GASPRO International Journal of Eminent Scholars

ABSTRACT

This study access the constraints faced in the Nigerian bond market. Bond market is a market in which debt instruments known as bonds are issued to raise funds to finance budget or projects. It is usually issued for a period of time more than one year. Bonds have different options such as redeemability, convertibility, etc. They can be purchased by an individual, banks, pension funds, mutual funds, portfolio managers, institutional investors. Bonds may be secured or unsecured. The causes of tightened liquidity in Nigeria’s economy have largely been self-inflicted by misinformed CBN’s monetary policy and the banking industry’s greed to be dominant capital market operators and formidable commercial banks. The monetary policy rates have frozen liquidity in the bond market and this have created a huge gap in the federal debt management program that even the strongest capitalized banks have been struggling to maintain its reserve requirements and liquidity ratios. It is on this note that the study recommends that there is need for government to increase its budgetary allocation to the bond market which in turn will provides a secure and flexible investment outlet for investors and stimulates economic activities of the country.

KEYWORDS: Constraints, Bond Market and Nigerian