IMPACT OF CAPITAL INVESTMENT IN NIGERIA ECONOMY
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IMPACT OF CAPITAL INVESTMENT IN NIGERIA ECONOMY
INTRODUCTION TO CHAPTER ONE OF THE IMPACT OF CAPITAL INVESTMENT IN NIGERIA’S ECONOMY
1.1 STATEMENT OF THE PROBLEM AND THE PURPOSE OF THE STUDY
Since its creation, the Nigerian capital market has been criticised for inactivity and failure to meet expectations (as described by Adam Smith in his book “the injury”).
This is because an active capital market is meant to effectively mobilise savings for investment objectives. It should be remembered that capital investment in all forms is possible provided there is a well-articulated capital market to assist business communities.
GOAL OF STUDY
In light of the aforementioned issues, which have resulted in a slower rate of capital investment when compared to first and second world countries, the purpose of this study is to investigate the extent of Nigerian capital investment and its impact on the Nigerian economy, with a view to suggesting improvements.
1.2 THE RATIONALE FOR THE STUDY
It is a well-known fact that a country’s capital investment must be virile for meaningful economic transformation, and a country’s economic strength is judged by how active or effective its capital is / or is executing its purpose function.
According to Karl Max, the Nigerian economy is characterised by “a low rate of industrialization, a low rate of productivity, import dependence, visions of poverty,” all of which are features of underdevelopment.
1.3 THE SIGNIFICANCE OF THE STUDY
The importance of this study will thus help the government and the central bank in order for them to plan, begin programmes and actions, and provide a solid framework for government monetary policies to sustain the economy.
This project work will be beneficial to institutional operators of the money and capital markets, other financial institutions such as commercial banks, non-banking financial societies such as cooperative societies,
insurance and reinsurance companies, business communities, government companies and parastatals, as well as future researchers in the academic field who want to share this world of experience.
1.4 BACKGROUND OF THE STUDY
Savings may be channelled towards unsuccessful companies due to a lack of sufficient infrastructure from work to absorb saving.
However, as the need for economic development grows, so does the need for an organised and well-developed capital market to encourage savings and investment, as well as to provide opportunities for savers to participate in the ownership and/or returns of business enterprises, which will encourage more capital investment.
In this contribution, G.A Akamiokhor stated, “in order to ensure that capital is efficiently allocated between competing ends and also to channel savings into investment for economic growth and development.” It is critical to create a well-coordinated capital market and investment structures.
1.5 DEFINITION OF THE PLAN
According to Dr. Mrs. Toyin Philips, the capital market is “the complex of institutions and mechanisms through which medium and long term funds are pooled and made available to businesses, governments, and individuals, and through which instruments already outstanding are transferred.”
As a result, the capital market and investment operate as a stimulant for any nation’s economic progress. This is due to the capital market serving as a conduit for the transfer of cash raised from areas of high need for meaningful investment. When such money are carefully invested, they will undoubtedly result in significant economic shifts.
Furthermore, the cash helps to eliminate the requirement for foreign sources of funding, which typically have onerous terms linked to them.
An active or established capital market should also allow indigenous people to participate in the ownership of foreign businesses.
It may be appropriate to mention that there are a number of issues that are causing Nigerian capital markets performance capital investment to fall short of expectations,
and it is in light of this that I have decided to conduct research into Nigerian capital investment in order to identify these issues, understand the impact thus far, and possibly offer solutions to increase capital investment growth for Nigeria’s development.
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