Transforming Nigeria Economy through the use of Derivatives

John Ifeanyichukwu Osuoha

Abstract


This paper evaluates the need for the introduction of organized derivatives market in Nigeria. Derivatives play vital role in the development and growth of the economy through its crucial role of price discovery, market completeness, risk management and market efficiency. It attracts foreign capital flow, reduce cost of capital and will help to deepen the market if introduced. Although Nigeria is rich in natural resources such as oil and Gas and minerals, poor infrastructure, corruption and absence of robust financial and derivatives market has not helped in transforming the abundant resources to real economic gains and transformation. Nigeria’s economic transformation depends so much on developing a deep financial market, coupled with a dynamic derivatives market where most of her natural resources can be traded globally in a competitive and transparent manner.


Keywords


Derivatives, Economy, Transformation, Nigeria

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