Nigerian Stocks 101 — A Beginner’s Guide to Investing in Local Companies

Ever wondered how people make money from companies like MTN, Dangote, or GTBank without working there? One way is by owning stocks – a piece of the company that anyone can buy.

You don’t need to be rich or a finance expert to start. With just your phone, you can own part of some of Nigeria’s biggest businesses, earn dividends yearly, and grow your money over time.

In this article, I’ll break down what Nigerian stocks are, how they work, and what you should know before you start investing.

What Are Nigerian Stocks?

Nigerian stocks are shares in companies that are listed on the Nigerian Stock Exchange. When you buy a share, you’re buying a small part of that company. That means you own a piece of the business.

Let’s say you buy shares in MTN. You become a part-owner of MTN and can earn dividends – a portion of their profit shared with shareholders, usually every year. And when the value of the company increases, your shares become more valuable too.

How Dividends Work

Dividends are your reward as a shareholder. When a company makes profit, they sometimes share part of that profit with you in cash – this is called a dividend.

• They’re usually paid yearly or twice a year

• The money goes straight into your bank account

• Not all companies pay dividends every year, but strong ones often do

Think of it as getting paid just for holding the shares.

How Buying Works

You don’t need to go to the company’s office or fill any complex paperwork.

All you need is a stockbroker: an app or website that helps you buy and sell shares. When you sign up with a stockbroker, they’ll give you a Central Securities Clearing System (CSCS) number – think of it like a BVN, but for stocks. It identifies you in the Nigerian stock market.

Once that’s set, you can start buying shares of any listed company directly from the app or website.

Can You Withdraw Your Money Anytime?

Yes, you can withdraw your money anytime – but it depends on how you sell.

If you want your money back, you’ll need to sell your shares through your stockbroker app. Once sold, the cash from that sale will appear in your wallet on the app. From there, you can withdraw it to your bank account.

Just keep in mind:

• If the stock price is lower than when you bought it, you might lose money if you sell

• Some brokers may take 1–3 business days to process your withdrawal

So yes, your money is accessible – but it's best to sell when you're comfortable with the price.

Can You Lose Money?

Not unless you panic and sell too early.

Here’s a simple example:

• You buy 4 shares of Company A at ₦10 per share = ₦40 total

• If the price drops to ₦5, your shares are now worth ₦20 (sad 😢, but not for long 😀)

• You’ve only lost money on paper, but only if you sell for low

• If you hold and the price later goes up to ₦100 per share in some years, your 4 shares are now worth ₦400

So yes, you can lose money temporarily, but over time, prices can recover and grow. Stock investing is a long-term and patient game.

Is It a Good Investment?

Yes – but only if you’re patient and consistent.

• Good for long-term wealth: Stocks grow in value over time

• Beats saving in cash: Your money grows instead of losing value to inflation

• Low entry barrier: You can start with as little as ₦1,000

Just remember: returns aren’t guaranteed every year, but over several years, the market generally goes up.

Recommended Stockbroker Apps

Here are a few beginner-friendly apps you can use:

• Trove – Simple interface, supports foreign and Nigerian stocks

• Chaka – Easy onboarding, CSCS number included

• Afrinvest – Focused on Nigerian stocks, great for dividend tracking

• Bamboo – Better for foreign stocks, but still offers Nigerian stock options

• InvestNaija – Specifically built for Nigerians, user-friendly, and provides educational content for beginners (I personally use this).

Pick one that works best for you and stick to it.

Common Fears and Misconceptions

• "It’s too risky" – Every investment has risk, but Nigerian stocks have a history of bouncing back

• "I’ll lose all my money" – You only lose when you sell low. If you wait, value can recover

• "It’s for rich people" – Nope! You can start with small amounts

• "It’s too hard to understand" – Apps today make it very beginner-friendly

Stocks are not gambling – they’re an informed, long-term way to build wealth.

Wrapping Up

This is your foundation – understanding what Nigerian stocks are and why they matter. In the next part, I’ll walk you through the exact steps to buy your first stock using a stockbroker app.

If you found this helpful, feel free to share it with someone who wants to start investing too.

If you’re ready to take the next step and learn how to buy Nigerian stocks directly from your phone, check out [Article 2: How to Buy Nigerian Stocks from Your Phone – A Step by Step for Beginners].