This paper seeks to examine the impact of the Nigerian capital market on its economic growth from the period of 1990-2010. This means that the performance of the stock market is an impetus for economic growth and development. The economic growth was proxied by Gross Domestic Product (GDP) while the capital market variables considered include; Market Capitalization (MCAP), Total New Issues (TNI), Value of Transactions (VLT), and Total Listed Equities and Government Stocks (LEGS).  Applying Johansen co-integration and Granger causality tests, results show that the Nigerian capital market and economic growth are co-integrated. This implies that a long run relationship exists between capital market and economic growth in Nigeria. The causality test results suggest a bidirectional causation between the GDP and the value of transactions (VLT) and a unidirectional causality from Market capitalisation to the GDP and not vice versa.  The F statistics is significant at 5 percent using a two-tailed test. On the other hand, there is no “reverse causation” from GDP to market capitalization. Furthermore, there is independence “no causation” between the GDP and total new issues (TNI) as well as GDP and LEGS.  This is a clear indication of the relative positive impact the capital market plays on the economic growth of the country. The evidence from this study reveals that the activities in the capital market tend to impact positively on the economy.  It is recommended therefore that the regulatory authority should initiate policies that would encourage more companies to access the market and also be more proactive in their surveillance role in order to check sharp practices which undermine market integrity and erode investors’ confidence.

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The Impact of the Nigerian Capital Market on Economic Growth (1990-2010)

This study investigated the role of stock market development on economic growth of Nigeria using a 15-year time series data from 1994 - 2008. The method of analysis used is Ordinary Least Square (OLS) techniques. The study measures the relationship between stock market development indices and economic growth. The stock market capitalization ratio was used as a proxy for market size while value traded ratio and turnover ratio were used as proxy for market liquidity. The results show that market capitalization and value traded ratios have a very weak negative correlation with economic growth while turnover ratio has a very strong positive correlation with economic growth. Also, stock market capitalization has a strong positive correlation with stock turnover ratio. This result implies that liquidity has propensity to spur economic growth in Nigeria and that market capitalization influences market liquidity. We should view with caution the notion that stock market size is not significant for economic growth since multicollinearity exists in the data used for this analysis. The government should make policies that boost the interest of domestic investors in Nigeria as this might spur investors’ interest and boost stock market activity. Keywords : Stock Market Development, Economic Growth, Time Series Analysis, Nigeria, Market capitalisation, liquidity.

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The Role of Stock Market Development on Economic Growth in Nigeria: A Time Series Analysis

The objective of this study was to empirically analyze the impact of the Nigerian capital market on her socio-economic development from 1981 to 2008. The socio-economic development was proxy by the...

An Empirical Analysis of the Impact of the Nigerian Capital Market on Her Socio-economic Development

In the paper, we examine the causal relationship and the direction of causality between stock market development and economic growth in Ghana, Kenya and Nigeria. In examining the causal relationship and the direction of causality, we used the Granger Causality test procedure as developed in Granger. The study regressed five indicators of stock market namely stock market capitalization (MC), stock turnover ratio (STO), stock traded value (TVL), number of listed securities (LS), and stock market index (MI) against the real gross domestic product (GDP) which is used as a proxy for economic growth. Using the 1989 – 2009 data sets, the empirical findings of the study show that there is no causal relationship between stock market development and economic growth in Ghana and Nigeria, but revealed a bidirectional causal relationship between stock market development and economic growth in Kenya. When MC was used as a proxy for stock market development, MC and LS were found to Granger cause economic growth. Bidirectional causality was found between STO and GDP. TVL was found to have a strong negative effect on GDP. Based on the results of the study, we recommend that policy makers and regulatory bodies should formulate and implement policies that will attract investors and avail the real sector of the economy the much needed fund for production and encourage listing of companies that contribute largely to GDP in the nation stock exchange.

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Stock Market and Economic Growth in Ghana, Kenya and Nigeria

This study examines the impact of capital market reforms on the Nigerian economic growth between 1981 and 2010. The prevailing challenges in the World financial markets; especially the capital market justifies the various forms of reforms going on around the World. The ordinary least square method of regression and the Johansen cointegration analysis were employed to analyse the secondary data sourced from the Central Bank of Nigeria statistical bulletin, the Nigeria Stock Exchange Fact book and the Nigeria Security and Exchange Commission Reports. The results show that capital reforms positively impact the economic growth. The study recommends among others that government should objectively evaluate enacted laws and reforms agenda in a manner that will enhance economic growth rather than considering political issues before embarking on reforms.

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IMPACT OF CAPITAL MARKET REFORMS ON ECONOMIC GROWTH: The Nigerian Experience

The paper is an appraisal of the impact of capital market efficiency on economic growth in Nigeria, using time series data on market capitalization, money supply, interest rate, total market transaction and government development stock that ranges between 1961 to 2004. The model specification for the analysis of data is multiple regression and ordinary lest squares estimation techniques. The result of the study shows that the capital market in Nigeria has the potentials of growth inducing, but it has not contributed meaningfully to the economic growth of Nigeria. This is as a result of low market capitalization, low absorptive capitalization, illiquidity, misappropriation of funds among others. The empirical test indicates that, these variables satisfied the economic apriori and are statistically significant except total transactions and money. Thus it was concluded and recommended that, the capital market remain one of the mainstream in every economy that has the power to influence economic growth, hence the organize private sector is encourage to invest in it. This will enable the capital market improve its illiquidity status for economic growth and development. Therefore the government must contribute in order to achieve these objectives through investing government securities in productive sectors and relaxing laws that spell threat to the capital market.

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Appraisal of Capital Market Efficiency on Economic Growth in Nigeria

Following the success of Audit Commission in the United State of America, it was introduced in Nigeria through the promulgation of Companies and Allied Matters. Act CAMD ‘90 (now CAMA 2004). So far, the compliance with the Act is not in doubt as seen in published accounts of quoted companies. What is left is for audit committees to justify their establishment and existence by not failing to check corporate failures and malpractices as was intended. The major constraints to the effectiveness of these audit committees which include deficiencies in the enabling laws and the lack-lust attitude of regulatory and professional bodies on the subject-matter in Nigeria have been identified. Suggestions that will, hopefully, reinvigorate the audit committees for effectiveness in Nigeria have also been proffered. These include appointing people of high integrity with the requisite qualifications and experience of the companies’ industry and financial arena: effective enlightenment of all stakeholders and a comprehensive review of CAMD ‘90 (now CAMA 2004), incorporating inputs from the Sarbanes-Oxley Act of 2002, to reflect our local realities and peculiarities. Overhauling the audit committees is even more impelling with the privatization and globalization currents. The adoption, and adaptation, of generally accepted managerial practices for effective corporate governance to our local context would facilitate the integration of Nigerian enterprises into the realm of international business.

The Challenges of Nigerian Economy Under Her Present Day Audit Committees

The focus of this paper is on foreign borrowing and economic growth of an emerging economy with Nigeria as a case of reference. It examines the linkages between foreign borrowing and selected macroeconomic indices such as Gross Domestic Product, (GDP), poverty, private investment, government investment, export/income ratio, vis-a-vis external debt to income ratio. The ordinary least square technique (OLS) was adopted through the use of time series data on the variables. Data were sourced from central bank of Nigeria statistical bulletin, International Monetary Fund (IMF), Human Development Reports International financial statistics year book and World Bank global finance. The study advocates that government investment in education, health, export and international trade should be adequately improved and encouraged by government so as to step up the standard of giving devoid of foreign borrowing. A negation of this, the paper opines, makes foreign debt a source of economic woes to the economies.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1447910_code1259952.pdf?abstractid=1447910&mirid=3

Foreign Borrowing and Economic Growth in an Emerging Economy: The Nigerian Case

This paper examines amongst other issues how accounting system and the management of environment information can be oriented towards the goals of improving corporate sustainability and eco-efficiency while promoting accountability of management activities. The problem of environmental financial reporting and the contemporary issues on environmental accounting is also examined. The paper concludes that, the general picture, which emerges from currents environment financial reporting, is that since disclosures of environmental information are voluntary; there is a diversity of reporting practice. While large companies tend to report more environmental information, medium-scale and small-scale businesses usually report little or no information on the environment; and these disclosures tend to be more qualitative rather than quantitative. Recommendations on ways in which accountants can contribute to environmental management are proffered.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1435237_code960953.pdf?abstractid=1435237&rulid=5147117&mirid=4

Environmental Financial Reporting

Cost, in accounting terms, refers to the sacrifice given up in order to obtain a product or service. Transportation cost, on the other hand, relates to the cost of carriage or conveyance of goods and services from one place (the origin - the factor) to another place (the destination - the warehouse). Various techniques and procedures are employed to minimize transportation cost. This paper dwells on the usage of linear programming approach towards solving transportation cost problems. Linear programming in a nut-shell is a term that covers a whole range of mathematical techniques that aim at optimizing performance in terms of combination of resources. It is one of the practical approaches which are employed by the cost accountant to achieve the desired objective of minimizing cost while maximizing profit and efficiency. According a brief introduction of the subject matter is proffered, and the concepts which are commonly used are examined. The paper also discusses the method of solving linear programming problems. Others areas where linear programming could be applied are also outlined.

Atim E. Esang

Papers

Appraisal of Capital Market Efficiency on Economic Growth in Nigeria

The Challenges of Nigerian Economy Under Her Present Day Audit Committees

Foreign Borrowing and Economic Growth in an Emerging Economy: The Nigerian Case

Environmental Financial Reporting

Linear Programming: A Practical Approach to Transportation Cost Problems