ATTENTION:
BEFORE YOU READ THE CHAPTER ONE OF THE
PROJECT TOPIC BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE
TOPIC BELOW. THE FULL PROJECT COSTS N5,000 ONLY. THE FULL INFORMATION ON HOW TO
PAY AND GET THE COMPLETE PROJECT IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN
CALL: 08068231953, 08168759420
ROLE OF
CAPITAL MARKET IN INDUSTRIAL GROWTH AND DEVELOPMENT IN NIGERIA
ABSTRACT
This
research work examined the role of capital market in industrial growth and
development in Nigeria. Secondary data were used in this research work. The
hypothesis was tested to examine the significance of relationship that exists
between capital market and industrial growth in Nigeria. The analytical
techniques used were the simple regression analysis while Ordinary Least Square
(OLS) R-2¬ and f-statistic was used for the test. From the test, it was observed
that a positive relationship existed with negative relationship exist between
the variables. Hence the researcher concluded that capital market is an
efficient tool for industrial economic growth and development in Nigeria.
CHAPTER ONE
INTRODUCTION
BACKGROUND
TO THE STUDY
The capital
market has been identified as an institution that contributes to the
socio-economic growth and development of emerging and developed economies. This
is made possible through some of the vital roles played such as channeling
resources, promoting reforms to modernize the financial sectors, financial
intermediation capacity to link deficit to the surplus sector of the economy,
and a veritable tool in the mobilization and allocation of savings among
competitive uses which are critical to the growth and efficiency of the economy
(Alile 1984).
It helps to
channel capital or long-term resources to firms with relatively high and
increasing productivity thus enhancing economic expansion and growth (Alile
1997). Ekundayo (2002) argues that a nation requires a lot of local and foreign
investments to attain sustainable economic growth and development. The capital
market provides a means through which this is made possible. However, the
paucity of long-term capital has posed the greatest predicament to economic
development in most African countries including Nigeria.
Osaze (2000)
sees the capital market as the driver of any economy to growth and development
because it is essential for the long-term growth capital formation. It is
crucial in the mobilization of savings and channeling of such savings to
profitable self-liquidating investment.
The Nigerian
capital market provides the necessary lubricant that keeps turning the wheel of
the economy. It not only provides the funds required for investment but also
efficiently allocates these funds to projects of best returns to fund owners.
This allocative function is critical in determining the overall growth of the
economy. The functioning of the capital market affects liquidity, acquisition
of information about firms, risk diversification, savings mobilization and
corporate control (Anyanwu 1998). Therefore, by altering the quality of these
services, the functioning of stock markets can alter the rate of economic
growth (Equakun 2005). Okereke-Onyiuke (2000) posits that the cheap source of
funds from the capital market remain a critical element in the sustainable
development of the economy. She enumerated the advantages of capital market
financing to include no short repayment period as funds are held for medium and
long term period or in perpetuity, funds to state and local government without
pressures and ample time to repay loans.
In 1986
Nigeria embraced the International Monetary Fund (IMF)-World Bank Structural
Adjustment Programme (SAP) which influenced the economic policies of the
Nigerian government and led to reforms in the late 1980s and early 1990s.The
programme was proposed as an economic package to rapidly and effectively
transformed the Nigerian economy within two years (Yesufu 1996). However, until
SAP was abandoned in 1994, the objectives were not achieved due to the
inability of government to judiciously implement some of its policy measures
Oyefusi and Mogbolu 2003). The notable reforms include monetary and fiscal
policies, sectoral reforms such as removal of oil subsidy in 1988 to the tune
of 80%,interest deregulation from August 1987, financial market reform and
public sector reforms which entails the full or partial privatization and
commercialization of about 111 public owned enterprises. The Nigerian Stock
Exchange was to play a key role during the offer for sale of the shares of the
affected enterprises (World Bank 1994; Anyanwu 1993; Anyanwu et al. 1997;
Oyefusi and Mogbolu 2003).
The
introduction of SAP in Nigeria has resulted in a very significant growth of the
country’s stock market as a result of deregulation of the financial sector and
the privatization exercise which exposed investors and companies to the
significance of the stock market (Alile1996;Soyode 1990). Ariyo and Adelegan
(2005) contend that the liberalization of capital market led to the growth of
the Nigerian capital market yet its impact at the macro-economy was negligible.
Again the capital market was instrumental to the initial 25 banks that were
able to meet the minimum capital requirement of N25billion during the banking
sector consolidation in 2005.The stock market has helped government and
corporate entities to raise long-term capital for financing new projects, and
expanding and modernizing industrial/commercial concerns (Nwankwo 1991).
Given the
roles the capital market has played during the privatization of public owned
enterprises, recent recapitalization of the banking sector and avenue of long
term funds to various government and corporations in Nigeria.
The major
focus of this research is to empirically assess with the contribution of
capital market to economic growth in Nigeria.
STATEMENT OF
THE PROBLEM
The capital
market is one of the main avenues investors invest their hard earned currency
in anticipation of good returns or yield. But since the inception of the global
economic crunch in addition to a number of causing factors the impact of the
capital market has remained rather docile. The federal government effort at
revamping it has still not yielded enough result.
In the light
of this, the following statement of research questions are being raised.
1. Does the capital market enhance the
growth of the Nigerian economy?
2. Does the capital market enhance and
promote investment in Nigerian economy?
3. Does the capital market help to
increase value of transactions (government and industrial securities)?
RESEARCH
OBJECTIVES
This
research work seeks to achieve the following objectives.
1. To ascertain whether the capital
market enhance the growth of the Nigerian economy.
2. To critically examine whether capital
market enhance and promote investment in Nigerian economy.
3. To verify whether the capital market
help to increase value of transactions (government and industrial securities).
SCOPE OF THE STUDY
This study
is undertaken to evaluate the impact of Nigerian Capital Market as an
Instrument in mobilization of investment capital. As such, this study is
restricted to all companies quoted on the floor of the Nigerian Stock Exchange
market. Temporally or in term of time series, a period of twenty seven years is
used i.e. 1981 to 2008 using some market indicators as means of assessing the
impact of the capital market in mobilizing investment in Nigeria. It is hoped
that this will help to achieve the stated objective of the study.
RESEARCH
HYPOTHESIS
The
following hypothesis will be tested
Hypothesis I
Ho: The capital market does not enhance the
growth of the Nigerian economy
H1: The capital market still enhance the growth
of the Nigerian economy
Hypothesis
II
Ho: The capital market does not enhance and
promote investment on the Nigerian economy.
H1: The capital market still enhances and
promotes investment on the Nigerian economy.
Hypothesis
III
Ho: Capital market does not help to increase
value of transactions (government and industrial securities) in Nigeria.
H1: Capital market helps to increase value of
transactions (government and industrial securities) in Nigeria.
SIGNIFICANCE OF STUDY
This
research work on its conclusion, together with whatever solution or findings
that may arise, will prove useful to some particular group of persons or
otherwise for various reasons in accordance with their varying needs.
Beneficiaries
Stakeholders:
This study will be important and beneficial to stakeholders of an organization
to know the role of the Nigerian capital market in mobilizing investment in
Nigeria economy.
The
Government: It will acquaint the government of the importance of Nigerian
Capital Market and how it should be properly managed.
The public:
This study will help to restore the lost confidence of the public as regard the
Nigerian capital market and investment mobilization in Nigeria economy.
Academic/future
researcher: Both academic and other future researchers in this similar subject
matter will find it a useful source of learning and research.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following
instructions and information if you will like to order/buy our complete written
material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount
(#5,000) into our bank Account below, send the following information to
08068231953 or 08168759420
(1) Your project
topics
(2) Email
Address
(3) Payment
Name
(4) Teller Number
We will send your material(s) after
we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE
Comments
Post a Comment