The Role Of Nigerian Stock Exchange In The Development Of The Nigerian Economy (a Study Of First Bank Plc Okpara Avenue Enugu)

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In this research work titled “the role of Nigerian Stock exchange in the development of Nigerian economy” with specific reference to First Bank Plc Okpara Avenue Branch Enugu the researcher To evaluate the role of Nigerian stock exchange in the development of Nigerian economy. determined the various activities of Nigerian stock exchange. Examined the instruments of the Nigerian stock exchange. created awareness of mechanics of stock exchange transaction and to increase communication facilities.  Data for the study was sourced from two main sources which include Primary and Secondary sources of data Collection. Primary data: questionnaires and oral interviews were used to collect information from the respondents. Secondary data: journals, and other relevant materials relating to the area of my investigation will be review. Extensive literature review was carried out on the direct literature and indirect literature on books, journals and past works. The research instrument used in this study includes oral interview and questionnaire. The questionnaire is structural as to contain both close and open ended question. Simple tables and percentages were used in treatment of data.  The researcher found out that The Nigerian stock exchange functions as an institution for sourcing capital development through the issues of public debt instruments. It also acts as the capital meeting place for members to buy and sell existing stock and shares and for granting quotations to the new issues through the provision of opportunities for raising new or fresh capital. Based on the findings the researcher recommends that government should enlightened the masses on the need and the importance of the stock exchange in the country.  Government should encourage the establishment of branches office of the stock exchange in all local areas of the federation. Employment of Qualified Staff: Qualified staff should be employed. This is necessary so that the investors will be given efficient services.




Title page                                                                                                    ii

Approval page                                                                                             iii

Dedication                                                                                         iv

Acknowledgement                                                                             v

Abstract                                                                                                      vii

Table of contents                                                                               viii


1.0        Introduction

1.1 Background of the study                                                             1

1.2 Statement of Problem                                                                  4

1.3 Objectives of the Study                                                                6

1.4 Research Questions                                                                     6

1.5        Research Hypotheses                                                               7

1.6        Significance of Study                                                                        8

1.7     Scope of the study                                                                             9

1.8 Limitation of the study                                                                9




2.0     Review of Related Literature                                                   12

2.1     Membership of Nigerian stock exchange                                  19

2.2     Development of the Nigeria stock                                             21

 2.3    Role of stock Brokers and Jobbers in Nigerian stock

Exchange                                                                                          24

2.4 It’s development to Nigerian economy                                         26

2.5     The Nigerian securities and exchange commission (NSEC)37

2.6        Economic Functions of the Nigerian stock exchange               48     

2.7        Management of the Nigerian stock exchange                           54


3.0 Research Design and Methodology                                              60

3.1     Research Design                                                                      60

3.2 Area of the study                                                                                   61

3.3     Population of the study                                                           61

3.4 Sampling Method                                                                                 62

3.5     Research Instrumentation                                                       64

3.6     Validity and Reliability of the instrument                                65

3.7 Sources of Data Collection                                                                    66

3.8 Method of Data Analysis                                                             68


4.0 Presentation and Analysis of Data                                               69

4.1     Data Presentation                                                                    69

4.2 Testing of Hypothesis                                                                            79


5.0     Summary of Findings, Conclusion and Recommendations

5.1 Findings                                                                                               84

5.2     Conclusion                                                                              84

5.3     Recommendations                                                                             85

Bibliography                                                                                     87

Appendixes                                                                                        88





The Nigerian stock exchange which started as the Lagos stock exchange Act of 1961, following the report of the Bare back committee, set up May 1958, by the Federal Government, to advice on ways and means of a share market in Nigeria.

The Lagos stock exchange was incorporated on the 15th September, 1960. But began operations on the 2nd December, 1977 transformed into the Nigerian stock exchange with branches now in Kaduna, Port-Harcourt, Ibadan and Onitsha.

The Nigeria stock exchange presently, there are six branches of Nigeria stock exchange with each branch having a trading floor. The branch in Lagos was opened in 1961, Kano was opened in 1989, Kaduna 1978, Onitsha 1990, Ibadan August 1990 and Port-Harcourt 1980.

Lagos is the head office of the Nigeria stock exchange. Besides Abuja is now included 2001. again, the Nigerian stock exchange started only with nineteen securities and traded on it’s floors in 1961, now has 257 securities made up of 36 Federal government stock, 62 cooperatives or industrial loans and debentures) preference stocks and 159 equity/ stock of companies, all was a total market capitalization of approximately three half billion. During the early years, trading was however, low due to the slow ratio of capital formation, lack of awareness of mechanics of stock exchange transaction and poor communication facilities.

However, with the implementation of the Nigeria enterprises promotion Decree, listing was booted and by 1980, the exchange registered a total of 91 firms. The market capital of equities only has grown to over N59, 924 billion (fifty nine billion nine hundred and twenty four million naira. There are 48 listed firms whose stock are traced on the floor of the exchange, all grouped by sub-sectors.

The idea of a stock exchange for Nigeria came into being from the report of Professor R.H. Darback committee published in 1950 which recommended as follows.

1.           The creation of facilities for dealing in shares.

2.           The establishment of rules regulating transfers.

3.           Measures to encourage savings and issues of securities of government and other organization.

This report was accepted by the federal government and in September 1960, the Lagos stock exchange was incorporated as a non-profit making organization through the combination of effort from the following.

1.           Central bank of Nigeria (CBN)

2.           Nigerian Industrial Development (NID)

3.           The Federal Government

4.           Nigeria business community. (NBC)

The subscribers to the memorandum and Article of association of the Lagos stock exchange at the time of incorporation include:

1.           Alhaji Shehu Bakar

2.           Chief Theophilus Adebayo Doherty

3.           Sir Odumegun Ogukwu

4.           Mr Akintola Williams

5.           C.Y. Boneings and Co. Nigeria Limited

6.           John Holt Nigeria Limited

7.           The Investment Company of Nigeria Limited.

The above listed names are men that contributed to the memorandum and article of association of the Lagos stock exchange.


The Nigerian exchange market was supposed to have contributed greatly to the development of Nigerian economy in many arrears but the unawareness of the public on the instrument that the traded by the stock exchange posses a huge problem to the Nigerian economy. The number of people that make use of the service of the stock exchange market in Nigerian is too low.

Additionally, most people are not abreast of the duties and responsibilities of the stockers and brokers. These two bodies play a role in the transaction of the stock exchange market in Nigeria. Since there duties and responsibilities are not properly known, these tend to present problem to the exchange.

Lastly, the Nigerian stock exchange is not fully financed by the Federal government and as a result, the exchange does not have adequate capital or fund to meet its obligations. The encouragement and incentives which they received from the Federal government is nothing to write home about, this study will analyze in details the contribution of the Nigerian stock exchange to the Nigerian economy. The Nigeria stock exchange market can equipt itself to thereby taking its rightful position as the solution of the problem as the case may be, the contribution to the solution of the problem is that the Nigeria stock exchange (NSE)  should make sure that their stokers and brokers abreast of the duties and responsibilities for that will contribute greatly to the development of Nigeria economy and that will also increase the number of people that make use of the services, because Nigeria capital market lack the liquidity needed for a sustainable bond market.

Therefore, this study will analyze in details the contribution of the Nigerian stock exchange to the Nigerian economy.


In order to ensure meaningful and adequate performance of the Nigerian stock exchange, the objective of the study could be stated as follows.

1.          To evaluate the role of Nigerian stock exchange in the development of Nigerian economy.

2.          To determine the various activities of Nigerian stock exchange.

3.          To examine the instruments of the Nigerian stock exchange.

4.          To create awareness of mechanics of stock exchange transaction and to increase communication facilities.

5.          To Proffer possible solutions to the problems identified.


Ho: Nigerian stock exchange does not play any role in the development of Nigerian economy.

H1: Nigerian stock exchange play significant role in the development of Nigerian economy.

Ho: Nigerian stock exchange is not faced with any problem in carrying its objective.

H1: Nigerian stock exchange is faced with so many problems in carrying its objective.



The following research questions were formulated by the researcher:

1.  What are the roles of Nigerian stock exchange in the development of Nigerian economy?

2.  What are the instruments of the Nigerian stock exchange?

3.  What are the various activities of Nigerian stock exchange?

4.  Does Nigerian stock exchange face any problems  in carrying its objective?

5.  What are the duties and responsibilities of those two bodies. The stokers and brokers?


The following benefits derived from this study are stated as follows.

1.          Creation of facilities for dealing in shares.

2.          Measures to encourage savings and issues of securities of government.

3.          Establishment of rules regulating transfers.

4.          The development of economic growth in the capital market.

5.          Issues and investors in the Nigerian capital market have access to world class brokerage advisory port-folio etc.

6.          The Nigerian stock exchange makes the movement of money into business finance.

7.          Creation of ability to raise capital in the primary market and understanding the nature of the Nigerian capital market.


This project work focuses on the role of Nigerian stock exchange (NSE) in the development of the Nigerian economy with particular reference to first Bank Nigerian Plc Okpara Avenue Enugu.


The researcher in carrying out this study encountered numerous problems, which includes:

i.            Time constraints

ii.          Financial problem.

i.            TIME:– Time is one of the constraints to the researcher.  This is because the researcher is combining school activities and at the same time other activities and this made her unable to cover a lot of interesting areas and therefore limited her research work only at Enugu metropolis.

But this constraints have limited the researcher to carry out her research work effectively.

ii.          Financial problem:– This included lack of enough fund to move around and visit the various areas in the state, also lack of money to buy enough research material and journals which constitutes on impediment of to researchers high cost of transportation in the city and outside the city due to long distance also imposed its own limitation on the researcher.

From the above mentioned points the researcher tried her best to bring out in details, the point in which the study may not go beyond.



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