IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 4 NO. 8 2018

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Economic Policy Road-Blocks on the Path to Sustainable Capital Market Growth in Nigeria

Dr. John Okey Onoh AND Gbalam Peter Eze (Ph.D)

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Abstract

The study is focused on the factors impeding the growth of the capital market in Nigeria. The problem of study is many economic policies crafted, legislated and implemented but has not had the desired effects on the real sector despite significant financial developments over the years. In determining if there were structural breaks over a space of years as a result of certain policies the research methodology included Quant Andrew and Bai Perron test. And unit root tests was employed to test the stationarity of values using Bartlett kernel and Kwiatkowski- Phillips-Schmidt-Shin. With evidence of stationarity an equation was introduced to capture seasonality given that the data is times series. Further correlogram tests was used to test if the error term is stationary and the results indicate that the level of Autocorrelation and the Partial Autocorrelation were very insignificance. A major finding was that in using the ARIMA model it was evident that AR is stationary and MA is invertible. Findings indicated that there were significant effects on the economy from the Nigerian capital market and that there was evidence of trend and intercept from the graph, a closer look of which reveals a sharp increase in market capitalization in the first three years (2006-2008) after the banking recapitalization but the increase in GDP over the same period was not as proportionate, this is attributable to the impact of the banking recapitalization exercise. By 2009 there was a sharp drop in the level of market capitalization and GDP as a result of the impact of the world financial meltdown which occurred in September of 2008. In subsequent years, the level of market capitalization and its attendant impact on the GDP did not progress at the same rate as the first eight years under study (2001-2008). Among recommendations from the study includes having a second look at the problems of high cost of transactions, effects of inflation, interest rate and exchange rate volatility as well

keywords:

Economic policy road-blocks, sustainable, capital market growth and Nigeria

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