Legal regulations of the capital market in Nigeria:analysis and prospects for reform

Abstract

This thesis focuses on the legal regulations governing the Nigerian capital market. Nigeria is described as one of biggest economies in Africa, endowed with natural and other resources that could be exploited to boost the economy of the country. There is however, a need for infrastructural development and job creation that can stimulate economic growth. The execution of these projects requires the free-flow of capital. The capital market serves various purposes to a country, principal amongst these is that it facilitates the free-flow of short and long term equity and debt capital to corporations and governments that use it to carry out capital-intensive projects that subsequently enhances the economy. In view of this, it is imperative that a capital market is efficient in its structure and operations so as to attract investors. This is tied to the realisation that capital markets thrive on investor confidence. This thesis, drawing on rules and practices in the United Kingdom, focuses on key problems affecting the Nigerian capital market, including information asymmetry, insider trading and inertia in the enforcement of regulations relating to the capital market. The issues highlighted, though not exhaustive, represent foundational and fundamental challenges with the current system in Nigeria. Using a mix of doctrinal and comparative analysis, the thesis argues that the subsisting regulation of the capital market in Nigeria lacks in many respects requisite legislative and enforcement tools to deal with the problems highlighted. As such, redressing these problems along the lines of the recommendations contained in this thesis would prove to be a crucial step in achieving sustainable financing for corporations in Nigeria as well as a viable Nigerian economy.