Abstract
The paper examined capital market performance as a panacea for economic growth in Nigeria from 1986-2016. A number of related literatures have shown that the Nigerian capital market variables studied has satisfactory market performance and has contributed to economic growth. Yet some researchers observed that the capital market has not significantly mobilized and effectively channeled substantial capital to the real sector of the economy. What could have been the reason for the divergences? The study was anchored on the demand following hypothesis. Secondary data were sourced from Central Bank of Nigeria Statistical Bulletin and Nigeria Stock Exchange fact-book of various editions. The paper adopted the ex-post facto research design while ordinary least square regression techniques was used to process the data gathered using E-views 9.0 software. The null hypotheses (Ho) were tested at 5% level of significance. The findings of the paper revealed that there is negative and insignificant relationship between capital market and the variables studied. The paper conclude that liquidity of the capital market is pivotal for economic growth in Nigeria while the study recommended that all tiers of government should be encouraged to fund their realistic long term developmental program through the Nigeria capital market.
Highlights
The Nigeria environment is a complex super structure comprising several inter-related sectors and activities that work together to facilitate economic growth
This paper studied how the Nigerian Capital Market performance relates to economic growth and much attention were not given to evaluating the soundness of the market
The paper conclude that since the variables studies has negative and insignificant relationship with economic growth, liquidity of the capital market is pivotal for economic growth in Nigeria
Summary
The Nigeria environment is a complex super structure comprising several inter-related sectors and activities that work together to facilitate economic growth. The real sector of the economy is essentially involved in the production of goods and services It activities cut across agriculture, manufacturing, mining, quarrying, water resources, service and technology, environment and tourism. This sector has the highest potential for achieving a broad based and diversified economy, but its performance has been unimpressive over the years. According to Donwa and Odia (2010), the capital market has been identified as an institution which contributes to the socio-economic growth and development of emerging and developed economies. This is made possible by the intermediary role played by the capital market in mobilizing funds from surplus units to deficits units to be invested into projects with positive net present value (NPV) which will enhance economic growth of the nation
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