Capital Market and Unemployment in Nigeria

This paper examines how the Nigerian capital market affects unemployment in Nigeria with a view to identifying how the market has been able to curtail unemployment over the years or otherwise. It employes annual series data from 1986 to 2012 on unemployment, market capitalization and other data obtained from the Central Bank of Nigeria, Statistical Bulletin. The study adopts the Johansson cointegration vector error correction technique for data analysis. The result shows that unemployment has risen unabatedly since the adoption of Structural Adjustment Programme (SAP) with an average unemployment rate of 8.12 per cent for the period while market capitalization relative to the size the economy is 14.42 per cent. The analysis also shows that while, economic growth significantly curtails unemployment capital market development fails to limit unemployment. The stock market thus has grown over the years at the expense job creation in Nigeria. It is expected that efforts are geared towards efficient capital market development to enhance mobilization of funds for long term investments by firms and propel job creation along the value chain. The government should also focus on developing those labour intensive sectors of the economy while pursuing its economic growth policy.