Privatization and Financial Performance (Return on Capital Employed) on Selected Deposit Money Banks in Nigeria (1980-2015)
- July 3, 2019
- Posted by: RSIS
- Category: Business Administration
International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VI, June 2019 | ISSN 2454–6186
R.W. Oladiran
PhD Student of Department of Business Administration and Marketing, Babcock University, Nigeria
Abstract:-The performance of these public dominated enterprises had not achieved the desired impact in the economy as a result of government inefficiencies. Economic reforms that facilitate efficient macroeconomic economic management such as privatization, commercialization and liberalization had been mentioned to address this issue. Hence, this study investigated the impact of privatization on financial performance (return on capital employed) of selected deposit money banks in Nigeria 1980-2015. The study employed ex-post facto research design. Three banks were chosen from the target population of nine privatized deposit money banks, namely, FBN Plc, UBA Plc and UBN Plc. Secondary data were used and were subjected to pre and post diagnostic tests. Data were analyzed using descriptive statistics and panel regression analysis. The findings revealed that privatization components have significant impact on financial performance (return on capital employed) (ROCE) (Adj. R2 = 0.463, F= 7.048, p<0.05 of selected deposit money banks in Nigeria after privatization. The study recommended that the current privatization programme should be pursued with robustness and zeal it deserves. For further studies the researcher suggested extending the research to other sectors of the economy and /or the state-owned privatized money deposit banks.
I. INTRODUCTION
The ultimate goal of any credible and legitimate government is to ensure sustained improvement in the standard of living of the citizenry. In line with this objective, government usually prepares development plans that facilitate effective and efficient mobilization, optimal allocation and management of national resources to boost performance. These are examples of the direct or indirect involvement of government in an economy to correct externalities; ensure equitable distribution of income as well as allocation of goods and services (Ajibola, 2008; Asaolu, 2015; Dornigie, 2012; Duru, 2000; Megginson & Netter, 2001).
