Stock Market Volatility and Macroeconomic Performance in Nigeria

Abstract This study is on the effect of stock market volatility on some selected macroeconomic performance indicators in Nigeria. The first objective was the identification of the determinants of stock market volatility in Nigeria. The second objective was the investigation of the effects of stock market volatility on some selected macroeconomic performance indicators in Nigeria. The third objective was the examination of the causal relationship between stock market volatility and selected macro-economic performance indicators in Nigeria from 1981-2019. The study used secondary data sourced from central bank of Nigeria and World Bank databank. The variables that turned out to be significant determinants of stock market volatility using the ECM are exchange rate, total savings, consumer price index, foreign direct investment and inflation.The results from the findings reveal the presence of long run relationship between the variables. This was shown using the Johansen co-integration test which helped to check for long run relationship between the variables. The results further reveal that causality exists between the variables.This study therefore recommends that the government of Nigeria should make consensus effort towards the revitalization and improvement in the overall efficiency of the significant determinants of stock market volatility in Nigeria, because if this improves the Nigerian stock market it can boost the growth of the overall economy.