Stock Market Indices and Economic Development Drive in Nigeria

This study examined the effect of stock market indices on economic development in Nigeria over the period 1986 to 2025. The main objective was to determine how the All-Share Index, the total value of equities traded on the Nigerian Exchange, and corporate bonds influenced economic development proxied by the Human Development Index. The study adopted the ex-post facto research design and relied the Fully Modified Ordinary Least Squares technique to estimate the model. The findings revealed that the All-Share Index had a positive and significant effect on the Human Development Index, implying that improvements in overall market valuation and investor confidence had supported economic development in Nigeria. The total value of equities traded also had a positive and significant effect, suggesting that market liquidity and trading activity had enhanced development outcomes. However, corporate bonds had a positive but insignificant effect, indicating that the corporate bond market had not yet developed sufficiently to exert a strong measurable influence on human development. Based on these findings, the study recommended that the Nigerian Exchange Group, Securities and Exchange Commission, and Central Bank of Nigeria should strengthen market transparency, disclosure standards, and investor protection to sustain confidence in the equity market. It also recommended that the Nigerian Exchange Group and Ministry of Finance should deepen market liquidity by removing trading frictions and widening investor participation, while the Securities and Exchange Commission, FMDQ Securities Exchange, Debt Management Office, and Central Bank of Nigeria should expand the corporate bond market through lower issuance costs, simplified approval processes, and stronger credit enhancement mechanisms.

Stock market indices, Economic development, Human Development Index

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