SELECTED MACROECONOMIC VARIABLES AND CAPITAL MARKET PERFORMANCE IN NIGERIA
Abstract
The need to bridge the capital and investment gap and to guarantee sustainable economic growth and development has more than ever before become pertinent in Nigeria following the recent fluctuations in the global crude oil price as well as plummeting crude oil production in the country. The capital market is one of the avenues through which savings can be mobilized and allocated for productive investments to diversify the Nigerian economic base. However, the outcome of macroeconomic variables over the years tends to alter the achievement of this goal. This study examined the impact of selected macroeconomic variables on capital market performance in Nigeria between 1981 and 2022 using annual time series data sourced from Central Bank of Nigeria and the Nigerian Exchange Group Databank. Growth rate of market capitalization was used as a proxy for capital market performance and dependent variable while broad money supply growth, exchange rate and inflation rate and interest rate were the selected macroeconomic variables and independent variables. The autoregressive distributed lag (ARDL) technique of analysis was adopted to estimating the model. The findings revealed that all the selected macroeconomic variables had positive but insignificant relationship with Imarket capitalization both in the short and long run periods. Thus, the study recommended that Government in its bid to encourage an active capital market should ensure that appropriate polices are formulated to achieve stability in interest rate, inflation rate and exchange rates, as this is a major way to guarantee improvement in investing in the capital market and to ensure its growth
Keywords:
Selected Macroeconomic Variables, Market Capitalization, Theory of Stock Market Development, ARDL, NigeriaDownloads
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Copyright (c) 2025 Francis Ariayefa ENIEKEZIMENE PhD , Ayibakari Captain OPUOFONI PhD
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