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Re-Evaluating Investment Tax Credit and Financial Performance of Nigeria's Agro-Allied Sector

NWANYANWU, Kingdom Uchenna PhD, OGONDA, Gift Orokwele PhD, WILLIAMS, Magdalene Enruchi PhD

Abstract

This study primarily investigated the relationship between Investment Tax Credit and the financial performance of Nigerian agro-allied companies. The measures of financial were net profit margin and return on equity. Secondary data were obtained from the published audited financial statements of the five listed agro-allied companies listed on the Nigerian Stock Exchange for a period of 13 years (2012-2024). The data were analysed with the aid of the Statistical Package for Social Science (SPSS). Specifically, descriptive statistical tools were used to assess the frequency of the study variables. To test the null hypotheses, regression analyses were performed to determine the relationship between the explanatory variable and the dependent variables. The study found a negative and statistically insignificant relationship between investment tax credits and net profit margin, and a positive but statistically insignificant relationship between investment tax credits and return on equity of listed agro-allied companies in Nigeria. The study recommended. that While considering future incentive packages, government and policymakers need to critically reassess how effective the investment tax credit framework was as it might not have achieved its intended purpose of stimulating profitability or shareholder returns within agro-allied sector. It was also recommended that government should support further research to identify the primary drivers of profitability as well as the barriers in this agro-allied sector, such as market volatility, infrastructure deficits, or regulatory hurdles that might be dampening the impact of tax incentives.

Keywords

Return on EquityNet Profit Investment Tax CreditAgro-Allied FirmsFinancial

References

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