AN EVALUATION OF FINANCIAL MALPRACTICES ON THE SERVICE PRODUCING COMPANIES
|BANKING AND FINANCE|
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The recent occurrence of financial malpractices in the service producing companies in Nigeria has made the country economic condition to be deteriorating on a geometrical bases, this has really caused an adverse effect on the entire economy.
Financial malpractices are stooge that has to be up rooted and totally eradicated; else the entire sector of the economy will be eaten up by the menace.
This research study is embarked upon to evaluate the effect of financial malpractice on the service producing companies in Nigeria, this study also provide the necessary solution that can be adopted to solve the problem of financial malpractice on the service producing sector of the economy.
In doing this, questionnaires were distributed to the staffs and customer of PHCN, which are analyzed and the used as the main research methodology for concluding on the research findings.
1.10 BACKGROUND TO THE STUDY
Financial malpractices are enemy to environment, environmental protection is not effective where financial malpractices in the public sector of an economy is pervasive and quality of life degraded.
This study will give an overview of the Nigerian’s recent experience in the context of economic reform program
It will discuss the possible cause and effect of financial malpractices and evaluate, such financial malpractices, which are seen to have rocked to socio-cultural, political practice and economic situation of the country.
Corruption is an effort to secure wealth or power through illegal means for private and personal gain at the public expense for private benefit.
Corruption as a phenomenon is a global problem and exists in a varying degree in different countries (Agbu, 2001).
Corruption practices are not issues that just begin today but its history is as old as the world itself. (Lip set and Lenz,2010).
However, the magnitude is not equal in every society as some countries are more corrupt than others.
Orwell George in the widely read book; Animal farm: said “All animals are equal, but, some animals are more equal than the others”.
The epileptic power supply in the economy reduces the living standard drastically and at the same time increase the cost of production in the country.
In 2010, President Good Luck Jonathan revealed that generating power from generator add more than 40 percent to the cost of goods and services in Nigeria and that Nigerian spend about N1.95trillion yearly running generator.
In a recent published report by British Broadcasting Corporation (BBC).
It was said that Nigeria lost 15Billion Dollars per year to corruption which means between 2001-2011 Nigeria has lost 150Billion Dollars in a span of 10years.
In the final report of the Nigeria corruption and survey study (June, 2011) the following institutions in Nigeria are rated based on their level of corruption.
1 Nigerian police
2 National and state assembly
3 Political parties
4 Federal and state executives
Nigeria as a nation practices a mixed economic system whereby both the government and the private sector play an active role in the economy.
However, despite the recent privatization policy of the government, the public sectors still hold a substantial part in the economy.
A financial malpractice which is one of the most dangerous social ill of any economy is pandemic in Nigeria and has defied all necessary medicines. (Dike, 2009).
For instance, to know how pervasive financial malpractices is, in our country the $12.4billion Gulf War oil windfall, during IBB regime far back 90’s, in 2007, the members of National Assembly decided to probe a contract of N23billion awarded by former President Olusegun Obasanjo, four days to the inauguration of AL haji Umaru Musa Yar Aduwa. All this cited cases and many more nothing is been done about it.
It is all about chop I chop game financial malpractices have been broadly defined as the use of personal deception in the misappropriation of funds of a given entity.
It is also the violation of established rules for personal gain.
(Sen,2008). Conclusively, by the end of the evaluation of financial malpractice in the service producing companies of Nigeria which is to be carried out and discussed by this study, a lot of suggested solutions will be given to reduce the financial malpractices and corruption at large which is the bane of Nigerian economy.
This will also impact to the future positive change in the performance of the private and public sector of the economy.
1.11 PROBLEM OF THE STUDY
The problem in the evaluation of financial malpractices in the service companies in Nigeria economy is that, corruption has eaten deeply in to the society at large.
Nigerians that are occupying the top political positions in the country are, highly corrupt.
During the inaugural, speech of the former President Olusegun Obasanjo, He vowed, to tackle, financial malpractice, and he established different, commissions, act and laws in that respect e.g. EFCC, ICPC, money, laundering act etc..
He said “No society will achieve its potential where it allow financial malpractices its full blown cancer as it is in Nigeria”.
(Dike,2009). Also, the leaders of our government parastatals that are, supposed to be the machinery against the menace of financial malpractices are not only involved in it but ranked as the 4th most corrupt in the country by the Nigerian Corruption and survey study.
This research study will solve the problems identified as highlighted in the background to the study.
These research questions are used in assessing the problem of the research study;
i. To what extent are financial malpractices hindering the development in the Power Holding Company of Nigeria (PHCN)?
ii. Does the Nigerian Government encourage corruption by the amount they are paying as salary to the service company workers?
iii. Is the low the investment attraction in Nigeria caused by the role of corruption in the Power Holding Company of Nigeria (PHCN)?
iv. To what extent is the under – development of power Holding Company of Nigeria caused by injustice in the system?
v. Is there any basic standard for recruiting personnel into the service companies of Nigeria?
vi. Are the roles of financial malpractices in Power Holding Company of Nigeria development constrained by psychological loss of faith in the government?
1.12 OBJECTIVES OF THE STUDY
The main objective of this research study is;
i.) To evaluate the extent of financial malpractices in the service producing companies of Nigeria.
Other specific objectives to be pursued are:
ii.) To examine the extent of financial malpractices in the Power Holding Company of Nigeria.
iii.) To evaluate the cause and effect of financial malpractice in the service companies of the entire economy.
iv.) To have a rational resolution on this research study thereby assisting the populace to develop the economy on the long run.
v.) To make recommendation based on the research findings on the impact of financial practice, on the service providing companies in Nigeria.
1.13 STATEMENT OF HYPOTHESES
The following hypotheses is stated for the purpose of this research study;
I – Hypothesis I
Null Hypothesis, (Ho): Power Holding Company of Nigeria development is constrained by the retro-active role of financial malpractices in the public sector.
Alternative Hypothesis (Hi): Power Holding Company of Nigeria development is not constrained by the retro-active role of financial malpractices in the public sector.
2- HYPOTHESIS II
Null, Hypothesis (Ho): There is a negative implication on service companies in Nigeria caused by corrupt leaders and financial malpractices.
Alternative Hypothesis (Hi): There is no negative implication on service companies in Nigeria caused by corrupt leaders and financial malpractices.
1.14 JUSTIFICATION FOR THE STUDY
There are many Nigerians that have seen reasons in embarking on this research study of evaluating financial malpractices in different sectors, of the economy. Many of those that carried out this researches are renowned in the country they include Chinua Achebe, (2005).
Gain Fawemi (2007) and the latest research carried on by SAN, Afe Babalola, (2011).
The above mentioned researcher did well but they are unable to complete some aspect of their research, this include, privatization of PHCN, Billing system, money laundering cases, corrupt politician cases and some outcome from litigation which are to be covered in this study.
This study will also made known the way out of the cankerworm of financial malpractices that are pervasive in the Nigerian economy.
1.15 SIGNIFICANCE OF THE STUDY
The significance of this research study cannot be over emphasized as it analyzes the effect of financial malpractice in the Nigeria service companies.
It will assist many stakeholders in the economy like entrepreneur, students and telecommunication companies to mention but few by reducing their cost of production; it will also lead to increase in the public trust in government and its institution.