Development of The Nigerian Economy

Subject: Development of The Nigerian Economy

This paper intends to illustrate and inspect if the capital market of Nigeria affects the economy. The significance of capital market and how it influences the economy and people’s standards of living is described and discussed in concurrence to the fact that Nigeria’s capital market is instrumental in the progress of its economy despite that many other factors have to play part in the economy as well. The paper proposes a capital market model using “Treasury bill rates, stock prices, exchange rate, and oil production” as variables to prove how the market is related to the economy and how a change in any of the variables can impact changes in other variables. The all share index is utilized in representing the performance of the capital market and changes in stock exchange market based on the listed companies. By finding out if the all share index has a relationship with the Treasury bill rates, the rates of exchange, and the production of oil, this study will establish whether the capital market of Nigeria has any significant impact on its economy. Conventionally, many researchers have employed the Gross Domestic Product to define the status, the rate of growing and developing the economy. However, this study will propose a different model that has not been fully utilized as a way of determining the direction of the economy or predicting changes that might occur as per the variables in the capital market. In the literature review, theories and concepts will be revealed that are in support of using the model in determining the Nigeria’s economic status while some of the theories will prove otherwise. From the review of the concepts and theories, hypotheses will be formulated for this study. The quantitative correlational research design, where the relationships between the variables is determined, will be utilized. Cointegration analysis will be the basis of determining if there exists a long-term relationship or a cointegration between the identified variables. Thus, it will be used to accept or reject the null hypotheses. The data to be utilized in this dissertation will be obtained from the statistical bulletin of the Central bank of Nigeria. The data that describes the variables will be used as the population of study and appropriate sample size estimated using G*power analysis.
*Keywords*: Nigeria, economy, treasury bill rate.
Abstract
This paper intends to illustrate and inspect if the capital market of Nigeria affects the economy. The significance of capital market and how it influences the economy and people’s standards of living is described and discussed in concurrence to the fact that Nigeria’s capital market is instrumental in the progress of its economy despite that many other factors have to play part in the economy as well. The paper proposes a capital market model using “Treasury bill rates, stock prices, exchange rate, and oil production” as variables to prove how the market is related to the economy and how a change in any of the variables can impact changes in other variables. The all share index is utilized in representing the performance of the capital market and changes in stock exchange market based on the listed companies. By finding out if the all share index has a relationship with the Treasury bill rates, the rates of exchange, and the production of oil, this study will establish whether the capital market of Nigeria has any significant impact on its economy. Conventionally, many researchers have employed the Gross Domestic Product to define the status, the rate of growing and developing the economy. However, this study will propose a different model that has not been fully utilized as a way of determining the direction of the economy or predicting changes that might occur as per the variables in the capital market.