Meaning and Development of the Capital Market for SS 3

Class: SS 3
Term: First Term
Week: 6
Age: 14 years
Duration: 45 minutes
Subject: Commerce
Curriculum Theme: Financial Markets
Previous Lesson: Commercialisation, Meaning, Reasons, Advantages and Disadvantages
Topic: CAPITAL MARKET
Subject Matter: Capital market; meaning; Historical development; 1946; (development loan stock first issue) 1960; Lagos stock exchange act- 1962, capital issue committee, 1979- capital issue commission; 1979 securities and exchange commission decree no. 71; 1985; second tier securities market (SSM) 1999 investment and securities act

Specific Objectives

By the end of the lesson, pupils/students should be able to:

Cognitive Domain

• Define the term ‘Capital Market’.
• Identify key historical events in the development of Nigeria’s capital market.
• State the significance of dates like 1946, 1962, 1979, 1985, and 1999 in the capital market’s history.

Affective Domain

• Appreciate the importance of the capital market in economic development.
• Recognize the continuous evolution of financial institutions.

Psychomotor Domain

• Outline the timeline of major developments in the Nigerian capital market.

Reference Materials

The following resources were used in planning this lesson:

• 2025 Revised 9 Years Basic Education Curriculum
• Relevant State Unified Scheme of Work
• A suitable Commerce textbook for SS 3
• The HeadTeacher Scheme of work

Instructional Materials

The teacher will teach this lesson with the aid of:

• Whiteboard and markers
• Charts showing a timeline of the Nigerian capital market development
• Handouts with key dates and events

Rationale for the Lesson

This lesson is important for students to understand the role of the capital market in mobilizing long-term funds for economic growth. It provides a historical perspective on how Nigeria’s financial landscape has evolved, which is crucial for comprehending current economic structures and policies. This knowledge supports a deeper understanding of investment and financial management concepts.

Prerequisite/Previous Knowledge

Students should have a basic understanding of financial institutions and the general concept of markets from previous Commerce lessons.

Lesson Content/Board Summary

Meaning and Development of the Capital Market

Meaning of Capital Market

The capital market is a financial market where long-term funds are raised by companies and governments. It deals with financial instruments such as stocks and bonds, which have a maturity period of more than one year. It facilitates the mobilization of savings for investment in productive ventures, leading to economic growth.

Historical Development of the Capital Market in Nigeria

The Nigerian capital market has evolved through several key stages and legislative actions:

1. 1946: The first issue of Development Loan Stock was made, marking an early attempt by the colonial government to raise long-term funds locally.
2. 1958: The Barback Committee was set up to study the possibility of establishing a stock market in Nigeria.
3. 1960: The Lagos Stock Exchange was established, following the recommendations of the Barback Committee.
4. 1962: The Lagos Stock Exchange Act was enacted, providing a legal framework for the operation of the stock exchange.
5. Capital Issue Committee: Established to regulate the issuance of securities.
6. 1979: The Capital Issue Commission was replaced by the Securities and Exchange Commission (SEC).
7. 1979: The Securities and Exchange Commission (SEC) Decree No. 71 was promulgated, giving SEC statutory powers to regulate the Nigerian capital market.
8. 1985: The Second Tier Securities Market (SSM) was introduced to provide a platform for small and medium-sized enterprises (SMEs) to raise long-term capital.
9. 1999: The Investment and Securities Act was enacted, repealing the SEC Decree of 1979 and consolidating various laws relating to the capital market. This Act further strengthened the regulatory framework and expanded the scope of the SEC.

Teaching Methods/Instructional Techniques

Discussion, Explanation, Question and Answer, Guided Practice

Instructional Procedures

Step 1: Introduction

Time: 5 minutes

Teaching Skill: Activating prior knowledge

Teacher’s Activity: The teacher asks students about financial markets and where businesses get money for long-term projects.

Pupils’ Activity: Students respond by mentioning banks, loans, or other financial sources.

Learning Point: Financial market overview

Step 2: Meaning of Capital Market

Time: 8 minutes

Teaching Skill: Explanation/Definition

Teacher’s Activity: The teacher explains the meaning of the capital market, differentiating it from the money market, and provides examples of instruments traded.

Pupils’ Activity: Students listen, ask questions for clarification, and note down the definition.

Learning Point: Capital market definition

Step 3: Early Development (1946-1960)

Time: 7 minutes

Teaching Skill: Historical Narration

Teacher’s Activity: The teacher outlines the early stages of capital market development, focusing on the 1946 Development Loan Stock and the establishment of the Lagos Stock Exchange in 1960.

Pupils’ Activity: Students listen and identify the initial milestones.

Learning Point: Initial market milestones

Step 4: Legislative Framework (1962-Capital Issue Committee)

Time: 7 minutes

Teaching Skill: Explaining legal structures

Teacher’s Activity: The teacher discusses the Lagos Stock Exchange Act of 1962 and the role of the Capital Issue Committee in regulating securities.

Pupils’ Activity: Students note the legislative acts and their significance.

Learning Point: Early regulatory frameworks

Step 5: Emergence of SEC (1979)

Time: 6 minutes

Teaching Skill: Detailing institutional changes

Teacher’s Activity: The teacher explains the replacement of the Capital Issue Commission with the Securities and Exchange Commission (SEC) in 1979 and the SEC Decree No. 71.

Pupils’ Activity: Students understand the establishment of SEC and its powers.

Learning Point: SEC establishment

Step 6: Market Expansion (1985-1999)

Time: 5 minutes

Teaching Skill: Discussing market growth

Teacher’s Activity: The teacher highlights the introduction of the Second Tier Securities Market (SSM) in 1985 and the comprehensive Investment and Securities Act of 1999.

Pupils’ Activity: Students identify later market developments.

Learning Point: Market expansion initiatives

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

1. What is the capital market?
2. When was the first Development Loan Stock issued in Nigeria?
3. Which body replaced the Capital Issue Commission in 1979?
4. What was the purpose of the Second Tier Securities Market (SSM)?

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Capital market understanding

Step 8: Note-Taking

Time: 4 minutes

Teaching Skill: Guided Writing

Teacher’s Activity: The teacher guides pupils/students to copy the essential Board Summary notes on the meaning and historical development of the capital market into their notebooks.

Pupils’ Activity: Pupils/students copy the notes carefully into their notebooks.

Learning Point: Capital market notes

Step 9: Conclusion

Time: 3 minutes

Teaching Skill: Summarization

Teacher’s Activity: The teacher briefly summarizes the key points of the lesson, emphasizing the importance of the capital market in Nigeria’s economy.

Pupils’ Activity: Students listen and reflect on the lesson.

Learning Point: Lesson consolidation

Continuous Assessment/Further Study

Type: Homework

Instruction: Answer the following questions in your Commerce notebook:

1. Discuss the role of the Lagos Stock Exchange Act of 1962 in the development of the Nigerian capital market.
2. Explain the significance of the Investment and Securities Act of 1999.
3. Research and list two financial instruments traded in the capital market, briefly explaining each.

Lesson Keywords

• Capital Market – A financial market for long-term funds.
• Development Loan Stock – Government bonds issued to raise funds.
• Lagos Stock Exchange – Nigeria’s first stock exchange.
• SEC – Securities and Exchange Commission, the regulatory body.
• SSM – Second Tier Securities Market for SMEs.
• Investment and Securities Act – Comprehensive law regulating the capital market.

Differentiation

For weaker learners, provide a simplified timeline chart with major dates and events clearly highlighted. For faster learners, encourage them to research the current structure and functions of the Nigerian Exchange Group (NGX) and compare it with the historical Lagos Stock Exchange.

Suggested Lesson Videos

For further understanding, students can search on YouTube for:
Nigerian Capital Market History SS3 Commerce

Teacher Guide for Using This Lesson Plan

Before the lesson, ensure you have a clear understanding of each historical milestone and its impact on the Nigerian capital market. Prepare charts or a timeline to visually aid students in grasping the chronological development. During the lesson, encourage students to participate actively by asking questions and sharing their understanding. Pay close attention to the distinction between the capital market and other financial markets. Guide students through the note-taking process, ensuring they accurately record the key definitions and historical dates. For weaker learners, simplify the explanations and focus on the most critical dates. For advanced learners, prompt them to think critically about the economic implications of each development. Ensure all students understand the importance of the SEC as the primary regulator. Students should copy the Board Summary notes during Step 8 of the instructional procedures.