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 CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND OF THE STUDY

Broadly speaking, there are two kinds of chance revolutionary or discontinuous change which is gradually and common (suble) yet dynamic. It is this latter form of change that is advocated for the development of Nigerian securities market vis-avis the capital market as a means of sourcing funds for the public sector. Right from the day Nigeria returned their independence till date, the country has been searching for economic change and development that would bring better living for her feering population.  This economic change and development could only be made possible by the public sector with enough of finance for its long-term project. However, comes the vital role, which the Nigerian capital market plays in the development of the nation.  The public sector today knows no bound.  What was seen as the public sector twenty years back will be grossly inadequate of considered as the public sector of present day Nigeria.  Due to this seeming limitless nature of the public sector which embraces local, state and federal governments.  The expenditure of these various government are always on the increase.  But with the privatization and commercialization programme of federal government parastatals had either it runed down or put to an end to. The deregulation of the capital market is meant to bring about sanity to the operation of the capital market to foster the much needed role of providing capital or funds to the public sector for its financial obligations.

1.2   STATEMENT OF THE PROBLEM

In the course of this study some problems associated with the Nigerian capital market have been identified. These includes:

1.The frequent change of the federal government does not lead to changes in economic policies.  These changes may in turn affect the operation of the capital market.

2.With the final release of the deregulation guidelines of the capital market, the issuing houses now to securities valuation.  These could lead to inside dealings whereby those in position of information on securities yet to be made public to take such advantage and by up the securities.

3.The Nigerian capital market lucked infrastructural facilities such as reliable tele communication net work, date storage capacity etc.  From where required information can be called upon when necessary.

4.The corrupt manifestation by public officer rested with the responsibilities of taking care of government funds is a very great problem in Nigeria.

5.The legal arrangement meant to guide the operation of the capital market where virtually borrowed.  These prelude Nigeria comparies and even government establishments from engaging in the stock exchange trade actively.

1.3   OBJECTIVE OF THE STUDY

This research is wholly undertaken to examine the capital market and its financing impacts on government financing of the public sector. After the examination one should be able to know what the Nigeria capital market looks like, some of the contributions.  It has made so far in the economy of the nation through the various tiers of government.  This is to be done with following objectives in mind.

1. To critically evaluate the Nigeria capital market with regards to its operation as its affects the public sector.

2.  To examine the effect of economic liberalization which is blowing through the whole world, or the Nigeria capital market.

3. To examine the various ways or means by which funds are made available to public sector.

1.4   SIGNIFICANCE OF THE STUDY

In recognition of the nature of the study, and find that the study involves a lot of excuses and accuracy figures relating to statistical representations and schedules, the author adopted secondary sources data in preferences to any other.  The important of this study should be able to know what the Nigeria capital market looks like, and some of the contributions.  It has made so far in the economy of the nation through the various tiers of government.

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