IMPACT OF THE NIGERIAN STOCK EXCHANGE ON CAPITAL FORMATION (1990 – 2014)

ABSTRACT

This study was carried out to determine the effect of stock market on capital formation in Nigeria. The variables included in the model were, Gross Fixed Capital Formation, value of share traded, interest rate, inflation rate, commercial bank investment indicator, and Stock Market Capital. Data were sourced from CBN statistical bulletin (2014). The study employed OLS technique to determine the effect of stock market on capital formation. The empirical finding shows that stock market capital, commercial bank investment indicator, inflation rate, interest rate, value of share traded and Gross Fixed Capital Formation. Based on the findings, the following recommendations were made. The total liberalization of the financial sector and encouragement of Nigerians to take advantage of the stock exchange.

CHAPTER ONE
INTRODUCTION

1.1 Background to the Study
The influence of colonialism on Nigeria cannot be over emphasized. The influx of white explorers, traders and missionaries led to the development of settlements that differed from the traditional domestic environment. These new settlements were designed to reflect the norms, values and economic policies of the colonial masters in Africa, the land of blessed race, where the opportunists came to develop in order to colonize their resources for their good, was then left in vain hope(Allen, 2011).
Although primarily established for white settlers, the new settlements known as urban areas or township also served as a refuge for appreciable number of Africans who had in some substantial degree emancipated themselves from the constraints of traditional society. Among them were professional men, clerks and shop keepers with at least primary education, growing numbers of wage-earners and large number of farmers receiving cash income from growing crops for world market (Fage, 1978).
The projection of industrial capitalism in Africa produced well-defined urban classes’ people with technical skills. They wanted to lift themselves into the twentieth century world modestly symbolized by radios and bicycles and to enjoy freedom based on knowledge and a more advanced mode of production. These ambitions were feasible only in an urban settlement. Lagos is reputed as a big commercial city. It is predominantly inhabited by businessmen of various persuasions traders, big – time technicians and craftsmen, importers and exporters transporters etc. Even the few professionals like Teachers, Doctors, Lawyers, Accountants, and Engineers etc. have unwittingly imbibed the commercial tradition of the dominant group.
In Lagos you are either a businessman or you are nobody. In fact the influence of commerce is so pervading that the market unions have come to connote the defacto government or power broker in all of Lagos. The commercial nature of Lgos has also influence the attitude and life style of most residents. The rat-race syndrome is very pronounced. Everything is measured in terms of its worth in money. People do not have time for anything else but money. Parents do not even have time for their children. In some cases the children are surrounded by paid cooks, drivers and house boy/maids who attend to their needs while their parents are busy making money. This creates room for child abuse through neglect and over indulgence by parents. We can observe that the environment regulates the social, religious, academic and cultural inclinations of the child as other less fortunate children are abused through exploitation. For example, those employed as shop assistants may sleep in the shops. The typical day starts for such children of about 5.30am. The business continues up to 9pm since there is no legislation on shopping hours in Nigeria. Children serving as house helps are in similar situation. They wake up about 5:30 am and do household chores up to 7:30 am or even later. Some of these servants who attend school go to school already very tired. In some cases they walk a distance to school thereby worsening the situation. About 2.00pm when the school closes they go home to continue the household chores or carry clothes to sell in the streets. They come back late in the evening tired and sleep off. This routine is performed almost daily at the expense of the children’s studies. The child who hopes to grow up and become a professional is subjected to social constraints that are likely to obstruct his progress. Some of the constraints are child labour, street hawking, street begging, early marriage, child abandonment, child prostitution, child battering, sexual and physical abuse and therapeutic abuse by fake traditional healers (Ebigbo, 1988, Echezona, 1991). The environment is characterized by models that cherish aggression act-rich syndrome, substance level ambition and disregard of Education.
It is also necessary to note that the surrounding or environment of a student influences their performance. Learning and reading begins in school but the first foundation of the child begins at home (Binkley 2008).

1.2 Statement of the Problem
The poor academic performance of pupils in schools in Lagos educational environment has recently become a cause for serious concern. It has been observed by the researcher that some senior primary school pupils cannot write or read a letter. Others attend as many as three schools within their primary school career due to constant failures in a bid to avoid the shame of repeating a class. It has also been observed by the researcher that in Lagos and some other parts of Nigeria private school proprietors tend to boost the population of their schools by admitting students without a testimonial or statement of result and award fictitious results to ensure the promotion of such pupils to the next class. This ugly development has been attributed to many factors such as teachers’ poor attitude to work; poor infrastructure, examination malpractice; lack of qualified teachers; truancy; poor motivation; Non-payment of salaries and the neglect of instructional media by teachers etc. The secondary school features the highest number of impressionable learners and consumes a greater percentage of the government budgetary allocation to education, hence the need to investigate the influence of environment on the academic performance of pupils in Lagos L.G.A.

1.3 Research Questions
The following research questions were formulated to guide the research.
1.) Does noise pollution hinder the development of memorization skills by pupils?
2.) Does the presence of rich but illiterate businessmen discourage excellent academic performance or behaviour in class?
3.) Do Pupils who indulge in so much domestic chores have poor academic performance than pupils who do not?

1.4 Objectives of the Study
The general objective of this study is to investigate the influence of learning environment on the academic performance of secondary school pupils. The following specific objectives are to guide the study:
1. To determine the extent to which a noisy environment hinders the development of memorization skills by secondary school pupils.
2. To find out how the presence of illiterate but rich businessmen affects the behaviour of primary school pupils towards learning.
3. To ascertain the ways in which the home environment affects the performance of primary school pupils at school.

1.5 Significance of the Study
This study on the influence of environment on the academic performance of pupils in secondary school will facilitate learning by enriching the knowledge of parents on the adverse effect of child labour and hawking on learning. It will create awareness on the importance of interaction and co-operation between parents and teachers for the success of pupils in learning activities. It will improve the attitude of pupils towards academic work through internal and external motivation of teachers and parents. It will contribute to the volume of existing literature on the role of environment factors on pupils learning. It also will sharpen teachers understanding of the root causes of some academic problems in the secondary school. The insight derived from that will help to prefer better solution to the problem. It will promote the development of the spirit of hard work, self-reliance and self-control among primary schools pupils.
The result gotten from this study will challenge the ministry of education to live up to her duty by making the infrastructure available for the creation of better learning environment. This study will highlight the importance of community participation through the P.T.A. in school affairs to check deviant behaviour resulting from the environment. Finally, it also will highlight the danger of monetized value system with its attendant; ‘corruption’ because money is only useful and valuable in the hands of an informed person.

1.6 Definition of Concepts
The following concepts were defined:
Influence:
According to the Sun Mobile Dictionary, the term influence is the “power to affect another”. The Oxford Advanced learner’s dictionary defines influence as “the effect that somebody or something has on the way a person thinks or behaves or on the way that something works or develops”. The concept influence, as related directly to this study, refers to the power the environment has on the academic performance of pupils,more especially, in all Local government area of Lagos State.
Environment:
The Sun Mobile Dictionary defines Environment as “surrounding, things, conditions, etc.” The Oxford Advanced learner’s dictionary defines it as “the conditions that affects the behaviour and development of somebody or something; the physical conditions that somebody or something exists in”. In essence, the concept environment refers to the surrounding of secondary schools in Lagos state. It can also be defined as the conditions that affect the behavior and development of pupils especially in primary schools.
Academy:
The Sun mobile dictionary refers to the concept academy as a “school”. A school on the other hand is a place of learning. A school is a place where children are thought (Oxford mini School Dictionary: 2007). A primary school can therefore be called an Academy.
Performance:
The Oxford advanced learner’s dictionary defines the term performance as “How well or badly you do something”. Performance as directly related to this study can also be defined as how well or badly pupils of Primary schools do in there academic work.
Academic Performance:
This can be define as the score a child or individual obtain in test or examination based on his or her learning experiences.
Socio status:
This is the total state of an individual based on inequality in terms of occupation, level of education and other societal issues defined by the environment.
Socio- cultural background:
This is the social and cultural makeup of an individual in relationship with his or her environment.
Education:
This is a formal instruction or training given to a child in school. According to the 6th edition of the Oxford dictionary, it is a process of teaching, training and learning, especially in schools or colleges to improve knowledge and develop skills.