Research Article

Effects of Capital Market on Economic Development in Nigeria

Patricia Onyemowo Agbo1*, Phillips Ozovehe Salawu2, Joy Ifeoma Iwugo3, Lawrencia Dangmi Datong1, Taiya Haziel Mbasti4
1 Department of Banking and Finance, University of Jos, Nigeria
2 Omegah Lion Chambers, (Solicitors and Advocates), Plot 1981, Lome Crescent, Wuse, Zone 7, Abuja
3 National Open University, Abuja
4 Department of Accounting, Adamawa State University, Mubi, Nigeria
* Corresponding author: onyemowoa@gmail.com
Published: Dec, 2025
DOI: 10.67862/jbfr.2025.o0kqwh5q
Pages: 120-130
Views: 44
Downloads: 32

Abstract

This study investigated the effects of capital market indicators on economic development in Nigeria, focusing specifically on market capitalisation, interest rates and inflation rates. An ex-post facto research design was employed, and relevant data were sourced from secondary records. The data were analysed using SPSS version 25, with multiple regression analysis applied to determine the relationships between the variables. The findings indicate that market capitalisation does not have a significant effect on Nigeria’s economic development. Similarly, interest rates and inflation rates were found to have no statistically significant effects on economic development within the study period. Despite the lack of significant relationships, the study offers practical policy recommendations. It suggests that regulatory bodies such as the Nigerian Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NGX) implement reforms to enhance transparency, strengthen investor confidence, and expand access for both domestic and institutional investors. Additionally, the Central Bank of Nigeria (CBN) should align interest rate policies with productive sector financing, maintaining levels that encourage borrowing for infrastructure and small- and medium-sized enterprise (SME) investment. Furthermore, government and monetary authorities are encouraged to adopt targeted measures to control inflation, including stabilizing exchange rates, reducing food price volatility, and ensuring fiscal discipline to support sustainable economic growth.

Keywords

Capital market Market capitalisation Interest rate Inflation Economic Development

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How to Cite

Agbo, P. O., Salawu, P. O., Iwugo, J. I., Datong, L. D., & Mbasti, T. H. (2025). Effects of Capital Market on Economic Development in Nigeria. Journal of Banking and Finance Research, 1(1), 120-130. https://doi.org/10.67862/jbfr.2025.o0kqwh5q

P. O. Agbo, P. O. Salawu, J. I. Iwugo, L. D. Datong, and T. H. Mbasti, "Effects of Capital Market on Economic Development in Nigeria," Journal of Banking and Finance Research, vol. 1, no. 1, pp. 120-130, December 2025. doi: 10.67862/jbfr.2025.o0kqwh5q

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