Markets are specified outlets in which supply meets demand. In a market, financial transactions take place. These transactions involve buying and selling. Whether it is a capital market or a commodity market, markets are of various types. In this article, the different types of markets in Nigeria would be discussed extensively.
The types of markets in Nigeria would be addressed below:
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Capital Market
Capital market is the type of market in which equity stock and bonds are sold and bought. In Nigeria, the Capital market is also referred to as the Nigerian Stock Exchange. The commerce that takes place in the capital market is mostly controlled and managed by forces within the financial sector.
Capital market helps companies and government agencies who wish to make long-term investments channel the resources they are offered to good use. Even though the transactions that take place in the capital market are controlled by certain entities, these transactions can be accessed by the general public.
The government issues bonds to the public in the capital market while companies issue bonds and equity. Loans issued in the capital market are mostly on a long-term basis. So, it is safe to say that the capital market which is known as the Nigerian Stock Exchange is part of the financial system of the country that deals with raising capital by issuing shares and bonds as well as other juicy long-term investments. So, in the capital market, investments and savings are channeled between people in need and suppliers.
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Money Market
Another type of market in Nigeria is the money market. In this market, short-term loans are issued to people and companies in need. In a money market, many financial transactions also take place. One of the advantages of the money market is that it plays a major role in the economic development of the nation. Money markets strive to balance the gap between the supply and the demand for funds. In other words, the money market seeks to balance the demand and supply of money although on a short-term basis.
Another way in which the money market promotes economic development in Nigeria is that they are always ready to provide money to any sector of the Nigerian economy in need. Aside from making money available to various sectors, the money market also makes funds available for various individuals, companies and businesses. The money market ensures that there is always a supply of funds and they also keep their doors open to businesses. What this money does for businesses is that it boosts the overall productivity of the businesses. In other words, the money market provides funds for businesses and enterprises.
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Labour Market
The Labour market is the type of market in which individuals sell their labour to companies and organizations in need of their capabilities and expertise in exchange for wages or salary. This type of market is also known as the job market. In the Nigerian labour market, the employers provide the demand for labour while the different employees supply the labour.
The Nigerian labour market is saturated with highly skilled and educated personnel who are very versatile and flexible in terms of productivity. Another thing to note about the Nigerian labour market is that the labour it provides is very cost-efficient. Certain factors influence the Nigerian labour market, they include minimum wage policies and the demand and supply of labour.
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Commodity Market
The Nigerian commodity market deals with the trading of different raw materials such as crude oil, cocoa, rubber, and many others. There are different types of commodity markets in Nigeria. They include open-air markets, stalls, shops, and online stores. Open-air markets are the types of markets we find in our everyday society. In this type of market, people buy and sell items in an open marketplace. This type of market involves trading items in temporary and permanent stalls. These stalls are usually built by the local government council. They are usually managed and maintained by the council. Open-air markets are always open to the general public to trade and buy different consumer commodities that they are in need of. Examples of this type of market include and are not limited to Balogun market Lagos, Ajah market Lagos, Bodija market Ibadan, Igbudu market Warri, and New Benin market Benin.
Another type of commodity market is stalls. Market stalls are mostly seen in many towns and urban areas. These stalls are built structures in which many traders display their wares for people to come and buy. These traders also store their goods in these stalls. The stalls are mostly located in small street markets and trade fairs.
Shops are a type of commodity market which are built as part of a building or built strictly as a block of shops. In these shops, different goods and commodities are sold and exhibited to customers who need the goods they sell. Online shops, on the other hand, are marketplaces on the internet where people buy items and have them delivered to them. The online shops include jumia.com.ng, Jiji, Konga, and so on.
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Foreign Exchange Market
The Foreign Exchange market is the type of market that deals with the buying and selling of foreign currencies. What this type of market does is it trades any type of currency in the world. The determinant of this trade and exchange is the exchange rate. This exchange rate is the value of one currency over another. The main people in the Nigerian Foreign Exchange market are authorized dealers who are financial entities for who the Central Bank of Nigeria issues the license to trade and exchange foreign exchange also known as FX. Another main participant in Nigerian Foreign Exchange is the Central Bank of Nigeria(CBN), and the clients who buy and trade Foreign Exchange to meet their daily needs.
The Nigerian Foreign Exchange(FX) market has many sections in which people can participate. These sections are called windows. They include the Bureau De Change(BDC) market, the Investors’ and Exporters’ Foreign Exchange window, and the Intervention window.