Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective
Macroeconomics and finance drive bond markets in developing countries, allowing governments to raise money for businesses and infrastructure. However, many factors in developing countries like Nigeria hinder the growth of the bond market. This study investigates a novel contribution by focusing exc...
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| Format: | Article |
| Language: | English |
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Jurusan Ekonomi Pembangunan Fakultas Ekonomi Universitas Sriwijaya
2024-12-01
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| Series: | Jurnal Ekonomi Pembangunan |
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| Online Access: | https://jep.ejournal.unsri.ac.id/index.php/jep/article/view/23107 |
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| author | Salisu Garba Abdullahi Ajibu Jonas Riliwan Olalekan Olanrewaju Ebrahim Omar Basalma |
| author_facet | Salisu Garba Abdullahi Ajibu Jonas Riliwan Olalekan Olanrewaju Ebrahim Omar Basalma |
| author_sort | Salisu Garba Abdullahi |
| collection | DOAJ |
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Macroeconomics and finance drive bond markets in developing countries, allowing governments to raise money for businesses and infrastructure. However, many factors in developing countries like Nigeria hinder the growth of the bond market. This study investigates a novel contribution by focusing exclusively on the Nigerian bond market and considering a set of macroeconomic drivers that have not been studied collectively. The study applies the Autoregressive Distributive Lag (ARDL) model to examine the short-run dynamics between key macrofinancial drivers and the Nigerian bond market. The findings show that an increase in fiscal deficit does not support the development of the bond market in Nigeria. Similar results are found for GDP per capita, inflation, interest rates, and banking scale; all negatively affect bond market development. However, domestic debt and stock market development positively promote bond market development. The policy implications offered from these findings are to redirect their spending to projects that have the potential to stimulate economic activities that help the government generate more revenue. Policymakers should also cut unnecessary spending on recurrent expenditure, which is a significant part by implementing efficient fiscal discipline.
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| format | Article |
| id | doaj-art-017ed08c26164a3bbfcd91e65fa7cfdf |
| institution | OA Journals |
| issn | 1829-5843 2685-0788 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Jurusan Ekonomi Pembangunan Fakultas Ekonomi Universitas Sriwijaya |
| record_format | Article |
| series | Jurnal Ekonomi Pembangunan |
| spelling | doaj-art-017ed08c26164a3bbfcd91e65fa7cfdf2025-08-20T02:20:45ZengJurusan Ekonomi Pembangunan Fakultas Ekonomi Universitas SriwijayaJurnal Ekonomi Pembangunan1829-58432685-07882024-12-0122210.29259/jep.v22i2.23107Boosting Nigeria's Bond Market: Evidence from Macroeconomic PerspectiveSalisu Garba Abdullahi0Ajibu Jonas1Riliwan Olalekan Olanrewaju2Ebrahim Omar Basalma3Department of Economics, School of Arts and Social Sciences, Jigawa State College of Education and Legal Studies, Ringim, NigeriaDepartment of Economics, Faculty of Economics and Business, Universitas Islam Internasional Indonesia, Depok, IndonesiaDepartment of Economics, Faculty of Economics and Business, Universitas Islam Internasional Indonesia, Depok, IndonesiaDepartment of Economics, Faculty of Economics and Business, Universitas Islam Internasional Indonesia, Depok, Indonesia Macroeconomics and finance drive bond markets in developing countries, allowing governments to raise money for businesses and infrastructure. However, many factors in developing countries like Nigeria hinder the growth of the bond market. This study investigates a novel contribution by focusing exclusively on the Nigerian bond market and considering a set of macroeconomic drivers that have not been studied collectively. The study applies the Autoregressive Distributive Lag (ARDL) model to examine the short-run dynamics between key macrofinancial drivers and the Nigerian bond market. The findings show that an increase in fiscal deficit does not support the development of the bond market in Nigeria. Similar results are found for GDP per capita, inflation, interest rates, and banking scale; all negatively affect bond market development. However, domestic debt and stock market development positively promote bond market development. The policy implications offered from these findings are to redirect their spending to projects that have the potential to stimulate economic activities that help the government generate more revenue. Policymakers should also cut unnecessary spending on recurrent expenditure, which is a significant part by implementing efficient fiscal discipline. https://jep.ejournal.unsri.ac.id/index.php/jep/article/view/23107Bond marketFiscal deficitDomestic debtGDPInflation rate |
| spellingShingle | Salisu Garba Abdullahi Ajibu Jonas Riliwan Olalekan Olanrewaju Ebrahim Omar Basalma Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective Jurnal Ekonomi Pembangunan Bond market Fiscal deficit Domestic debt GDP Inflation rate |
| title | Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective |
| title_full | Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective |
| title_fullStr | Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective |
| title_full_unstemmed | Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective |
| title_short | Boosting Nigeria's Bond Market: Evidence from Macroeconomic Perspective |
| title_sort | boosting nigeria s bond market evidence from macroeconomic perspective |
| topic | Bond market Fiscal deficit Domestic debt GDP Inflation rate |
| url | https://jep.ejournal.unsri.ac.id/index.php/jep/article/view/23107 |
| work_keys_str_mv | AT salisugarbaabdullahi boostingnigeriasbondmarketevidencefrommacroeconomicperspective AT ajibujonas boostingnigeriasbondmarketevidencefrommacroeconomicperspective AT riliwanolalekanolanrewaju boostingnigeriasbondmarketevidencefrommacroeconomicperspective AT ebrahimomarbasalma boostingnigeriasbondmarketevidencefrommacroeconomicperspective |