVA) based on F distribution at a 5% level of significance. The results of this study indicate a positive impact of non-oil revenue on Nigeria’s economic growth.
Open Access
NEXUS BETWEEN FINANCIAL SECTOR DEVELOPMENT AND ECONOMIC GROWTH IN NIGERIA
(Department of Banking and Finance, Nasarawa State University Keffi, 2019-03-05) Vincent, Harrison S.; Aruwa, Suleiman A.S.; Gimba, John Toro
This study evaluates the nexus between financial sector development and economic growth in Nigeria for the period 1986 to 2016. Secondary data were extracted from Central Bank of Nigeria statistical bulletin 2016. The dependent variable is Economic growth which was proxy by GDP and the independent variable is financial sector development which was proxy by credit to private sector and market capitalization while inflation rate as control variable. Expo-facto research design was thus used. The study applied multiple regression model ofanalysis using Eview statistical package version 8. It was found thatf inancial sector development has positive and significant relationship with economic growth in the period of study. The study recommends that Central Bank of Nigeria (CBN) ensure effective compliance with its credit control policy which direct credit to more productive private sector activities and the Securities and Exchange Commissionformulating strategies to deepen the Nigerian Stockmarket.
Open Access
EEFECT OF EXCHANGE RATE FLUCTUATIONS ON THE NIGERIA STOCK MARKET
(Department of Banking and Finance, Nasarawa State University Keffi, 2017-03-01) Gimba, John Toro; Mahmoud, A.; Vincent, Harrison S.
Exchange rate fluctuation has implications for the financial system in the country especially the stock market. However available literature revealed contrasting views of researchers on the issue of exchange rate fluctuations impacting on stock market. Through the Regression model, this study assess the effect of exchange rate fluctuations on and Nigeria stock market. Secondary data relating to the study were obtained from Centra! Bank of Nigeria Statistical Bulletin and Nigeria Stock Exchange fact hook for the period 1986 to 2016 Market Capitalization and AH Share Index were used as the dependent proxies and naira against American dollar rate as the independent proxy. If was found that exchange rate has a significant relationship with Nigeria stock market. It was cone!tided based on the analysis that exchange rate has more significant relationship on All Share index. Based on the findings, it was recommended that a coordinated monetary and fiscal policies should be put in place to check mate the fluctuation of exchange rate in order to deepen the depth of the Stock Market.
Open Access
EFFECT OF FOREIGN EXCHANGE RATE FLUCTUTUION ON THE PERFORMAMNCE OF THE NIGERIAN STOCK MARKET
(2022-02-02) Theresa, Udenwa; Hassan, Tukur Rabiu
This study examines the effect of foreign exchange on the performance of the Nigerian stock market for the period 2011Q1 to 2021Q1. Quarterly time series data for British pounds sterling to naira rates, Chinese yuan to naira rates and market capitalization were collected from the Nigerian stock exchange statistical bulletin and the Central Bank of Nigeria statistical bulletin. Philip Perron test was used to test the stationarity of the data and the Johansen cointegration test was utilized to determine presence of long run relationship. Vector Autoregressive Model (VAR) was used for analysis since cointegration was not established in the series. Ordinary Least Square method was used to test the effect of foreign exchange fluctuations on the performance of the Nigerian stock market. The findings showed that Pounds sterling to naira has significant effect on market capitalization in Nigeria. Chinese yuan to naira on the other hand have insignificant effect on market capitalization in Nigeria. It is recommended that more efforts should be put in place especially by increasing Pound streling through foreign exchange-based securities that will help to attract bigger net foreign exchange inflows rather than relying on export of crude oil. The Securities & Exchange Commission, the Nigerian Exchange Group, the debt Management office and big corporates should encourage more foreign portfolio investment in the stock market through the use and creation of foreign exchange based securities of pounds sterling as it has shown a significant relationship with performance of the Nigerian stock market. There is need for the Central Bank of Nigeria to have a second look at the Nigeria/China currency swap so as to redirect the objectives towards achieving greater economic benefit for Nigeria..
Open Access
MONETARY POLICY IMPLEMENTATION IN DEVELOPING ECONOMIES: THE NIGERIAN FINANCIAL SYSTEMS PERSPECTIVE
(Department of Banking and Finance, Faculty Of Administration Nasarawa State University, Keffi., 1998-12-10) Udenwa, Theresa A
Monetary policy is a very component of any country's economic policy aimed at achieving economic growth and development. Developing nations like Nigeria have been facing up-hill tasks in implementing their monetary policies due to such deficiencies as the existence .of undeveloped money markets, excessive government borrowing and budgetary deficits among other problems. But, despite these inadequacies, the country has, through the implementation of its monetary policies, been able to stimulate competition in the financial sector, achieve greater efficiency in the allocation of resources and maintain the liquidity in the system within a reasonable level.
Open Access
BANK FRAUDS IN NIGERIA AN ANATOMY OF INTERNAL CONTROL
(Department of Banking and Finance, Faculty Of Administration Nasarawa State University, Keffi., 1998-12-14) Udenwa, Theresa A
Banking fraud is an economic cankerworm that is fast eating deep into the fabrics of the banking sector of many economies including Nigeria. The adverse effects of this phenomenon can not be overemphasized because not only does it spell disaster for the banks and their customers but also for the entire economic system. In fact this ugly trend accounts for part of the high level of distress currently witnessed in the banking sector. An analysis of bank frauds in the Nigerian banking system shows that between 1989 and 1993, the level of frauds have been on the increase in both number and quantum. There is need, therefore, to examine the nature and causes of such frauds as to be able to recommend appropriate solutions and in the process establish the role of effective internal control. This is of importance not just to the Nigerian economy but to all those economies where banking fraud is prevalent.
Open Access
FOREIGN EXCHANGE MANAGEMENT: THE NIGERIAN EXPERIENCE
(Department of Banking and Finance, Faculty Of Administration Nasarawa State University, Keffi., 1995-12-19) Udenwa, Theresa A
Foreign exchange could be defined as the monetary asset used for the settlement of current international transactions and for financing imbalances in a country's external payments. It could arise from foreign currency receipts from the export of goods and services, inflow of foreign capital such as loans and investments or from grants, aids and gifts which represent unilateral transfers. The interdependence of Nations in terms of international trade has grown so much that, perhaps, no country can lay absolute claim on self-sufficiency in its resource requirements or on a perfectly balanced supply of resources. Also since resources (including foreign currency) are scarce, the need for management of such resources becomes inevitable. Foreign exchange earnings from international trade transactions are vital for the economic development of most nations especially the less developed countries since such earnings can induce increased factor supplies and promote the development of technical-know-how which should enhance domestic capital formation and economic growth. Consequently the role of foreign exchange has become a critical element in the development planning process of less developed countries, it, therefore, becomes necessary that for a country to optimise the advantages of foreign exchange earnings, it has to have a sound foreign exchange management strategy.
Open Access
COMMUNITY BANKING IN NIGERIA: PROBLEMS AND PROSPECTS
(Department of Banking and Finance, Faculty Of Administration Nasarawa State University, Keffi., 2002-12-17) Udenwa, Theresa A
The community banking scheme is an innovative banking institution that took off in Nigeria in 1990. It is meant to be a tool for the financial and economic emancipation of rural communities and groups like community development associations, co-operative societies, farmers’ groups and trade groups who hitherto had been finding it very difficult gaining access to credit facilities through the orthodox banking institution. Recent, as it is, there are currently more community banks in the country than any financial institution all spread throughout the states of the federation. But their operations have not been hitch-free as they have been encountering some problems. This paper, therefore, is an x-ray of the community banking scheme in Nigeria with a view to determining their problems and prospects for the future.
Open Access
IMPACT OF BANK PROXIMITY AND ACCESSIBILITY ON ECONOMIC GROWTH IN NIGERIA
(Department of Banking and Finance, Faculty Of Administration Nasarawa State University, Keffi., 2021-06-23) Busari, Rashidat Ayanbanke; Udenwa, Theresa A; Abubakar, Halimatu Sa'adiya
This study empirically examined the impact bank proximity and accessibility on the economic grouth of Nigeria within the period 1986 to 2019. The specific objectives are to assess the impact of bank proximity on economic growth in Nigeria and investigate the impact of bank accessibility on economic grozvth in Nigeria.Also, the study adopted the ex post facto research design and employed the Autoregressive Distributed Lagged (ARDL) and the Error Correction Model (ECM) were used to establish the short-run and long-run effect of financial inclusion determinants on economic growth in Nigeria. EGRN is Economic Growth in Nigeria which serves as the dependent variable, Wltile ACS is Bank Accessibility and PROX is Bank Proximity in Nigeria serves as the independent variables. Findings revealed established that all the variables have a positive impact on economic growth in Nigeria both in the long run and short run. However, the probability of the ARDL result showed that Bank Accessibility in Nigeria (ACE) zvas insignificant in explaining the variation in economic grozvth in Nigeria, zvhile the ECM revealed that Bank Proximity in Nigeria (PROX) grozvth in Nigeria. This study recommended that financial authorities should put a mechanism in place bank branches and increase the number of bank branches per certain statistically significant zvas in explaining the variation in the economic that zvill enable banks to open more number of population and ATMs provision for maximum formal financial services to the rural population on short team basis since bank proximity has a significant impact on economic gin the short run.