Bond Market and Economic Growth in Nigeria

Abstract

Prompted by the need to assess the influence of bond market on the Nigeria’s economy , this study examines the nature of the  interrelationships between Nigeria’s gross domestic product and various bond market components  over the period 1981-2021. The study employs stationarity test, co-integration test, error correction (ECM) and Granger causality test. All the variables were stationary at first difference, the co-integration test reveals a significant relationship between the study variables. The ECM results show that  corporate bonds (CBOND) and federal government Bond(FGNBOND) are significantly related to Nigeria’s gross domestic product while the Granger causality tests indicates that all the independent variables support and promote growth of Nigeria’s economy. The study concluded that all the bond types are valuable in predicting Nigeria’s economic growth. It is recommended that Nigeria’s government should encourage or promote the study bond types in order to create a more viable business which will promote more confidence in the investing public

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