The Nigerian Money Market
The following reasons are responsible for the establishment of the Nigerian Money Market:
(a) The Nigerianisation of the credit base. A money market was considered necessary to implement the declared objective of policy of providing local investment outlets for retention of funds in Nigeria and for the investment of funds repatriated from abroad as a result
of government persuasions to that effect.
(b) A monetary market was found necessary to provide the machinery
needed for government short term financing requirements. This was
evident in the increase and volume of treasury bills issues and the
introduction of Treasury Bill Certificate in 1968.
(c) The Nigerian Capital Market was seen as one of the essential steps on the path to independent nationhood. The money market, it was considered, is a part of the modern financial and monetary system
which will enable Nigeria to establish the monetary autonomy which is part and parcel of the working of an independent modern state and the basis for prosperity and progress as a nation.
(d) The Nigerian money market was established to perform the country
all the functions which a money market traditionally performs.
One of these is to provide the basis for operating and executing an effective monetary policy.


![man96587__480.jpg](https://files.peakd.com/file/peakd-hive/mandate/oatLnyyx-man-96587__480.jpg)
[Source](https://pixabay.com/illustrations/man-silhouette-briefcase-umbrella-96587/)


**The Investments of the Nigerian Money Market**


(a) The Treasury Bills: These are 1.O.U's which the Federal Government of Nigeria uses to borrow for short term periods of about three months pending the collection of its revenue.

(b) The Call Money Market: This is an instrument whereby the partici-
pating institutions invest monies surplus to their immediate requirements on an overnight basis with interest and withdrawable

(c) The Treasury Certificate: It is a medium term government security which matures after a period of one or two years and is intended to bridge the gap between treasury bill and long term government
securities. The Treasury Certificate therefore differs from the money
scheme which is a market for money on an overnight basis and from Treasury Bill which provides a imarket for funds for periods not on demand.
exceeding ninety-one days.

(d) Commercial Bill: Basically, two types of these bills were in operation to provide foreign businesses with the facility to offer their shares, the Nigeria public an opportunity to invest and participate in the
One is the ordinary trade bill. This is drawn by ordinary reputable commercial firm and accepted by a bank or acceptance house and secured on stocks of manufactured goods or other stocks in trade.


They are not so much in use now. They are not also popular with the banks since they are not eligible for rediscount at the Central Bank of Nigeria except when secured on export produce.
The other and more important bill were the marketing board bills.
These bills originated with the inception of the market scheme in 1962. The need was to enable Central Bank to be prepared to
provide the seasonal expansion of credit required to fill the gap between the credit which the banks could provide and the larger amount usually required to finance the major export crops.