An Analysis on the Growth of the Nigerian Capital Market and Its Effect on Economic Development {a Case of the Nigerian Stock Exchange; 1995 to 2005}

The importance of a vibrant capital market in the mobilization of long term investable fund for economic development especially for developing countries like Nigeria can not be over emphasized. This research work examines the growth of the Nigerian Stock Exchange (NSE) ; the hub of the Nigerian capital market and it effect on the economic development of Nigeria using time series data from 1995 to 2005. Studies reveal that there have been a remarkable growth in the capital market during the period under study like non-other as far as security issue is concerned in Nigerian. The research findings, found a positive and significant relationship between the value of new issues, rate of returns on securities, the bank recapitalization exercise of 2004/2005 and market capitalization (a proxy of stock market growth). It also found a negative relationship between the level of interest rate (lending) and market capitalization. The number of listed security according to findings is suggested to be insignificant in determining capital market growth. The research findings also reveals that the level of efficiency and effectiveness of the capital market have an impact on economic development. As both the capital market and economic development were found to have a positive relationship.
Finally, this study suggest a systematic and conscious effort to be made by the government and the regulatory authorities responsible in overseeing security issues in order to ensure the speedy growth of the capital market and thus providing investable funds that propels economic development

CHAPTER ONE

1.0. INTRODUCTION There is no gain saying the fact that economic developing and growth of any nation or state virtually depends on long term development plans. Oftentimes, economic development requires long term plans which needs long term investments. In a developing economy like Nigeria, there has been the need for increased capital resources mobilization to increase savings and thus

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