Equity investment is an important component of domestic investment and for over two decades Nigeria has witnessed volatility in the value of equity investment. The objectives of the study are to examine the effects of interest rate and domestic debt on private equity investment growth in Nigeria covering the 1987-2010 period as well as to determine if government borrowing crowds out private investment and borrowing. We used the co-integration technique to test the long run relationship among the variables and went to use standard ordinary least squares technique and error correction analysis. The results show that domestic debt and GDP growth rate had a positive effect on equity investment as expected. On the other hand, monetary policy rate had a negative effect on equity investment. The results of this article have crucial implications on the desire by individuals, firms and governments to participate in the equity investment market and policymakers' decisions. The Nigerian government should take cognisance of the 25 percent debt-to-GDP benchmark as adopted by the Federal Executive Council in 2010 and the revision to 30 percent in view of recent realities or the international norm of 60 percent target. Furthermore, funds from debt should be used productively and avoid misappropriation. The monetary policy rate should be allowed to exhibit the interplay of the market forces so as to encourage both internal and external capital investment in the Nigerian economy.

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Policymakers in Nigeria are aware of the importance of sustained economic growth as a macroeconomic policy. The paper is aimed at examining the effects of stabilization policy instruments on economic growth. We used modern econometric techniques and the empirical results based on annual data spanning the period 1981-2010. Econometric results show that fiscal policy instrument had a negative impact on GDP growth. CEF took a negative sign in all the three models. All monetary policy variables except PRM had a positive impact on GDP growth. Nominal exchange rate growth had a positive impact on growth except in model 1. All three models had a good fit. This study recommends that expansionary fiscal policy measures be pursued with caution not to worsen inflationary trend in the economy. A less volatile interest rate regime would increase reliability and confidence of investors in the economy. It is also relevant for monetary authorities and other players in the economy to encourage economy wide international trade competitiveness so as to maintain positive growth in exchange rate of the naira which will contribute to bringing about the desired GDP growth in the Nigerian economy and other developing economies.