This term paper is written to help show the contributions of the Nigeria capital market and it’s contribution to the economy. It is a term paper that brings out the whole system of Nigeria capital market, it’s problem and contribution to the economy it also provide the recommendations that are supposed to be made to the capital market as a whole so as to effect it’s growth and efficiency.
Its also talk about the review of related literature, the second tier securities market, the financial market in economic development, the summary of findings, its References.
This term paper in therefore n partial fulfillment of the requirement of the Institute of management and Technology.
1.1 BACKGROUND OF THE STUDY
To understand the Nigeria Economy there are two crucial document the Nigerian Development plant and Annual budget, which in general the plan given a ten years perspective of the economy five before and fire years. Hence budget give two years perspective. One year before and up date the plan on an Annual basis. Darning from the perspective, the think, objective and strategic of the economy are established. The plan and budgets also specify the policy thrust for Achiving the set objective broadly these are fiscal and monetary policies. While fiscal policy involves measures or combination of measures in government Revenues and expenditure monetary policy involves measures or combinational of measures to influence or regulate the volume price of direction of money and credit.
While the two instruments are analytically different they have a common objective of influencing Aggregate economic activity to achieve the overall economic objective of the nation.
Capital market are markets in which under and investor provides long-term fund in exchange for financial assets offered by borrowers or holders- it is also where long- term financial assets are bought and sold and has and original maturity of more than one year.
Capital market provide liquidly for financial assets, thus making investors more willing to hold them.
Improvements in information, functioning and efficiency in capital market approve liquidity and hence facitate the flow of fund into investments, capital market activities, started prior to 1960. Infact two federal government stock 3 1/4 percent first development loan stock issued on 1940 and 1959 respectively the Lagos Exchange did not commence operation until 1961 from the exchange had only 14 companies up to 1971, but this situate has reversed in the period between 1971 and 1974 when the number reached 34 in order words, government fiat accounted for the relatively rapid growth of exchange.