ABSTRACT
The study investigated the impact of Nigerian Stock Exchange on economic development in Nigeria. The descriptive survey design was used in the study. The target population comprised employees in the employment of financial institutions in Lagos metropolis. A sample of 200 senior management employees was randomly selected from ten financial institutions in the metropolis. A 20-item self-developed questionnaire with Likert scale was used in the study. Pearson product moment correlation co-efficient statistical method was used to test hypotheses, and the results of the analysis revealed that:
1.There is a significant relationship between Nigerian Stock Exchange and economic growth in Nigeria.
2.Activities in the Nigerian Stock Exchange have a significant impact on economic growth in Nigeria.
3.The performance of the stock market has a significant impetus for economic growth and development.
From the findings of this study, it can be concluded that the stock market promotes economic growth is not in doubt. Hence, there is the need to restore confidence to the market by regulatory authorities’ activities that portray transparency, fair trading transactions and dealings in the stock exchange
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Nigerian Stock Exchange is an engine of economic growth and development globally; Nigeria inclusive is made up of markets and institutions which facilitate the issuance and secondary trading of long-term financial instrument. The history of Nigerian Stock Exchange could be traced to 1946 when the British colonial administration floated a N600, 000 local loan stock bearing interest at 3.% for the financing of developmental projects under the Ten Years Plan Local Ordinance. The loan stock, which had a maturity of 10-15 years, was oversubscribed by more than N1 million, yet local participation of the issued was terribly poor. An as result of poor local participation federal government established several economic programmes with hope to foster economic and financial development, such Structural Adjustment Programme (SAP) 1986, Vision 2010, Vision 2020, Millennium Development Goal (MDGs), National Economic Empowerment Development Strategy (NEEDS), State Economic Empowerment Development Strategy (SEEDS), and other development plans.
Recently, Nigerian Stock Exchange has experienced unprecedented growth which was attributed to the banking sector reform of 2004-2005. (Nwankwo, 1991) says that Nigerian Stock Exchange has helped government and corporate entities to raise long term capital for financing new projects, and expanding and modernizing industrial and commercial concerns. Pedro and Erwan (2004) assert that financial market development raises output by increasing the capital used in production and by ensuring that capital is put into best uses. Beckaert et al (2005) analyze that Nigerian Stock Exchange development would lead to financial liberalization, which will lead to a 1% increase in annual real economic growth.
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