Bond Market Development and Economic Growth in Nigeria

This study examined the Effect of Bond Market Development on the Economic Growth of Nigeria. The study adopts the efficient market theory model by Fama which advocates for a capital market where ''investment capital must be allocated to its most productive use'' in one hand and on the other hand a ''market where investors cannot beat the market or find securities that are mispriced'' ''such that their stock constantly outperform the market. The study employed the use of secondary data for the period of 2003- 2020 which were sourced from CBN online published bulletin and report. Bond market capitalization, Bond market size, Government bond performances were considered as proxies for the independent variable. Real Domestic Product RGDP was used as proxy for dependent variable. Findings revealed that bond market capitalization and government bond performance have insignificant negative effect on Nigeria's RGDP whereas bond market size has insignificant positive effect on the real RGDP. The paper concludes that government borrowing with respect to public debt has not shown significant effect on Nigeria's economic growth.