CAPITAL MARKET AS A CATALYST FOR ECONOMIC GROWTH IN NIGERIA

This study examined the impact of capital market development on economic growth in Nigeria between the periods of 1981 to 2022. Annual time series data were sourced from world development indicators (WDI) and Central Bank of Nigeria (CBN) 2022. Using autoregressive and distributed lag (ARDL) model techniques, the result Optimal lag selection test was conducted using Akaike Information Criterion (AIC) and ARDL bounds test approach to cointegration was used to test for cointegration among the variables of study and were found to have a long-run equilibrating relationship. The long-run ARDL result revealed a significant positive relationship between capital market development and Nigerian economic growth and also a significant but negative relationship between savings and economic growth in Nigeria over the study period. While interest rate was found to have a positive but insignificant impact on economic growth. Moreover, the short run result indicates a significant positive relationship between capital market development, interest rate (INT) and economic growth while savings was found to have a significant negative relationship with economic growth. The study therefore recommends that the Nigerian government and financial regulators should continue to enhance the infrastructure and regulatory framework of the capital market. This includes modernizing trading systems, improving transparency, and ensuring a stable legal environment to attract both domestic and foreign investors, which will further stimulate economic growth.