This study examined the dynamic effects of development stock instruments on the Nigerian economy from 1981 to 2022. Financial contributions from savings-type institution (STI), insurance companies (ISC) and deposit money banks (DMBs) were employed as components of development stock instruments. Secondary data sourced from the statistical bulletin of Central Bank of Nigeria were used. Given the nature of study, we employed structural vector autoregressive (VAR) econometric method of data analysis. The result revealed mixed dynamic interactive effects between development stock instruments and Nigerian economy. It is therefore concluded that while accounting for feedback loops, lagged relationships and indirect effects within the system, development stock instruments from DMBs made significant contributed to the growth of the Nigerian economy, while those from STI and ISC failed to do same within the period of the study.

The government should provide more bonds and infrastructure bonds that could enhance investor protection against mismanagement, offer tax exemptions on interest earned from development stocks to encourage investment. Also, the monetary authority should provide liquidity mechanisms that allow investors to easily trade or redeem these instruments. Government should focus on strengthening regulatory frameworks, promoting financial literacy, and encouraging the development of innovative insurance products to maximize these benefits and ensure sustainable economic growth. By so doing, development stock instruments can be made worthwhile tools for the Nigerian economy to grow.