STOCK MARKET AND ECONOMIC DEVELOPMENT IN NIGERIASTOCK MARKET AND ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

This study investigates the relationship between stock market performance and economic development in Nigeria, Africa's largest economy with diverse sectors such as oil and gas, agriculture, manufacturing, and services. It emphasizes the critical role of the Nigerian Stock Exchange (NSE) in capital formation and investment, serving as an economic activity indicator. Using data from the Central Bank of Nigeria, the NSE, and the World Bank, the research employs econometric models to analyze the correlation between stock market indicators (market capitalization, trading volume, and stock market index) and economic growth metrics (GDP growth rate, investment levels, employment rates). The findings reveal a complex interaction between stock market performance and economic growth, with significant yet variable impacts. Key influencing factors, including political stability, regulatory environment, and foreign investment, are discussed. The study addresses challenges like market volatility and investor confidence, offering policy recommendations to enhance market efficiency and promote investment.