MACROECONOMIC FACTORS AND BOND MARKET DEVELOPMENT: EVIDENCE FROM NIGERIA
Adeyemi Ayodele , Ismaila Olotu Abdullahi, PhD and Ahmed A. Mahmoud, PhD
Volume 12 Issue 1
Abstract
This research assessed the effect of macroeconomic factors on the bond market development in Nigeria. The study employed ex post facto research design. The population for the study consists of all entities and stakeholders involved in the Nigerian bond market. Based on the nature of the study, all the Nigerian bond during the period of study were selected. Relevant secondary financial data about macroeconomic factors (economic size, trade openness, inflation, economic development) were sourced from the Nigerian bond market, statistics bulletin of the Central Bank of Nigeria (CBN), the Fact Book of the Nigerian Exchange Group (NXG), the annual Reports of the DMO, the annual Report of the SEC, as well as the websites of the World Bank and IMF for the period from 2000 to 2023. The collected data were analysed using Pooled OLS regression and stationarity test was conducted on the respective variables of the model. It was found that economic size and economic development have a positive significant effect on the bond market development in Nigeria. Meanwhile, results reveal that trade openness and inflation have no significance influence with bond market development in Nigeria. It is recommended that policymakers should focus on strengthening macroeconomic fundamentals such as ensuring fiscal discipline, controlling inflation, and promoting inclusive economic growth alongside implementing policies that effectively translate economic scale and openness into tangible financial market. Keywords: Bond Market, Economic Development, Economic Size, Inflation, Trade Openness
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