Impact Of The Nigerian Capital Market On Economic Growth (1980-2011):- Maduagum, Obioma L.

ABSTRACT

This study examined the impact of Nigerian capital market on economic growth between 1980 to 2011. Data were collected from Security and Exchange Commission reports, the Nigerian Stock Exchange review reports, Central Bank of Nigerian Statistical Bulletin respectively. It examined the challenges associated with the economic development ofNigeria and the effective performance of the financial markets. A brief history of the financial market was discussed, highlighting the significant role they play in the economic development of Nigeria. Correlation test was used to establish ifthere was a significant relationship between the variables ofinterest. From the findings, the study ascertained the existence of a positive significant relationship between the capital market activities represented by the indicators and the Gross Domestic Product ofNigeria. The study also revealed that the total market capitalization of the Nigerian capital market has a significant positive relationship with Gross Domestic Product ofNigeria. It was recommended that to compliment the role of the capital market in capital formation, the government should supervise the capital market to ensure orderly, fair and equitable dealings in shares and stocks and to forestall illegal deals by privileged insiders at the expense ofinnocent and often uninformed investors. Among others, government should put up measures to build up investor’s confidence in the capital market by fair transactions and disabuse the minds of investors from buying and hold ofsecurities syndrome. A better understanding of capital market by people can potentially lead to an increase in awareness on the issues and elimination ofsharp practices and ultimately increase the investor base.