Lagos Journal of Banking, Finance and Economic Issues

THE GROWTH IMPACT OF FOREIGN PRIVATE CAPITAL IN NIGERIA

Isaac. A. OGBUJI — 2025-04-19

This study examined the impact of foreign private capital (which is the portmanteau for foreign direct investment and foreign portfolio investment) on economic growth in Nigeria, using secondary data for the period 1990 to 2019. Foreign private capital flow consists of net foreign direct investment and portfolio investment. The study used the gross domestic product as the independent variable and a proxy for economic growth while foreign direct investment, foreign portfolio investment, exchange rate, real interest rate, gross fixed capital formation, and inflation rate were used as explanatory variables. The data on the study variables covering the period 1990 to 2019 were collected from the CBN Statistical Bulletin. The study employed the descriptive statistics and empirical estimation techniques (which consist of Augmented Dickey Fuller, Johansen co-integration, and Error correction model as method of data analysis. The results of analysis revealed that all the explanatory variables used in the study had a positive and significant impact on economic growth. However, foreign private capital (foreign direct investment and foreign portfolio investment) was not significant at 5%. Based on the results of the empirical analysis, the study concluded that foreign direct investment and foreign portfolio investment have positive impact on the growth of the Nigerian economy. Nevertheless, the Federal government needs to create more conducive and investment-friendly climate to attract enough foreign investors into the productive sectors of the economy (by identifying and eradicating the root cause of terrorism in Nigeria and its sponsors). The study therefore recommended that the monetary and fiscal authorities in Nigeria should formulate formidable economic policies and create the enabling business environment that is capable of attracting foreign investment into Nigeria.

TRADE OPENNESS AND ECONOMIC GROWTH IN NIGERIA

Samson Isumaila OJO — 2025-04-19

This study looked at the connection between trade openness and economic growth in Nigeria. The nature of relationship that exist between these variables has been a major topic of economic debates in countries of the world. The study empirically investigates the nature and causal links between these two variables in Nigeria during the years 1986-2021 with the use of ARDL method and Granger Causality test. The study includes exchange rate, investment, and government expenditure as control variables. Results emanating from the study revealed that openness to trade in the short run, produce a significant negative influence on economic growth in Nigeria. It shows that trade openness or trade liberalization policies negatively influence economic growth in Nigeria. This influence becomes positive an insignificant in the long run. In addition, the overall results of causality test indicate unidirectional positive causality between economic growth and trade openness in the long-run. This implies that openness to trade possess the capacity that may promote long run economic growth in Nigeria. The short-run results suggest that the joint lagged value of the wald test result is not significant meaning that openness to trade may not be beneficial to economic growth in Nigeria.

THE EFFECTS OF MACROECONOMIC RISK FACTORS ON FOREIGN DIRECT INVESTMENT IN NIGERIA.

Adekunle O ALONGE — 2025-04-19

This study analyses how macroeconomic risk factors impact foreign direct investment in Nigeria. The data used covers the period from 1990 to 2021. Macroeconomic risk factors were measured by interest rates, exchange rates, trade openness, and GDP growth. The findings reveal that interest rates, exchange rates, trade openness, and GDP growth have no long-run effect on foreign direct investment. Furthermore, interest rates and trade openness have a significant positive short-run effect on foreign direct investment. The exchange rate has a significant negative short-run effect on foreign direct investment, while GDP growth has no significant short-run effect on foreign direct investment. The study recommends that the government create a positive economic environment to attract foreign investors.

ECONOMIC POLICY UNCERTAINTY AND REMITTANCE INFLOW IN SELECTED AFRICAN COUNTRIES.

Olufunsho Victor HAMBOLU — 2025-04-20

The study examines the asymmetric impact of Global economic Policy Uncertainty (GEPU) on remittance inflows in selected African countries. The study explores a Nonlinear Autoregressive Distribution Lag (NARDL) in achieving the objective. The study examines both the short-run and long run impacts of GEPU on remittance inflows. Yearly data were observed for the study across 17 African countries from 1997 to 2022. The result suggests that GEPU has a negative and significant impact on remittance inflow in the short run. Specifically, the negative partial sum has an impact on remittance inflow in the short run. Additionally, the long run does not suggest a significant impact on remittance except for the negative partial sum that is significant at 5% under the mean group. The outcomes suggest a symmetric relationship in the short run but an asymmetrical relationship in the long run based on the PMG model. The findings of the study enrich existing knowledge and understanding of the role of GEPU on remittance inflow. The outcome of the study will be of great value to policymakers, and various stakeholders, as they are actively involved in decision making and policy formulation on remittance inflows

EFFECT OF RISK-BASED SUPERVISION ON THE MANAGEMENT OF PENSION FUNDS ASSET IN NIGERIA

A.B. SOGUNRO — 2025-04-20

This study investigates the impact of risk-based supervision on the asset management of Nigerian pension funds, using primary data collected through structured questionnaires. The study's participants include individuals within the pension fund sector and practitioners interested in the topic. The study employs descriptive statistics, such as frequency distribution and percentages, to analyze demographic data, while regression modeling is used to address research hypotheses. The findings reveal a significant and positive relationship between risk identification, risk evaluation, regulatory reporting, and the cultivation of a robust risk governance culture in the effective management of pension fund assets. In conclusion, this study emphasizes the importance of proactive risk management in safeguarding pension fund investments. To ensure long-term sustainability, we recommend that pension fund managers and regulatory authorities prioritize risk-based supervision, establish clear risk reporting standards, and implement training programs to enhance risk management competencies among practitioners. These measures are essential for the security and sustainability of pension fund assets and the financial well-being of retirees in Nigeria.

THE DIVIDEND RELEVANCE THEORY AND FIRM VALUE OF LISTED NIGERIAN DEPOSIT MONEY BANKS (DMBs)

Bashiru UMORU — 2025-04-20

The main objective of every firm is to create corporate value. Studies have shown that shareholders benefit more from the firm as its value increases. The two opposing views on dividend policy and its effect on share price are the dividend relevance theory posited by Lintner (1956) and the dividend irrelevance theory put forth by Miller and Modigliani (1961). The puzzle of the relevance of dividend payment on a firm’s value remains inconclusive and controversial, despite the substantial body of literature on dividend policy, thus requiring continuous improvement. It is on this premise of inconclusive results that spurred the current study. The study uses secondary data on listed Deposit Money Banks in Nigeria (DMBs), which spans a ten (10) year period from 2011 to 2020. The data was estimated using the panel regression analysis, and the findings showed that dividend payout significantly and positively influenced the firm value of listed banks in Nigeria. The study recommends that investors exhibit care in studying and understanding the dividend policy of firms to guide their investment decisions.

THE EFFECT OF CORPORATE GOVERNANCE ON AGENCY COSTS OF LISTED COMMERCIAL BANKS IN NIGERIA.

Gerald Uchenna NZEKWE — 2025-04-20

This study investigates the impact of corporate governance on agency costs for a sample of twelve (12) listed commercial banks in Nigeria from 2011 to 2021. Corporate governance was measured by board size, board independence, and gender diversity, while agency costs were proxied by the expense ratio. The data was analyzed using a fixed-effects estimation technique. The findings show that board independence and gender diversity do not significantly affect agency costs. However, board size significantly negatively affects the agency costs of listed commercial banks in Nigeria. The study recommends increasing the board size of listed commercial banks in Nigeria. A larger board allows for the inclusion of directors with a wider range of skills, knowledge, and experiences.

CAPITAL STRUCTURE AND AGENCY COST DETERMINANTS ON VALUE OF NON-FINANCIAL FIRMS NIGERIA

Stanley, Osasere OMUEMU — 2025-04-20

This study examined the impact of capital structure, agency cost on firms’ value of non-financial listed firms in Nigeria over the period of 2011 to 2020. Panel regression techniques was adopted. The study revealed that debt ratio (long term debt to assets) has a positive (negative) and significant effect on the value of firm. The study also revealed that there is a positive and significant effect of asset tangibility and operating expenses to sales on the value of the non-Financial firms in Nigeria. Based on the interactive effect, it was revealed that the negative effect of long term debt ratio on Tobin’s Q ratio (TQ) is increased for firm with high agency problem. Also, the study discovered that positive effect of debt to assets on Tobin’s Q ratio (TQ) is reduced for the firm with high agency problem. Thus, this increase will only come when there optimality. The study therefore recommends that since capital structure matters, non-financial firms should use debt optimally so as to increase market value.

EMOTIONAL LABOUR AND SATISFACTION OF EMPLOYEES IN COMMERCIAL BANKS IN LAGOS STATE, NIGERIA

Olufemi.O OLAYEMI — 2025-04-20

The relationship between emotional labour and job satisfaction has received little attention in the literature. Emotional labour in this study was measured using surface acting and deep acting. This study is hinged on the behavioural school of management thought. To meet the study's aims, two different hypotheses were developed. The participants in this study are employees of selected commercial banks in Lagos State. The data gathered from respondents was analysed using Partial Least Square Structural Equation Modelling. Statistical analysis revealed that deep acting is a significant predictor of job satisfaction while surface acting does not predict job satisfaction. As a result of this research, bank management should emphasize strategies to minimize workplace stress by creating working arrangements that foster stronger relationships between employers and workers, as well as improve employee health. This will reduce absenteeism and increase employees' commitment.

EFFECT OF CAPITAL ADEQUACY REGULATION ON THE FINANCIAL PERFORMANCE OF INSURANCE FIRMS IN NIGERIA.

Maureen Nneka NWALA — 2025-04-20

Given the higher risk environment within which Insurance firms operate, capital adequacy is critical in ensuring that Insurance firms have the capacity to withstand losses, underwrite risks and guarantee policyholders that all genuine claims will be adequately and promptly settled. Notably, the non- prompt payment of claims by some insurance companies in Nigeria has been attributed to the issue of low capitalization. Hence, insurance industry regulators have always placed great importance on monitoring the capital levels of insurance firms in order to set minimum capital requirements that would enhance the effectiveness of the industry. Therefore, this study examined the effect of capital adequacy regulation on the financial performance of insurance firms in Nigeria. The study adopted ex-post facto research design. The population of this study comprised all the 24 insurance companies listed on the Nigerian Exchange (NGX) from year 2013 to 2022. Out of this population, 15 insurance companies were sampled on the grounds that they have been listed on the Nigerian Exchange (NGX) throughout the period under consideration and also have complete data set for the periods of 2013-2022. Secondary data obtained from the annual financial reports and accounts of the 15 selected insurance companies was utilised and panel multiple regression was used to analyse the data. Based on the outcome of the Hausman specification test, the study adopted the Random effect regression and it revealed that core capital (tier 1 capital) has significant positive effect on financial performance of listed insurance firms in Nigeria while tier 2 capital has a negative insignificant effect on ROA. The study concluded that an increase in capital adequacy regulation will result to an increase in the financial performance of insurance firms proxied by return on assets (ROA). In line with the findings, the study recommended that the National Insurance Commission (NAICOM) which is Nigeria’s insurance regulatory authority, should ensure that insurance firms adhere strictly to capital adequacy regulations by maintaining adequate capital to support their risk profiles.

THE MODE AND GROWTH IMPACT OF REVENUE ALLOCATION IN NIGERIA.

Maureen Nneka NWALA — 2025-04-20

Decades after independence and the practice of federalism in Nigeria, the country is still grappling with the challenge of having a revenue sharing formula that will be acceptable to all the tiers of government. The study examined the effect of revenue allocation to federal government on economic growth in Nigeria. The study collected quarterly time series data from secondary source within the period 2001Q1 to 2021Q4 from Central Bank of Nigeria (CBN) annual statistical bulletin. The independent variable for the study is revenue allocation to federal government (RAFG) and the dependent variable is economic growth proxied by gross domestic product (GDP). Employing Eviews 10, the study uses error correction model (ECM) and autoregressive distributed lag (ARDL) Co-integration tests for robust policy recommendations. Findings revealed that the revenue allocation to federal government exerts positive but insignificant effect on economic growth in Nigeria within the period under study. The study recommends that stern policy measures that will checkmate corruption and monitoring of application of public funds should be put in place. Policies like introduction of e-government in almost all government services will promote transparency. Code of ethics should be clearly developed to prevent ambiguity, increase decision making and work processes between private and public sectors.