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CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

To understand the Nigeria Economy there are two crucial document the Nigerian Development plant and Annual budget, which in general the plan given a ten  years perspective of the economy five before and fire years. Hence budget give two years perspective. One year before and up date the plan on an Annual basis. Darning from the perspective, the think, objective and strategic of the economy are established. The plan and budgets also specify the policy thrust for Achiving the set objective broadly these are fiscal and monetary policies. While fiscal policy involves measures or combination of measures in government Revenues and expenditure monetary policy involves measures or combinational of measures to influence or regulate the volume price of direction of money and credit. 

While the two instruments are analytically different they have a common objective of influencing Aggregate economic activity to achieve the overall economic objective of the nation. Capital market are markets in which under and investor provides long-term fund in exchange for financial assets offered by borrowers or holders- it is also where long- term financial assets are bought and sold and has and original maturity of more than one year. Capital market provide liquidly for financial assets, thus making investors more willing to hold them.

Improvements in information, functioning and efficiency in capital market approve liquidity and hence facitate the flow of fund into investments, capital market activities, started prior to 1960. Infact two federal government stock 3 1/4  percent first development loan stock issued on 1940 and 1959 respectively the Lagos Exchange did not commence operation until 1961 from the exchange had only 14 companies up to 1971, but this situate has reversed in the period between 1971 and 1974 when the number reached 34 in order words, government fiat accounted for the relatively rapid growth of exchange.

1.2   STATEMENT OF THE PROBLEM

With the increase in the security and exchange commission valuation activities one is left to say that the Nigeria capital market is enhancing it’s performance there by contributing to the growth of the economy. ( A total of 253 securities, involving 1.734 billion shares valued at 2.033 billion were assessed by securities and exchange commission in 1989 compared with 129 securities with 593.4 million in the proceeding years).

1.3    OBJECTIVE OF THE STUDY

The main aim and objectives of this study involves        around the following:

1.To identify the contributions of the Nigerian capital market in our Economy.

2.To explain what Nigerian capital market is all about.

3.To know the performance of the Nigerian capital market toward growth of the economy.

4.To identify the problems of the N.C.N

5.To make suggestions for improved performance

1.4  SIGNIFICANCE OF THE STUDY

The market for long-term government securities is guide important because government securities provide most of the ultimate liquidity that is important whenever the possibility of substantial default or other obligation occurs. Other government security instrument are income tax management Act of 1961 and national provident fund Act of the former provides tax incentives of pensions and provident fund which the later restrict investment and debenture listed on exchange.

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