Global Economic Crisis Effect on Shareholders Wealth in Agro-Allied Industries in Nigeria

Abstract

This paper examined the effect of global economic crisis on shareholders’ wealth through evaluation of price movement in agro-allied industries in Nigeria. Agriculture being the most accepted sustainable source of revenue to Nigeria economy, though under gross neglect since the time of oil boom, is becoming the turning point of action for Nigeria to retain her economic status among the Commonwealth Nations in recent time. Consequent upon this, the trend of movement of share price in this sector need urgent analysis. Selected listed agricultural based company’s share prices were collected through secondary source from April, 2004 to March, 2014. The trend of share price movement were observed for a period of ten years divided into pre-share crisis period (April 2004 to March 2008) and post share crisis period (April 2008 to March 2014). Data were analyzed through Analysis of Variance (ANOVA) and the student’s t-test. The paper revealed that there is a significant relationship between the 2008 global economic crisis and shareholders’ wealth in the agriculture sector of economy in Nigeria as the p value of yearly average share price was (0.000) in the post share crisis period which is lower than (0.05) level of significant record in the pre-crisis period. The paper concluded that the crisis was responsible for the crash in the agro-based share price on the Nigeria Stock Exchange Markets thus rendering investment in the share of this sector unattractive. Based on this, proactive stock market regulation and reforms to strengthen the wealth of investors by regulatory institutions were recommended.