This study takes a look at the impact of the capital market in the development of the Nigerian economy. The main objective includes; identifying the importance of the capital market. Data were collected from the Central Bank Statistical Bulletin from the period of 1992 to 2007 and the Ordinary Least Square and cochrane – Orcutt iterative methods were used to analyze the data. It was discovered that the capital market has not contributed positively to the development of the Nigerian economy. However, there is a positive correlation between the rate of transactions in the capital market and the development of Nigerian economy. It is recommended that stringent requirement for entry into the capital market should be relaxed and adequate publicity should be given to the activity at the capital market, it is believed that when these recommendations are implemented, the impact of capital market on the economy will be positive.
Key word: Capital market, economy, development.
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