Original Research Article | OPEN ACCESS
Stock Market Development and Economic Growth in Nigeria and South Africa: Comparative Empirical Analysis

F. M. Fapohunda

Department of Accounting and Finance, Faculty of Social and Management Sciences, Elizade University, Ilara-Mokin, Ondo State, Nigeria.;

For correspondence:-     Email: florence.fapohunda@elizadeuniversity.edu

Received: 15 January, 2019        Accepted: 25 Feb. 2019        Published: 31 Marcch 2019

Citation: Fapohunda FM. Stock Market Development and Economic Growth in Nigeria and South Africa: Comparative Empirical Analysis. Account Tax Rev 2019; 3(1):93-103 doi:

© 2019 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..


The study examines stock market development and economic growth in Nigeria and South Africa usingquarterly time series data for the period 1995Q1 to 2015Q4 sourced from World Bank Indicators. The Johansen co-integration and Vector error correction mechanism were employed as estimation techniques. Stationarity test was conducted using the Augmented Dickey Fuller test. The stock market indicators used in this study were market capitalization, turnover ratio, and total value of shares traded ratio and inflation rates while real gross domestic product was used as a measure of economic growth. The study concludes that the South Africa stock market indicators on economic growth outperform that of Nigeria in the reference period. The study recommends the government of Nigeria should strengthen the institutional framework in order to enhance transactions in the stock market. The regulators of the Nigeria stock market should come up with policies to reduce likelihood of market frictions. This will enhance investors’ confidence and trading activities. The study also recommends that Nigeria and South Africa should constantly encourage bilateral relations as they have a lot to benefit economically there from.

Keywords: Real Gross Domestic Product, Market capitalization, turnover ratio, total value of shares traded ratio and inflation rate

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