This paper explores the impact of digital banking technology adoption on the operational efficien... more This paper explores the impact of digital banking technology adoption on the operational efficiency of commercial banking firms in Nigeria. It synthesizes existing literature to establish theoretical frameworks, including Technological Adoption and Operational Efficiency Theory, Customer Experience and Efficiency Enhancement Theory, and Regulatory Compliance and Risk Management Theory. Empirical evidence is provided through quasi-experimental research design utilizing financial time series analysis. Findings indicate a significant and positive relationship between the adoption of digital banking technology and the efficiency of commercial banking firms. Panel unit root tests confirm non-stationarity at the level values of all variables, with stationarity achieved through differencing. Cointegration tests reveal a long-run equilibrium relationship between digital banking technology adoption and banking efficiency. Pairwise Granger causality tests suggest uni-directional causality from electronic fund transfer to operational efficiency. The study concludes that policymakers and stakeholders should prioritize strategies promoting digital banking technology adoption to enhance the efficiency and performance of commercial banking firms in Nigeria.
This empirical paper investigates the relationship between financial inclusion and economic growt... more This empirical paper investigates the relationship between financial inclusion and economic growth in Nigeria. It draws on the Institutional Theory of Financial Inclusion, Social Capital Theory of Financial Inclusion, and Finance-Growth Nexus Theory as its theoretical foundations. Utilizing annualized data extracted from the Central Bank of Nigeria's Statistical Bulletin (2022), the study employs financial time series methodology, employing Ordinary Least Squares (OLS) and Granger Causality Techniques for comprehensive analysis. The research findings reveal a robust and positive association between financial inclusion and economic growth in Nigeria. Notably, the Granger causality test results establish unidirectional causation from the number of bank branches to Real Gross Domestic Product (RGDP), indicating that as the number of bank branches increases, there is a corresponding augmentation in RGDP. This outcome underscores a discernible cause-and-effect relationship between the two variables. Recognizing the pivotal role of the banking industry in Nigeria's economic development, acting as a crucial channel for monetary transfers within the economy, the study concludes with insightful recommendations that the federal government should facilitate the establishment of low-cost financial centers nationwide, particularly in rural areas, to provide informal banking services to underserved populations. At the same time, operators of automated teller machines should lower transaction fees, thereby fostering increased utilization of ATMs for transactions, thereby reducing dependence on traditional banking methods.
Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a pro...
The main objective of this study is to analyze the impact of digital financial inclusion on pover... more The main objective of this study is to analyze the impact of digital financial inclusion on poverty alleviation in Rivers State, Nigeria. The study focused on residents of Rivers State as the target population. Using a combination of multistage and purposive sampling methods, a sample size of 223 participants was selected. Data collection involved the administration of a structured questionnaire, with steps taken to ensure the validity and reliability of the research instrument. The collected data was analyzed using basic descriptive statistics, including tables, frequencies, graphs, and percentages. Hypotheses were tested using simple regression models through SPSS version 25.0 software. Findings showed a significant and positive correlation between mobile money accounts, presence of point-of-sale (POS) machines, frequency of mobile payments, and consumption expenditure in Rivers State. Based on these results, it is concluded that digital financial inclusion plays an important role in poverty alleviation, especially in developing countries like Nigeria. The recommendation is for the Central Bank of Nigeria to enact effective monetary policies to promote financial inclusion and poverty alleviation. In addition, expanding digital financial services in both urban and rural areas and implementing comprehensive financial literacy programs for low-income individuals, especially in rural areas, are suggested to address financial exclusion and reduce poverty levels.
The global financial crisis underscored the imperative to enhance the efficacy of performance and... more The global financial crisis underscored the imperative to enhance the efficacy of performance and corporate governance practices. This is crucial for enabling banks to proactively identify and address potential issues, thereby fortifying their resilience in times of crisis. Given the pivotal and indispensable roles that commercial banks play in the economy, it is imperative that they operate within well-defined standards of governance. This study empirically investigated the impact of corporate governance on the stability of domestically significant banks in Nigeria over the period of thirteen years from 2010 to 2022.Drawing on time series data sourced from the annual reports of these banks and the Nigerian Exchange fact books, the research employed an expo-facto research design. Various analytical techniques were applied, Panel unit root test Hausman test, panel random effect test, Residual cross-section dependence test, and normality test. The panel random effect regression technique was employed to unveil the shortterm effects with a 95% confidence interval. Our findings unequivocally demonstrate a significant relationship between corporate governance variables (namely, Board Representation, Board Size, Audit Committee Independence, Board Activism, and Audit Committee Meetings) and Capital Adequacy of Banking firms in Nigeria. In light of these results, we advocate for the enforcement of robust corporate governance mechanisms within the banking sector to temper the high risk appetite exhibited by directors. Moreover, there is a pressing need for the implementation of more stringent regulatory measures to uphold the regulatory threshold for soundness of domestically significant banks in Nigeria. Additionally, it is imperative that officers of these banks assume direct liability for approved loans, thereby ensuring that only high-quality assets are recorded on their books.
Advance Journal of Management, Accounting and Finance, 2024
This study investigates the dynamic interplay between digital payment channels and economic growt... more This study investigates the dynamic interplay between digital payment channels and economic growth in Nigeria, drawing on the theoretical frameworks of financial inclusion, economic growth, and technology-driven efficiency and productivity. Leveraging quarterly data from the Central Bank of Nigeria's Statistical Bulletin (2022), the research employs financial time series methodology, utilizing Ordinary Least Squares (OLS) and Granger Causality Techniques for analysis. The findings reveal distinctive impacts of various digital payment channels on economic growth. Specifically, transactions through Automated Teller Machines (ATMs) and Mobile Banking Apps (MBAs) exhibit positive and statistically significant influences, while Point of Sale (POS) transactions lack significant impact, and Electronic Wallet (EWT) transactions display a negative effect. Granger causality tests indicate past values of these digital payment channels can predict future economic growth, suggesting causal relationships. The study underscores the pivotal role of mobile banking apps and ATMs in driving economic growth, emphasizing the need for enhanced digital infrastructure, widespread financial literacy campaigns, and a supportive regulatory framework. The positive correlation between specific channels and economic growth underscores the transformative potential of digital payment systems in Nigeria. Recommendations include investing in digital infrastructure, promoting financial literacy, formulating conducive regulatory frameworks, and fostering continuous research and innovation in financial technology.
Journal of Arts Humanities and Social Sciences, 2024
This study investigates the nexus between banking sector intermediation and economic growth in Ni... more This study investigates the nexus between banking sector intermediation and economic growth in Nigeria through the lens of traditional time series prediction methods, specifically employing multivariate regressions. Spanning a comprehensive dataset from 1960 to 2022, sourced from the Central Bank of Nigeria, the analysis focuses on three crucial banking intermediation indicators: the Ratio of Private Sector Credit to GDP (RPSC), the Ratio of Currency outside Banks to Broad Money Supply (RCOB), and the Ratio of Total Loan to Total Deposit (RTLD). The research methodology encompasses both descriptive and econometric analytical techniques. Descriptive statistics offer preliminary insights, while econometric techniques, including unit root tests, Vector Autoregressive (VAR) models, and cointegration tests, establish relationships between variables and explore long-term dynamics. The findings reveal significant cointegration among the variables, particularly between banking intermediation indicators and economic growth. Lagged values of banking sector intermediation metrics demonstrate a notable influence on their current values, suggesting potential implications for economic growth. The study recommends further exploration using Vector Error Correction Models (VECM) for a nuanced understanding of the long-term dynamics and causal relationships. The study provides four key recommendations. First, a deeper exploration with VECM is suggested to uncover subtleties in the relationships. Second, policymakers should consider the historical trends of banking intermediation metrics when shaping policies. Third, continuous monitoring of these metrics is essential for anticipating shifts in economic growth trends. Lastly, policy measures are recommended to enhance the efficiency of banking intermediation, focusing on credit allocation, currency management, and loan-to-deposit ratios.
Global Journal of Economic and Finance Research, 2024
This study investigates the impact of corporate risk management strategies on quoted companies in... more This study investigates the impact of corporate risk management strategies on quoted companies in Nigeria, focusing on hedging instruments such as forward contracts, futures contracts, options contracts, and swap contracts. The research aims to analyze how these tools influence a company's market value, contributing to our understanding of their role in shaping financial stability and market perception. Grounded in established hedging theory, the study utilizes a robust data analysis methodology, including fixed effects, random effects, Hausman test, and ordinary least squares (OLS) estimation. Various statistical tests, such as T-statistic, F-test, Durbin Watson test, and corrected R-square, assess variable significance and overall regression validity. The analysis reveals a noteworthy negative correlation between forward contracts and market value, suggesting that an increased reliance on forward contracts is associated with a decrease in market valuation, prompting questions about their efficacy in enhancing market value. In contrast, futures contracts show no significant relationship with market value, emphasizing their role in managing price volatility and ensuring supply chain stability. Options contracts yield mixed results, indicating their complex nature and the need for comprehensive investigation. Conversely, swap contracts consistently demonstrate a significant positive relationship with market value, highlighting their potential as highly effective risk management tools. Based on the findings, the study recommends that firms adopt diversified hedging strategies, conduct thorough risk assessments, strategically employ options contracts, maximize the use of swap contracts, engage in continuous monitoring and adaptation, implement integrated risk management frameworks, collaborate with experts, and maintain a long-term perspective in their risk management strategies.
Journal of Economics and Business Management (GASJEBM), 2024
This study explores the relationship between Nigeria's domestic debt dynamics and public investme... more This study explores the relationship between Nigeria's domestic debt dynamics and public investment decisions, considering their implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain, including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills, lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights that can inform policy interventions aimed at promoting fiscal sustainability and economic development.
This study examines the impact of monetary policy on banking system fragility in Nigeria over the... more This study examines the impact of monetary policy on banking system fragility in Nigeria over the period from 1986 to 2022. The financial time series approach was use to gather secondary data since the variables investigated are quantitative. These variables include bank distressed levels, prime lending rates, maximum lending rates, savings rates, Treasury bill rates, treasury certificate rates, monetary policy rate, narrow money supply, broad money supply and currency ratio. The data for these variables were obtained annually from the Central Bank of Nigeria (CBN) statistical bulletin from 1986 to 2022. Stationarity of the variables was assessed using the Augmented Dickey Fuller (ADF) unit root technique due to the presence of structural breaks. After confirming the mixed integration nature of the variables, they were transformed to first order and modeled using the vector Auto-regression (VAR) based on co-integration tests using the methodology developed by Johansen (1991, 1995). The study found that 16.8% of the changes in the dependent variable could be attributed to variances in Model 1. This assertion is further supported by the F-statistics and the associated probability value. The result for Model II revealed that the Error Correction Model (ECM) is appropriately aligned, and the independent variables can account for 50.3% of the variations in bank distress levels. Similarly, Model three demonstrated that the independent variables can elucidate 48.7% of the variations in bank distress levels. In contrast, in Model 111, the independent variables elucidated a substantial 72.9% of the variance in the dependent variable, whereas in another context, they accounted for 35.5% of the variance. The investigation determined that a noteworthy 88% of the variations in the dependent variable could be linked to the model's variation, a conclusion that is again supported by the F-statistics and probability value. Furthermore, 80.4% and 50% of the variations in the dependent variable could be attributed to the model's.
Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a profit for the year under review. The econometric results show that the current ratio of the banks was within the range of 1.74 to 2.49 indicating that most of the banks under study are well within the desired range and not overstretched as they may not meet the demand of their depositors for withdrawals in the near future. The coefficient of cash ratio in the random effect model is statistically insignificant which indicate that its impact is negligible on the profit margin of the commercial banks. With an R-square value of 0.66, it can be concluded that 66% of the variation in the dependent variable is explained by the independent variables used in the model. The coefficients of the current ratio and cash ratio were statistically insignificant and negatively related to net profits of the banks, this result implies that current and cash ratios have a limited impact on net profits. Conclusion: In conclusion, most Nigerian commercial banks have adequate financial resources to meet their current liabilities this is because they are well capitalized.
This study examined the relationship between inflation and capital structure of industrial goods ... more This study examined the relationship between inflation and capital structure of industrial goods manufacturing firms in Nigeria. The study modelled debt to equity ratio as the function of inflation rate, nominal interest rate and real interest rate. Panel data were sourced from central bank of Nigeria statistical bulletin and financial statement and annual reports of the industrial goods firms from 2012-2021. Panel regression models were formulated to analyze the relationship between inflation and capital structure. The study found from the fixed effect model that 45 percent variation on debt equity ratio of Nigeria quoted industrial goods manufacturing firms can be explaining by variation on real interest rate. The regression coefficient indicated that there is no statistically significant relationship between inflation rates and debt equity ratios of the listed companies in Nigeria; there is no statistical evidence that there is an effect of the consumer price index on the debt equity ratio, and also no statistical evidence that there is a significant effect on the debt equity ratio from the nominal interest rate. However, the debt equity ratio increases with the changes in the nominal interest rate when the industry performance improves. The study concludes that it is advantageous for a company to reduce its debt portfolio and increase its equity holdings to improve its financial condition and its long-term growth when the economy is doing well. For this to happen, however, the company's management must recognize that there are risks when it decides to go the equity route, and therefore it requires them to take a disciplined approach to managing its balance sheet. We recommend that company with high debt levels should consider reducing its debt in order to reduce its borrowing costs and improve its financial strength and it is in the best interest of a company to increase its level of equity financing in order to take advantage of the higher returns that an adequately funded balance sheet can offer.
RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT AND FINANCE RESEARCH VOLUME 1, NUMBER 1, , 0
This study was set out to examine the effect of capital market deepening on economic growth in Ni... more This study was set out to examine the effect of capital market deepening on economic growth in Nigeria. Financial time series data were collected from the annual report and accounts of Securities and Exchange Commission and Central Bank of Nigeria statistical bulletin for the duration of 1990 to 2021. The data was analyzed using multiple regression techniques. The results show that capital market deepening variables of market capitalization, all share index, value of transaction and total listing of stock have positive effect on economic growth in Nigeria. The global result shows that 72 percent of the changes in real gross domestic product are explained by joint effects of capital market performance variables. Thus, the study concludes that deepening of the capital market plays a critical and significant positive effect in enhancing economic growth in Nigeria. We recommend the government should invest more and develop the nation's infrastructure in order to create an enabling environment for business to grow and for productivity and efficiency to thrive which will boost economic activities.
This study examines the impact of monetary policy on profitability of commercial banks in Nigeria... more This study examines the impact of monetary policy on profitability of commercial banks in Nigeria over the period from 1988 to 2021. Data on credit to deposit ratio, return on asset, return on equity, Z-score, money supply, income per head, interest rate, interest spread, and inflation were obtained from the statistical bulletin of the Central Bank of Nigeria. Autoregressive distributed lag (ARDL) techniques were used to estimate the short and longterm dynamic equilibrium relationship between monetary policy and commercial banks' profitability in Nigeria. The analysis confirms mixed integration through unit root tests, which justifies the use of the ARDL approach for the four baseline models. The estimation results for these models provide evidence of a cointegrating relationship between monetary policy and commercial bank profitability in Nigeria, indicating that all the variables are bound in the long run. Among the indicators of commercial bank profitability, return on asset responds more quickly to changes in monetary policy, compared to return on equity, credit-deposit ratio, and Z-score. The long-term disequilibrium adjustment further supports the presence of a cointegrating relationship among these variables. The estimated level equations demonstrate that money supply and inflation have positive multiplier effects on the bank credit-deposit ratio in the long run. Based on these findings, the study strongly recommends increasing the Z-score of the Nigerian banking sector by reducing the standard deviation of return on asset. The volatility of ROA in the Nigerian banking system contributes to a low Z-score, therefore, bank management teams should strive to maintain relatively stable ROA over time. The government should work on reducing inflation, particularly inflation resulting from reckless spending of public funds, excessive quoting by public officers, and corruption-induced inflation. The interest spread is too wide, and any increase in this margin has a negative impact on return on asset and equity. Accordingly, the study suggests meaningfully shrinking the margin between lending rate and deposit rate, aiming for a one-digit margin. Banks can achieve this by simply reducing lending rates to single digits.
This paper theoretically examines the effect of Naira redesign on economic growth in Nigeria. The... more This paper theoretically examines the effect of Naira redesign on economic growth in Nigeria. The objective of the study is to determine the economic implications of Naira redesign, reasons for redesigning Naira and the proposed relevance of Naira redesign policy of the Central Bank of Nigeria. The study discovered that the key rationale for currency redesign were to reduce the level of hoarding of money by affluent Nigerians, to mitigate counterfeiting of the currency and to control the amount of money in circulation with the view of controlling the rate of inflation in Nigeria. The study also discovered that there are both positive and negative sides to Naira redesign which includes the fact that Naira redesign could lead to reduction in the level of cash insecurity and money laundering, huge deficit cost to the economy, a rise in price level and the mitigation of counterfeiting in the economy. The study suggests that the redesign of Naira may not be the antidote to the consistent...
This study examined the influence of the cost of capital on the market value of manufacturing com... more This study examined the influence of the cost of capital on the market value of manufacturing companies that are listed on the Nigerian Exchange Group. The researchers assessed the cost of capital by considering the cost of debt, the cost of equity, and the weighted average cost of capital. The market value of the companies was approximated using their share prices. To select the sample, the researchers used purposive sampling and chose 15 manufacturing firms out of a total of 63 listed firms. They collected panel data from 2007 to 2021 from the Nigerian Exchange Limited fact sheet and the Annual Financial Reports of the companies. Descriptive and inferential statistics were employed to analyze the data, and various econometric techniques were utilized, including Unit Root Test, Co-integration Test, Granger Causality Test, and Panel data regression. To determine the most suitable analysis method, three regression techniques were employed: ordinary least square with a pool effect, fixed effect, and random effect regression. The fixed effect model was ultimately used for interpretation and discussion. The findings indicated that the impact of debt cost on market value was not substantial, whereas equity cost displayed a positive and statistically significant correlation with market value. Moreover, the study discovered no causal connection between firms' market value and the weighted average cost of capital, implying that changes in the weighted average cost of capital did not influence the market value of the companies. Consequently, the study concludes that the cost of capital plays a significant role in determining the market value of manufacturing firms in Nigeria. It is recommended that company management thoroughly analyze all factors influencing market value and devise strategies to optimize value by effectively utilizing both debt and equity.
This study investigated the impact of central bank policy on commercial bank distress Level in Ni... more This study investigated the impact of central bank policy on commercial bank distress Level in Nigeria. Financial time series data were obtained from the central bank of Nigeria statistical bulletin. The data collected were tested using the vector auto regression analysis. The study established that 99.3 percent variation in commercial bank distress level in Nigeria is accounted for by the combined efforts of the explanatory variables of the study. The study concludes that Central Bank of Nigeria must continuously monitor the level of liquidity in order to mitigate any adverse impact on the stability of the financial system.
Noble international journal of economics and financial research, 2017
This study investigated the impact of macroeconomic dynamics on bank lending behavior in Nigeria ... more This study investigated the impact of macroeconomic dynamics on bank lending behavior in Nigeria between 1976 to 2016 using ordinary least square equation estimation, Johansen multivariate co integration and granger causality techniques. The findings of this study leads to various conclusive remarks. The result of the cointegration shows a long run equilibrium impact between macroeconomic variables and bank lending behavior in Nigeria. The OLS result reveals that bank capitalization ratio is the most important bank internal variables that explain their lending behavior given the vagaries of the macroeconomic environment in Nigeria while the money supply was found to be the most important macroeconomic variable that explains bank lending behavior in Nigeria. These variables (MOS & CAP) were found to be positive and significant at 5% level. Additionally, it was found that dynamics associated with monetary and macroeconomic variables (EXR, GDP, INF, MPR & LIQ) have a negative impact on bank lending behavior in the short run. The result of causality shows a unidirectional causality flowing from CPS to GDP, CPS to MPR and CPS to CAP in all cases excerpt for EXR to CPS. There is also evidence of bi-directional causality between CAP & EXR, CAP & GDP, LIQ & MPR and CAP & LIQ. From the findings of this study and the conclusion derived there from, we recommend that macroeconomic policy makers should adopt policy measures geared toward controlling the rising trend of inflation, exchange rate, and interest rate in Nigeria. While frantic effort should be made by the manager of the economy toward restoring the Nigeria 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.
This paper explores the impact of digital banking technology adoption on the operational efficien... more This paper explores the impact of digital banking technology adoption on the operational efficiency of commercial banking firms in Nigeria. It synthesizes existing literature to establish theoretical frameworks, including Technological Adoption and Operational Efficiency Theory, Customer Experience and Efficiency Enhancement Theory, and Regulatory Compliance and Risk Management Theory. Empirical evidence is provided through quasi-experimental research design utilizing financial time series analysis. Findings indicate a significant and positive relationship between the adoption of digital banking technology and the efficiency of commercial banking firms. Panel unit root tests confirm non-stationarity at the level values of all variables, with stationarity achieved through differencing. Cointegration tests reveal a long-run equilibrium relationship between digital banking technology adoption and banking efficiency. Pairwise Granger causality tests suggest uni-directional causality from electronic fund transfer to operational efficiency. The study concludes that policymakers and stakeholders should prioritize strategies promoting digital banking technology adoption to enhance the efficiency and performance of commercial banking firms in Nigeria.
This empirical paper investigates the relationship between financial inclusion and economic growt... more This empirical paper investigates the relationship between financial inclusion and economic growth in Nigeria. It draws on the Institutional Theory of Financial Inclusion, Social Capital Theory of Financial Inclusion, and Finance-Growth Nexus Theory as its theoretical foundations. Utilizing annualized data extracted from the Central Bank of Nigeria's Statistical Bulletin (2022), the study employs financial time series methodology, employing Ordinary Least Squares (OLS) and Granger Causality Techniques for comprehensive analysis. The research findings reveal a robust and positive association between financial inclusion and economic growth in Nigeria. Notably, the Granger causality test results establish unidirectional causation from the number of bank branches to Real Gross Domestic Product (RGDP), indicating that as the number of bank branches increases, there is a corresponding augmentation in RGDP. This outcome underscores a discernible cause-and-effect relationship between the two variables. Recognizing the pivotal role of the banking industry in Nigeria's economic development, acting as a crucial channel for monetary transfers within the economy, the study concludes with insightful recommendations that the federal government should facilitate the establishment of low-cost financial centers nationwide, particularly in rural areas, to provide informal banking services to underserved populations. At the same time, operators of automated teller machines should lower transaction fees, thereby fostering increased utilization of ATMs for transactions, thereby reducing dependence on traditional banking methods.
Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a pro...
The main objective of this study is to analyze the impact of digital financial inclusion on pover... more The main objective of this study is to analyze the impact of digital financial inclusion on poverty alleviation in Rivers State, Nigeria. The study focused on residents of Rivers State as the target population. Using a combination of multistage and purposive sampling methods, a sample size of 223 participants was selected. Data collection involved the administration of a structured questionnaire, with steps taken to ensure the validity and reliability of the research instrument. The collected data was analyzed using basic descriptive statistics, including tables, frequencies, graphs, and percentages. Hypotheses were tested using simple regression models through SPSS version 25.0 software. Findings showed a significant and positive correlation between mobile money accounts, presence of point-of-sale (POS) machines, frequency of mobile payments, and consumption expenditure in Rivers State. Based on these results, it is concluded that digital financial inclusion plays an important role in poverty alleviation, especially in developing countries like Nigeria. The recommendation is for the Central Bank of Nigeria to enact effective monetary policies to promote financial inclusion and poverty alleviation. In addition, expanding digital financial services in both urban and rural areas and implementing comprehensive financial literacy programs for low-income individuals, especially in rural areas, are suggested to address financial exclusion and reduce poverty levels.
The global financial crisis underscored the imperative to enhance the efficacy of performance and... more The global financial crisis underscored the imperative to enhance the efficacy of performance and corporate governance practices. This is crucial for enabling banks to proactively identify and address potential issues, thereby fortifying their resilience in times of crisis. Given the pivotal and indispensable roles that commercial banks play in the economy, it is imperative that they operate within well-defined standards of governance. This study empirically investigated the impact of corporate governance on the stability of domestically significant banks in Nigeria over the period of thirteen years from 2010 to 2022.Drawing on time series data sourced from the annual reports of these banks and the Nigerian Exchange fact books, the research employed an expo-facto research design. Various analytical techniques were applied, Panel unit root test Hausman test, panel random effect test, Residual cross-section dependence test, and normality test. The panel random effect regression technique was employed to unveil the shortterm effects with a 95% confidence interval. Our findings unequivocally demonstrate a significant relationship between corporate governance variables (namely, Board Representation, Board Size, Audit Committee Independence, Board Activism, and Audit Committee Meetings) and Capital Adequacy of Banking firms in Nigeria. In light of these results, we advocate for the enforcement of robust corporate governance mechanisms within the banking sector to temper the high risk appetite exhibited by directors. Moreover, there is a pressing need for the implementation of more stringent regulatory measures to uphold the regulatory threshold for soundness of domestically significant banks in Nigeria. Additionally, it is imperative that officers of these banks assume direct liability for approved loans, thereby ensuring that only high-quality assets are recorded on their books.
Advance Journal of Management, Accounting and Finance, 2024
This study investigates the dynamic interplay between digital payment channels and economic growt... more This study investigates the dynamic interplay between digital payment channels and economic growth in Nigeria, drawing on the theoretical frameworks of financial inclusion, economic growth, and technology-driven efficiency and productivity. Leveraging quarterly data from the Central Bank of Nigeria's Statistical Bulletin (2022), the research employs financial time series methodology, utilizing Ordinary Least Squares (OLS) and Granger Causality Techniques for analysis. The findings reveal distinctive impacts of various digital payment channels on economic growth. Specifically, transactions through Automated Teller Machines (ATMs) and Mobile Banking Apps (MBAs) exhibit positive and statistically significant influences, while Point of Sale (POS) transactions lack significant impact, and Electronic Wallet (EWT) transactions display a negative effect. Granger causality tests indicate past values of these digital payment channels can predict future economic growth, suggesting causal relationships. The study underscores the pivotal role of mobile banking apps and ATMs in driving economic growth, emphasizing the need for enhanced digital infrastructure, widespread financial literacy campaigns, and a supportive regulatory framework. The positive correlation between specific channels and economic growth underscores the transformative potential of digital payment systems in Nigeria. Recommendations include investing in digital infrastructure, promoting financial literacy, formulating conducive regulatory frameworks, and fostering continuous research and innovation in financial technology.
Journal of Arts Humanities and Social Sciences, 2024
This study investigates the nexus between banking sector intermediation and economic growth in Ni... more This study investigates the nexus between banking sector intermediation and economic growth in Nigeria through the lens of traditional time series prediction methods, specifically employing multivariate regressions. Spanning a comprehensive dataset from 1960 to 2022, sourced from the Central Bank of Nigeria, the analysis focuses on three crucial banking intermediation indicators: the Ratio of Private Sector Credit to GDP (RPSC), the Ratio of Currency outside Banks to Broad Money Supply (RCOB), and the Ratio of Total Loan to Total Deposit (RTLD). The research methodology encompasses both descriptive and econometric analytical techniques. Descriptive statistics offer preliminary insights, while econometric techniques, including unit root tests, Vector Autoregressive (VAR) models, and cointegration tests, establish relationships between variables and explore long-term dynamics. The findings reveal significant cointegration among the variables, particularly between banking intermediation indicators and economic growth. Lagged values of banking sector intermediation metrics demonstrate a notable influence on their current values, suggesting potential implications for economic growth. The study recommends further exploration using Vector Error Correction Models (VECM) for a nuanced understanding of the long-term dynamics and causal relationships. The study provides four key recommendations. First, a deeper exploration with VECM is suggested to uncover subtleties in the relationships. Second, policymakers should consider the historical trends of banking intermediation metrics when shaping policies. Third, continuous monitoring of these metrics is essential for anticipating shifts in economic growth trends. Lastly, policy measures are recommended to enhance the efficiency of banking intermediation, focusing on credit allocation, currency management, and loan-to-deposit ratios.
Global Journal of Economic and Finance Research, 2024
This study investigates the impact of corporate risk management strategies on quoted companies in... more This study investigates the impact of corporate risk management strategies on quoted companies in Nigeria, focusing on hedging instruments such as forward contracts, futures contracts, options contracts, and swap contracts. The research aims to analyze how these tools influence a company's market value, contributing to our understanding of their role in shaping financial stability and market perception. Grounded in established hedging theory, the study utilizes a robust data analysis methodology, including fixed effects, random effects, Hausman test, and ordinary least squares (OLS) estimation. Various statistical tests, such as T-statistic, F-test, Durbin Watson test, and corrected R-square, assess variable significance and overall regression validity. The analysis reveals a noteworthy negative correlation between forward contracts and market value, suggesting that an increased reliance on forward contracts is associated with a decrease in market valuation, prompting questions about their efficacy in enhancing market value. In contrast, futures contracts show no significant relationship with market value, emphasizing their role in managing price volatility and ensuring supply chain stability. Options contracts yield mixed results, indicating their complex nature and the need for comprehensive investigation. Conversely, swap contracts consistently demonstrate a significant positive relationship with market value, highlighting their potential as highly effective risk management tools. Based on the findings, the study recommends that firms adopt diversified hedging strategies, conduct thorough risk assessments, strategically employ options contracts, maximize the use of swap contracts, engage in continuous monitoring and adaptation, implement integrated risk management frameworks, collaborate with experts, and maintain a long-term perspective in their risk management strategies.
Journal of Economics and Business Management (GASJEBM), 2024
This study explores the relationship between Nigeria's domestic debt dynamics and public investme... more This study explores the relationship between Nigeria's domestic debt dynamics and public investment decisions, considering their implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain, including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills, lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights that can inform policy interventions aimed at promoting fiscal sustainability and economic development.
This study examines the impact of monetary policy on banking system fragility in Nigeria over the... more This study examines the impact of monetary policy on banking system fragility in Nigeria over the period from 1986 to 2022. The financial time series approach was use to gather secondary data since the variables investigated are quantitative. These variables include bank distressed levels, prime lending rates, maximum lending rates, savings rates, Treasury bill rates, treasury certificate rates, monetary policy rate, narrow money supply, broad money supply and currency ratio. The data for these variables were obtained annually from the Central Bank of Nigeria (CBN) statistical bulletin from 1986 to 2022. Stationarity of the variables was assessed using the Augmented Dickey Fuller (ADF) unit root technique due to the presence of structural breaks. After confirming the mixed integration nature of the variables, they were transformed to first order and modeled using the vector Auto-regression (VAR) based on co-integration tests using the methodology developed by Johansen (1991, 1995). The study found that 16.8% of the changes in the dependent variable could be attributed to variances in Model 1. This assertion is further supported by the F-statistics and the associated probability value. The result for Model II revealed that the Error Correction Model (ECM) is appropriately aligned, and the independent variables can account for 50.3% of the variations in bank distress levels. Similarly, Model three demonstrated that the independent variables can elucidate 48.7% of the variations in bank distress levels. In contrast, in Model 111, the independent variables elucidated a substantial 72.9% of the variance in the dependent variable, whereas in another context, they accounted for 35.5% of the variance. The investigation determined that a noteworthy 88% of the variations in the dependent variable could be linked to the model's variation, a conclusion that is again supported by the F-statistics and probability value. Furthermore, 80.4% and 50% of the variations in the dependent variable could be attributed to the model's.
Objective: The objective of this research is to examine how liquidity risk management practices i... more Objective: The objective of this research is to examine how liquidity risk management practices impact the profitability of Nigerian banking institutions. The study utilizes panel data from 1960 to 2021 for analysis. Methods: The study employed financial time series methodology and based on the results of the descriptive analysis and augmented Dickey-Fuller unit root tests for stationarity, the authors employ the Johansen co-integration test to establish the long-run effect of liquidity risk management practices alongside other control factors on profitability of banking firms in Nigeria. The study also examines the short-run relationship between liquidity risk management practices and profitability by estimating the ordinary least square. Results: Based on the result of the descriptive statistics, it is evident that there is a positive relationship between the variations in the mean of the net profit for each of the banks. This result indicates that most of the banks recorded a profit for the year under review. The econometric results show that the current ratio of the banks was within the range of 1.74 to 2.49 indicating that most of the banks under study are well within the desired range and not overstretched as they may not meet the demand of their depositors for withdrawals in the near future. The coefficient of cash ratio in the random effect model is statistically insignificant which indicate that its impact is negligible on the profit margin of the commercial banks. With an R-square value of 0.66, it can be concluded that 66% of the variation in the dependent variable is explained by the independent variables used in the model. The coefficients of the current ratio and cash ratio were statistically insignificant and negatively related to net profits of the banks, this result implies that current and cash ratios have a limited impact on net profits. Conclusion: In conclusion, most Nigerian commercial banks have adequate financial resources to meet their current liabilities this is because they are well capitalized.
This study examined the relationship between inflation and capital structure of industrial goods ... more This study examined the relationship between inflation and capital structure of industrial goods manufacturing firms in Nigeria. The study modelled debt to equity ratio as the function of inflation rate, nominal interest rate and real interest rate. Panel data were sourced from central bank of Nigeria statistical bulletin and financial statement and annual reports of the industrial goods firms from 2012-2021. Panel regression models were formulated to analyze the relationship between inflation and capital structure. The study found from the fixed effect model that 45 percent variation on debt equity ratio of Nigeria quoted industrial goods manufacturing firms can be explaining by variation on real interest rate. The regression coefficient indicated that there is no statistically significant relationship between inflation rates and debt equity ratios of the listed companies in Nigeria; there is no statistical evidence that there is an effect of the consumer price index on the debt equity ratio, and also no statistical evidence that there is a significant effect on the debt equity ratio from the nominal interest rate. However, the debt equity ratio increases with the changes in the nominal interest rate when the industry performance improves. The study concludes that it is advantageous for a company to reduce its debt portfolio and increase its equity holdings to improve its financial condition and its long-term growth when the economy is doing well. For this to happen, however, the company's management must recognize that there are risks when it decides to go the equity route, and therefore it requires them to take a disciplined approach to managing its balance sheet. We recommend that company with high debt levels should consider reducing its debt in order to reduce its borrowing costs and improve its financial strength and it is in the best interest of a company to increase its level of equity financing in order to take advantage of the higher returns that an adequately funded balance sheet can offer.
RSU FACULTY OF MANAGEMENT SCIENCES JOURNAL OF INVESTMENT AND FINANCE RESEARCH VOLUME 1, NUMBER 1, , 0
This study was set out to examine the effect of capital market deepening on economic growth in Ni... more This study was set out to examine the effect of capital market deepening on economic growth in Nigeria. Financial time series data were collected from the annual report and accounts of Securities and Exchange Commission and Central Bank of Nigeria statistical bulletin for the duration of 1990 to 2021. The data was analyzed using multiple regression techniques. The results show that capital market deepening variables of market capitalization, all share index, value of transaction and total listing of stock have positive effect on economic growth in Nigeria. The global result shows that 72 percent of the changes in real gross domestic product are explained by joint effects of capital market performance variables. Thus, the study concludes that deepening of the capital market plays a critical and significant positive effect in enhancing economic growth in Nigeria. We recommend the government should invest more and develop the nation's infrastructure in order to create an enabling environment for business to grow and for productivity and efficiency to thrive which will boost economic activities.
This study examines the impact of monetary policy on profitability of commercial banks in Nigeria... more This study examines the impact of monetary policy on profitability of commercial banks in Nigeria over the period from 1988 to 2021. Data on credit to deposit ratio, return on asset, return on equity, Z-score, money supply, income per head, interest rate, interest spread, and inflation were obtained from the statistical bulletin of the Central Bank of Nigeria. Autoregressive distributed lag (ARDL) techniques were used to estimate the short and longterm dynamic equilibrium relationship between monetary policy and commercial banks' profitability in Nigeria. The analysis confirms mixed integration through unit root tests, which justifies the use of the ARDL approach for the four baseline models. The estimation results for these models provide evidence of a cointegrating relationship between monetary policy and commercial bank profitability in Nigeria, indicating that all the variables are bound in the long run. Among the indicators of commercial bank profitability, return on asset responds more quickly to changes in monetary policy, compared to return on equity, credit-deposit ratio, and Z-score. The long-term disequilibrium adjustment further supports the presence of a cointegrating relationship among these variables. The estimated level equations demonstrate that money supply and inflation have positive multiplier effects on the bank credit-deposit ratio in the long run. Based on these findings, the study strongly recommends increasing the Z-score of the Nigerian banking sector by reducing the standard deviation of return on asset. The volatility of ROA in the Nigerian banking system contributes to a low Z-score, therefore, bank management teams should strive to maintain relatively stable ROA over time. The government should work on reducing inflation, particularly inflation resulting from reckless spending of public funds, excessive quoting by public officers, and corruption-induced inflation. The interest spread is too wide, and any increase in this margin has a negative impact on return on asset and equity. Accordingly, the study suggests meaningfully shrinking the margin between lending rate and deposit rate, aiming for a one-digit margin. Banks can achieve this by simply reducing lending rates to single digits.
This paper theoretically examines the effect of Naira redesign on economic growth in Nigeria. The... more This paper theoretically examines the effect of Naira redesign on economic growth in Nigeria. The objective of the study is to determine the economic implications of Naira redesign, reasons for redesigning Naira and the proposed relevance of Naira redesign policy of the Central Bank of Nigeria. The study discovered that the key rationale for currency redesign were to reduce the level of hoarding of money by affluent Nigerians, to mitigate counterfeiting of the currency and to control the amount of money in circulation with the view of controlling the rate of inflation in Nigeria. The study also discovered that there are both positive and negative sides to Naira redesign which includes the fact that Naira redesign could lead to reduction in the level of cash insecurity and money laundering, huge deficit cost to the economy, a rise in price level and the mitigation of counterfeiting in the economy. The study suggests that the redesign of Naira may not be the antidote to the consistent...
This study examined the influence of the cost of capital on the market value of manufacturing com... more This study examined the influence of the cost of capital on the market value of manufacturing companies that are listed on the Nigerian Exchange Group. The researchers assessed the cost of capital by considering the cost of debt, the cost of equity, and the weighted average cost of capital. The market value of the companies was approximated using their share prices. To select the sample, the researchers used purposive sampling and chose 15 manufacturing firms out of a total of 63 listed firms. They collected panel data from 2007 to 2021 from the Nigerian Exchange Limited fact sheet and the Annual Financial Reports of the companies. Descriptive and inferential statistics were employed to analyze the data, and various econometric techniques were utilized, including Unit Root Test, Co-integration Test, Granger Causality Test, and Panel data regression. To determine the most suitable analysis method, three regression techniques were employed: ordinary least square with a pool effect, fixed effect, and random effect regression. The fixed effect model was ultimately used for interpretation and discussion. The findings indicated that the impact of debt cost on market value was not substantial, whereas equity cost displayed a positive and statistically significant correlation with market value. Moreover, the study discovered no causal connection between firms' market value and the weighted average cost of capital, implying that changes in the weighted average cost of capital did not influence the market value of the companies. Consequently, the study concludes that the cost of capital plays a significant role in determining the market value of manufacturing firms in Nigeria. It is recommended that company management thoroughly analyze all factors influencing market value and devise strategies to optimize value by effectively utilizing both debt and equity.
This study investigated the impact of central bank policy on commercial bank distress Level in Ni... more This study investigated the impact of central bank policy on commercial bank distress Level in Nigeria. Financial time series data were obtained from the central bank of Nigeria statistical bulletin. The data collected were tested using the vector auto regression analysis. The study established that 99.3 percent variation in commercial bank distress level in Nigeria is accounted for by the combined efforts of the explanatory variables of the study. The study concludes that Central Bank of Nigeria must continuously monitor the level of liquidity in order to mitigate any adverse impact on the stability of the financial system.
Noble international journal of economics and financial research, 2017
This study investigated the impact of macroeconomic dynamics on bank lending behavior in Nigeria ... more This study investigated the impact of macroeconomic dynamics on bank lending behavior in Nigeria between 1976 to 2016 using ordinary least square equation estimation, Johansen multivariate co integration and granger causality techniques. The findings of this study leads to various conclusive remarks. The result of the cointegration shows a long run equilibrium impact between macroeconomic variables and bank lending behavior in Nigeria. The OLS result reveals that bank capitalization ratio is the most important bank internal variables that explain their lending behavior given the vagaries of the macroeconomic environment in Nigeria while the money supply was found to be the most important macroeconomic variable that explains bank lending behavior in Nigeria. These variables (MOS & CAP) were found to be positive and significant at 5% level. Additionally, it was found that dynamics associated with monetary and macroeconomic variables (EXR, GDP, INF, MPR & LIQ) have a negative impact on bank lending behavior in the short run. The result of causality shows a unidirectional causality flowing from CPS to GDP, CPS to MPR and CPS to CAP in all cases excerpt for EXR to CPS. There is also evidence of bi-directional causality between CAP & EXR, CAP & GDP, LIQ & MPR and CAP & LIQ. From the findings of this study and the conclusion derived there from, we recommend that macroeconomic policy makers should adopt policy measures geared toward controlling the rising trend of inflation, exchange rate, and interest rate in Nigeria. While frantic effort should be made by the manager of the economy toward restoring the Nigeria 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.
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implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out
hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical
studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain,
including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing
on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers
the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined
as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The
methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the
relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills,
lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged
Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public
transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding
the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights
that can inform policy interventions aimed at promoting fiscal sustainability and economic development.
implications for economic development and fiscal sustainability. Theoretical frameworks from Keynesian economics and the crowding-out
hypothesis provide the foundation for understanding the relationship between domestic debt dynamics and public investment decisions. Empirical
studies offer mixed findings, underscoring the need for context-specific analysis in Nigeria. Despite growing literature, significant gaps remain,
including the lack of comprehensive studies specific to Nigeria's context and the neglect of sectoral differences in investment outcomes. Drawing
on a robust financial time series methodology and secondary data from reputable sources, including the Central Bank of Nigeria, the study covers
the period from 1986 to 2022. Key financial instruments such as Treasury Bonds, Treasury Bills, and Federal Government Bonds are examined
as proxies for domestic debt, while public investment decisions are assessed through expenditures in the public transportation sector. The
methodology employs unit root tests, co-integration analysis, Error Correction Models (ECM), and Granger Causality analysis to explore the
relationship between domestic debt dynamics and public investment decisions. The results indicate significant influences of lagged Treasury Bills,
lagged Federal Government Bonds, and the error correction mechanism on public transportation expenditure. However, the difference in lagged
Treasury Bills does not appear to have a statistically significant effect. The model explains approximately 67.38% of the variation in public
transportation expenditure, with no significant autocorrelation present in the model residuals. In conclusion, the study contributes to understanding
the intricate relationship between domestic debt market dynamics and public investment decisions in Nigeria. It provides evidence-based insights
that can inform policy interventions aimed at promoting fiscal sustainability and economic development.