The analysis of Nigerian exchange group mechanisms on economic growth
Dr. Sani Abdul Rahman Bala and Mohammed Auwal Babangida
The NEG operates a platform for the purchase and sale of securities, which includes stocks, common stock, debentures, and government bonds. The NSE, like other stock exchanges across the world, is expected to influence the country’s economic growth. Therefore, this paper aims to statistically study the impact of stock exchange mechanisms on Nigeria's economic growth. To accomplish this goal, time-series data from the DMO, CBN, and NEG statistical bulletins were obtained for the years 1980 to 2020. The study adopted an econometric technique of analysis using the unit root test, co-integration, and regression model. The statistics reveal that government bonds, with a coef value of 0.070194 and a p-value of 0.0003, positively and significantly influence Nigeria's economic growth, proxied by GDP at 1%. Market cap shows a coef. Value of 0.134597 and a p-value of 0.0000, indicating a positive, significant influence on Nigeria's GDP at 1%. Similarly, the statistics show that listed securities have a coef. Value of -0.444153 and a p-value of 0.0257, indicating a negative significant influence on Nigeria's economic growth (GDP). The study concluded that Nigerian group exchange mechanisms (govt bonds, market cap. and listed securities) significantly propel the country’s GDP. The paper, therefore, recommends that the government put in place enough informational and infrastructural facilities that would enhance ease of access and participation in the NEG activities through effective sensitization and stock market advancements.