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Macroeconomic factors, corporate governance and financial malpractices in Nigerian banks

Alexander Ehimare Omankhanlen (Department of Banking and Finance, Covenant University, Ota, Nigeria)
Ediomi Abasi-Favor Tometi (Department of Banking and Finance, Covenant University, Ota, Nigeria)
Ese Urhie (Department of Economics and Development Studies, Covenant University, Ota, Nigeria)

Journal of Money Laundering Control

ISSN: 1368-5201

Article publication date: 24 July 2020

Issue publication date: 31 July 2021




Many studies have traced the collapse of most banks in the past to weak corporate governance. In response to this, the Central Bank of Nigeria established a Code of Corporate Governance which was made mandatory for all banks in Nigeria since 2003. Fifteen years after this provision the amount of actual loss attributed to financial malpractices in banks is still substantial. Available statistics show that the number of fraud cases has been on the increase in recent times.


This study examined the extent to which corporate governance has mitigated or moderated the effect of two macroeconomic factors – unemployment and inflation – on fraud in Nigerian banks. An interactive model was specified and estimated with PROCESS – a computational tool developed by Andrew Hayes.


The result revealed that while the structure of corporate governance by banks in Nigeria moderates the effect of unemployment, the reverse is the case for inflation.

Practical implications

This goes to show that the motivation factor stipulated by the fraud triangle theory holds sway in Nigeria.


It is recommended that efforts to bring a lasting solution to the challenge of financial malpractices in Nigerian banks must adopt a holistic approach.



The authors appreciate the financial support of Covenant University Centre for Research, Innovation, and Discovery (CUCRID) for the conduct and publication of this research paper.


Omankhanlen, A.E., Tometi, E.A.-F. and Urhie, E. (2021), "Macroeconomic factors, corporate governance and financial malpractices in Nigerian banks", Journal of Money Laundering Control, Vol. 24 No. 3, pp. 647-658.



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