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Full Project – THE IMPACT OF GOVERNMENT BONDS ON CAPITAL MARKET GROWTH IN NIGERIA

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ABSTRACT

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

1.2 Statement of problem

1.3 Objective of the study

1.4 Research Hypotheses

1.5 Significance of the study

1.6 Scope and limitation of the study

1.7 Definition of terms

1.8 Organization of the study

CHAPETR TWO

2.0 LITERATURE REVIEW

CHAPETR THREE

3.1 Introduction

3.2 Research methodology

3.3 sources of data collection

3.4 Population of the study

3.5 Sampling and sampling distribution

3.6 Validation of research instrument

3.7 Method of data analysis

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS AND INTERPRETATION

4.1 Introductions

4.2 Data analysis

CHAPTER FIVE

5.1 Introduction

5.2 Summary

5.3 Conclusion

5.4 Recommendation

Appendix

ABSTRACT

The capital market serves various purposes to a country; principal amongst these is that it facilitates the free-flow of short and long term equity and debt capital to corporations and governments that use it to carry out capital-intensive projects that subsequently enhances the economy. In view of this, it is imperative that a capital market is efficient in its structure and operations so as to attract investors. This is tied to the realization that capital markets thrive on government bonds policies.

This study therefore tends to find out the impact government bonds have on capital markets and their growth in Nigeria. To proceed with the research, the researcher used questionnaires as the instrument for the data collection to get data from a total population sample of 200 CBN, Abuja staff. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up human resource managers, accountants, customer care officers and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies. The empirical results obtained from the analysis show that though bonds do not essentially have direct impact on macroeconomic variables, the indirect impact on economic growth in particular cannot be denied.

CHAPTER ONE

INTRODUCTION

Background of the study

The Nigerian capital market is relatively new and has many factors influencing it. The capital market is for sourcing of long term loans, while the floating of government bonds will greatly stimulate the capital market in it’s size and activities. Also, most market started with bonds that are actually floated first. According to SEC, (2020), the bond market is preferred as the ideal mechanism for the exchange of claims among buyers. Government bonds has interest bearings securities in the capital market and also mutual relationship with itself, thus government stock as an instrument gives the capital market room to exist. The presence of government bonds in the Nigerian capital market can be traced to the early twentieth century (20th) and also floating of a bond in 1946 by the then colonial government. The Federal government development bonds which were formally introduced in 1959 was designed to provide long term finance for government projects and later most proceeds are leased on regular basis till 1986 when deregulation of the capital market started. The recent challenges of the capital market in Nigeria was due to economic meltdown from 2009, according to CBN (Central Bank of Nigeria) annual report on its fair share on government bonds. The dismal performance of the banking sector was owing to reforms, administrative charges and others of the CBN and SEC and also counter policies within and outside the market are some factors that have inhibited the capital market as well and the impact of government bonds.

1.2 STATEMENT OF THE PROBLEM

The secondary objective of floating government bond is to source for funds which would be loanable to state governments. Most authors on the Nigeria n capital market literature have recognized the significant impact the capital market has on the economic growth and development of Nigeria, but to some extent the capital market have under gone some challenges which include; Unstable macro-economic environment, poor system of supervision and regulation, limited range of securities, inhibited foreign capital inflow etc. This research work attempts to ascertain if government bond has been able to influence capital market growth and economic development in Nigeria. In Nigeria, much work has not been done to empirically investigate the impact of government bonds on capital market growth in Nigeria. This is the gap in knowledge the researcher is attempting to fill.

1.3 Objectives of the Study

The main objective of the study is to investigate;

The impact of the government bonds on capital market growth in Nigeria
2. To ascertain if government bond affect economic growth and development in Nigeria
To ascertain the relationship between government bond on capitals market and the economic growth of the study

1.4 RESEARCH HYPOTHESES

The hypotheses are stated in null and alternative forms.
Ho1: Government bonds do not have effect on capital market growth in Nigeria.

HA1: Government bonds do have effect on capital market growth in Nigeria.

Ho2:Government bonds do not significantly affect economic growth and development in Nigeria

HA2:Government bonds do significantly affect economic growth and development in Nigeria

1.5 SIGNIFICANCE OF THE STUDY

Government: The study will enable the government to understand when to float bonds and how to set up policies to achieve a stable macro-economic environment animal at fostering the growth of the capital market.
Investors: The study will enable investors to seek for better return on their investment in fixed income securities.

Students and fellow researchers:This study will enable students to understand the meaning of capital market growth and government bond. Researchers can build on this research work for further study by expanding the scope of for their academic purpose.

1.6 Scope and Limitation of the Study

This study attempts to investigate the impact of government bonds on capital market growth in Nigeria. Data will be extracted from the entire stock market list in the Nigerian stock exchange annual reports and statement of accounts, Central Bank Statistical bulletin, stock exchange fact book over a period of time specifically 1990 to 2011 which is the scope of the study. This document will form the source of data collection.The researcher encounters some constrain which limited the scope of the study;

a) Availability Of Research Material: The research material available to the researcher is insufficient, thereby limiting the study
b) Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
c) Organizational privacy: Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities
7 Definition Of Terms

Capital Market: A capital marketis a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments.
Economic Growth: Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.

1.8 ORGANIZATION OF THE STUDY

This research work is organized in five chapters, for easy understanding, as follows: Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study

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Full Project – THE IMPACT OF GOVERNMENT BONDS ON CAPITAL MARKET GROWTH IN NIGERIA

Full Project – THE IMPACT OF GOVERNMENT BONDS ON CAPITAL MARKET GROWTH IN NIGERIA

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