FINANCING STATE GOVERNMENT PROJECT THROUGH THE CAPITAL MARKET PROBLEM PROSPECTS
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FINANCING STATE GOVERNMENT PROJECT THROUGH THE CAPITAL MARKET PROBLEM PROSPECTS
INTRODUCTION TO CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
Financing state government projects through the capital market has created many challenges in our country, and people are looking for solutions.
The researcher now wishes to ascertain the difficulties faced in funding the State government project through the capital market, as well as how the capital market aids in financing the State government project.
Furthermore, the researcher will discover the roles that the capital market has played in the funding of government projects. All of these points will assist the researcher in completing her work successfully.
1.2 RATIONALE OF THE STUDY
There have been a number of inefficiencies in the capital market funding of state government projects. As a result, the following are the reasons for this study:
i. To identify the issues confronting state government.
ii. To investigate potential solutions to these problems.
1.3 SIGNIFICANCE OF THE STUDY
The goal of financing the state government project through the capital market is to ensure the Nigeria government’s top goals and the capital market’s success.
As a result, the public and state governments will profit from this study in the following ways:
i. Offering facilities for the quotation and ready marketability of shares and stocks, as well as the chance and facility to raise new capital in the market.
ii. To give local options for mobilising long-term money for long-term purposes.
iii. Foreign businesses profit from the ability to offer their shares, giving the Nigerian public the option to invest in and participate in foreign firm shares and ownership.
1.4 BACKGROUND OF THE STUDY
In recent years, the state government’s function has expanded to encompass the provision of capital-intensive services and infrastructure. Most state governments, particularly in developing nations, have carried out such responsibilities with monies from external sources such as loans,
grants, and development assistance or subsidies over the years. Domestic resources, such as statutory allocations from federal accounts, internally generated cash, and domestic borrowing, have frequently supplemented these resources.
However, recent events have demonstrated that these sources are insufficient. Nigerians’ experience in funding capital projects has been comparable to that of other developing countries with significant oil wealth. As a result of the economic downturn caused by acute external stocks in the worldwide oil market,
capital projects have become increasingly important, and there has been a broad change in priority to the capital market in funding government projects. This term paper examines the opportunities and challenges of financing state government projects using financial markets.
This term paper, in particular, examines the potentials for capital market financing facilities such as stadiums, municipal markets, and industrial housing estates, among others.
1.5 DEFINITION OF THE TERMS
THE CAPITAL MARKET
This is a group of financial institutions established to make medium and long-term loans. It is a market for longer-term instruments such as government securities, corporate bonds, corporate shares (stocks), and mortgage loans.
BONDS FOR REVENUES
State or local governments issue these. They are often project-linked, with the expectation that the underlying projects will be available to pay both the principal and interest on the bonds from the earnings accruing to such initiatives. Water system market building, road and bridge construction, and hospital construction are examples of such undertakings.
INDUSTRY
Mining and quarrying, manufacturing, construction, electricity, gas, water, and sanitary services are examples of economic activity groups.
PRIMARY INFORMATION
These are facts organised or gathered by the researcher throughout the course of his research.
SECONDARY INFORMATION
The researcher gathered these facts. These facts were already in existence. It could be a document or anything else.
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