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The capital market has been perceived to be instrumental to the growth of any country from the stance point of the predictive power it has on the finance and economic activity of the nation. The capital market is not just a trading floor where securities are traded but refers to places where the individuals who require extra reserve search out other people who wish to contribute their abundance and it’s also a place where members can manage and also spread their risks. There has been a great and heightened concern for the capital market which is adduced to the reason of the immense benefits that is associated with it. For economies to compete internationally and to experience continuous growth it has been attributed to the activities of the capital market which is a bed rock of any business. The variations and degree of sensitivity in the level of economic activities can be measured through the activities of the capital market. This section shall attempt to espouse both theoretically and evidences from literatures on the subject discuss restricting it to the Nigeria capital market the, its challenges amongst other related concepts.
According to Osaze and Anao (1999) they posited that the capital market serves as a foundation for the success of any financial system because it provides funds that is needed for financing monetary organizations and businesses which is built up in the program of the government. It was further buttressed by Ilaboya and Ibrahim (2004) that the capital market is used as an instrument in measuring the level of economic activities of any nation or society.
2.1 CONCEPT OF CAPITAL MARKET
The capital market was described by Mbat (2001) to be an institution where funds for long term are deployed from the areas of plenty to areas of scare resources of the sector of the economy. The surplus sector of the economy however has unlimited access to the capital market unlike the sector with scarce resources. This limited access is due to the fact that the providers of capital must ensure certain guarantee and to ensure that lenders are protected from risk. Some certain obligations need to be fulfilled by those seeking capital before access can be granted which has a significant impact for the economic growth of any country such as Nigeria.
Levine and Zervos (1998) opine that the capital market promotes savings which will increase the rate of savings if mobilization is enhanced. The fundamental challenge of growth is the sufficiency in terms of long term funds which savers are willing to commit which impedes economic growth. In the last few decades it has been discovered that there are has been a significant increase in the activities of the capital market which suggest great concern for the market in increasing and improving economic activities translating to boom in the economy.
Capital formulation and allocation makes the capital market efficient and reliable as there is a striking balance in the distribution of resources that are scared for optimal use in the economy. This process reduces the dependence on short term borrowing for long term financing of projects. These long term projects funded by the capital market are capable of providing the nation with basic social amenities and infrastructure for a sustainable development (Sule ; Momoh, 2009).
Levine (1991) gives two processes where the capital market can help in the area of financial integration and intermediation to accelerate the level of growth to be the availability of property changes and portfolio investment diversification.
2.2 OVERVIEW OF THE NIGERIAN CAPITAL MARKET
One of the significant mainstays of the capital market which is the financial institution is the capital market which provides long term funds for financing businesses and other sectors of the economy which is also the initiative of the government in general to make sure that the capital market operates efficiently. It is a market that is regulated by the Security and Exchange Commission (SEC), which is the peak body that regulates the Nigerian capital market. The capital market is such that deals with bonds, stock and debentures which usually last for more than three years and became operational after the commencement and operations of the Central bank in 1959 followed by the establishment of the Lagos Stock Exchange in 1961. Although, securities were already being floated as far back as 1946. The need however to have an organized stock exchange market became imperative and as a result the need for the Nigeria capital market to be established to satisfy the following reasons: to break the challenge of bond sales, creating an avenue for lending for the purpose of long term, to ascertain that long term funds are used for growth and development and grant international business the opportunity of trading their shares to interested participants. And the major participants of the capital market in Nigeria are the stock brokers, the Central Bank of Nigeria (CBN), government, Nigeria Stock Exchange (NSE), Nigeria Securities and Exchange Commission (NSEC), Quoted companies and many more.
The capital market is viewed as a very strong institution that is saddled with the responsibility of making long term funds available to various sectors of the economy which consists of the households, firms and even the government to stimulate growth and development (Nyong 1997). The evolvement of the capital market as well as the stock market gives a variety of chances for funds mobilization, efficient distribution and allocation of resources and ultimately providing relevant information for performance (Emenuga, 1997).

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