How Has COVID-19 Impacted the Nigerian Capital Markets? An Interview with NSE CEO Oscar N. Onyema

The CEO of The Nigerian Stock Exchange, Oscar N. Onyema, talks to COVID-19 Africa Watch about how the exchange has responded to the COVID-19 pandemic.


Key Takeaways

The following are a few of the main takeaways from COVID-19 Africa Watch’s conversation with Oscar N. Onyema, CEO, The Nigeria Stock Exchange (NSE):

  • At the start of the pandemic, the NSE quickly implemented a business continuity plan that included, initially, temperature checks, the use of hand sanitizers, and in-office social distancing and then, later, transitioned to remote work, which would not have been possible had the groundwork not already been in place.
  • As investors move to safer assets, the NSE’s gold ETF has performed well, including among foreign investors. The fixed income market also remains active due to increased government borrowing and corporate issuances.
  • Domestic investors have stepped in to spaces in the marketed vacated by foreign investors.
  • The government and the private sector in Nigeria appear to have cooperated effectively in the face of the challenges posed by COVID-19.
  • Management lessons from the current crisis include 1) the importance of preparing the response before the crisis hits; 2) the need to carry along the entire ecosystem not just one’s own institution; and 3) the value of forging partnerships.

The interview was conducted by the NSE’s Kenneth Ohaeri, who is an IFC-Milken Institute Capital Market Scholar from Nigeria. A transcript is available below.



Hello everyone, I’m Kenneth Ohaeri. I work for The Nigeria Stock Exchange, and I am a scholar of the IFC- Milken Institute Capital Market Program here in Washington, DC. I am joined today by my boss, Mr. Oscar N. Onyema. Mr. Oscar N. Onyema is the Chief Executive Officer of The Nigeria Stock Exchange, an institution that services one of the largest economies in Africa and champions the development of African financial markets. The transformation agenda, which he launched in 2011, has transformed the NSE into a globally competitive exchange. CEO, it’s a pleasure to have it with us today on COVID-19 Africa Watch.

Oscar N. Onyema

Thank you very much, Kenneth.


The COVID-19 pandemic had generated unprecedented restrictions, not only on the movement of people, but also on a range of economic activities and the declaration of national emergencies in most countries, including Nigeria. Yet financial markets, which are in a sense essential infrastructure have largely managed to remain open. CEO, can you tell us more about how The Nigerian Stock Exchange managed the lockdown process? How was the transition from floor trading to full remote trading by traders made possible? And what are the lessons learned that you want to share with us?

Oscar N. Onyema

Very good question. Let me, first of all, start by saying that the COVID-19 pandemic is first and foremost a health crisis. We’ve now seen the full-on impact from an economic perspective. By the time COVID-19 hit Nigeria and the government started taking action, we had already started implementing our business continuity plan, which first of all, called for, health measures, temperature checks, hand sanitizers, social distancing, and things like that. On the 25th of March, we kicked in the next phase of our business continuity plan, which was to get everybody to be working from home, so working remotely. And so we completely digitized. But you know, it wasn’t something that you could have done if you had not already prepared for it.

We had to do some work to support various people in the supply chain, also in the ecosystem. But by and large every broker was able to connect through either through a virtual private network or X-Net through the fixed protocol. We’re also able to get the issuers to continue to access us using our X-Issuer portal, and investors to access the other management systems of the various brokers. And also to be able to pass market information to through our X-Whistle platform or through various channels. So by and large, it’s worked very well and continues to work very well as we continue to work remotely.


Imagine on frontier markets with next and outflow foreign investments are the start of the pandemic due to capital flight to safety. How has this impacted the Nigerian capital market? Which asset classes have investors turned to, or moved away from?

Oscar N. Onyema

First of all, I should say that when investors in frontier/emerging markets move, they don’t initially pick and choose. They just exit the country because of country risk. But as the dust settles down they begin to look at the more— let’s call it flight to quality. So the more sustainable types of companies, the more sustainable types of asset classes. And so we’ve witnessed that in this COVID-19 experience as well, where we saw significant market volatility in the equity markets. That has now settled down with significant recoveries in April and May, with April giving a return of about 8% and May giving a return of about 9.8%. So we’ve by and large recovered most of the losses we experienced in March. And we’re now seeing that there’s significant activity in the financial services industry in some aspects of our manufacturing sector and in the telecommunication space.

From an asset class perspective, we’ve also seen significant activity from the foreign investors in our ETF asset class, especially the gold ETF. The gold ETF is a currency hedge. It also tracks the valuation of gold, and is backed by gold in vaults in London. So a lot of the foreign portfolio investors, again, consistent with flight to quality, have gone into our new gold ETF, which year to date has returned about 50%.

Another area that was since significant activity is in the fixed income space. So again, this is consistent with current thinking where a lot of the governments are doing deficit financing to finance and spend their way out of this crisis. And so we’ve seen the federal government come to tap the bond markets to help to raise capital to finance and increase the spending that they have to do. We’ve seen companies do a bond capital raise to refinance and access low interest rates.


Now, looking ahead, how do you think the domestic investment landscape can better sustain liquidity during times of volatility, as we’re experiencing currently?

Oscar N. Onyema

We have seen the domestic market players come in big time as the foreign investors have exited the markets. Year to date, the average participation of the domestic investors is about 60%, and it’s not only institutional investors, but also retail investors. So we’re seeing significant participation from retail investors who are coming in to take advantage of historically low valuations, so very good valuations for the buyers. We also see them take positions as foreign investors have exited the markets. We think that it’s a good thing. We encourage the domestic investors to the active players because really, the domestic investors are ‘on ground,’ as we say in Nigeria. And therefore they should have the confidence to invest in their own economy. And that is what then triggers full-on investments from foreign investors.


Have the private sector and the government collaborated effectively in fighting the pandemic and its impact on the economy?

Oscar N. Onyema

You know, Kenneth, one of the things that I like about the way the government and the private sector responded to this particular crisis is that they worked very well together. So the government, especially from the monetary policy side was right up front and ahead of the challenges. So they held a conference, where all forces of the private sector engaged with them and agreed on the various coordinated and integrated policy responses to be made in order to help the country to survive the COVID-19 pandemic.

On the fiscal side, we also saw similar activities, and all of this is supported with significant giving. And then interestingly, these initiatives are also catalyzing public private partnerships, in the way the government is working to address infrastructure gaps, for example, to come up with plans for sustaining the economy and growing it. So for example, the sustainability plan has significant private sector input. There are quite a number of areas where I think that the government and the private sector have worked very well. Having said that, I think we need to then have a paradigm shift and continue to move the ball. So it’s important that we’ll continue to partner together, provide those safety nets, remain ahead of the curve with appropriate planning so that we can better respond to future challenges.


Thank you. Are there any leadership or management lessons you’d like to share with us following your experiences in the past few months?

Oscar N. Onyema

I can summarize it by making these three points.

The first one be prepared ahead of ahead time, because that really helped us. We started our digitalization efforts as far back as 2013. So it was an easy thing to flip the switch.

The second thing is to carry the entire ecosystem along. If we had done all that work by ourselves and the brokers wouldn’t connect, the companies wouldn’t connect, investors wouldn’t connect, it would have been wasted. The supply chain is very important. So make sure that you secure the supply chain.

And then the last thing is partnerships. We found that we needed to engage with policymakers and regulators to come up with various types of palliatives for players in the capital market, including the issuers, to make it easier for the entire community to weather the storm.


Thank you for such great insights. The Milken Institute and I appreciate you for being with us today. Goodbye and please continue to stay safe.

Oscar N. Onyema

Thank you very much and have a nice one.

More analysis from COVID-19 Africa Watch:

COVID-19 Africa Watch tracks major developments and policy announcements from across the continent and also offers a curated selection of analysis on how the pandemic will impact African economies and development efforts. The site is a project of the Milken Institute’s Global Market Development Practice.

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