This paper examined the impact of capital market on economic growth of Nigeria between the periods of 1990 – 2013. The study adopted time series econometrics analysis to determine the long run and causal relationship between capital market and economic growth in Nigeria. The empirical analysis that was carried out to achieve the objectives mentioned above were diagnostic tests such as unit root, co-integration, Error Correction Mechanism (ECM) and ordinary least square (OLS), in which changes in GDP was regressed on Market capitalization (MCAP), All share index (ASI), Total value for Transactions (VLT) and Turnover (TO) using annual time series data from CBN statistical bulletin (volume 24). The result of our unit root showed that all variables are all stationary at first difference and also co-integrated of the same order in the long run. Similarly, the OLS result revealed that there is a significant impact of capital market on economic growth in Nigeria. Based on the findings above, the study recommends that there is the need for government to intensify effort in promoting investment in Nigeria. This can be done by creating an enabling environment for investment to thrive in the country The higher the number of investors in the economy the more the patronage received by the Nigeria stock exchange. Apart from improving the stock market development, investment will also increase domestic output which is a major antidote for any ailing economy.

Keywords: Capital market, Stock market, Economic Growth,

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