Effect of Credit Risk and Liquidity Risk on the Performance of Commercial Banks in Ghana

In recent years, commercial banks in Ghana have seen great development in assets and profitability and have been playing increasingly important roles on national economy and social development which has become irreplaceable in a wide range. However, financial risks have been identified as the cause of hinderances to the banks’ normal development and has rendered some banks to fail. In recent years, Ghana’s commercial banks have faced vigorous challenges.  An important setback is the collapsing and merging of commercial banks and the increment of the minimum capital requirement. The cause of these misfortunes can be attributed to the combine effect of liquidity risk and credit risk since bank managements, supervisory authorities and government overlooked their impact. The focus of this paper is to study the impact of credit risk and liquidity risk on the performance of commercial banks in Ghana. The paper studied the annual and financial reports of licensed commercial banks in Ghana over a period of 14 years. The hypotheses generated for the study was tested using the OLS regression. The results revealed a negative relationship between non-performing loans and performance (ROA). Similarly, credit ratio and loan to deposit ratio also had a negative effect on ROA of banks in Ghana. On the contrary, liquidity ratio revealed to have a positive relationship with the dependent variable. The study recommended that, Ghanaian commercial banks must adopt a general framework for liquidity risk and credit risk management to ensure avoidance or reduction in the occurrence of these risks. Control variables help to check the robustness and also explain the objectives of the study in a more precise way. Keywords: Credit Risk; Liquidity Risk; Commercial Banks: Performance; Ghana DOI: 10.7176/RJFA/11-17-11 Publication date:October 31st 2020

Collapse of Big Banks in Ghana:Lessons on Its Corporate Governance

Funding: National Natural Science Foundation of China (No. 71371087) Abstract The news that two indigenous banks, UT and Capital Bank have been taken over by GCB Bank has come as a shock to many Ghanaians, as just a year ago, Capital Bank was adjudged the Best Growing Bank, and Best Bank in Deposits & Savings at the15th Edition of Ghana Banking Awards while UT Bank was adjudged best bank in 2011 by the same institution. UT bank is one of Ghana’s most celebrated brands, after it evolved from a micro-finance company into a successful bank.The study reveals the weak compliance to common Corporate Governance practices within the two banks. Specifically, the two banks had small board size as compared to the standard size of the banking industry. Also, the boards did not have enough committees to discharge its operation. The independence of the boards was also impaired as in most of the directors are executives and the non-executive directors have a close relationship with the promoters and executives. Keywords: Corporate Governance, Collapse, Commercial Banks, Board of Directors DOI: 10.7176/RJFA/10-10-04 Publication date:May 31st 201

Impact of Board Characteristics on Corporate Social Responsibility Disclosure in Ghana

This study examines the impact of board characteristics on Corporate Social Responsibility (CSR) disclosure in Ghana. It uses panel data covering 15 financial years which was extracted from the companies’ annual report to test the hypothesis using OLS regression. The results provide evidence that board characteristics such as size, board independence, board members below age 40, foreign nationals on board and gender diversity has a positive and significant impact on the CSR disclosure in Ghana. Board size recorded a negative and significant impact on CSR disclosure while women as board chairperson recorded no significant impact on CSR disclosure. In terms of structural break, the results indicate that, there is no structural break at 1% and 5%. However, at 10%, there is structural break. Based on these findings, the study recommends that, board size should be made up of minimum of 5 and maximum of 9. Again, there should be gender diversity, more independent directors, foreign nationals and younger board members below age 40 to ensure effectiveness and full disclosure of CSR in listed companies in Ghana

Assessing the impact of international trade on ecological footprint in Belt and Road Initiative countries

The Belt and Road Initiative (BRI) is one such comprehensive plan that aims to boost economic growth and connectivity across Africa, Asia, and Europe. While the effort may be good for boosting exports and foreign direct investment (FDI), some are worried about the toll it may take on the environment. Therefore, we aim to examine the effect of international trade and FDI on the ecological footprint in BRI countries, considering the mediating role of the environmental performance index. The CCEMG estimator was used to examine the impacts of imports, exports, FDI, population growth, urbanization, and the Environmental Performance Index (EPI) on the global ecological footprint. Our findings show that export has a positive relationship with ecological footprint. Similarly, imports and FDI revealed a positive association with the ecological footprint. Finally, environmental performance revealed a negative association with ecological footprint in BRI countries. Our findings support the pollution haven theory by demonstrating the critical importance of environmental regulations in enticing responsible investors. By using the ecological footprint as an all-encompassing measure of environmental effect, this study sheds light on the need to incorporate sustainability within the goals of the BRI. This research emphasizes the importance of adopting well-informed methods to promote sustainable development and mitigate the BRI's adverse environmental impacts