The Impact of Exchange Rate Fluctuation on the Nigerian Economic Growth

The Impact of Exchange Rate Fluctuation on the
Nigerian Economic Growth

Introduction

 Exchange rate is the price of one country’s currency expressed in terms of some other currency. It determines the relative prices of domestic and foreign goods, as well as the strength of external sector participation in the international trade. Exchange rate regime and interest rate remain important issues of discourse in the International finance as well as in developing nations, with more economies embracing trade liberalization as a requisite for economic growth (Obansa, Okoroafor, Aluko and Millicent, 2013). In Nigeria, exchange rate has changed within the time frame from regulated to deregulated regimes. Ewa, (2011) agreed that the exchange rate of the naira was relatively stable between 1973 and 1979 during the oil boom era and when agricultural products accounted for more than 70% of the nation’s gross domestic products (GDP). In 1986 when Federal government adopted Structural Adjustment Policy (SAP) the country moved from a peg regime to a flexible exchange rate regime where exchange rate is left completely to be determined by market forces but rather the prevailing system is the managed float whereby monetary authorities intervene periodically in the foreign exchange market in order to attain some strategic objectives (Mordi, 2006). This inconsistency in policies and lack of continuity in exchange rate policies aggregated unstable nature of the naira rate (Gbosi, 2005). Benson and Victor, (2012) and Aliyu, (2011) noted that despite various efforts by the government to maintain a stable exchange rate, the naira has depreciated throughout the 80’s to date. Against this background, this research study intends to investigate the impact of exchange rate on economic growth in Nigeria over a period of 28 years (1986 – 2013).

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VALUE- RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN STOCK MARKET

VALUE- RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN STOCK MARKET

Abstract

There is little known about the role of accounting information in terms of its ability to explain changes to the security prices of listed companies on the Nigerian Stock Exchange (NSE). Almost all evidence in this area is obtained from  the  United States or Western European countries which have sophisticated markets compared to most developing countries. This work investigates the value relevance of accounting data in the Nigerian stock market, with a view to determining whether accounting information has the ability to capture data that affect share prices of firms listed on the NSE. It also examines the difference in perception of  institutional and individual investors about the value relevance of various items of financial statements in equity valuation. This study used secondary and  primary data to investigate the value relevance of accounting numbers. Secondary data were obtained from the Nigerian Stock Exchange Factbook, Annual Financial reports of companies quoted on the Nigerian Stock Exchange, the Nigerian Stock Market Annual and primary data were obtained through survey questionnaires administered on the respondents. The methods used for gauging information content of various accounting numbers were Ordinary Least Squared (OLS), Random Effects Model (REM), Fixed Effects Model (FEM) and Independent – Samples t-Test.  The findings show that there is a significant relationship between  accounting information and share prices of companies listed on the NSE. Dividends are the most widely used accounting information for investment decisions in Nigeria, followed by earnings and net book value. The accounting information of manufacturing companies is more informative in the NSE. The study also finds that a significant negative relationship exists between negative earnings and share prices of companies listed on Nigerian Stock Exchange. It equally  observes  that there  is no significant difference between the perception of institutional and individual investors about the value relevance of accounting information. The study therefore suggests that the firms should improve the quality of earnings as manipulated earnings (of which dividends are sub-sets) have large effects on share prices. Moreover, there should be firm and stiff penalty by  the national standards setters for manipulating earnings in the Nigerian stock market. It is also recommended that all companies listed on Nigerian Stock Exchange should prepare Simplified Investor’s Summary Accounts (SISA) with emphases on the most widely used accounting information along the required mandatory detailed financial statements to suit Nigerian peculiarities. This is expected to remove information over-load particularly for non-accountants and non-financial analysts. The afore-mentioned measures are anticipated to increase investors’ confidence in accounting numbers and by extension the economic growth in Nigeria.Download Full Material-N5000

THE CONTROL OF REVENUES IN THE HOTEL INDUSTRY

CHAPTER ONE

INTRODUCTION

 

  • BACKGROUND OF THE STUDY

It is generally accepted that the historical origin of the hotel and catering workforce lie in the class of domestic servants who maintained the homes of the ruling classes in the latter half of the 19th century and first half of the 20th century (Sanders, 1981a; Riley, 1985). According to Sanders (1981a) the decline in the number of domestic servant, in the part of the 20th century, coincided with the first significant growth in hotel employment. Many domestic workers were leaving their employment as a result of push factors such as lack of employment protection (which made domestic labour less attractive) and the improvements being made in domestic technology (that reduced the need for servants). Riley (1985 argued that the location of such domestic servant employment geographically mapped the growth areas for hotel and catering, notably in seaside resort, country Spas and large urban conurbations. Sander argues that this process of labour transfer meant that by the end of the second world war, conditions made it seem logical that substantial number of male and female domestic staff drift into the expanding hotel and catering industry (sanders 1981a: 83).

Since the 1940s the term hotel industry has come into common usage. It embraces the economic activities of undertaking aim to satisfy the demand for accommodation, food and drink away from home. To a greater or lesser extent many products of the group as well as other characteristics distinguish its entrepreneurs from others. They have a common function to supply those away from home with their basic needs. These are the considerations which combine this heterogeneous variety of units into a group, described here as an industry.

The hotel and catering industry is one of the largest employers in many developed and increasingly, less developed countries. Some 10% of the British workforce are engaged in hotel and catering employment representing some where between 2 & 2 and a half million person. The hospitality industry as it is now commonly referred to is the most important element in the wide tourism sector.

 

  • STATEMENT OF PROBLEM

Economists, frequently point to the heterogeneous nature of hotel industries. The industry comprises units ranging from the most humble café to the largest luxury hotel owned by a multinational corporation. Hospitality industry employers stress the catering people oriented nature of hotels and catering, generating a glamorous, mystic that is all too easily reinforced by images in popular media (wood, 1990 a).

Furthermore, the industry is often presented as a paragon of conservative virtues, low barriers to entry mean that, in theory at least, the hotel and catering sector is fertile grouped for the small time entrepreneur. Similarly, a view is promulgated of a career development in the industry as open and meteoritic: even the kitchen pan washer can rise to become general manager of the hotel with hard work and dedication. Supporting these powerful images in an educational system that post school students separate courses in hotel and catering management from those in general business studies, encouraging an insularity that is characteristics of the industry as a whole.

This insularity manifests itself in a variety of ways, most commonly in places from those connected with it for the industry to be regarded as unique and special requiring specialist skills and training, a special attitude of mind and body, specialist professional associations, and above all special academic understanding. Those engaged in hotel and catering industry cannot disguise the true nature of much hospitality industry employment, of how wages and poor working conditions, of exploitation and minimal job security, of monotonous yet demanding works of degrading and low status occupations.

The purpose of this research is to investigate and provide answers to such problem and question as:

  1. Do hotel industry control revenue appropriately?
  2. Can high rate of loss in a hotel industry be attracted to poor working conditions?
  3. Are the staff of hotel industry exploited?
  4. Is hotel industry of low status occupation?
  5. Do the staff of hotel industry see their jobs as minimally secured?
  6. Attempts to make suggestions which will be of help to any hotel that is not measuring up to expectation with regards to the control of revenue.

 

  • OBJECTIVES OF THE STUDY

It is clear that the persistence of hotel and catering industry as major employers cannot be explained in terms proposed by Riley and Sanders. Other contemporaries discussion of hospitality industry employment tend to be couched in terms of the attractiveness of such work to persons who are in some way socially and / or psychologically marginal (Mars, Bryant and Michell 1979). Thus, in explain the attractiveness of hotel and catering work in the face of poor formal rewards, Mars and Mitchell (1976) argues that hotel workers obtain satisfaction from their employment that is not easily obtained in other occupations, satisfaction which can offset low earnings. This view can be trace back to whyte (1948) who comments that: apparently there are many people who require a high rate of social activity in order to be happy in their work.

The restaurant fills this need for them (whyte 1948: 13) Thus, the objectives of the study are:

  1. Identify the problems in revenue control of the hotel industry
  2. Find out the extent to which hotels can reduce loss / fraud through auditing process.
  • Find out what really causes the procurement of loss in the business.
  1. Find out the extent to which loss can occur in a hotel industry
  2. Make recommendations / suggestions that can go a long way to influence the internal control system and move things into normality.

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EXPANDED PROFIT MOTIVE AS A FUNDAMENTAL FACTOR FOR FAILURE OF ENTREPRENEURIAL EFFORTS

EXPANDED PROFIT MOTIVE AS A FUNDAMENTAL FACTOR FOR FAILURE OF ENTREPRENEURIAL EFFORTS

ABSTRACT

Many factors have been fingered and blamed for low productivity of Nigerian economy, prominent among which is the weak industrial base.  And this weakness is indicated by the low level of the index of capacity utilization in the manufacturing sector and general high rate of business failure in Nigeria.

Having considered the problems from the accounting point of view, the researcher formed an opinion that EXPANDED (OR QUICK) PROFIT MOTIVE is a fundamental factor for failure of entrepreneurial efforts; this opinion considers the proper management of available resources – especially financial resource – as a primary factor that will make for success of a business venture.

This expanded profit motive manifests in various forms, which include (a) lack of compliance to loan repayment schedule, (b) venturing into business without business ideas. (c)  Over-pricing of products, (d) Employment of unskilled labour and high labour turnover etc.

But whatever form(s) such manifestation may take, ultimately they culminate into poor discharge of business functions.

Accordingly, this research was driven by the investigation and assessment of various manifestations of Expanded profit motive as to establish the truth or otherwise and the extent of their contributions to business failure.  The investigation was carried out on the basis of five (5) stated hypotheses about which the research revolved.

Besides the data collected from ALO Aluminum Company inform of responses obtained from questionnaires, the researcher visited some other establishments which are considered to be in position to have a store of data and numerical information that would have been useful for comparative analysis.

Those organizations visited did not permit the researcher to avail the required data, and this made it difficult to use standard statistical technique, such as correlation coefficient and distributions in the analysis of data.  Consequently, the researcher resorted to the use of simple percentage, published and verbal information as basis for conclusion.  The research result suggests that every rational business owner/manager should strike a balance between profit motive and need for business survival.Download Full Material-N5000