African Development Finance Journal

Accounting Ethics and Quality of Financial Reporting of Firms in Nigeria

Kenny Esosa ORUMWENSE — 2025-03-12

This study examines the connection between accounting ethics and the quality of financial reports in the Nigerian Manufacturing Sector, emphasis on Edo State Manufacturing Companies. Integrity, objectivity, confidentiality, professional competence, and due care as the independent variable were found to be a significant factors in improving the quality of financial reports in the Nigerian manufacturing sector in Edo State. Ten (10) manufacturing companies were specifically selected for the study, which was carried out utilizing a cross-sectional research survey. The factors were tested and examined using multiple regression analysis. The study comes to the conclusion that if a code of accounting ethics is strictly enforced as a prerequisite for professional accountants, it will increase the quality of financial reports. According to the study, accounting ethics are crucial to raising the caliber of financial reports produced by a company and ought to be given careful consideration in order to increase stakeholders' trust in those reports.

Keywords: Accounting, Ethics, Behaviour, Financial, Report, Firms

Board Characteristics, Audit Committee Attributes and NBFIs Performance: Empirical Evidence from Tanzania

Ramadhani Khalid Mndeme — 2025-03-12

This study investigates the relationship between corporate governance (CG) practices and the performance of listed NBFI’s on the Dar es Salaam Stock Exchange (DSE). Fourteen (14) non-bank financial institution companies were selected. Data was collected from annual reports for eight years, from 2015 to 2022. The results reveal that the existence of women directors on the board, audit committee independence and the long tenure of the CEO in the office resulted in a significant increase in NBFI performance. However, board meetings, chief executive officer –duality, audit committee size and audit committee meetings were insignificant does not improve the performance of listed NBFIs. In this regard, are not important and did not influence the profitability of listed NBFIs in Tanzania. The findings also revealed the existence of non-executive directors and board size significantly and negatively related to the performance of listed NBFIs. This study contributes to the literature that investigates the relationship between CG and the performance of listed NBFIs in Tanzania. The results are important for non-bank financial institution companies, policymakers and other stakeholders.

Keywords: Audit Committee Characteristics, Corporate Governance Practices, Non-banks Financial Institutions, Performance

Factors Influencing Non-Performing Loans for Listed Commercial Banks in Tanzania

Gregory D Lyimo — 2025-03-12

This study investigated the factors that influence non-performing loans (NPLs) for listed commercial banks in Tanzania. Lower NPLs are indicators of best credit risk management that enhance financial stability. Specifically, this study examined the influence of bank-specific factors—return on asset, capital adequacy, licensed bank age, and bank size—on NPLs covering the 2015 – 2022 period. The study employed a quantitative research approach, specifically the panel data regression to calibrate the coefficients of the independent variables of the study. The study findings suggest that capital adequacy is significantly inversely related to non-performing loans (NPLs). Also, bank size is significantly negatively linked with NPLs. However, the age of licensed banks is positively correlated with NPLs. As such, the study recommends for listed commercial banks to enhance equity as it provides a governance supervision mechanism that lowers NPLs. Likewise, listed commercial banks ought to increase the number of branches that can result in more staff with skills and expertise that may further lower NPLs. Moreover, listed commercial need not consider licensed bank age as enough attribute to enhance lower NPLs. The new insight about bank-specific factors that influence NPLs stemming from the study may help to enhance low NPLs, thus stimulating financial stability.

Keywords: NPL, Capital Adequacy, Bank Size, Licensed Bank Age, Return on Asset

Government Revenue Management Practices and Financial Sustainability of Oil Resources in South Sudan

Matiok Santino Akuei — 2025-03-12

Government revenue management practices serve as the foundation upon which the other variables either thrive or falter. Financial sustainability is fundamental to the enduring viability and resilience of any entity, be it a business, organization, or government. The study's objective was to determine the effect of government revenue management practices on the financial sustainability of oil resources in South Sudan. The study was anchored on public choice theory and supported by resource dependency theory. A descriptive longitudinal research design was adopted, utilizing secondary data collected from 2012 to 2023 from sources such as the Central Bank of South Sudan, the Ministry of Petroleum (MOP), the Ministry of Finance and Planning (MOFP), the World Bank Report and the International Monetary Fund (IMF) and analysis by regression models. The findings revealed that government revenue management practices positively and significantly impact financial sustainability of oil resources in South Sudan, highlighting the crucial roles of effective tax collection and transparent public expenditure (R2 = 0.2411, p<0.05). The study concludes that effective government revenue management is essential for the financial sustainability of oil resources in South Sudan. The findings reinforce public choice theory by demonstrating that strong governance and institutional structures are vital for managing the financial aspects of natural resources in resource-rich but economically vulnerable countries. This study aids industry stakeholders in developing best practices that ensure the sustainable extraction and sale of oil resources, the findings can shape the development and refinement of national strategies and regulations pertaining to the oil sector and the study enriches academic literature on the dynamics of resource-rich economies. Based on the findings, the study recommends that policymakers in South Sudan prioritize the implementation of robust fiscal policies that enhance the efficiency of revenue collection and ensure transparency in public expenditure. Specifically, the government should establish an independent fiscal oversight body tasked with monitoring oil revenue management and ensuring that revenues are allocated and spent in a manner that supports long-term economic stability.

Keywords: Government revenue management practices, Public Expenditure, Financial Accountability and financial sustainability

International Financial Reporting Standard 9 and Performance of Commercial Banks in Kenya

Thogo Mburu Daniel — 2025-03-12

Commercial banks play a critical role in resource allocation and financial intermediation, channeling funds from depositors to investors. In response to the 2007–2008 global financial crisis, regulators introduced measures to enhance financial stability, including the International Financial Reporting Standard 9 (IFRS 9), issued by the International Accounting Standards Board in 2014. IFRS 9 replaced IAS 39, aiming to strengthen bank financial performance through a forward-looking credit risk management framework and expected credit loss (ECL) provisioning. However, studies have suggested that the early recognition of credit losses and stricter risk management practices under IFRS 9 may negatively impact bank profitability. This study examines the impact of IFRS 9 on the financial performance of commercial banks in Kenya, focusing on loan loss provisioning, credit risk, and capital adequacy. Additionally, bank competition was analyzed as a moderating factor. The research is grounded in Credit Risk Theory, Asymmetric Information Theory, Agency Cost Theory, the Basel Capital Adequacy Framework, and the Structure-Conduct-Paradigm Theory. A positivist research philosophy and a longitudinal design were employed, utilizing secondary data from 39 banks over the period 2018–2022, sourced from audited financial statements and Central Bank of Kenya supervision reports. Descriptive statistics and panel regression analysis were conducted, alongside diagnostic tests to ensure data reliability. The findings indicate that loan loss provisioning, credit risk management, and capital adequacy have a significant positive impact on bank performance. Additionally, market share was found to moderate this relationship. The study recommends that bank managers enhance loan loss provisioning, maintain adequate capital buffers to meet regulatory requirements, and strategically expand market share to improve financial performance.

Keywords: IFRS 9, Performance, Commercial Banks

Islamic Green Finance and Solid Waste Management in Nigeria

JIMOH Abdulrazaq Taiye — 2025-03-12

The growing population and urbanization have increased the amount of solid waste generation in Nigeria, leading to environmental degradation. The management of such waste has however become a challenge due to inadequate funding. As government financing is insufficient for effective waste management, Islamic green finance seems to be a viable alternative due to its environmentally friendly shariah principles. Although, some Islamic green financial products have been identified, empirical research is lacking in this regard. This study therefore assessed the potential impact of Islamic green finance on solid waste management in Nigeria. Data were collected from staff of waste collection services firms which are registered with Environmental Health Council of Nigeria (EHCON). Questionnaire was administered to the respondents through the contact of the companies. Descriptive statistics and logistic regression were used to analyze the data. The study found that green murabaha (p<0.05), green mudharaba (p<0.05), green musharaka (p<0.01) and green ijarah (p<0.1) were positively and significantly correlated the turnover growth of solid waste management firms. The study however, found that green musharaka wa mutanaqisah (p >0.1) had insignificant, positive relationship while green sukuk (p>0.1) had insignificant, negative relationship with turnover of solid waste management firms in Nigeria. The study concluded that Islamic green financial services are needed for improving solid waste management in Nigeria. Based on the findings and conclusion therefrom, it recommended that Islamic banks in Nigeria should adopt shariah-compliant green financial products and channel their funding to green investment including solid waste industry.

Keywords: Environmental degradation, green finance, Islamic banks, Nigeria, Solid waste

The impact of Climate Change and Development Finance on Economic growth of Sub Saharan Africa Countries

Shiro Abass Akanni — 2025-03-12

Sub-Saharan Africa's (SSA) economic growth has garnered global interest due to its growth potential, abundant resources, and youthful population. However, challenges like climate change and limited developmental finance hinder progress. The region is particularly vulnerable to climate change, as its economy heavily relies on rain-fed agriculture, making it susceptible to temperature shifts, changing precipitation patterns, and extreme weather events such as droughts and floods. The study employed the Generalized Method of Moments (GMM) to investigate the effects of developmental finance and climate change on economic growth. The analysis focused on ten African countries from 1999 to 2022. Developmental finance was evaluated through foreign direct investment (FDI) and net official development assistance (ODA), while climate change was represented by mean annual temperature and rainfall. Economic growth was measured using the annual gross domestic product (GDP) growth rate. The findings revealed that foreign direct investment and mean annual rainfall significantly enhance economic growth. Conversely, net official development assistance and mean annual temperature negatively affected economic growth. The study recommends that political and economic stability are crucial for attracting FDI. Furthermore, it recommends implementing policies that promote transparency, reduce corruption, and safeguard investors' rights to increase FDI inflows. Considering rainfall as a vital resource, investments in water conservation, rainwater harvesting, and watershed management are essential to mitigate the impacts of low rainfall and flooding.

Keywords: climate change, developmental finance, FDI, ODA, Sub-Saharan Africa's

The Economic Impact of Climate Change on Nigeria’s Agriculture and Food Security

Ihugba Okezie A — 2025-03-12

Climate change poses a significant threat to Nigeria's agriculture and food security, impacting the nation's economy, environment, and the livelihoods of its population. As the most populous country in Africa, Nigeria relies heavily on rain-fed agriculture, making it particularly vulnerable to changing climate patterns, such as rising temperatures, altered rainfall, and extreme weather events. Inadequate infrastructure, limited access to modern farming methods, and a growing population exacerbate these challenges. This paper provides a comprehensive analysis of the economic impacts of climate change on Nigeria's agricultural sector, focusing on the implications for food security. It evaluates existing policies, identifies gaps, and suggests improvements while applying metrics to measure the effects on food availability, access, utilization, and stability. The findings highlight the urgent need for climate-smart agricultural practices, effective policy interventions, and investment in sustainable technologies to mitigate the adverse effects of climate change. Recommendations include enhancing adaptation and mitigation strategies, strengthening institutional frameworks, and promoting public awareness to build a climate-resilient agricultural sector and ensure long-term food security in Nigeria.

Keywords: Climate Change, Agriculture, Government Policy, Food Availability, Mitigation

The Effect of Firm Attributes and Board Structures on Financial Distress of Non-Financial Firms in Nigeria

BABALOLA Olufisayo — 2025-03-12

Major global corporations, such as Swissair, Enron, Arthur Andersen, WorldCom, Parmalat, and Silicon Valley Bank, unexpectedly suffered financial distress and eventually failed, resulting in severe consequences. Despite being previously perceived as stable, their bankruptcy shocked researchers, analysts, and industry professionals. Previous studies examining the effect of firm characteristics and board structures on financial distress reported inconsistent findings. The system-generalised method of moments (SGMM) model was used in the research to investigate the impact of firm characteristics (such as leverage, profitability, and sales growth) and board structures (such as board size and independence) on the degree of financial distress experienced by a sample of listed twenty non-financial companies in Nigeria between the years 2011 and 2023. The findings showed that board structure (both size and independence) and firm attributes (leverage profitability and sales growth) significantly impact the Altman Score, indicating better financial health or lower financial distress. Nigerian publicly traded firms should adhere to and practice excellent corporate governance procedures. This would result in a rise in the trust of investors, regulators, and other stakeholders. Businesses must place a larger emphasis on financial information, particularly profitability and sales growth, all of which have been shown to affect financial distress.

Keywords: board size, board independence, leverage, profitability. Sales growth

The influence of Internal Control Components on Performance in Local Government Authorities, Tanzania

James Daniel Chindengwike — 2025-03-12

According to the Controller and Auditor General's reports, many firms suffer financial losses as a result of their internal control systems. This puts into doubt the effectiveness of the different internal control measures employed by several businesses. As a result, the purpose of this study is to look at the linkage between internal control components and performance in Tanzanian local government authorities. The study used a descriptive research approach. This technique was acceptable since it examined and explained the relationship between variables in their natural condition without modifying them. The research involved 130 staff members from the Singida Municipal Council, Singida District Council, and Ikungi District Council. The researcher selected the sample using simple random and selective sampling techniques. SPSS was used. Correlation and regression analysis were used to show the relationship between variables. Statistics were given as figures and tables. According to the paper, local governments may enhance their performance by including internal control components such as risk assessment, monitoring, control actions, information and communication systems, and control environments. The results show a statistically significant relationship between control activities, risk assessment, information and communication, and performance in local government units. Furthermore, the study discovered no statistically significant link between the monitoring and control environment and the performance of local governments. The study focuses on internal control components such as risk assessment, monitoring, control actions, information and communication, and control environments. The study recommends that management commit to assisting all employees in developing internal control systems through interaction and training, allowing them to be guided on issues related to the proper implementation of accounting policies and procedures, thereby improving their professional skills and expertise. It is necessary to take legal action against individuals who abuse local government funds, and recovery must be achieved.

Keywords: Internal Control Components, Performance, LGAs, Tanzania