Akaninyene Orok

Type of the article: Research Article

Abstract
Capital structure decisions in the Nigerian economy are vital and significantly influence the performance of manufacturing firms. This study investigates the effect of the debt-equity ratio on the financial outcomes of the following manufacturing companies: BUA Cement Plc, Dangote Cement Plc, Lafarge Africa Plc, and Flour Mills Nigeria Plc, all quoted on the Nigeria Exchange Group Ltd. during the period 2015–2024. Fixed-effect panel data regression analysis is used to determine the influence of short-term and long-term debts on profit (return on investment). The findings suggest that the negative relationship is strong and statistically significant between the financial performance (profitability) and the leverage ratios, such as short-term debt/net worth ( -0.042, p < 0.025), long-term debt/net worth ( -0.061, p < 0.009), and total debt/net worth ( -0.035, p < 0.025). Therefore, all the null hypotheses were rejected at the 5% level of significance. The model describes the variation in firm performance which is, on average, 39%. At the firm level, BUA Cement Plc experienced a deleveraging trend and the profitability of the firm was on the downwards trend while Flour Mills Plc, owing to its high leverage, was marginally affected in its profit performance. The conclusion is that effective control of capital structure is essential if a better return per naira is to be earned for the country’s manufacturing sector.

Type of the article: Research article

Abstract
Interest rates facilitate credit flow in the economy, serve as a monetary transmission mechanism, and support banks in their role as financial intermediaries. Macroeconomic performance enhances people’s economic well-being and enables stable economic development. The study aims to examine the effects of Nigerian banks' interest rates on macroeconomic performance in both the long and short run. The study used a historical research design. The model was estimated using the Vector Error Correction Mechanism (VECM) approach. The results showed that the effect of interest rates on gross domestic product was significantly negative in the long run (C = –0.48985, t = –2.31238, p < 0.05), but not in the short run (p > 0.05). Interest rates exerted a negative, insignificant effect on savings in the long run (C = –0.01912, t = –0.73741, p > 0.05) and an insignificant effect in the short run (p > 0.05). Interest rates had a negative significant effect on gross fixed capital formation in the long run (C = –0.16559, t = –4.25940, p < 0.05) and insignificant effect in the short run (p > 0.05), while interest rates had a negative significant relationship with money supply in the long run (C = –0.05094, t = –2.10251, p < 0.05), and also significant in the short run (p < 0.05). Interest rate behavior is crucial for determining bank performance; therefore, banks should develop and deploy policy instruments to stabilize interest rates and encourage substantial investment.