ABSTRACT:- This study examined the effect of capital market development on economic growth in Nigeria from 2008-2018. The stock market development was proxy by market capitalization rate; interest rate and inflation rate while economic growth variable considered was GDP. The study utilizes the multiple regression analysis test in establishing if a positive and significant relationship does exist between stock market development and economic growth in Nigeria. The empirical result suggests that stock market is positively related to economic growth in Nigeria but has insignificant effect on economic growth. It is recommended that Capital market regulators like the Security and Exchange Commission (SEC) should be more open to innovations and be flexible without jeopardizing the interest and protection of investors as well as the efficiency of the market. Furthermore, government should discourage Nigerian investors’ attitude of buy and hold securities instead of trading in the capital market. Communication and information network should be upgraded. Lastly, the government should invest more and develop the nation’s infrastructure in order to create an enabling environment for businesses to grow and for productivity and efficiency to thrive which will boost economic activities.

Keywords: Capital market, Economic growth, Interest Rate, Market capitalization. Inflation rate, Productivity, Business environment