Nigeria capital market a catalyst to financial and economic growth

Central Bank of Nigeria C. The promotion of rapid capital. It is machinery for mobilizing long-term financial resources for industrial development. The provision of an alternative source of fund other than taxation for government.

Nigeria capital market a catalyst to financial and economic growth

Shallu describes the capital market as a market where borrowing and lending of long term funds takes place involving both debt and equity like shares, debentures, bonds etc. She points that capital market plays a very important role in promoting economic growth through the mobilization of long-term savings and the savings get invested in the economy for productive purpose.

Yadirichukwu and Chigbu state that capital market contributes to economic growth through the specific services it performs either directly or indirectly, notable among these functions are: However, from a microeconomic perspective, Kaserer and Rapp argue that the positive impact of stock markets is related to two major channels: They provide new evidence for both effects, highlighting the importance of stock markets for financing of innovations and for attracting independent institutional investors.

To a great extent, the positive relationship between capital accumulation and real economic growth has long been affirmed in economic theories Anyanwu, ; Osamwonyi and Kasimu, Success in capital accumulation and mobilization for development varies among nations, but it is largely dependent on domestic savings and inflows of foreign capital Osamwonyi and Kasimu, ; Okoye and Nwisienyi, Therefore, to arrest the menace of the current economic downturn, effort must be geared towards effective resource mobilization.

It is in realization of this that consideration is given to measures for the development of capital market as an institution for the mobilization of finance from the surplus sectors to the deficit sectors Adeusi, et al.

Nigeria capital market a catalyst to financial and economic growth

Owolabi and Ajayi posit that the links between saving, capital formation and economic growth on the one hand and direction of causality on the other, still remain subject to further analysis across countries stressing that accepting that the relationship is unidirectional i. Therefore, this project work will examine the role of the capital market in harnessing and mobilizing these resources to generate economic growth in the country and consequently, economic development.

According to Donwa and Odiathe paucity of long-term capital has posed the greatest predicament to economic development in most African countries including Nigeria.

The business sector has depended mainly on short-term financing such as overdrafts to finance even long-term capital. Based on the maturity matching concept, such financing is risky. All such firms need to raise an appropriate mix of short- and long-term capital Demirguc-Kunt and Levine Although, most recent literatures on the Nigerian capital market have recognised the tremendous performance the market has recorded in recent times, Ngerebo and Torbira, reveal that there are two divergent opinions on the role of capital market activities in Nigeria; the first view is that capital market activities synchronize the divergent preferences of portfolio managers and financial institutions and those of savers by mobilizing long-term funds; the alternative view is that the capital market merely promote investment in consumer goods and not the acquisition of new fixed assets that are invested rather than consumed.

However, the vital role of the capital market in economic growth and development has not been comprehensively investigated thereby creating a research gap in this area. This study is undertaken to examine the contribution of the capital market in the Nigerian economic growth and development. Aside the social and institutional factors inhibiting the process of economic development in Nigeria, the bottleneck created by the dearth of finance to the economy constitutes a major setback to its development.

Equity market – Listed securities on NSE

As a result, it is necessary to evaluate the Nigerian capital market. The specific objectives of the study are as follows: To evaluate the performance of the capital market in relation to the economic growth in Nigeria; 2.

To examine the operations of the Nigerian capital market; 3. To examine the rate at which new stocks are issued on the capital market. How does the capital market impact on the economic growth and development process in Nigeria?

What is the trend of trading activities on the Capital Market? What is rate at which new stocks are issued on the Nigerian capital market? That the capital market does not stimulate significantly the economic growth of Nigeria.

That the capital market stimulate significantly the economic growth of Nigeria.Nov 25,  · The study also examined the impact of capital market development on economic growth in Nigeria and tested for the evidence of long run relationships.

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Annual data on some capital market development indicators and real growth domestic product were collected and used for the study. Olubi noted that regulatory approach to capital market architecture would formed a vital part of discussion at the conference, saying a digital economy has been a key driver of growth in major.

Still,,,,, impact of capital market on Nigeria economic growth. The Nigerian capital market provides the necessary lubricant that keeps turning the wheel of the economy. It not only provides the funds required for investment but also efficiently allocates these funds to projects of best returns to fund owners.

The quest for economic growth and development compelled Nigeria to acquire external debt. The first major external loan of US$28 million by Nigeria was acquired .

The capital market has been identified as institution that contributes to the economic growth and development of emerging and developed economies.

Nigeria capital market a catalyst to financial and economic growth

It is a major driving force of economic growth and development of a nation. The capital market needs to be deepened more than this to provide an opportunity for growth in the economy; it is a barometer of growth and development in the economy.

Osinbajo Tasks Capital Market On Economic Growth — Leadership Newspaper