Privatisation and Corporate Governance Efficiency: Liquidity Ratio Assessment of the Nigerian Cement Industry

Abstract

The study examines how privatization affects public corporations’ corporate governance efficiency in the management of the liquidity ratio of the Nigerian cement industry. The observed variables are liquidity ratio and fourteen Corporate Governance proxies as dependent variables and independent variables. Secondary data were outsourced from the cement firms. Descriptive statistics and Pooled OLS regressions were used for analysis. Results suggest that the factors affecting corporate governance efficiency and causing capacity underutilization in the cement industry are macro-economic challenges and the weak private sector. The average total market value of shares, average foreign ownership, the average percentage of executive directors and average workforce has a positive impact on the Cement industry’s performance. However, privatization harms the performance of the company. Likewise, corporate governance has a significant impact on the liquidity ratio of the 1cement industry in Nigeria. The study recommends that corporate governance should reduce the liquidity ratios via long-term investment that will enhance return on investment. In addition, suggests devising strategies for proper liquidity and risk management to enhance financial performance and move towards sustainability and growth.