The Growth-Inducing Impact of Nigeria Capital Market on the Agricultural Sector

Abstract

The capital market performs many roles that are critical for the growth and development of an economy. Such roles include liquefying the economy, efficient allocation of resources, pooling of savings and reducing risk etc. There is paucity of capital in developing countries like Nigeria, thus the need to enhance the capital market. Despite the increased activities in the capital market, the real sectors of the economy are not feeling the impacts of these activities. The study was aimed at finding out whether the capital market has growth-inducing impact on the agriculture sector. The study employed co-integration techniques to achieve this purpose using time series data sourced from CBN bulletin from 1980-2012. The study found that capital market measures had statistically insignificant impact on agricultural output long run. This implies that despite the expanded activities in the Nigerian capital market over the years, there has not been any remarkable impact on the real sectors of the economy. On the basis of these findings some of these recommendations were proffered: removal of the impediments to the growth of agricultural sector; reduce the cost of doing business in Nigeria; there should be transparency in policy formulation and implementation etc.