Capital market development and infrastructural financing in Nigeria

Abstract

This study examines the effect of capital market development on infrastructural financing in Nigeria, with particular emphasis on healthcare expenditure. The study adopts an ex-post facto research design and employs annual secondary data covering the study period. Capital market development is measured using capital market turnover ratio (CMTR), all share index (ASI), and market capitalization (MCAP), while healthcare expenditure (HCE) represents infrastructural financing. Data are sourced from the Central Bank of Nigeria Statistical Bulletin and the Global Health Expenditure Database and analyzed using the Autoregressive Distributed Lag (ARDL) technique. The findings reveal that CMTR has a negative and statistically insignificant effect on HCE, while ASI and MCAP exert positive but statistically insignificant effects. Despite the individual insignificance of the capital market indicators, the model is jointly significant, indicating that capital market development collectively contributes to variations in healthcare expenditure. The study concludes that Nigeria’s capital market has not sufficiently translated its expansion into effective infrastructural financing, particularly in the healthcare sector. The study therefore recommends stronger regulatory and institutional frameworks, alongside targeted capital market instruments such as infrastructure bonds and project-based securities, to channel market resources toward long-term infrastructural investment and reduce speculative market activities.