Nigerian deficit financing and bond market development

Martins, Afolabi Olayomi (2017-03)

Thesis (MBA)--Stellenbosch University, 2017.


ENGLISH SUMMARY : This study investigated the impact of deficit financing on bond market development and its impact on the growth of the Nigerian economy for the periods 1986 to 2014. Total bond capitalization, the dependent variable used within the ambit of this study, was used as a proxy for bond market development. The explanatory variables used in this research study include deficit finance, gross domestic product, domestic debt and public debt. The study employed the Vector Error Correction Mechanism methodology to evaluate both long-run and short-run impacts on the system. The study established that deficit financing has significant negative long-run and no significant short-run impact on the development of the Nigerian bond market. The study recommended that the Nigerian Government should ensure that funds sourced through the issuance of bonds in the market are deployed to productive use which, in turn, will ensure economic growth and development, encourage the development of corporate bonds in the market to complement government bonds that will ensure a balanced bond market, as well as to maintain a domestic public debt level that will not crowd-out private bonds in the market.

AFRIKAANSE OPSOMMING : Geen opsomming beskikbaar.

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