ABSTRACT
The essence of this project is to evaluate the efficiency of capital market in economic development in Nigeria. Accordingly, some of the objectives of the study are to highlight the activities of the Nigeria capital market in relations to economic development as a means of providing credit and investment funds in the economic of the country. This project also tends to show the efficiency of the Capital Market in Nigeria particularly the development of National building and economic and growth pursuance. It has impacted positively on the country.
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Over the years, credit institution exit in the country (Nigeria) even during the time of barter, goods were given in exchange for a promise of reimbursement at a futune date and where other assets are not available or acceptable as collateral. Children were often used with coming of Europeans into the country and the introduction of currency, credit became better organized with the emergency of local money lenders and agricultural cooperatives whose surpluses were given out as loan. A formal capital market did not develop in Nigeria until the eve of independence because the economic policy of the British colonial government in the country was geared towards the interest of the imperial government in England.
The real concept of the capital market as it is known today was introduced into Nigeria 1946 in when the ten year plan local ordinance was promulgated. This allowed for the floating of local loans to the tune of N300,000,000 (three hundred million naira). The units were multiples of 10 (ten pounds), at an interest rate of 3½% with a maturity of between 10-15 years. Incidentally, there was an over subscription by over 500,000 though not surprisingly the bulk of the response came from the United Kingdom (UK) and not within the country.
In 1951, there was another attempt at capital accumulation in public sector when a local development fund was created in order to finance four commercial corporations. Payment arising from revenue were paid into the fund and soft loans, with easy repayment terms, were advanced to these corporation from the fund between 1946 – 1956. The British government was said to have carried out an open door policy and this was described as the first conscious effort by the British to give investment opportunities to Nigeria and revolutionized the capital market. Despite this growth held back in the capital market and industrial sector, because growth would have had the effects of reducing the market of British goods.
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