GOVERNMENT FINANCIAL REGULATIONS COMPLIANCE IN PUBLIC ENTERPRISES IN NIGERIA
This study examined government financial regulation compliance in the public enterprises. In order to actualize the objectives of the study, various literature and theoretical issues were discussed. The instrument used for the purpose of this research was gathered through primary and secondary sources. The primary source is through questionnaires while the secondary source extracts from journals by different authors and other publications. The mass of information generated from the questionnaires was summarized in form of table and analyzed using simple percentage. The researcher administered two hundred and fifty (250) questionnaires to respondents, out of which two hundred and twenty (220) were retrieved for the purpose of presenting and analyzing responses to issues raise in the questionnaires. The hypotheses stated in the study were tested using Z-test statistical tool. The findings from analysis revealed among other things that corporate organization compliance with government financial regulation impact positively on corporate performance. The researcher recommends that the management of Government should improve in the generalization of relevant reports of its operational activities. This will make supervisory and monitoring function of the financial regulators to be easy to carry out and it will assist the formulation and implementation of policies.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
Background to the Study
Statement of the Research Problem
Objectives of the Study
Scope of the Study
Significance of the Study
CHAPTER TWO: LITERATURE REVIEW
Review of Theoretical Studies
CHAPTER THREE: RESEARCH METHODOLOGY
Population of the Study
The Sample Size
Data Collection Method
The Research Instrument
Data Analysis Method
CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION
4.2 Descriptive Statistics
4.3 Test of Hypothesis
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
Summary of Findings
BACKGROUND TO THE STUDY
According to Seelig and Novoa (2008), financial sector supervisory bodies are organized in different forms in different countries. These structures range from independent stand-alone agencies to consolidated supervisors responsible for supervising the entire financial sector, including banks, insurance companies and securities firms. In some countries financial sector supervisors function under the ministry of finance, while in others the supervisory body may be a department of the central bank. The financial landscape has changed, and banks, insurers, and securities firms have begun to offer similar or even identical products, or have common ownership. This, in turn, has caused some countries to reexamine their regulatory structure and consider changes. Frequently this has led to the creation of a new agency, forcing authorities to make decisions about governance of the new entity. While there is an extensive literature on corporate governance, guidance on governance issues for public entities is not so clear. Moreover, given the public nature of these bodies, it is unlikely that the governance practices will, or should, depart dramatically from those in the rest of the government.
Mark and David (2008) says that, in today’s world of global capital markets, political leaders face two primary challenges in regulating their economies. First, leaders must ensure the stability of their country’s financial institutions. The frequency and magnitude of banking crises have reached levels not seen since the interwar period. The United States, for example, experienced a dramatic bout of banking instability during the 1980s, with more banks collapsing in 985–87 than in the prior 30 years. The United Kingdom faced a similar crisis among small banks during the 1970s, followed by the sudden and dramatic collapse of a prestigious bank in the mid-1980s. Such episodes of financial instability have prompted governments to place ‘‘prudential regulation’’ rules and policies designed to ensure the solvency and soundness of banks and other financial institutions—at the top of their economic policy agendas.
STATEMENT OF THE RESEARCH PROBLEM
The period 1986 – 2004 is important for the Nigerian banking sector, as it witnessed both deregulation with its effects and an increased effort at bank regulation. The period 1986 – 1995 marked the beginning of the deregulation of the Nigerian economy (including the banking sector) and the emergence of many new generation banks owned by state governments and private sector operators. They further stated that, banks performed poorly in this period and some of them failed. The Nigeria Deposit Insurance Corporation (NDIC), was therefore, created in 1988, to insure banks’ deposits. Several other actions were taken to ensure banks soundness in Nigeria, including the introduction of the ‘Prudential Guidelines for banks in 1990, the enactment of the Banks and Other Financial Institutions Act in 1991, Failed Banks’ decree of 1994, the amendment of the CBN and NDIC Acts in 1997 and banks, consolidation in 2005. These efforts at banks’ regulation were expected to have taken effect by 1996 hence the period 1996 – 2004, is regarded as a period of increased regulation.
In the light of this the following research questions were raised:
Do the corporate organizations in Nigeria compliance with government financial regulation?
Does corporate organization compliance with government financial regulation impact positively on corporate performance?
OBJECTIVES OF THE STUDY
The broad objective of the study is to examine government financial regulations compliance in public enterprise in Nigeria.
The specific objectives are:
To examine if corporate organizations in Nigeria compliance with government financial regulation.
To determine if corporate organization compliance with government financial regulation impact positively on corporate performance.
The hypotheses to be tested to enable us achieve the objectives of this project are:
Corporate organizations in Nigeria compliance with government financial regulation.
Corporate organization compliance with government financial regulation impact positively on corporate performance.
SCOPE OF THE STUDY
This study is motivated by a desire to examine government financial regulations compliance in public enterprise in Nigeria.
The population of the study consist of the entire the quoted companies in Nigeria, while the sample size is restricted to five selected quoted banks operating in Nigeria.
SIGNIFICANCE OF THE STUDY
It is expected that this study would consolidate existing literature on the issues surrounding the relationship between government financial regulation and public companies in Nigeria. The study would also facilitate the examination of the effects of government financial regulation and public companies in Nigeria and thus boosting the empirical evidence from Nigeria. Furthermore, given the empirical nature of the study, the outcome of this study would aid policy makers and regulatory bodies in economic modeling and policy simulation with respect to the selected variables examined in the study.
The result of the study would be of benefits to investment analysts, investors and corporations in examining the effectiveness of government financial regulation and public companies in Nigeria. It will also be useful in stimulating public discourse given the dearth of empirical researches in this area from emerging economies like Nigeria. Finally, it would also add to the available literature on the area of study while also providing a platform for other researchers who may want to further this study.
Mark, S. C. & David, A. S. (2008), Financial Regulation, Monetary Policy, and Inflation in the Industrialized World, The Journal of Politics, 70(3), 663–680.
Seelig, S. & Novoa, A. (2008), Governance Practices at Financial Regulatory and Supervisory Agencies, IMF Working Paper, 1 – 31.
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