Tag Archives: Liberalization

ANALYSIS OF BANKS FINANCIAL PERFORMANCE IN A LIBERALIZED BANKING ENVIRONMENT: A STUDY OF FIVE SELECTED BANKS IN NIGERIA. (Published)

The very essence of this research was to assess the financial performances of banks in a liberalized banking environment using an ordinary Least Square (OLS) method of regression analysis to analyze five selected banks in Nigeria. The time series properties of the variables were investigated by conducting a unit root test to determine the stationarity status of the data using annual series data spanning from 2001 – 2010. The analysis was further extended to cointegration and error correction modeling (ECM) technique in order to test for the stationarity status of the data by conducting a unit root test using the Dickey–Fuller (DF) and Augmented Dickey–Fuller (ADF) test. The objective of this research among others is to find out the effect of the nominal lending rate, the exchange rate and the credit volume on banks financial performances in terms of their profitability. The data sources were mainly from a ten year financial summary of the banks selected and CBN Statistical Bulletin, various years. From the empirical evidence made from the study so far, it was discovered that the nominal lending rate and the total credit had a positive impact on the profit of the five selected banks under review. Only exchange rate has a negative significance which is contrary to the other variables studied. The overall submission was that the variables employed are statistically significant as over 98 percent of them were explained at the long run. The researcher, therefore, recommends that to improve banks financial performance, the banks need a good regulatory environment that will enable them to expand their scope of business but strictly within the financial service industry and also good corporate governance that will allow for transparency and minimize fraud in the bank.

Keywords: Exchange Rate, Financial Performance, Interest Rate, Liberalization, Total credit

CHALLENGES FOR HIGHER EDUCATION POLICY IN INDIA (Published)

There has been a significant growth in enrolment in higher education in recent years; which has been substantially contributed by the private sector in technical education. However, despite various initiatives, a New Education Policy after 1992 is yet to be promulgated which is in sync with India’s liberalization policy to foster quality & improve Human Development Index (HDI). Research and excellence remain a serious challenge, compounded by policy prevarication. Public funding arrangement is grossly inadequate and largely to elitist institutions. The paper argues that our obsession with improving enrolment has to give way to credible quality improvement measures. Specifically there is a need to upscale public spending, treat private sector as a partner, improve industry academia interface, encourage research, Public Private Partnership (PPP), improve infrastructure and encourage FDI into higher education sector through MoUs with reputed foreign universities. The paper also cautions against recent ambivalence towards Open Distance Learning (ODL).

Keywords: FDI, HDI, Liberalization, ODL, PPP

ANALYSIS OF BANKS FINANCIAL PERFORMANCE IN A LIBERALIZED BANKING ENVIRONMENT: A STUDY OF FIVE SELECTED BANKS IN NIGERIA. (Review Completed - Accepted)

The very essence of this research was to assess the financial performances of banks in a liberalized banking environment using an ordinary Least Square (OLS) method of regression analysis to analyze five selected banks in Nigeria. The time series properties of the variables were investigated by conducting a unit root test to determine the stationarity status of the data using annual series data spanning from 2001 – 2010. The analysis was further extended to cointegration and error correction modeling (ECM) technique in order to test for the stationarity status of the data by conducting a unit root test using the Dickey–Fuller (DF) and Augmented Dickey–Fuller (ADF) test. The objective of this research among others is to find out the effect of the nominal lending rate, the exchange rate and the credit volume on banks financial performances in terms of their profitability. The data sources were mainly from a ten year financial summary of the banks selected and CBN Statistical Bulletin, various years. From the empirical evidence made from the study so far, it was discovered that the nominal lending rate and the total credit had a positive impact on the profit of the five selected banks under review. Only exchange rate has a negative significance which is contrary to the other variables studied. The overall submission was that the variables employed are statistically significant as over 98 percent of them were explained at the long run. The researcher, therefore, recommends that to improve banks financial performance, the banks need a good regulatory environment that will enable them to expand their scope of business but strictly within the financial service industry and also good corporate governance that will allow for transparency and minimize fraud in the bank.

Keywords: Exchange Rate, Financial Performance, Interest Rate, Liberalization, Total credit

EFFECTS OF FINANCIAL SECTOR LIBERALIZATION ON BANK PERFORMANCE IN NIGERIA: 1971-2011 (Published)

The study critically assessed the extent to which financial sector liberalization has affected bank performance in Nigeria. Panel data model was employed for data spanning a period of thirty four years (i.e. 1971-2011). Earnings per share (EPS), Returns on capital employed (ROCE) and Returns on equity (ROE) were used as proxies for bank performance (i.e the dependent variables) while interest rate, real financial savings and exchange rates were used as the proxies for financial sector liberalization (i.e. the independent variables). A number of diagnostic tests were also conducted on the residuals to evaluate the models; these include the Breuch-Godfrey serial correlation Lagrange Multiplier (LM) test, the Ramsey REST test of specification error (i.e. to test for omitted variables, incorrect functional form, correlation between exogenous variables and error term) and the Cumulative Sum (CUSUM ) tests of parametric stability, the LM test of serial correlation showed that there was an absence of first order serial correlation in the residuals and cumulative sum tests also showed that observations are more stable during Pre-SAP period than the post-SAP era. The result obtained showed that though the effect of financial sector liberalization on bank performance in Nigeria for the period of study has been significant, especially as measured by the proxies of Earnings per Share and Return on Equity, it has not been significant enough to transform the nations’ economy to the desired level. Hence, the study suggests among other things that a precondition for the efficiency of a liberalized financial sector is a stable macroeconomic environment and it is essential to ensure that government fiscal policy is assigned to complement monetary policies not to work against monetary and fiscal policies and help restore domestic and international confidence in the Nigeria banking system.

Keywords: Bank Performance, Financial Sector, Liberalization, Nigeria

Effects of Exchange Rate Liberalization on French Beans Exports in Kenya (Review Completed - Accepted)

The exports of French beans are one of the leading contributors to foreign exchange earnings in Kenya. Nevertheless, the economic impacts of exchange rate liberalization on French beans exports in Kenya are unclear. The purpose of this paper is to evaluate the magnitude and direction of the effects of exchange rate liberalization on French beans exports from Kenya to its major trading partners in the European Union. Monthly data for a fixed exchange regime represented by the period from 1990- 1993 and a flexible regime represented by the period from 1994-2011 was used in the estimation of an export demand model. The empirical results show that the liberalization of the exchange rate led to an increase in the French beans export volumes from Kenya to the European Union. The paper recommends maintenance of a competitive exchange rate and export promotion in order to boost Kenya’s French beans exports.

Keywords: Exchange Rate, Exports, Liberalization, Time Series

The Relevance of Traditional Post Office Services in the Growth of Modern Corporate Entities (Published)

The Postal Corporation of Kenya was established by parliament under section three (3) of The Postal Corporation Act, 1998. Its mandate, as set in section five (5), is to provide and operate postal services, postal financial services, and perform other functions and duties as the Minister of Transport and Communications may assign. On 1 July 1999, Kenya Posts and Telecommunications Corporation split into three entities. Telkom Kenya was now responsible for offering Telecommunication services, Postal Corporation of Kenya (PCK) to offer mail and financial services and Communication Commission of Kenya (CCK) to be a regulatory body. The sector was also liberalized so other companies were registered to offer communication services. There are currently ninety-six companies offering mail (courier and parcel) services that are registered by the Communications Commissions of Kenya, the official regulatory body in Kenya. With liberalization, the Post Office found itself in the competitive market, a concept that was new and needed to be integrated in its business operations. In the mail business the post office is mainly engaged in distributing four types of mail, that is, administrative, marketing, periodicals and newspapers. Private individuals’ mail is few and seasonal such as occasion cards on festive occasions like Christmas and examinations. The corporation is offering its services by dividing the country into eight regions i.e. Coast, Nairobi, Central, Eastern, Western, Northern, Rift Valley and Nyanza.This paper explores the relevance of the traditional postal services in the growth of modern corporate entities. In order to gain an in-depth understanding of the postal business in Kenya, a qualitative research in the form of an explorative study was used. The study explores the different approaches PCK adopted to counter the risks and uncertainties as it entered the liberalized market. We will identify, categorize and prioritize the risks and uncertainties it faces in the competitive market and find out how it currently hedges itself against the risks and propose sustainability strategies for risk management by the company.

Keywords: Letters, Liberalization, Mail Runners, Native Runners, Postage Stamp, Postmaster