Credit Risk Management and Banks Profitability in Nigeria

Credit Risk Management and Banks Profitability in Nigeria

Literature Review

This chapter reviews literature on credit risk management and return on investment.  It starts with theoretical framework, exposition on risk management, followed by reviews of literature on kinds of risk faced by banks with particular emphasis on credit risk. [Read more…]

Evaluation of Advertising Effectiveness on the Sales of Consumer Goods

Evaluation of Advertising Effectiveness on the Sales of Consumer Goods. A Case Study of Unilever Nigeria Plc, Lagos

Review of Related Literature

2.1     Introduction

Advertising is a powerful communication tool used to reach a wide target audience with informative and persuasive message about a company and its product attributes. American marketing Association defines advertising as any controlled paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor that is used to inform and persuade a selected market through the media.

The root of advertising is dated back to early history. The use of signs to announce various events and offers. Advertising as a matter of fact is not a new activity of modern industrialist but an ancient practice. [Read more…]

Managing Public Enterprises in Nigeria: Issues, Problems and Prospects

Managing Public Enterprises in Nigeria; Issues, Problems and Prospects”, A Case Study of Ezzamgbo Building Material Industry Abakaliki.

Literature Review


It is an obvious fact that when two men co-operate to roll a stone that either could have moved alone, the rudiments of management have appeared. The first ingredient of management is people because people have to be present before management can take place. Government like any other body operates businesses.

The management of public enterprises, like Ezzamgbo building material industry is not an easy one, this stems from the fact that virtually all the strategic policies and programmes of the organization is strictly governed and regulated by the government in charge. The government first and foremost has to constitute board of directors and also enforce government programmes on the organization through the management offices. [Read more…]

effect of electronic payment system on customer satisfaction in Nigeria banking system

effect of electronic payment system on customer satisfaction in Nigeria banking system

Chapter One


Background of the Study

Statement of the problem

Objectives of the study

Research questions

Research hypotheses

Significance of the study

Assumptions of the study

Scope and limitations of the study

Chapter Two

Literature Review and Theoretical Framework

Theoretical framework

Empirical studies on electronic banking

Area of deployment of common products on electronic banking System

Electronic funds transfer

Nigeria interbank settlements system

Nigerian electronic funds transfer (NEFT)

Mobile banking

Automated teller machine

Real time gross settlement (RTGS)

Telephone and pc banking products

Cheque truncation

Traveller’s cheque

Point of sale terminals (POS)

The card system

Credit card

Debit card

Reasons for automation of banking operation

Advantages of electronic payment systems

The emerging issues on electronic banking in Nigeria

Chapter Three

Research Methodology

Research design

Population study

Sample and sampling techniques

Sources of data

Method of data collection

Validity and reliability of instrument.

Techniques of data analysis

Chapter Four

Data Presentation and Analysis and Discussion of Findings

Presentation and Analysis of Data

Discussion of findings

Chapter Five

Summary, Conclusion and Recommendation

Summary of findings




[Read more…]

effect of manpower development on workers’ productivity

effect of manpower development on workers’ productivity in Cross River State civil service Calabar.

Literature Review and Methodology

Review of Literature

There is a large and growing body of evidence that demonstrates a positive linkage between the development of human capital and organizational performance. The emphasis on human capital in organizations reflects the view that market value depends less on tangible resources, but rather on intangible ones, particularly human resources (Adeniji,2002) . The organization also has to leverage the skills and capabilities of its employees by encouraging individual and organizational learning and creating a supportive environment, in which knowledge can be created, shared and applied (Rastogi, 2000). [Read more…]

Problems and Prospects of Small and Medium Enterprises in Nigeria

Problems and Prospects of Small and Medium Enterprises in Nigeria. A Case Study of Enugu East Senatorial Zone

 Literature Review

  • Conceptual Framework

Small and medium scale enterprises in most developed and economics of which Nigeria is one are the main life wire of the economy. Small scale enterprises have helped in the transformation of many countries South East Asia such as India, Taiwan, Malaysia, Indonesia and the Latin American countries or Itile, Brazil, Uruguany and Argentina.

Small scale enterprises that are adequately managed and properly funded help the government to achieve some macro-economic objectives which include employment creation, mobilization of local resources, mitigiating rural urban migration and poverty reduction. Small and medium scale enterprises also to help in encouraging capacity utilization in agriculture and industries. Small scale enterprises help in income distribution, and encourage development of local technology. [Read more…]

Strategies for Healthy Employer- Employee Relationship in an Organisation

A Study on the Strategies for Healthy Employer- Employee Relationship in an Organisation (A Case Study of Emente Company Limited Emene Enugu)

Literature Review

  • Concept of Strategy.

According to the long man dictionary of contemporary English (new edition) strategy means a well planned series of action for achieving an aim especially success against an opponent.

Denis Onyemaechi Nebeife in his text business policy and strategic management Vol.1 (2002:29) the term strategy has to do with given direction on how to realize set of goals.  It is a general programme of action and development emphasis and resources to attain comprehensive goals.

In the business perspective chandler (1962:13) strategy is the determination of long terms goals objective of an enterprises and the adoption of courses of action and the allocation of resources necessary to easy out the organization’s objective.

For the purpose of this research work the researcher therefore defines the concept of strategy as all the series of action which must be taken to ensure a good healthy relationship between the employer and the employee in an organization.  In all management of any organization needs a guide to the activities or pattern of activities necessary to enhance cordial relationships between the management and the worker so as to accomplish her set objectives. [Read more…]

examination of the strategic role in assessing workers training need

examination of the strategic role in assessing workers training need in niger mills plc and united cement company, calabar.

training needs analysis

According to Lee & Nelson, (2006). effective training or development depends on knowing what is required for the individual, the department and the organisation as a whole. With limited budgets and the need for cost-effective solutions, all organisations need to ensure that the resources invested in training are targeted at areas where training and development is needed and a positive return on the investment is guaranteed (Rossett 1987).

Nowack (1991) stated that effective training needs analysis is particularly vital in today’s changing workplace as new technologies and flexible working practices are becoming widespread, leading to corresponding changes in the skills and abilities needed (Carnevale, 1990),. Analysing what the training needs are is a vital prerequisite for any effective training programme or event. Simply throwing training at individuals may miss priority needs, or even cover areas that are not essential. TNA enables organisations to channel resources into the areas where they will contribute the most to employee development, enhancing morale and organizational performance. TNA is a natural function of appraisal systems and is key requirement for the award of  Investors in People. [Read more…]

impact of taxation on performance in small scale enterprise

impact of taxation on performance in small scale enterprise

literature review


This chapter looks at taxation and its impact to performance of small scale business enterprises in Nigeria particularly Rivers state.

It consists of existing literature on taxation by different scholars/research studies from magazines, text books, journals and news papers.

This chapter covers taxation, classification, and purpose of taxation. However it particularly addresses the problems affecting tax payers, the awareness of the tax obligation and performance of small scale business enterprises.

The concept of taxation

This refers to assessment, collection, administration and management of taxes in Nigeria. It deals with raising public revenue, managing public expenditure and public debt (Manasseh, 2000). The general idea behind taxation is the provision of public goods and services. However the benefits received by tax payers from the government are not related to or proportionate to the tax paid (Bhatia, 2002).

Taxation is a payment which cannot be avoided without attracting a punishment and in return of which no gain/quid pro-quo is promised by the government to the tax payer (Balunywa, 1988). The government is responsible for providing to its citizens certain public facilities and services like roads, hospitals, schools, and market securities. There are two main tax authorities; the local government authority and the central government authority through Nigeria revenue authority.


It can be defined as a compulsory and non refundable contribution executed by government for public purposes. Payment is not followed by concurrent benefit in return. A tax is generally referred to as a compulsory levy imposed by the government upon the assessees of various categories. A tax is paid without a corresponding return in terms of goods or services from the government and hence it is referred to as a non quid proquo payment.

A tax can also be defined as a contribution imposed on any person, business/property, for supporting central/local governments (Tayebwa, 1998).

Classification of taxes.

According to Manasseh (2000), taxes are classified as either direct versus indirect or proportional versus progressive tax.

  1. Direct versus indirect.
  2. Direct taxes are those that affect the individuals/firms directly through a deduction from earnings. Examples include; individual income tax, corporation tax, taxes on property and others.
  3. Indirect taxes are those taxes that are paid to government by an intermediary and then passed on to the final user by including the tax in the final price. Examples include; export and import duties, excise and local production, value added tax (VAT) and others.
  4. Proportional versus progressive tax

On the basis of equity, taxes are classified as proportional/progressive. A tax is said to be progressive when with increasing income the tax liability not only increases in absolute terms but also proportionate to income.

The purpose of taxation

According to Income Tax Amendment Act (2011), taxation is an important source of government revenue and an economic policy tool by government to attain economic growth. The importance of taxation therefore arises from debate of whether government should interfere in the operations of the market mechanism. Income Tax Amendment Act (2011) further noted that taxes may be levied for other reasons but revenue remains the prime objective of most taxes.

Balunywa (1988) noted that, taxation has increased in importance not only as a tool of raising revenue for the traditional roles but also for accelerating the economic growth and ensuring social justice.

The primary objective of taxation in underdeveloped countries is not related to stability of income and expenditure. These countries face a number of problems of insufficient savings and capital accumulation, which calls for a need to promote specific products to fill both the supply and demand gaps. It is the problem of growth that covers a number of aspects; the tax system has to be designed to help the economy (Bhatia, 2002).

According to the Nigeria economic journal (1973), taxes can reduce the quality of resources consumed by the private sector. The Economic Journal (1973) also shows that, in stressing consumption reducing aspect, taxes may change the distribution of income and help to stablise the economy.

Tax policies.

The World Bank has influenced many countries in under taking tax reform policies. For the case of Nigeria, the tax base has remained significantly narrow since independence, leading to inadequate tax revenue. By May 2004, the tax ratio of tax revenue to GDP was just 18-20%. The composition of tax revenue has been predominantly important. Small scale businesses are taxed differently compared to corporation/business with an annual turn over of above 50 million Naira. Medical practices, legal practices, engineering service, accounting and audit practices are tax payers even when their turn over is less than 50 million Naira.

As quoted by Kitinisa (2003), there are three broad approaches to tax policies and these are;

  1. Application of the standard tax provisions to all business activities
  2. Taxing various business activities differently to achieve economic business policy such as; increase in private investment, exports/employment depending on the revenue needs, the second approval can result in a relatively high tax rates in some sectors and hence induce problems for compliance and adversely affect the general investment climate.
  3. Nigeria has gone through a number of tax policy reforms, these include; gender, nationalization, and harmonisation of tax rates and tariffs, abolition of wide ranging exemptions, new tax incentives and conditional exemptions

Approaches to tax administration

According to Bird (1974), tax administration refers to the identification of the tax payer, assessment of tax payable, collection of taxes and enforcement of tax liability.  According to Olman (1967), tax administration refers to a structure/procedure of identification of potential tax payer, collection and laws governing taxation.

RoyBahl (1988) says that much attention should be paid to critical aspects of tax administration, training, procedures, staffing, collection and use of information. The weaknesses in tax administration are mainly caused by lack of relevant information about the tax payer, continued criticism of the tax and its structure. The tax structure should be simple in order to avoid tax evasion.

Identification of a tax payer

Taxes are levied on individuals, groups/legal entities income earned. The identification of a tax payer is done with reference to natural/artificial persons who can earn income.

However, for the purpose of this research we shall confine ourselves to business as a tax payer and a business can be defined as vocation, trade, profession, adventure in the nature of trade but does not include employment (Income Tax Amendment Act 2011).

Assessment of taxes

Income Tax Amendment Act (2011) section 3 (a), defines assessment as the ascertainment of the chargeable income and the amount of tax payable on it by the tax payer for a year of income. Assessment of tax is a process of ascertaining the amount of tax to be levied on a person/business according to his/its income.

According to the Income Tax Amendment Act (2011) section 96 (11) the commissioner is required to make an assessment of the chargeable income based on his returns and on any other information available within seven years from the date the return was furnished. However, small scale businesses are not required to submit in any return to the commissioner.

Small scale business

According to the Income Tax Act (1997), small scale businesses are those with growth turn over of less than 50 million naira per annum.

In Nigeria it’s not only income tax Act that has tried to define small scale businesses; there are also institutions which have tried to define small scale business (SSB) such as: Nigeria Association of Chambers, Commerce, Industry, Minning and Agriculture (NACCIMA), the Nigeria Small Scale Industries Association (USSIA).

The study is to assume a small scale business as one with the following features;

  1. A business which employees 1-50 people.
  2. Has a capital investment of less than N 2 million.
  • Has average annual revenue/sales of less than N5 million.

Fines and penalties

Musgrave argues that in all matters of legal rules, better compliance can be served either by a higher penalty if the offender is caught or by well facilitating the enforcements so as to increase the probability of being caught. However, Bird (1974) argued that the law should provide an adequate penalty structure, appeal system and general administration. The penalty structure should be primarily financial in character and probably progressively related to the amount of tax evaded and the seriousness of the offence in case a tax payer fails to pay any tax including; provisional tax, any withholding tax or tax required to be withheld, the penalty is 2% simple interest per month on the amount unpaid calculated from the date on which payment was due until the date on which payment is made (Pius, 2001). Under estimating provisional income return is less than 90% of the tax payer’s actual chargeable assessed for the year of income, the penalty is 20% of the difference between taxes based on provisional return as revised, and tax calculated in respect of the 90% of the actual income for the year of income.

Performance of small scale business

Kitinisa (2004) describes performance of small scale business as the ability to attain it’s goals by using resources in an efficient and effective manner, the goals of the organisation include; survival, profit making and expansion.

Pandey (1979) looks at financial analysis as a measure of the organisation/business performance. The assessment of financial performance of business entities has a well established methodology that includes computation and interpretation of univariate and multivariate models. Univariate predictions of performance are single ratios calculated for efficiency (Business Journal, 1996).

In this study, the researcher is to consider performance of small scale business as the ability of the business:

  1. To meet its tax obligations.
  2. Cover its operating expenses and still retain some profits which can either be used for re-investment or otherwise.
  • The ability of the business to make sales that sustain its expenses.

Taxation and business performance

Taxes levied on revenue are worthwhile only if it can generate meaningful revenues at acceptable rates and procedures (Musgrave and Musgrave, 1984).

According to Gordon and Dawson (1987), through taxation, the government takes away money from people they would otherwise spend on private sector. As a result, purchasing power reduces per unit of production in the private sector to the public sector. They further asserted that, one of the most frequent arguments against high income tax is that it destroys the incentive to business people and employees to work harder and more efficiently.

According to the Central Bank (1991), businesses carry out tax planning so as to have a minimal tax liability and thus increasing the purchasing power. It is through taxes that the government takes away money from people/business they would otherwise spend on private sector. This loss of purchasing power reduces the demand for units of products in the private sector (Gordon and Dawson, 1987).

Taxes and profit levels.

The taxable profits of business are always different from the normal business account profits for three major reasons;

  1. Certain income which may be considered in the normal accounting system may not be liable to tax.
  2. Certain expenses that are deducted on profit and loss account may not be available when determining taxable income.
  • Some tax allowances may be provided and will not be reflected in business account. (Manasseh T. 2000).

Gordon and Dawson (1987) assert that many business people have complained probably with some justification that taxes interfere with the opportunities to re-invest their profits in their businesses.

Taxation and investment

Given the fact that there are financial institutions and mechanism for collecting the community’s savings and bringing them to investors, the level and patterns of investment will be greatly influenced by taxes. This is because the investors are basically interested in making profit yet profitability of investment can be affected through various tax measures in the following ways;

  1. The possibility of taxing savings themselves. If this happens, the investor will experience a low level of savings and the over all level of investment will be low.
  2. The authorities might tax earnings from investment to an extent that it might become a problem for the firm to raise adequate resources in the market.
  • If the retained profits of the firm are taxed, they will not be able to depend much upon their internal resources for expansion, instead they will borrow and invest if at all they do so (Bhatia H.L, 2002).

Problems encountered by SSBs in trying to comply with tax policies.

Most businesses in Nigeria are owned and managed by persons who are unskilled in the profession of accounting and thus do not keep proper books of accounts. These are especially sole proprietors and family businesses or partnerships. These generally do not keep books of accounts, have low sales turn over and change hands and business very often (Ravenous, 2005).

Mugulusi (2001) found out that a large proportion of business community is ignorant about taxes they pay, how these taxes are computed, lack of knowledge is attributed to the poor methods of sensitization used by URA.

According to Ravenous (2005), the following are some of the problems faced by tax payers;

  1. There is unfair treatment of tax payers, some of which are not necessary tax obligations and thus not met as a result of this process.
  2. Tax payers have little understanding of the obligation as a result of lack of tax education. It is said that URA would get fewer problems with tax payers if they were able to understand how their liabilities come about.

Tax payer’s knowledge

Most Nigerians have poor/lack understanding of the rationale of taxes and knowledge of different taxes imposed on them (Coping with taxes 1996). As a result, the tax compliance in Nigeria is still very low. Besides that, various surveys conducted on small scale businesses in Nigeria suggest that about 60% of them keep no records at all, while 25% keep partial records making it difficult to assess taxes (Ndandiko, 2000).

Alwedi (2002) found out that most SSBs are managed on unprofessional lines (poor or no business records) thus there is great uncertainty among traders in Nigeria as regard to tax matters and to some extent due to their own making.

Ludega (2002) asserts that, many traders have expressed ignorance about taxes imposed on their businesses. They say that this is highly attributed to the poor work being done by the tax authorities leaving traders ignorant about issues like the way taxes are assessed, advantages of paying taxes and the use to which it is put. Therefore there is a need to sensitize the public especially business owners. The sensitization should be done on different taxes that impact the business owners and the rationale that underlines the imposition of taxes, because tax payers are not aware of the reasons for paying taxes, evasion of tax duties, laws and regulations are very rampant. (World Bank Survey, 1994).


This chapter is analyzed using across section of literature dealing with taxation and the performance of SSBs. However, most of the literature reviewed does not give details about how taxation affects the performance of small scale businesses. Therefore there was need to carry out a primary research to close the gap between research variables as this was not made clear in literature reviewed.



Impact of Small-Scale Enterprises in Urban Development

Impact of Small-Scale Enterprises in Urban Development


Background of the Study.

It has become notable that small-scale enterprise plays a major role in the economic development of any nation both developing and developed nations. Onuogu (2005) states that, research report on business support in Nigeria has proved that Governments all around the world now recognize the important contribution that small-scale enterprises (business) makes to the economy.

It is a generally accepted tenet of international development that small scales enterprises (also referred to as SMEs) it plays an important role in alleviating poverty, especially in Africa. Programs addressing African development have identified private sector development, and in particular small scale enterprise development as a priority area for action. There have been a number of small scale enterprise development programs over the years. Some have evolved from the relationships established with transnational companies (TNCs) and private sector initiatives, while others have been driven by governments, multilateral and donor agencies (Abiola,2006). [Read more…]