INTRODUCTION

The Capital Market exists to provide long term capital to both government and co-operate bodies for incentives, socio-economical and infrastructural development purposes.

The Capital Market deals with financing instruments of long-term nature. These instruments include equities (ordinary shares) and bonds. The Capital Market is different from the money market in terms of the maturity profile of the instrument issued and traded.

The Money Market especially consists of short term instruments, often of less than one year maturity such as banker’s acceptance. Commercial papers and treasury bills.

The Capital Market operates at two-levels, the primary where new issues or securities are raised from the investing public, with proceed going to the issuer and the secondary market where old or outstanding securities are bought and sold.

These markets cannot operate in isolation without anyone approaching the Capital Market which shall provide long term financing is being complemented by various project financing ranging from the private sector (individuals AND companies). Here, the Capital Market appears good option since the banking industry is not the ideals source for long term funds.

The study adopts a different prospective by closely looking at the importance of Capital Market its institution on project financing for the development of the Nigerian economy.

Also, there are various sources of finance in every economy, developed, developing or undeveloped. Those sources include, the Capital and Money Markets. Money Market is an avenue for short –term finances. It provides a mechanism for meeting the liquidity needs of the lenders and the short term requirement of the borrowers. This is done through the trading of some market instruments, which include treasury bills, call money. Treasury certificate, certificate of deposit e.t.c.

This study will therefore attempt to appraise the role of the Nigerian Stock Exchange (NSE) being one of the most active operators of the Capital Market in the generation of finance for public and private projects and also in developing the Nigerian economy.