Value Relevance of Accounting Numbers in Emerging Sub-Saharan Africa Stock Markets: Comparison Between Ghana and Nigeria

There is a growing concern regarding how different stock markets respond to diverse accounting information disclosure which is of utmost importance to (foreign) investors and other stock market participants. Thus, the study attempted to investigate and compare value relevance of accounting numbers between Ghana stock exchange and Nigerian Exchange group for an eight-year period from 2015 to 2022. Based on certain selection criteria, secondary data were gathered from annual reports of 19 and 113 listed firms sampled from Ghana and Nigeria stock markets respectively. Descriptive analyses show that share prices at the Ghana stock market are less dispersed compared to that of Nigeria. Ordinary least square regression, Newey–West HAC standard error, and Generalised Method of Moments (GMM) were employed to analyse the data due to the presence of heteroscedasticity, and endogeneity problems. The results show that irrespective of the model, both earnings per share and book value of equity per share jointly explain significant variations in share price of the listed firms in both Ghana and Nigeria stock markets, but more for large firms in both markets and more for financial and non-financial in Ghana and Nigeria, respectively. Furthermore, the accounting information are value relevant in both stock markets, but earnings per share presents positive effect while book value shows antithetic effect at the two markets. Succinctly, the accounting information is more value relevant in the Nigeria exchange group than Ghana stock market, based on the parameters’ coefficient and explanatory powers. These results have implications for foreign investors, market regulators and other stock market participants.