Sustainability Practices and Financial Stability of Non-Financial Companies in Sub-Saharan Africa: Camel Parameter Ratio Approach

Abstract

Most countries in Sub-Saharan Africa (SSA) have witnessed challenges with their financial stability, as most of their non-financial companies could not balance their performance. The study examined the effect of sustainability practices on financial stability of listed non-financial companies in SSA, using CAMEL parameter. Within the framework of ex-post facto research design, 183 non-financial companies Listed on the exchanges of Ghana, Nigeria and Johannesburg, South Africa as at December 31, 2020 constituted the population from which purposive sampling technique was used to draw a sample of 20 firms based on pre-determined criteria. Data covered 10 years period from 2011 to 2020 were analysed via Ordinary Least Squares (OLS) estimation techniques. The study concluded that Size and age significantly enhanced the effect of sustainability practices on the CAMEL ratio of the firms. Hence, strict monitoring and low risk profile on the part of the directors of corporate non-financial companies were recommended. Keywords: Sustainability practice, Financial Stability, Economic Value Added, CAMEL Parameters ratio.