Consequences of the Treasury Single Account Policy on the Wealth of Nigerian Commercial Banks’ Shareholders

We examine the impact of the Nigerian government’s Treasury Single Account (TSA) policy to withdraw the funds of Ministries, Departments and Agencies from commercial banks. Following the economic policy uncertainty theory, we use an event study methodology to measure the impact of the TSA policy on the shareholders’ wealth. Our results reveal that the announcements and subsequent final implementation of the TSA policy caused negative abnormal returns and losses on the wealth of the commercial banks’ shareholders. This article contributes to the literature on stock market reaction to policy announcements and the unintended consequences government policy can have in an emerging economy.     

Image Difference Between Culture and Nature Destination Visitors in Tropical Africa: Case Study of Nigeria

The study evaluates images of tourism destinations in diverse cultures and nature destinations in Nigeria amongst 880 domestic and foreign tourists surveyed by systematic random sampling. Colour photographs and structure questionnaires were employed to evaluate the destination preferences and images considered very important to various tourist groups, and comparison was also undertaken through chi-square test. The results revealed nature destinations, especially ecotourism/wildlife and landform areas, as desired most by tourists. Natural attraction, landform features, facilities/ amenities and historic/archeological features represented most important images underlying destination perception and selection. Safety/security and prompt services/ personal quality were least appreciated destination features. Significant differences emerged between domestic and foreign tourists and tourist groups in various destinations, in types of destinations preferred and in environmental images held of tourism destinations. Implications of the study for destination planning, management and marketing are highlighted.     

Complementarity and sequencing of innovations: new varieties and mechanized processing for cassava in West Africa

Complementarity among inter-related innovations may help explain the location and timing of productivity growth, and may be particularly important in the transformation of semi-subsistence agrarian economies. We study the case of cassava in West Africa, where both mechanized processors and new varieties are more widespread in Nigeria than in neighboring countries. One explanation involves complementarity: mechanization may have induced new variety adoption, or vice-versa. We test the magnitude and significance of these linkages using a system of equations approach. Controlling for other factors, we find that new variety adoption consistently increases the likelihood of subsequent mechanization by an average of 75 percent. Mechanization is less consistently associated with subsequent new variety adoption. Historically, mechanization came first – but the later development of new varieties made mechanization much more profitable, and the two then spread together.     

Effects of domestic multiculturalism on job attitudes in Nigeria: a research note

This study investigates possible cultural differences in job attitudes among the three main sub-cultural groups dominating the entire population of the Nigerian work-force: Hausa (n=80), Ibo (n=119) and Yoruba (n= 151). Several hypotheses were derived from previous knowledge of the three cultures and differences were explored in the relationships between perceptions and attitudes concerning specific aspects of the job. Consistent cross-cultural differences that can be related to characteristics of the cultures studied were revealed with regard to only three motivational factors, namely, interpersonal relations, nature of work and supervision. The overall results seem to indicate that employees' cultural background has little impact on their perceptions of job motivation. However, a number of different personal variables were found to affect responses. Practical and research implications of the findings are discussed as well as directions for future research.     

Emerging Equity Market Volatility

Abstract

This paper considers two emerging markets that are under-researched, Kenya and Nigeria. It offers a comprehensive view of four time properties that emerged from the empirical time series literature on asset returns: (1) the predictability of returns from past observations; (2) the auto-regressive behavior of conditional volatility; (3) the asymmetric response of conditional volatility to innovations; and (4) the conditional variance risk premium. Results of the exponential GARCH (EGARCH) model indicate that asymmetric volatility found in the U.S. and other developed markets also characterized the Nigerian stock exchange. In Kenya, however, the asymmetric volatility coefficient is significant and positive, suggesting that positive shocks increase volatility more than negative shocks of an equal magnitude. The Nairobi Stock Exchange (KSE) returns series report negative but insignificant risk-premium parameters. In Nigeria (NSE), return series exhibit a significant and positive time-varying risk premium. The results also show that expected returns are predictable, that the auto-regressive return parameters (? ₁ ) are significant in both Kenya and Nigeria. Finally, the GARCH parameter (b) is statistically significant, indicating that volatility persistence is present in the two emerging markets studied.     

Analysis of the Role of Banks in the Corporate Financing Mix of Nigerian Quoted Manufacturing Enterprises

Abstract

The aim of this study is to investigate the role of Nigerian banks in funding the short-term and long-term financing requirements of Nigerian quoted manufacturing enterprises in an environment of economic reforms. It has been argued that the deregulation of the financial system induces financial fragility, credit rationing and bank disinterme-diation, thus limiting the effectiveness of the monetary transmission mechanism. We analyzed relevant data from selected authoritative official publications and found that the liberalization of the Nigerian economy in 1986 under the Structural Adjustment Program (SAP) resulted in deteriorating corporate liquidity, declining bank credit to the manufacturing sector, outrageous increases in interest rates, with the consequential decline in the contribution of the manufacturing sector to the GDP. As economic reforms commence, it is necessary for managers of banks and quoted manufacturing enterprises to maintain a well diversified portfolio of liquid assets. That way, spontaneous financial gaps can be better managed. Top management must make important borrowing decisions before relatively predictable events occur. As banks continue to emphasize high asset quality in their loan portfolio, manufacturing enterprises are expected to manage strategically the resulting credit crunch by expanding their corporate finance matrix in a way that matches their operating cycles. Monetary policy should be redirected to moderate interest rates, as well as improve credit supply in order to make the banking sector more relevant as competitive pressures intensify in the Nigerian financial services industry.     

Buyer preferences for sheep and goats in southern Nigeria: A hedonic price analysis

A survey of two rural markets in southwest Nigeria over 14 months showed that supplies, sales and prices of sheep and goats varied widely during the period with a sharp peak during the Muslim festival of' Eid-el-Kabir and a smaller peak during the Christmas-New Year period. Local West African Dwarf (WAD) sheep and goats and northern Y'ankasa sheep and Red Sokoto goats were traded in the markets and animals were purchased for rearing, trading, ceremonies, butchering/catering, sacrifice, and festivals. There were significant differences between species/breeds purchased for various purposes. A hedonic price model was fitted to determine factors influencing price. After adjustments were made for age, weight, sex, time of transaction and market, WAD sheep commanded higher prices than WAD goats and Red Sokoto goats for all purposes except for butchering/catering; Red Sokoto goats commanded similar or lower prices than WAD goats depending on the purpose for purchase; and Y'ankasa sheep, principally purchased for the Eid-el-Kabir festival, commanded marginally higher prices than WAD sheep. The market share of WAD sheep is currently small and is under competition from northern sheep and goats, so increased production of WAD sheep in the south will benefit both producers and consumers in the area. In general, the results indicate that buyers have preferences for specific breeds and species for specific purposes, so producers and sellers may benefit by targeting specific buyer categories and times of the year.