Capital Market Performance and Economic Growth in Nigeria: 1986-2016


Faculty: Management Sciences
Department: Banking And Finance


Akpokerere, O. E.
Ibenta, S. N.O.
Adigwe, P .K.


This study set out to examine capital market performance and economic growth in Nigeria from 1986-2016.A number of related literature have shown that Nigerian capital market has satisfactory market performance and has contributed to economic growth. Yet some researchers observed that the markethas not significantly mobilized and effectively channeled substantial capital to the real sector of the economy. What could have been the reasons for the divergences? The main objective of the study was to study the relationship between Nigerian capital market indices and economic growth. The study was anchored on the supply leading hypothesis. Secondary data were sourced from Central Bank of Nigeria Statistical bulletin and Nigerian Stock Exchange Factbook of various editions. The study adopted the ex post facto research design while ordinary least square regression techniques was used to process the data gathered using E-view 9.0 software. The null hypothesis (Ho) were tested at 5% level of significance. The findings of the study revealed that there is insignificant relationship between capital market indices and economic growth in Nigeria which is an indication of the underdeveloped nature of the capital market and its little role in contributing to economic growth in Nigeria and concluded that the Nigeria capital market has not contributed significantly to economic growth in Nigeria and is not surprising as growth in a sub-system can hardly overtakes the entire economy growth potentials. The study recommends among others thatcapital market regulatory authorities should be more proactive in their surveillance role by promoting preference for stock statements through public enlightenment campaigns, quick payment of dividend to shareholders via automated process and ensure that capital market operators should be more disciplined, acting professionally toward prospective investors so as to increase volume of transactions in the market as this will result in economic growth in Nigeria.