• Format
  • Pages
  • Chapters


The Project work studies capital market as a tool for economic growth in Nigeria and other countries. The method of data collection is the use secondary data from CBN statistical bulletin using the Multiple regression Analysis. The Major Findings of the research work is to find out the Impact of the Capital Market on the Nigerian economy. The results shows that Capital Market has Contributed Positively towards Economic Growth in Nigeria.




The capital market is a highly specialized and organized financial market and indeed essential agent for economic growth because of its ability to facilitate and mobilize savings and investment. To a great extent, the positive relationship between capital accumulation and real economic growths has long affirmed in economic theories (Anyanwu, 1993), Success in capital accumulation and mobilization for development varies among nations but it is largely dependent on domestic savings and inflow of foreign capital. Therefore, to arrest the menace of the current economic downturn, effort must be geared towards effective resources mobilization. It is in realization of this that consideration is given to measure for the development of capital market as an institution for the mobilization of finance from the surplus sectors to the deficit sectors.

The development of capital market in Nigeria, as in other developing countries has been induced by the government. However, prior to the establishment of stock market in Nigeria, there existed some less formal market arrangements for the operation of capital market. It was not prominent until the visit of Mr. J. B. Lobynesion in 1959, on the invitation of the Federal government, to advice on the role the Central Bank could play in the development of local money and capital market. As a follow-up to this, the government commissioned and set up the Barback Committee to study and make recommendations on the ways and means of establishing a stock market in Nigeria as a formal capital market. Acting on the recommendation of the committee, the Lagos Stock Exchange (as it was called then) was set-up in March 1960, and in September 1961, it was incorporated under Section 2 cap 37,through the collaborative effort of Central Bank of Nigeria, the Business Community and Industrial Development Bank (Alile&Anao, 1990). With the establishment of the Central Bank of Nigeria in 1959 and the coming into existence of the Lagos Stock Exchange in 1961 and Subsequently, the Nigeria Stock Exchange by an Act in 1979, a sound foundation was laid for the operation of the Nigerian Capital Market for trading securities of long term nature needed for the financing of the industrial sector and the economy at large. After the incorporation of the Lagos Stock Exchange, it was granted further protection under the law and its activities was placed under some sort of control by the government, hence the passing of the Lagos Stock Exchange Act. However, the Lagos Stock Exchange was only operational in Lagos. By the mid 70’s, the need for an efficient financial system for the whole nation was emphasized, and a review by the government of the operations of the Lagos Stock Exchange market was advocated. The review was carried out to take care of the low capital formation, the huge amount of currency in circulation which was held outside the banking system, the unsatisfactory demarcation between the operation of .Commercial Banks and the emerging class of the Merchant Banks, and the extremely shallow depth of the Capital In response to the problems mentioned above, the government accepted the principle of decentralization but opted for a National Stock Exchange, which will have branches in different parts of the country. On December 2nd 1977, the memorandum and article of association creating the Lagos Stock Exchange was transformed into the Nigerian Stock Exchange, with branches in Lagos, Kaduna, Port-Harcourt, Yola and now in Federal Capital Territory (FCT) Abuja some other cities. The history of Nigeria Capital Market could be traced to 1946 when the British colonial administration floated a N600, 000 local loan stock bearing interest at 3’i4%for the financing of developmental projects under the Ten-Years Plan Local Ordinance. The loan stock, which had a maturity of 10-15 years, was oversubscribed by more than N l million, yetlocal participation of the issued was terribly poor. Certainly, potential fund abound in Nigeria, but the overriding consideration in this project is to examine the impact of the capital market in harnessing and mobilizing these resources (fund) to generate economic growth in the country and consequently economic development.


1. Operations of the capital market that alleviates economic growth

2. Under performance of the capital market that affects capital growth negatively


The objective of this study is to investigate the impact of the Nigerian capital market on Economic growth of Nigeria. The study examines the activities and performance of Nigerian capital market The specific objectives of the study are as follows:

1.      To examines the operations of the Nigerian capital market.

2.      To evaluate the performance of the capital market in relation to the economic growth in Nigeria.

3.      To make recommendations as to how the operations of the market could be improve to boost economic growth and development of Nigeria.


This research was guided by the following research questions:

i.                   What is the impact of market capitalization on economic growth?

ii.                 What is the impact of total value of trading transaction on economic growth?

iii.              What is the impact of total number of listed securities on economic growth?

iv.              What is the impact of exchange rate on economic growth?

v.                 How is the operation of Nigeria capital market?

vi.              What is the performance of the capital market in relation to economic growth in Nigeria?

vii.             What is the rate at which new stocks are issued on the Nigerian capital market?


1.  H0:  Capital market has no significant impact on economic growth in Nigeria .

    H1:  Capital market has significant impact on economic growth in Nigeria

2.  H0:  Exchange rate has no significant impact on economic growth

    H1:  Exchange rate has significant impact on economic growth.


The study explored the impact or effectiveness of capital market instruments on Nigerian economic growth. Though the scope of the study was limited to the capital market, it is hoped that the exploration of this market will provide a broad view of the operations of the capital market. It will contribute to existing literature on the subject matter by investigating empirically the role, which the capital market plays in the economic growth and development of the country.

The main importance of this study is that it will provide policy recommendations to policy- makers on ways to improve operations and activities of the capital market.


The economy is a large component with lot of diverse and sometimes complex parts; this research work only looks at a particular part of the economy (the financial sector). This work did not cover all the aspects that make up the financial sector, but focus only on the capital market and its activities and it impacts on the Nigerian economic growth. The empirical investigation of the impact of the capital market on the economic growth in Nigeria was restricted to the period between 1980 and 2011 due to the non-availability of some important data.


The study is divided into five (5) chapters and organized as follows:

Chapter one: It forms the introduction part; this is where the main theme of the research is given. 
It comprises of the statement of the problem, objectives of the study, research questions and hypotheses, significance of the study, scope and delimitation of the study and organization of the study.

Chapter two: This is the literature review of the impact of capital market on the economic growth of Nigeria.

Chapter three: It forms the research methodology which includes Introduction, nature of data sources of data, data analytical procedure, model specification and methods of evaluation.

Chapter four: This is the data analysis while        

Chapter five: This includes the summary, recommendations and conclusion.

This material content is developed to serve as a GUIDE for students to conduct academic research

Find What You Want By Category:

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like