Impact of Capital Market Fundamentals on Industrial Sector Growth in Nigeria: 1986-2024

Jason Baba Kwaghe, Sunday E. Ologunla and Justina Adaku Okoror
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Jason Baba Kwaghe: Department of Economics, Bingham University, Karu, Nasarawa State, Nigeria
Sunday E. Ologunla: Department of Economics, Bingham University, Karu, Nasarawa State, Nigeria
Justina Adaku Okoror: Prime University, Kuje Abuja

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 9, 7809-7824

Abstract: This study examined the impact of capital market fundamentals on industrial sector growth in Nigeria, using the All-Share Index (ASI), Equities, and Corporate Bonds as key indicators. The study utilized secondary time series data covering the period from 1986 to 2024, sourced from the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), and World Development Indicators (WDI). An ex-post facto research design was adopted, and the data were analysed using unit root testing, Engle and Granger cointegration analysis, and the Dynamic Ordinary Least Squares (DOLS) technique. The result showed that the All-Share Index had a positive and statistically significant impact on industrial sector growth, suggesting that strong overall market performance contributed to increased investment in the industrial sector. In contrast, Equities had a negative but marginally significant impact, indicating structural inefficiencies in how equity capital was mobilized and allocated within the industrial sector. Corporate Bonds had a strong positive and significant effect, highlighting their growing importance as a stable, long-term financing source for capital-intensive industrial activities. Based on these findings, the study recommended that the Securities and Exchange Commission (SEC) and Nigerian Exchange Group (NGX) strengthen investor protection, enforce transparency, and promote broader industrial participation in the stock market to sustain ASI growth. The Nigerian Investment Promotion Commission (NIPC) and CBN were advised to develop sector-specific incentives and policies that attract equity investment into industrial enterprises. Furthermore, the Debt Management Office (DMO) and SEC were encouraged to streamline corporate bond issuance processes and support credit enhancements to attract more institutional investors. These recommendations aimed to ensure that each segment of the capital market contributes effectively to financing sustainable industrial development in Nigeria. The study concluded that optimizing capital market performance is essential for accelerating the growth of Nigeria’s industrial sector.

Date: 2025
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