The study shows that the present Nigeria financial system is incomplete and lacking in hedging mechanism. The Nigeria financial system has only organized Money Market and Capital Market. Although these markets have proved useful in mobilizing resources for firms and governments for development and growth of the economy but they are very vulnerable and not fully developed as expected because of the absence of an organized derivatives market. Derivatives markets suppose to provide an impetus and encouragement for more investors (both local and foreign) to patronize the money and capital markets knowing the risk of their investments can be managed. Also Nigeria abundant oil and gas resources are lacking in hedging mechanism to manage the volatility of oil and gas prices in the international market which directly affect the wealth and economic development of Nigeria. Therefore, Nigeria government and corporate leaders should fast tract the establishment of derivatives exchange in Nigeria where futures and options on Nigeria Mineral resources, agricultural produce and other basic instruments can be traded. This will attract more foreign investments in the Nigeria financial markets thus boosting liquidity of the market, increasing market depth and enhancing economic growth.

The study investigates the impact of corporate governance on derivatives usage in African nonfinancial firms. Using a sample of 760 African non-financial firms from 17 African countries, the study shows that derivatives usage among African non-financial firm is very low. The study finds that the main reasons why most African firms do not use Derivatives are lack of knowledge about derivatives, absence of organized derivatives market and absence of derivatives experts. The results also show that Board composition is the strongest measure of corporate governance impacting derivatives usage. Derivatives usage increases with increase in the number of executive directors but has an inverse relationship with the board size. Derivatives user firms have strong corporate governance in place to mitigate the risk of derivatives misuse that could hurt the firms.