The Place of Financial Markets in the Development Process: Evidence from Nigeria

Abstract

The paper examines the place of financial markets in the development process in Nigeria. The paper used descriptive approach and discovered that financial markets play fundamental role in the development process. However, the overall performance of the Nigeria’s financial market despite some expansion in recent times has been below its potential. In particular, as propellers of economic development, the markets have not been able to meet their goals such as accelerating industrial development, promoting the rate of investment, generating employment opportunities, providing services that help accelerate poverty reduction, promoting human capital development, and accelerating agricultural productivity. Some of the challenges confronting the Nigeria’s financial markets include; dearth of instruments and lack of market breadth and depth, the oligopolistic structure of the markets, dependence on government, slow growth of the secondary market and information gap and asymmetry. It was therefore recommended that the financial markets should be reformed and effectively harnessed as tools of economic development, and policy makers should create the enabling environment for financial markets to thrive to propel Nigeria to the path of development with a view to achieving Vision 20:2020.