Abstract:

This study examined the Impact of bond market on economic growth of Nigeria. Developing countries have not used the opportunities available in the bond market to finance their development. Emphasis has always been on using bank finance.  The proxy for Economic growth is gross domestic product while bond market performance was measured by bond market capitalization, volume of transaction and total new issues. The technique employed was multiple regression as tool of analysis for the study. The findings of the study show that the bond market has positive and significant impact on the Nigerian economy within the period of the study (1981-2016). The study found out that Bond market capitalization has contributed to the economic growth in Nigeria. Volume of transaction increases the demand of securities and eventually investment and Total new issues increases the amount of trading activities of the market and finally transcend in improving the economic growth of the country. The study therefore, recommends amongst others that the Central Bank of Nigeria (CBN), the Nigerian Stock Exchange (NSE) and Security and Exchange Commission (SEC) should ensure free flow of information in the market. This is necessary in order to attract more investors and increase new issues which will automatically increase the quantum of market capitalization that will result in improving the performance of the Nigerian Bond market.