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Digital Disruption: How Nigerian capital market leverages technology to battle Covid-19 challenges

In the early hours of April 16, Ademola Adeoye walked leisurely across different sections of his living room in Oluyole area of Ibadan, Oyo State, completely unperturbed by the chaos of events happening outside of his immediate environment. A Lagos-based stock analyst and policy expert, Mr Adeoye moved to his Ibadan home shortly before the Nigerian government declared a nationwide lockdown to arrest the spread of coronavirus in the first quarter of the year.

Hours afterwards, he would join hundreds of other Nigerians and capital market enthusiasts across the world to witness the first-ever Digital Closing Gong ceremony hosted by the Nigerian Stock Exchange via Instagram Live.

The programme, held in honour of the contributions of Sterling Bank Plc to the fight against Covid-19 in Nigeria, took place in Lagos but was broadcast to a global audience via the social networking site, Instagram. Mr Adeoye, sitting at a spot located about 130 kilometres away from the Lagos location of the Nigerian bourse, joined the celebrations online.

“It was an immensely successful and disruptive move,” 39-year-old Mr Adeoye told PREMIUM TIMES in an interview. “It shows the promise of digital technology in the growth of Nigeria’s capital market and the larger economy.”

The finance expert said such moves must be encouraged to eliminate the barrier associated with physical activities at this critical period and deepen the adoption of digitally compliant means of participation in market activities.

“I enjoyed the ceremony, and those of us who witnessed the ‘open outcry’ era could not but marvel at the disruption brought by technology over these years,” he said.

‘Open Outcry’: the genesis

Before the advent of disruptive technologies, the ‘open outcry’ system was in place in stock markets across the globe. The system is a trading method used in stock exchanges where traders use verbal and nonverbal signals to communicate. Before the adoption of electronic trading, financial trading was conducted via open outcry, with stockbrokers typically shouting and using hand signals to communicate in melodramatic fashions.

Back in the day, stockbrokers yell how many contracts are for sale and at what price, and they also use hand gestures in order to get through to one another despite the cacophony. Some experts believe the open outcry method is effective because it makes possible a structured process that ensures bids and offers are matched in ways many considered quite efficient.

The system, because of its interpersonal elements, allows traders to appraise facial expressions that reveal a lot about the concerned parties, including emotions that may not be visible in electronic trading. The intensity of the chaos may also signal the market volatility.


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Nigeria stock market made a significant leap in 1997 as it joined the global markets by transiting from manual clearing, delivery and settlement system to an electronic system with the commencement of its central depository, otherwise known as the Central Securities Clearing System (CSCS).

By 1999, the Exchange had transited from the manual system of trading called Open Outcry or Call-Over or Pit Trading to the Automated Trading System (ATS). The ATS refers to the use of computers to execute transactions on the market.

But it is often argued that liquidity is more enhanced in open outcry than electronic trading. Till date, the open outcry is still being used interchangeably with electronic, even in exchanges like the New York Stock Exchange, Chicago Board of Trade (CBOT) and others.

Since the coronavirus pandemic hit capital markets around world, there has been a significant improvement in peoples’ adoption of digital technology to leverage remote trading and participate in market activities. For many Nigerian stakeholders in the capital market, the adoption of these technologies and the attendant disruptions have shown how much technology would shape the future of trading across bourses in Africa and the world.

The Nigerian bourse has equally shown readiness to address the concerns around remote trading while providing stakeholders the necessary digital platforms to operate in the market without much challenge. This, experts said, is essentially a function of the years of preparedness of the exchange, through technological transitions made under the administration of Hayford Alile, the Director-General and his successor, Ndi Okere-Onyuike, now amplified by the Oscar Onyema-led leadership of the Nigerian bourse.

Digital technologies during Covid-19

In March, the Nigerian government ordered a lockdown of the economy and placed a ban on air travels, amid other measures to contain the spread of the coronavirus.

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Mr Onyema said that against the backdrop of this development, the NSE quickly implemented a business continuity plan that included, initially, temperature checks, the use of hand sanitizers, and in-office social distancing. It would later transition to remote work, which would not have been possible had the groundwork not already been in place.

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