Liquidity Constraints and Tax Liability Targeting of Banks in Ghana: Analysis of Persistence and Distance to Target

Kwakye BOATENG; Kwame Bosiako OMANE-ANTWI; Yaw Ndori QUEKU

doi:10.2478/fman-2025-0017

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Liquidity Constraints and Tax Liability Targeting of Banks in Ghana: Analysis of Persistence and Distance to Target

Foundations of Management

Volume 17 (2025): Issue 1 (January 2025)

By: Kwakye BOATENG , Kwame Bosiako OMANE-ANTWI and Yaw Ndori QUEKU

Open Access

|Feb 2026

Figures & Tables

Tax revenue-to-GDP
(*Source*: OECD Revenue Statistics, 2022)

Table 1.

Analysis of Liquidity Funds/Total Deposits

(Source: Ghxana Banking Survey Report, 2023)

Banks	2022	R	2021	R	2020	R	2019	R	2018	R	2017	R
FBN	1.31	1	1.00	9	0.98	7	1.32	3	1.78	2	1.10	5
BOA	1.04	2	1.40	1	0.95	10	1.05	7	0.74	14	0.79	19
ABG	0.97	3	1.10	5	1.02	5	0.94	10	0.93	9	0.87	11
FBL	0.95	4	1.27	2	0.98	8	1.46	2	1.17	5	1.03	6
FNB	0.90	5	1.14	4	1.16	1	1.65	1	2.81	1	1.89	3
SCB	0.90	6	0.99	10	0.95	9	0.93	11	0.98	8	0.86	14
UBA	0.89	7	0.92	11	0.93	11	0.97	9	1.33	4	0.87	12
PBL	0.88	8	0.90	13	0.79	15	0.59	17	0.57	19	0.70	21
ABSA	0.82	9	1.16	3	1.02	6	1.25	5	1.13	6	0.69	22
OBL	0.82	10	0.92	12	0.73	19	0.00	-	0.00	-	0.88	10
ZBL	0.81	11	1.07	8	1.12	2	1.26	4	1.34	3	0.96	7
CBG	0.75	12	1.09	7	1.04	4	1.10	6	0.00	-	0.00	-
GCB	0.75	13	0.90	14	0.87	13	0.79	14	0.8	12	0.85	15
GTB	0.75	14	0.76	16	0.90	12	1.03	8	1.05	7	0.96	8
SBG	0.71	15	0.68	20	0.74	18	0.58	18	0.66	17	0.83	17
CAL	0.70	16	1.10	6	1.07	3	0.89	12	0.77	13	0.79	18
RBL	0.69	17	0.71	19	0.70	20	0.69	15	0.72	15	0.66	23
UMB	0.67	18	0.00	-	0.54	23	0.00	-	0.00	-	0.86	13
SG-GH	0.66	19	0.76	17	0.62	21	0.45	19	0.65	18	0.53	26
EBG	0.64	20	0.73	18	0.74	17	0.59	16	0.71	16	0.76	20
ADB	0.63	21	0.77	15	0.79	14	0.83	13	0.89	10	0.84	16
FABL	0.58	22	0.62	21	0.77	16	0.00	1	0.88	11	0.89	9

Table 2.

Banks’ Liquid Funds/Total Assets

(Source: Ghana Banking Survey Report, 2023)

Banks	2022	R	2021	R	2020	R	2019	R	2018	R	2017	R
FBN	0.76	1	0.65	11	0.66	8	0.74	6	0.89	1	0.82	3
ABG	0.73	2	0.76	4	0.73	3	0.65	9	0.67	8	0.63	9
SCB	0.72	3	0.75	5	0.69	4	0.69	8	0.71	7	0.63	10
CBG	0.71	4	0.84	1	0.87	1	0.91	1	0.00	-	0.00	-
ZBL	0.70	5	0.77	3	0.81	2	0.85	2	0.83	2	0.72	8
OBL	0.69	6	0.70	7	0.63	11	0.00	-	0.00	-	0.62	12
UBA	0.69	7	0.71	6	0.68	7	0.77	4	0.79	4	0.61	14
FBL	0.68	8	0.78	2	0.69	5	0.73	7	0.75	6	0.76	4
GCB	0.63	9	0.68	9	0.68	6	0.62	10	0.63	11	0.62	13
BOA	0.59	10	0.65	10	0.55	19	0.57	13	0.47	16	0.52	22
GTB	0.59	11	0.56	17	0.66	9	0.75	5	0.76	5	0.75	7
SBG	0.58	12	0.55	18	0.59	17	0.45	17	0.48	15	0.56	18
PBL	0.57	13	0.59	15	0.49	21	0.39	18	0.42	18	0.47	25
FNB	0.57	14	0.61	12	0.59	16	0.82	3	0.81	3	0.75	6
RBL	0.56	15	0.54	19	0.53	20	0.53	14	0.55	13	0.54	19
EBG	0.55	16	0.60	14	0.60	13	0.49	15	0.53	14	0.60	16
ABSA	0.54	17	0.60	13	0.56	18	0.59	12	0.62	12	0.53	20
CAL	0.51	18	0.69	8	0.60	14	0.49	16	0.45	17	0.47	24
UMB	0.50	19	0.00	-	0.38	23	0.00	-	0.00	-	0.56	17
ADB	0.50	20	0.58	16	0.59	15	0.62	11	0.64	10	0.60	15
FABL	0.49	21	0.52	20	0.62	12	0.00	-	0.65	9	0.76	5
SG-GH	0.43	22	0.47	21	0.42	22	0.32	19	0.41	19	0.38	26

Table 3.

Banks’ Liquid Funds to Total Interest Bearing Liabilities

(Source: Ghana Banking Survey Report, 2023)

Banks	2022	R	2021	R	2020	R	2019	R	2018	R	2017	R
FBN	1.29	1	0.99	2	0.96	3	1.28	2	1.78	2	1.01	4
UBA	0.89	2	0.92	6	0.93	4	0.97	6	1.00	5	0.77	12
ABG	0.87	3	0.95	4	0.92	5	0.79	10	0.83	9	0.76	13
SCB	0.87	4	0.93	5	0.91	6	0.86	7	0.92	6	0.84	10
OBL	0.80	5	0.87	8	0.69	18	0.00	-	0.00	-	0.75	14
ZBL	0.80	6	1.03	1	1.05	1	1.08	3	1.04	4	0.88	9
BOA	0.75	7	0.87	9	0.82	8	0.81	8	0.59	16	0.63	22
GTB	0.74	8	0.75	14	0.88	7	1.03	5	1.04	3	0.94	6
FBL	0.73	9	0.88	7	0.80	11	0.81	9	0.85	8	0.88	8
CBG	0.71	10	0.98	3	1.01	2	1.08	4	0.00	-	0.00	-
GCB	0.71	11	0.84	10	0.81	9	0.75	12	0.77	11	0.75	15
SBG	0.71	12	0.68	19	0.73	14	0.57	17	0.65	15	0.80	11
FNB	0.68	13	0.81	11	0.81	10	1.56	1	2.81	1	1.89	2
ABSA	0.68	14	0.76	13	0.73	15	0.73	13	0.76	12	0.69	18
RBL	0.68	15	0.68	18	0.67	19	0.65	14	0.67	14	0.64	21
EBG	0.64	16	0.73	15	0.74	13	0.58	15	0.70	13	0.74	16
PBL	0.63	17	0.73	16	0.60	20	0.49	18	0.52	19	0.55	25
FABL	0.58	18	0.62	21	0.77	12	0.00	-	0.88	7	0.89	7
SG-GH	0.57	19	0.65	20	0.56	22	0.43	19	0.56	17	0.51	26
CAL	0.56	20	0.80	12	0.71	16	0.57	16	0.54	18	0.58	24
ADB	0.56	21	0.70	17	0.71	17	0.76	11	0.80	10	0.71	17
UMB	0.56	22	0.00	-	0.47	23	0.00	-	0.00	-	0.66	19
TCB	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	20.29	1
NIB	0.00	-	0.00	-	0.57	21	0.00	-	0.00	-	0.00	-
BOB	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	1.12	3
PRB	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	0.97	5
ECB	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	0.65	20
BSIC	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	0.60	23
TRB	0.00	-	0.00	-	0.00	-	0.00	-	0.00	-	0.26	27

Framework for liquidity constraint-tax liability targeting, persistence, and delay to convergence
(*Source*: Authors’ Construct Developed from the Literature)

Table 4.

Variable Description and Measurement

(Source: Authors’ construct developed from varying literature)

Variables	Description	Measurements
TLT	Tax liability targeting	$\frac{Cash Tax Paid}{{(Pre Tax Income}_{−special Items})}$
CETR	Cash effective tax rate	$\frac{Cash Tax Paid}{{(Pre Tax Income}_{−special Items})}$
NLG	Negative loan growth	Loan growth rate multiplied by -1
NDG	Negative deposit growth	Deposit growth rate multiplied by -1
NLD	Negative loan deposit	Loan-to-deposit rate multiplied by -1
BS	Bank size	Log of total assets
BA	Bank age	Age of bank
BT	Bank tangibility	Carrying balance on PPE
BL	Bank leverage	Long-term liability to assets

1 Cash effective tax rate is adjusted by extraordinary items

Time-Varying Mean Trend of Cash Effective Tax Rate (CETR) of Banks in Ghana
(*Source*: Generated from Eviews version 12.0)

Disaggregated Observable Patterns in the CETR
(*Source*: Generated from Eviews version 12.0)

Table 5.

Descriptive Analyses of Tax and Liquidity Constraint Variables

(Source: Generated from Eviews version 12.0)

	CETR	NDG	NLG	NLD
Mean	0.3129	-0.4182	-0.2427	-1.2871
Median	0.2686	-0.2230	-0.1673	-0.6010
Maximum	10.8066	0.9891	0.8773	0.0000
Minimum	-1.9509	-10.3252	-3.2301	-18.0997
Std. Dev.	0.6416	0.8575	0.3738	2.1419
CoV	2.0505	2.0505	1.5402	1.6641
Observations	3600	3600	3600	3600

Table 6.

Descriptive Analyses of Control Variables

(Source: Generated from Eviews version 12.0)

	AGE	BL	BS
Mean	31.2800	0.0899	3570000000
Median	23.2083	0.0601	2340000000
Maximum	126.0000	0.6289	25800000000
Minimum	1.0000	0.0000	0.000000
Std. Dev.	25.5988	0.0809	3790000000
CoV	0.8184	0.9019	1.0616
Observations	3600	3600	3600

Table 7.

Correlation Matrix of Explanatory Variables

(Source: Generated from Eviews version 12.0)

	CETR	NDG	NLG	NLD	AGE	BL	BS
CETR	1
NDG	-0.0251	1
NLG	-0.0092	0.1114	1
NLD	0.0573	-0.0059	0.0010	1
AGE	-0.0419	0.1322	0.2217	0.1136	1
BL	-0.0188	0.0505	0.1141	-0.1124	-0.0036	1
BS	-0.0206	0.1087	0.0985	0.2355	0.2332	0.0887	1

Table 8.

Tax Liability Targeting and Liquidity Constraints: DOLS Estimation

(Source: Generated from Eviews version 12.0)

Variable	Coefficient	Std. Error	t-Statistic	Prob.
NDG	-1.6031	0.0852	-18.8198	0.0000
NLD	-0.3608	0.2022	-1.7842	0.0800
NLG	0.9731	0.1344	7.2383	0.0000
LAGE	0.6805	0.4541	1.4987	0.1398
LBS	-0.6407	0.1796	-3.5677	0.0008
BL	0.5050	0.7868	0.6418	0.5237
R-squared	0.9894	Mean dependent var		0.2953
Adjusted R-squared	0.9683	S.D. dependent var		0.2044
S.E. of regression	0.0364	Sum squared resid		0.0716
Long-run variance	9.35E-05

Table 9.

Persistence Analysis: Composite and Cross-Sectional Unit Root Test

(Source: Generated from Eviews version 12.0)

Method	Statistic	Prob.^**
ADF, Fisher chi-square	226.312	0.0000
ADF, Choi Z-stat	-11.1493	0.0000

1** Probabilities for Fisher tests are computed using an asymptotic chi-square distribution. All other tests assume asymptotic normality.

Intermediate ADF test results: individual cross sections
Cross section	Prob.	Lag	Max Lag	Obs
ADB	0.3684	2	2	177
ABSA	0.0028	2	2	177
ACCESS	0.0049	2	2	177
BoA	0.0016	2	2	177
CAL BANK	0.0016	2	2	177
ECOBANK	0.0035	2	2	177
FNBBANK	0.1193	2	2	177
FIRST ATLANTIC	0.0018	2	2	177
NIB	0.0643	2	2	177
GT BANK	0.0002	2	2	177
PRUDENTIAL	0.0002	2	2	177
REPUBLIC	0.0005	2	2	177
STANBIC	0.0005	2	2	177
STANDARD CHARTERED	0.0036	2	2	177
UMB	0.0003	2	2	177
ZENITH	0.0029	2	2	177
FIDELITY	0.0011	2	2	177
SOCIETE G.	0.0143	2	2	177
GCB	0.0002	2	2	177
UBA	0.9016	2	2	177

Impulse Response: Degree of Persistence in Tax Liability Target
(*Source*: Generated from Eviews version 12.0)

Table 10.

Unit Root of the Residuals

(Source: Generated from Eviews version 12.0)

Method	Statistic	Prob.**
Im, Pesaran and Shin W-stat	-7.11459	0.0000
ADF, Fisher chi-square	138.826	0.0000
PP, Fisher chi-square	164.969	0.0000

Table 11.

Delay Measure, Half-Life, and Speed of Adjustment

(Source: Generated from Eviews version 12.0)

Variable	Coefficient	Delay	Half-Life	^*SOA Rate per Month	Distance to Target in Month
NDG	-1.6031	0.1675	0.3880	257.73%	12 days
NLD	-0.3608	0.4108	0.7791	128.36%	23 days
NLG	0.9731	0.2743	0.5358	186.64%	16 days

1* Speed of adjustment rate per month of half-life

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/fman-2025-0017 | Journal eISSN: 2300-5661 | Journal ISSN: 2080-7279

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Language: English

Page range: 247 - 272

Published on: Feb 20, 2026

Published by: Warsaw University of Technology

In partnership with: Paradigm Publishing Services

Keywords:

tax liability targeting,

loan growth,

deposit growth,

loan-to-deposit,

liquidity constraint,

dynamic ordinary least square,

delay,

half-life,

impulse response function,

persistence,

distance to target,

banks,

Ghana

JEL:

G21,

G32,

H21,

H25

Related subjects:

Computer sciences,

Business computing,

Business and economics,

Business management,

Management accounting, financial controlling, cost calculation, investment

© 2026 Kwakye BOATENG, Kwame Bosiako OMANE-ANTWI, Yaw Ndori QUEKU, published by Warsaw University of Technology
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 17 (2025): Issue 1 (January 2025)

Liquidity Constraints and Tax Liability Targeting of Banks in Ghana: Analysis of Persistence and Distance to Target

Figures & Tables

Figure 1.

Table 1.

Table 2.

Table 3.

Figure 2.

Table 4.

Figure 3.

Figure 3.

Table 5.

Table 6.

Table 7.

Table 8.

Table 9.

Figure 5.

Table 10.

Table 11.

Paradigm

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