Tax Revenue Mobilization and Economic Growth in Nigeria

Reference code: C098

ABSTRACT

This research thesis is an investigation into the tax revenue mobilization of the Nigerian government and its effects on the economic growth of the country. In order to achieve the objectives of the study, four hypotheses were formulated and tested using the ordinary least squares method of the multiple regression analyses. The results of the data analyses indicated that: taken as a unit, taxation is an important factor in economic growth. The study also showed that petroleum profit tax, company income tax and personal income tax are not statistically significant in explaining economic growth in Nigeria on the other hand, value added tax contributes significantly to the growth of the economy. On the basis of our findings, we make the following recommendations: Institutions responsible for tax revenue collection in Nigeria should be strengthened and empowered to better carry out its duties. For example, staff of such institutions should be provided with adequate training and equipment. Legal framework empowering such institutions should also be reviewed to give more teeth their effort in sanctioning tax defaulters. Efforts should be made to fully automate tax system from assessment to collection thereby getting rid as much as possible the possibility of interference by individuals. Finally, collected tax revenue should be judiciously applied in the provision of visible infrastructure and amenities. If the average tax payer is confident that his tax is applied in bettering the community, he will be more willing to pay his taxes and less willing to evade payment.

BACKGROUND TO THE STUDY

............... In a natural resources blessed country like Nigeria, also with the operation of indigenous and foreign companies, the problem of underdevelopment should not be the topic of the day. Thus the emphasis on taxation by one and all cannot be overemphasized though is just one of the avenue open to the government to generate revenue. Taxation according to Nightingale (1997) is a compulsory contribution imposed by the government on its citizens. Our quest to ensure economic growth shall meet with desired expectation if all expected tax is paid and as at when due. 

From the forgoing, we can now deduce the need to garnish our understanding with contemporary knowledge in the area of Taxation, Economic growth so as tune around the fortune of our Governments. 

Taxes are levied on individuals, groups, business or corporate organisation, by constituted authority for funds used by state in the maintenance of peace, security, economic growth, and social engineering among others for the benefit of the citizenry. In this view, the management of a society for effective growth rest on the government who can only discharge such responsibilities creditably to the citizenry with adequate resources.

Therefore, it behooves a responsible citizenry to discharge his/her duties to the state through prompt and regular payment of taxes. The economic history of both developed and developing countries reveals that taxation is an important tool in the hand of the government; not only to generate revenue, but also to achieve goals such as influencing the direction of investment and taming the consumption of certain goods and services. As hold by Hyman (1992) a tax is simply a compulsory payment levied on the citizens by government for the purpose of the government itself.

Traditionally, taxes are based on income of individuals or profit of an economic entity. Other bases of taxes are wealth, capital, property and consumption. All forms of consumption taxes (ail within the purview of indirect taxation. Income taxes 'and those based on capital, profit and wealth are in the realm of direct taxation.

The imposition of a tax is based on certain considerations. One of these is how effective as well as equitable the tax can be. Since tax can be equitable without being effective and vice versa, the capacity of the tax base to reflect both equity and effectiveness becomes a serious subject in taxation. Taxation as a system has been known to have existed as early as history. 

Historically, taxation constitutes the oldest instrument of financing the public sector in times of either peace or war. For sacrificing their private resources to the state in the form of taxes, citizens expect the government to reciprocate by spending public revenue in a way that will enhance their welfare. This is why scholars have almost always collapsed the issue of public finance into two aspects, what Adebayo Adedeji terms "the principle of expenditure". 

Similarly, economic literature shows that as far back as 1776 during the era of Adams Smith the place of taxation in public finance has caught the attention of experts like David Richardo, another classical economist who did, in fact, argue that "an economic principle could only be considered useful if it directs government to the right measure of taxation". 

Richardo as well as John Stuart Mill both classical economists too had put revenue first in the division finance into three via: "revenue, expenditure and public debt". The issue is that since access to revenue is basic to the functioning of government, the sources of such revenue taxation must be prioritized. In recent years, the changes in tax- practice that have been in operation were a modification of traditional approaches by the colonial authority. These changes are majorly centered on different taxes, laws and administration. 

Nonetheless, the new system introduced by the colonial authority met with stiff resistance from the people and this partly might have been due to high rate of illiteracy among the Nigeria people. The problem still persists till today while such a resistance is believed to have political undertone. James (1992) shows that one of such resistance was the "Aba Women Riot of 1929". 

Thus, the imposition of direct Personal income tax by the colonial authority in Northern Nigeria through the native, the Revenue ordinance of 1917 was nothing strong to the people. Native Revenue ordinance of 1917 then  became the law that guided taxation in Nigeria the ordinance of 1917, 1918 and 1928 were later incorporated into direct taxation ordinance No. 4 of 1940, which repealed the native revenue ordinance. In 1957, there was the Raisman commission ......................

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY …… 1
1.2 STATEMENT OF THE PROBLEM … 7
1.3 PURPOSE OF STUDY ………… 10
1.4 RESEARCH QUESTIONS …. 10
1.5 STATEMENT OF HYPOTHESES …. 11
1.6 SIGNIFICANCE OF THE STUDY.... 11
1.7 DEFINITION OF TERMS .… 13
1.8 LIMITATION AND SCOPE OF STUDY …… 14
1.9 ORGANIZATION OF THE STUDY …… 15
REFERENCE ……… 16

CHAPTER TWO: REVIEW OF LITERATURE
2.0 INTRODUCTION ……….. 17
2.1 THEORETICAL LITERATURE …… 18
2.2 STRUCTURE OF THE TAX REVENUE SYSTEM IN NIGERIA …. 22
2.3 DIFFERENT ASPECTS OF TAXES IN NIGERIA ….. 29
2.3.1 PETROLEUM PROFIT TAX (ISSUES AND PERSPECTIVE) …. 29
2.3.2 COMPANY (CORPORATE) INCOME TAX ….. 30
2.3.3 VALUE ADDED TAX (VAT) .…. 31
2.3.4 PERSONAL INCOME TAX …. 32
2.4 PROBLEMS OF TAX EVASION …… 35
2.4.1 EXTENT OF TAX EVASION IN NIGERIA ... 36
2.4.2 REASONS FOR TAX EVASION ……… 41
2.5 HISTORICAL BACKGROUND OF NIGERIAN TAX REFORMS ….. 44
2.6 IMPACT OF TAXATION ON ECONOMIC GROWTH … 47
2.7 THE ROLE OF TAXATION ON REVENUE GENERATION IN 
THE NIGERIAN ECONOMY ……… 51
2.8 TAX SYSTEM IN NIGERIA: ISSUES AND CHALLENGES … 56
REFERENCES…….. 62

CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION …… 68
3.1 RESEARCH DESIGN …… 68
3.2 POPULATION SAMPLING PROCEDURE AND SIZE DETERMINATION ..… 69
3.3 DATA COLLECTION METHOD ……. 69
3.4 OPERATIONAL MEASURES OF VARIABLES ... 69
3.4.1 VARIABLES IN THE MODEL …. 70
3.5 DATA ANALYSIS TECHNIQUES …. 71
REFERENCES …… 73

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION …… 74
4.1 DATA PRESENTATION …… 74
4.2. DATA ANALYSIS AND INTERPRETATION OF RESULTS …. 76
4.3 HYPOTHESES TESTING …… 77

CHAPTER FIVE: DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.0 INTRODUCTION ……. 81
5.1 DISCUSSION OF FINDINGS …… 81
5.2 CONCLUSIONS …… 83
5.3 RECOMMENDATIONS …. 84
BIBLIOGRAPHY ….. 86
APPENDICES ….. 92


Reference code: C098
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Impact of Information Technology on Corporate Financial Reporting: A Study of Commercial Banks in Nigeria

Reference code: C096

ABSTRACT

The purpose of this paper is to focus on the impact of IT related on corporate financial reporting function and to contribute to the body of knowledge about to what extent IT affects the ability to solve accounting tasks in the banking sector. The relationship between IT and accounting practices was investigated qualitatively using a case study (Guaranty Trust bank plc.) and we will measure the impact of IT on corporate financial reporting. The research was carried through the use of questionnaires, in which 120 was administered to staff of Guaranty Trust bank plc Bayelsa with 20 not  returned  and the data technique used  was the Pearson Product Moment Correlation which measured the relationship between the two variables information technology (x), and corporate financial reporting (y), from the field survey, coupled with the research hypotheses, it was observed that there is a averagely positive relationship between IT and CFR, hence, for the banking industry IT to be effective, positive investment has to be made towards to the IT segment of the bank. It was also observed that IT also has a very strong relationship with the credibility of financial reports, the more effective the banks IT systems are the more will stakeholders of the banks will rely on the financial statement. It is recommended that the banks must be focused in terms of their needs and using the right technology to achieve their  goals, which is to ensure that accuracy of financial reports  because it determines decision making. In conclusion IT allows the banking industry to process large amounts of financial information and process it quickly through the accounting system. Quicker processing times for individual transactions has also lessened the amount of time needed to close out each accounting period. Month- or year-end closing periods can be especially tasking ing on accounting departments, resulting in longer hours and higher labor expense. Shortening this time period aids the bank in cost control, which increases overall company efficiency.

BACKGROUND TO THE STUDY

...................... According to Paul, (1990), the rapid growth of networked information systems also creates threats to the security of financial market infrastructure if the trustworthiness of those networks is permitted to decline as their scope .and today, the term information has ballooned to encompass many aspects of computing and technology, and the term has become very recognizable. IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information databases. 

 A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. Information technology is starting to spread farther than the conventional personal computer and network technology, and more into integrations of other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs (Williams, 1999).

This global integration and mass market reach is creating a huge potential market for financial services. Some new financial service providers are developing wholly new information systems based on Internet standards and as a result, are achieving rapid growth with low overheads (Erik Brnjolfsson, 1997). The most dramatic progress in this area has been achieved with online stock trading through discount brokerage firms, (Hagg, 2005). It was not very long ago that the field of IT only consisted of a single computer operator who stored data on a magnetic tape and then placed it in storage. Times have changed drastically in the field of technology from its inception several years ago. 

The field today typically includes a chief Information Officer and several individuals who work together to achieve their goals. Years ago there was simply a single operator who performed all the tasks related to this form of technology. Today the job outlook for people interested in this field is very good with data security and server specialists among the highest paid in the field, those with the needed skills and a keen interest in IT stand to earn a substantial annual income.(Steven, 1995). 

FASB (2008), International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). IFRS financial statements consist of a balance sheet, income statement, statement in changes of equity or statement of recognized income, cash flow statement, and notes. The impact of International Financial Reporting Standards on technology should not be an issue to be overlooked. By 2011 the entire world, including the United States could potentially using IFRS to some extent viewing the financial reporting standards change as simply as a technical change could lead to costly rework for processes and programs.

In conclusion with the increasing complexity of services offered comes greater complexity in the risk management process associated with those services. In addition, advances in technology permit a greater volume and velocity of transaction processing to take place. If responsibility for security for new projects that involve substantially greater risk than earlier undertakings is not clearly assigned or the implementation of security seems to undermine the chances for attaining the desired business objective, adequate security may never be put encryption in place. For example, the design of secure applications using encryption technology can be very slow, expensive and difficult. 

Because they are also complex, encryption applications are likely to contain design flaws that can only be discovered through extensive, expensive testing ............................

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION                                                          

1.0 Background to the study…...... 1

1.1 Statement of Problem………..  4

1.2 Research Question…………… 5

1.3 Research objectives………… 6

1.4 Statement of hypothesis…… 6

1.5 Significance of study………… 6

1.6 Scope of the study…….…… 7

1.7 Limitation of study…………… 8

1.8 Definition of terms ………… 9

1.9 Historical background ……  9

CHAPTER TWO: LITERATURE REVIEW.

2.0 Introduction……………………………………  10

2.1 Review of information technology……      ..… 12 

2.2 Evolution of information technology…………. 14

2.3 Corporate financial reporting………………    16

2.4 Impact of internet on CFR……………………  18

2.5 Impact of information technology on internal auditing...27          

2.6 A review on financial accounting report………….............27

2.7 Financial performance as a basis for investors forecasts..   28

2.8 The users of the regulated financial statements.....         29

2.9 Financial reporting as a prime source of financial analysis. 31

2.10 Quantitative characteristics of financial reporting information   33

2.11 The relevance and usefulness of accounting information 36

2.12 The effect of computer process on financial statement…. 37

2.13 The effect of IT on the security of financial information 39

2.14 The development of IT in the banking industry………………….… 45

2.15 Computer technology in the banking industries…………………..… 46

2.16 The view on electronic banking……………………………………  49

2.17 Electronic banking and the common banking product……………. 51

2.18 Telephone and PC banking products……………………………… 52

2.19 The card system…………………………………….…………….        52

2.20 The automated teller machine (ATM)………………………………  53

2.21 The entry of the Nigeria banks into electronic banking……… 54

2.22 Threats of Cyber-Crimes on the Nigerian Banking Premises… 56

2.23 Globalization of IT and Nigeria commercial bank……………….… 57

2.24 Impact of information technology on corporate financial reporting 59

CHAPTER THREE: RESEARCH METHODOLOGY

3.0 Introduction………… 65

3.1 Research Design……………. 65

3.2 Study population…………………… 65

3.3 Sampling technique……….…………… 66

3.4 Source of data collection…… 66

3.5 Research instrument………… 67

3.6 validity of research instrument……………………… 67

3.7 Reliability of research instrument………………… 68

3.8 Method data analysis and presentation………… 68

3.9 Test of hypothesis……………………………………………………..  69

CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND ANALYSIS

4.0 Introduction……………………………… 70

4.1 Data presentation analysis 70

4.2 Main question analysis……… 71

4.3 Test of hypothesis………………… 81

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.0 Introduction…………………… 84

5.1 Summary of findings…………… 84

5.2 Conclusion…………………… 85

5.3 Research findings …………… 86

5.4 Recommendation…………… 87

BIBLIOGRAPHY 90

Reference code: C096

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Accounting Ratios and Decision Making in Nigeria Manufacturing - A Survey of Selected Manufacturing Companies in Nigeria

Reference code: C094

ABSTRACT

Ratios are highly essential profit tools in financial analysis that helps financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage and interest coverage. Although ratios report mostly on past performances, they can predict too, and provide lead indications of potential problem areas. In this research work, relevance of accounting ratios and decision making in Nigeria manufacturing  company ; a case study of Nigerian breweries plc. The researcher considered in chapter one, the introduction of the study which will in turn consider the following topics. The background of the study, the statement of problem, research questions, objectives of study, hypothesis, scope of study, significance of the study. The main objective of this study is therefore to evaluate the relevance of Accounting Ratios and Decision Making in Nigeria. Amongst the specific objective of this study was the determination of the effects of Relevance of Accounting Ratios and Decision Making In Nigeria Manufacturing companies. The study shows that Accounting ratio and Decision Making has helped to provide the knowledge of financial analysis techniques and interpretation of the available data for managerial purpose which makes it necessary  for managers to rely strongly on Ratios  for Decision Making. Chapter two focuses on the literature review; this chapter is where the researcher extracts materials from various books, magazines, newspapers and internet resources. In chapter three, the researcher deals on research methodology  which consists of Research Design, population, sample and sample techniques, types and sources of data, instrument of data collection, validation and reliability of research instrument, data analysis technique and method of data presentation and analysis. The population of this study consists of the staff of the finance and account department of nig breweries plc. T test analysis was used to test the model formulated to support the hypothesis based on the study and that of the tested hypothesis while chapter four is data analysis and interpretation and based on the review and data analysis carried out it was said that financial ratio is a relevant tool in organization decision making, accounting ratio is significant in management decision making of firms, managers rely on ratios for their decision making and ratio analysis can be used to monitor profit trend and yearly performance of organization. Chapter five consists of summary of findings, conclusion and recommendation, and it was concluded that the current appropriate use of ratio analysis in Nigeria breweries has helped to highlighting areas where organizations are having problem as regards financial management.

BACKGROUND TO THE STUDY

............. In consequences, managers had to look for the means of discharging their stewardship responsibility; this can be obtained through the use of accounting ratios. The use of accounting ratios is a time-tested method of analyzing a business. Wall Street investment firms, bank loan officers and knowledgeable business owners use accounting ratio analysis to learn more about a company's current financial health as well as its potential (Vernmmen, 2006). Ratios analysis simplified, summarizes, and systematizes a long array of accounting figures. Its main contribution lies in bringing out the inter-relationship which exists between various segments of business. Ratios are more of a diagnostic tool that helps to identify problem areas and opportunities within a company.

1.2 Brief Historical Background of Nigerian Breweries Plc

Nigerian Breweries Plc, the pioneer and largest brewing company in Nigeria, was incorporated in 1946. In June 1949, the company recorded a landmark when the first bottle of STAR lager beer rolled off its Lagos Brewery bottling lines. This first brewery in Lagos has undergone several optimization processes and as at today boasts of the most modern brew house in the country  ...................

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION
1.1. Background to Study           1
1.2. Brief Historical Background   2
1.3. Statement of The Problem      3
1.4. Research Question             4
1.5. Objectives of the Study       4
1.6. Hypothesis                    5
1.7. Scope of the Study            5
1.8. Significance of the Study     5
1.9. Organization of the Study     6
1.10. References                    7

CHAPTER TWO: LITERATURE REVIEW 
2.1. Financial Statement                      8
2.2. Accounting Ratios and Decisions makings  12
2.2.1. Analyzing of Liquidity                 12
2.2.2. Asset Equity Ratio or Leverage Ratios  14
2.2.3. Analyzing Sales and Profitability      14 
2.2.4. Analyzing Efficiency           15
2.3. Classifications of Ratios        15
2.4. Uses/Users of Financial Ratios   16
2.5. Ratio Analysis                   20 
2.6. Usefulness of Financial Ratio    21
2.7. Financial Analysis               22
2.7.1 Types of Financial Analysis     24
2.7.1.1. Intra company Analysis       24
2.7.1.2. Inter Company Analysis       25
2.8. Importance of Financial Information  26
2.9. Classification of Ratios       26
2.9.1. Profitability Ratio          27
2.9.2. Liquidity Ratio              29
2.9.3. Leverage Ratio               31
2.9.4. Activity Ratio               33
2.10. Limitations of Ratios         38
2.10.1. Dealing with the problems   45
2.11. References                    47

CHAPTER THREE: RESEARCH METHODOLOGY
Introduction                                    50
3.0. Research Design                            50
3.1. population, Sample and Sample Technique    50
3.2. Types and sources of Data                  50
3.3. Instruments of Data Collection             51
3.4. Validity and Reliability of Instruments    51
3.5. Data Analysis Techniques and Presentation  52
3.4. Method of Data Presentation and Analysis   52  
3.5. References                                 54

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0. Introduction                                                55
4.1. Data Presentation and Analysis                              55
4.1.1. Presentation and Analysis of Secondary Data collected     55
4.1.2. Presentation and Analysis of Primary Data Collected       57
4.1.2.1 Presentation and Analysis of Respondents Bio-Data        57
4.1.2.1 Presentation and Analysis of Data Related to the Study   63
4.2 Hypothesis   Testing                                         68

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1. Summary of Findings                   71
5.2. Conclusion                            73
5.3. Recommendation                        74
BIBLIOGRAPHY                               75
APPENDIX                                   79


Reference code: C094
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Budget Implementation and Economic Growth in Nigeria

Reference code: C093

ABSTRACT

This research project is an empirical investigation into Public Sector Budget Implementation and Performance of the Economy in Nigeria. The study covered a period of thirty four (34) years: 1981-2016. In order to achieve the objectives of the study, data was collected from Central Bank of Nigeria statistical Bulletin, two (2) hypotheses were formulated and tested using the ordinary least squares method of the multiple regression analyses. The results of the data analyses indicated that: both recurrent and capital expenditure of the federal government were positively related to the performance of the economy although only recurrent expenditure was statistically significantly in explaining economic performance. On the basis of our findings, we make the following recommendations: The federal government should increase its budgets in the area of capital expenditure. The government should also endeavour that proper and complete implementations on the budget with regards to infrastructural development mostly at the grassroots is made. The government should also introduce measures that will bring about an optimal level with reference to the relationship between capital and recurrent expenditure. This is because the current system seems to favour the recurrent expenditure.

BACKGROUND TO THE STUDY

...................... budgeting can be viewed from several perspectives which include: As an allocation mechanism whereby a significant proportion of the nation’s resources and channels into effort decided upon in the government sectors. 

As a process for organizing the appropriation of money by elected leaders from specific purposes. As a stylized interaction among groups of governmental elites, all of whom have specific particular budgeting outcomes. As a technical tool for controlling expenditures, for managing agencies for planning programs. As a ritual in which many political and government figures go through the paces leading to a nearby-fore ordained concluding processes. As plain simple polities, by which is meant “who gets what, when and how”. 

Finally, as a measurement of certain outputs of the government. While each of these perspectives may appeal in differing degree to each reader to understand the phenomenon of budgeting, one must understand all of them. This research work therefore seeks to examine how budgeting and budgetary implementation affects the growth of the economy ...................

STATEMENT OF THE PROBLEM 

A budget is a framework for revenue and expenditure outlays over a specified period usually one year (Olurankise (2012)). It is an instrument stipulating policies and programmes aimed at realizing the development objectives of a government. Meigs and Meigs, (2004) defined budgets as a comprehensive financial plan, setting forth the expected route for achieving .............. 

TABLE OF CONTENTS

CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY - 1
1.2 STATEMENT OF THE PROBLEM 3
1.3 PURPOSE OF THE STUDY - 5
1.4 RESEARCH QUESTIONS 5
1.5 RESEARCH HYPOTHESES 6
1.6 SIGNIFICANCE OF THE STUDY 6
1.7 LIMITATIONS OF THE STUDY 7
1.8 SCOPE OF THE STUDY - 7
1.9 DEFINITION OF TERMS - 8
1.10 ORGANIZATION OF THE STUDY - 9

CHAPTER TWO: REVIEW OF LITERATURE
2.0 INTRODUCTION - - - 12
2.1 THEORETICAL LITERATURE - - 12
2.2 BUDGETING AND APPROPRIATION PROCESS 23
2.3 FORECASTING AS A BUDGETING TOOL - 29
2.4 IMPLEMENTATION/PERFORMANCE-BASED BUDGETING IN NIGERIA 32
2.5 REVIEW OF EMPIRICAL LITERATURE - 41

CHAPTER THREE: RESEARCH METHODOLOGY
3.0 INTRODUCTION - - - 54
3.1 RESEARCH DESIGN - - - 54
3.2 SAMPLE SIZE DETERMINATION - 55
3.3 DATA COLLECTION METHOD - - 55
3.4 OPERATIONAL MEASURES OF VARIABLES 55
3.5 DATA ANALYSIS TECHNIQUE - - 56 

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 INTRODUCTION - - - - 59
4.1 DATA PRESENTATION - - - 59
4.2. DATA ANALYSIS AND INTERPRETATION OF RESULTS 64
4.3 HYPOTHESES TESTING - - - 65

CHAPTER FIVE: DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.0 INTRODUCTION - - 67
5.1 DISCUSSION OF FINDINGS 67
5.2 CONCLUSIONS - -- 69
5.3 RECOMMENDATIONS - - -70
BIBLIOGRAPHY - - 71
APPENDICES - - 77


Reference code: C093
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Effect of Bank Loans on the Performance of the Agricultural Sector in Nigeria

Reference code: C092

ABSTRACT

This research thesis investigated the effect of commercial bank loans and advances on the performance of the agricultural sector in Nigeria. In order to achieve the purpose of the study, three (3) hypotheses were formulated and data was collected from the Livestock production, Crop production and Fish production subsectors of the agricultural sector of for a period of thirty four (34) years covering 1981 to 2014 from the Central Bank of Nigeria (CBN) Statistical Bulletin 2015. The data collected analyzed using simple regression and correlation analyses on Statistical Package for Social Sciences (SPSS) version 21. From the data analyses, the following findings were made: A positive and significant relationship between Livestock Production and bank loans and advances. Our findings also showed that there is a positive and significant relationship bank loans and advances and crop production in Nigeria. Finally, our findings showed a positive and significant relationship between bank loans and advances and fish production in Nigeria. Based on the findings, we conclude that provision of loans and advances by commercial banks has significantly improved livestock production in Nigeria. We also conclude that increased bank loans and advances from commercial banks have positively impacted on the performance of crop production in Nigeria. Finally, we conclude that the provision of loans to fish production has boosted the productivity and performance of the sector. Given our finding and conclusions, we make the following recommendations: The federal government should make policies that will incentivize commercial banks to increase funding provided for agro-based production in Nigeria. Other sources or avenues for agricultural loans and advances should be made available especially for those farmers who may not be able to meet up with the stringent requirements of the commercial banks. Training and awareness programmes should be organized for farmers and others in the industry on the availability of funds and how to meet the stringent requirements demanded by commercial banks.

BACKGROUND TO THE STUDY

Agricultural credit is the loan extended to farmers for the production, storage, processing and marketing of farm products. Agricultural credit is sometimes referred to as farm credit. Farm credit plays a crucial role in agricultural development as it enables farmers reap economies of scale, venture into new fields of production, employ new technologies and empower them to provide utilities for a widening market (Ayegba & Ikani, 2013).

Agricultural credit have a secondary spillover effect on nonfarm household through input, labour and output linkages. According to Nzotta (1999) agricultural credit reactivates, expands and/or modernizes all types of agricultural enterprises which are considered economically feasible and desirable to the achievement of stated economic goals of self sufficiency in agricultural production. 

Furthermore, (Qureshi, et al 1992) reports that such credit removes financial constraints faced by farmers as it provides incentives to adopt new technologies that would otherwise be more slowly accepted. Thus the availability of credit enables farmers to switch quickly to new technologies which enable the achievement of rapid productivity and growth. 

Since suppliers of credit/loan are in business for profit and will only lend to credit worthy sectors and knowing the positive role played by agricultural credit on food production, consumption and agricultural inputs, the Federal Government of Nigeria decided to established the agricultural credit guarantee Scheme (ACGS) with capital base of three billion Naira (N3 billion) to guarantee credit extension to Nigerian farmers (Ogar et al (2014).

The difficulties in accessing loans from deposit money banks has limited the ability of the sector to expand it production, used modern technologies, provide employment opportunities to the teeming population and contribute to the growth of the Nigerian economy (Ogar, 2015). To solve these problems, many policy dimensions have been evolved meant to increase the funding to the agricultural sector including the requirement of banks to play pivotal roles in providing cheap credit to the sector’s operators. 

However, deposit money banks have not fully complied with this policy requirement as there are still reports of the unwillingness of the banks to grant credit to the sector’s operators. Furthermore, where credits are granted, the interest charges are often too high. Other problems associated with the access to deposit money banks’ credit by the agricultural sector include: excessive paper work, requirement for collateral securities and the fear of default in the payment .............

TABLE OF CONTENTS

CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF RESEARCH PROBLEM 5
1.3 PURPOSE OF THE STUDY 6
1.4 STATEMENT OF RESEARCH QUESTION 7
1.5 RESEARCH HYPOTHESES 7
1.6 SIGNIFICANCE OF THE STUDY 8
1.7 SCOPE AND LIMITATION OF STUDY 9
1.8 ORGANIZATION OF STUDY 9
1.9 DEFINITION OF TERMS 11

CHAPTER TWO
REVIEW OF RELEVANT LITERATURE
2.0 INTRODUCTION 13
2.1 THEORETICAL FRAMEWORK 14
2.2 CONCEPTUAL FRAMEWORK 17
2.2.1 Commercial Banks 17
2.2.1 Agric Sector in Nigeria 20
2.3 AGRIC SECTOR PERFORMANCE & THE ECONOMY 23
2.4 REVIEW OF RELEVANT EMPIRICAL LITERATURE 26

CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION 32
3.1 RESEARCH DESIGN 32
3.2 SAMPLE PROCEDURE & DATA COLLECTION METHOD33
3.3 OPERATIONAL MEASURES OF VARIABLES 34
3.5 DATA ANALYSES TECHNIQUES 36
3.5.1 MODEL SPECIFICATION 36
BIBLIOGRAPHY 38

CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.0 INTRODUCTION 38 
4.1 DATA PRESENTATION 39
4.2 DATA ANALYSES AND HYPOTHESES TESTING 45
4.3 DISCUSSION OF FINDINGS 50

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.0 INTRODUCTION 52
5.1 SUMMARY OF FINDINGS 53
5.2 CONCLUSIONS 54
5.3 RECOMMENDATIONS 55
BIBLIOGRAPHY 56
APPENDICES 60


Reference code: C092
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Reference code: C092

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Elements of a Quality Financial Report for Disclosure in the Financial Statement

Financial accounting involves the process of recording, summarizing and reporting the various of business transactions resulting from operations of an organization over a period of time - normally one year. The business transactions are summarized in the preparation of financial statements, including the balance sheet, income statement and cash flow statement that record the company's operating performance over a specified period of time (Phillips, 2011). 

Information contained in the financial accounting records are summarized into financial statement/report for stakeholders of the business. The objective of financial reporting is to provide financial information about the concerned business that is useful to stakeholders including investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit. 

Financial reporting is concerned with the presentation of financial statements in a form for comprehension by users of financial information. It is essentially a process of communicating financial information and also represents an instrument of identifiable stewardship (Nwanyanwu, 2013). Similarly, Adebayo, (2005) opine that financial reporting is the medium of communicating information about the financial affairs of both profit and non-profit organizations. Considering the nature of the informal sector, most businesses in the sector keep very minimal accounting records and hardly produce financial reports.

The quality of a financial report depends on the extent to which the information contained therein can be relied on to make informed and useful investment decisions. Pivac, Vuko, and Cular (2017) provide a lost of 44 disclosure items that must be contained in the financial report for it to be considered to be of good quality. Before we provide a list of these disclosure items, it is important to note that the mere fact that financial report contains all the elements listed below does not on its own mean that it is of good quality:

Elements of Disclosure Items for Quality Financial Reports

1-Executive summary and key financial indicators;
2-Company profile;
3-Business activities;
4-Short companyvreview;
5-The most important achievements in the reporting year;
6-Position on the business market;
7-Report by the supervisory board;
8-Report by the management board;
9-Code of Corporate Governance (CC G);
10-Annual survey of the CC G;
11-Management board members;
12-Members of the supervisory board; 13-The authority of company bodies;
14-Organizational structure;
15-Expectations for future periods;
16-The mission and vision of the company;
17-Corporate strategy;
18-Relationship to stakeholder group - customers;
19-Relationship  to stakeholder group - shareholders;
20-Major shareholders;
21-The report on the movement of company shares;
22-Relationship to stakeholder group – suppliers;
23-Relation to employees;
24-Structure of employees;
25-Corporate social responsibility;
26-Company contributions to economic prosperity;
27-Environmental protection;
28-Quality management; 29-Business environment risk;
30-Competition risk;
31-Industry risk;
32-Liquidity risk;
33-Business risk;
34-Accounting policies;
35-Financial indicators;
36-Balance sheet;
37-Income statement;
38-Cash flow statement;
39-Statement of changes in equity;
40-Notes in financial statements;
41-Responsibility for the financial statements;
42-Independent auditor’s report;
43-Events after the balance sheet date;
44-Contact information.

Adapted From: Pivac, Vuko and Cular (2017)

References

Adebayo, A. (2005). Financial reporting: an aid to efficient economic management in the public                      sector, The Nigerian Accountant, 4(1), p.33.

Nwanyanwu, L. A. (2013). Financial reporting and organizational liquidity in Nigeria: the                               accounting bases perspective, Research Journal of Finance and Accounting, Vol.4, (16)

Phillips, F. (2011). Fundamentals of financial accounting, (3rd edition.). Boston: McGraw-Hill                      Irwin, ISBN 9780073527109.

Pivac, S., Vuko, T. and Cular, M. (2017) Analysis of annual report disclosure quality for listed                       companies in transition countries, Economic Research-Ekonomska Istraživanja, 30:1, 721-731

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