Corporate Governance and Challenges of Financial Leverage of Privatised Cement Industry in Nigeria

Bappayo Masu Gombe, Mustapha Mukhtar
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Abstract

The paper studies new corporate governance and the challenges of financial Leverage of privatised cement industry in Nigeria. The variables studied were leverage ratio as Performance proxy (dependent variables) and fourteen Corporate Governance proxies as independent variables. Data was collected from secondary sources, and the statistical tools employed in the Methodology were Trend Analysis and Pooled OLS regressions. Trend Analysis result suggests that;Devaluation, high cost of importation, insufficient power supply, bank strike, and deflation of global oil prices created capacity underutilization in cement industry and severe burden of financial leverage to sustain operational activities pre privatization. The result also, reveals that, the leverage ratio remarkably declined post privatization, however, the global financial crisis of 2009 inflicted high cost of production on the industry which necessitated increased leverage in order to cushion the effects on operational activities. Inferential Statistics Result suggests that corporate governance has positive and significant impact on the leverage ratio of the industry in general. The study concludes that, despite the challenges of unfavourable macroeconomic environment, the new corporate governance reduced the leverage ratio post privatisation and it has positive and significant impact on the financial leverage of the Cement Industry. The researcher recommends that Nigerian government should ensure favourable macroeconomic environment and improve private sector activities. Collectively, the new Corporate Governance of Cement Industry should strategize on how to; Increase Revenue, profitability, better management of inventory, and restructuring of debt to mitigate increased leverage.
尼日利亚私有化水泥行业的公司治理和财务杠杆挑战
本文研究尼日利亚私有化水泥行业的新公司治理和财务杠杆挑战。研究的变量是作为业绩代理(因变量)的杠杆比率和作为自变量的 14 个公司治理代理。数据从二手资料中收集,研究方法中使用的统计工具是趋势分析和集合 OLS 回归。趋势分析结果表明,货币贬值、进口成本高、电力供应不足、银行罢工和全球油价通缩造成了水泥行业产能利用不足,并对私有化前的运营活动造成了严重的财务杠杆负担。结果还显示,私有化后杠杆率显著下降,然而,2009 年的全球金融危机给该行业带来了高昂的生产成本,因此有必要提高杠杆率,以减轻对运营活动的影响。推理统计结果表明,公司治理对整个行业的杠杆率具有积极而重要的影响。研究得出结论,尽管面临不利宏观经济环境的挑战,但新的公司治理降低了私有化后的杠杆率,对水泥行业的财务杠杆产生了积极而重要的影响。研究人员建议尼日利亚政府确保有利的宏观经济环境,改善私营部门的活动。总之,水泥行业的新公司治理应就如何增加收入、提高盈利能力、更好地管理库存和重组债务以降低杠杆率制定战略。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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