You’ve probably heard that investing in stocks is one of the ways to build long-term wealth. You may even know people who earn dividend income or have watched the value of some stocks grow over the years, and now, you’re ready to start.
But where do you begin?
The good news is that investing in Nigerian stocks is not difficult once you understand the process. Like opening a bank account before you can save money, there are a few important steps that every investor must complete before buying their first shares.
In this guide, we’ll walk you through exactly what you need to buy and sell stocks in Nigeria, so you’ll know exactly what to expect before you invest.
How Does the Nigerian Stock Market Work?
Before diving into the steps, it’s helpful to understand how the Nigerian stock market works behind the scenes.
Many first-time investors assume they can simply visit the Nigerian Exchange (NGX), choose a company, and buy shares directly. In reality, that’s not how the market operates.
Buying and selling shares involves a few key players, each with a specific role.
- The Nigerian Exchange (NGX): where shares of publicly listed companies are traded.
- Licensed stockbrokers: those who are authorized to buy and sell shares on behalf of investors.
- The Central Securities Clearing System (CSCS): a depository for keeping electronic records of shares and their owners and settling completed transactions.
When you place an order to buy shares, your broker sends that order to the Nigerian Exchange. Once the trade is successfully executed, the shares are credited to your CSCS account, where they’re held electronically in your name.
This is why you cannot buy shares directly from the Exchange without going through a licensed broker or an investment platform that provides access to the market.
Today, digital investment platforms like the Zedcrest Wealth app make it much easier to buy and sell stocks in Nigeria. Instead of filling out lengthy paperwork or visiting a brokerage office, you can complete the entire process online and manage your investments from your smartphone.
Steps to invest in stocks in Nigeria
1. Choose a Licensed Stockbroker or Investment Platform
In Nigeria, only licensed dealing members of the Nigerian Exchange can execute trades on behalf of investors. This means the platform you choose should either be a licensed stockbroker or work directly with one.
This is an important distinction because not every investment app offers direct access to the Nigerian stock market.
When comparing platforms, look for features such as:
- Access to a wide range of NGX-listed companies
- A secure and regulated trading experience
- Simple digital onboarding
- Easy funding and withdrawals
- Portfolio tracking
- Reliable customer support
The Zedcrest Wealth App gives investors access to buy and sell stocks in Nigeria through Zedcrest Securities, a licensed dealing member of the Nigerian Exchange. This means your trades are executed through a regulated stockbroker while you enjoy the convenience of managing your investments from one easy-to-use platform.
Choosing a trusted platform from the start makes the rest of the investment journey much smoother.
2. Open Your Trading Account
Once you’ve chosen your investment platform, the next step is creating your trading account.
Opening a stock trading account isn’t very different from opening an account with a financial institution. Because stockbrokers operate within a regulated industry, they’re required to verify the identity of every investor before allowing them to trade.
During registration, you’ll typically be asked to provide information such as:
- Your full name
- Date of birth
- Residential address
- Phone number and email address
- Bank Verification Number (BVN)
- National Identification Number (NIN), where required
- A valid means of identification
- Bank account details
- Employment or occupation information
Depending on the platform, you may also be required to upload supporting documents to complete your Know Your Customer (KYC) verification.
Although this may seem like a lot for someone simply trying to buy shares, these checks are designed to protect investors, prevent fraud, and ensure compliance with regulatory requirements.
Once your information has been verified, you’re one step closer to entering the market.
3. Create Your CSCS Account
One of the first terms many new investors encounter is CSCS.
CSCS stands for Central Securities Clearing System, and it’s one of the most important parts of Nigeria’s capital market.
Think of a CSCS account as a secure electronic vault for your investments.
Just as your bank account keeps a record of the money you own, your CSCS account keeps a record of the shares you own. Every time you purchase shares on the Nigerian Exchange, they’re credited to this account electronically.
Without a CSCS account, you cannot own or hold shares purchased on the Nigerian Exchange.
Your CSCS account also helps you:
- Keep a secure record of your investments
- Receive shares after successful trades
- Track your holdings over time
- Facilitate future sales and transfers
Years ago, opening a CSCS account involved completing physical forms and visiting a stockbroker’s office.
Today, many digital investment platforms simplify the process by helping investors create a CSCS account during onboarding. This removes much of the paperwork and makes it easier for first-time investors to begin trading.
If your platform requests information relating to your CSCS account, don’t be alarmed—it’s simply a necessary part of the process of owning shares in Nigeria.
4. Obtain Your Clearing House Number (CHN)
Another term that often confuses first-time investors is the Clearing House Number, commonly known as the CHN.
The CHN is a unique identification number assigned to every investor participating in Nigeria’s capital market.
Think of it as your personal investor ID.
It helps identify you across the market and links your transactions to your investment profile. Whether you’re buying shares today or selling them years later, your CHN helps ensure your transactions are properly recorded and processed.
In many cases, you won’t have to apply separately for a CHN. Depending on the investment platform or stockbroker you choose, it is often generated for you as part of the account opening process.
While you may never need to memorise the number, it’s an important part of the infrastructure that makes it possible to buy and sell stocks in Nigeria safely and efficiently.
5. Fund Your Trading Account
With your account set up, you’re finally ready to prepare for your first investment.
Before you can buy shares, you’ll need to fund your trading account or investment wallet.
Most digital investment platforms allow you to transfer money directly from your bank account into your wallet. Once the funds are available, you can use them to purchase shares of companies listed on the Nigerian Exchange.
How much should you invest?
There’s no universal answer.
A good starting point is to invest an amount you’re comfortable leaving untouched for a while. Unlike a savings account, stock prices move up and down, so it’s generally not advisable to invest money you’ll need for immediate expenses.
As you begin building your portfolio, remember a few simple principles:
- Start with an amount that fits your financial situation.
- Invest consistently instead of waiting until you have a large lump sum.
- Avoid putting all your money into a single company.
- Build your portfolio gradually as you become more familiar with the market.
At this stage, you’ve completed the foundation every investor needs. Your trading account is open, your identity has been verified, your CSCS account is ready, you’ve obtained your Clearing House Number, and you’ve funded your account.
Now comes the exciting part—choosing a company and placing your first stock order.
6. Search for the Company You Want to Invest In
With your account funded, you’re ready to buy your first stock.
On your trading platform, you’ll typically see a list of companies listed on the Nigerian Exchange. These companies span different sectors of the economy, including banking, consumer goods, industrial goods, oil and gas, insurance, agriculture, healthcare, and telecommunications.
If you’ve already decided which company you’d like to invest in, you can search for it by name or ticker symbol. If not, take some time to review the available companies before making a decision.
When viewing a stock, you’ll usually see information such as:
- The current share price
- The day’s price movement
- Trading volume
- Market data
- The company’s ticker symbol
Don’t rush into buying the first stock you come across. A low share price doesn’t automatically make a stock a good investment, just as a higher-priced stock isn’t necessarily expensive.
If you’re unsure how to evaluate a company before investing, read our guide on How to Analyze a Stock Before You Buy for a more detailed look at what to consider.
Once you’ve chosen the company, enter the number of shares you’d like to purchase. Your trading platform will automatically calculate the estimated cost of your order before you proceed.
Take a moment to review the details carefully before confirming your purchase.
7. Place Your Order and Wait for Execution
When you tap Buy, your order doesn’t immediately become a completed transaction.
Instead, your broker sends your order to the Nigerian Exchange, where it is matched with a seller offering shares at your chosen price.
Depending on the type of order you place and current market activity, one of three things may happen:
- Your order is executed immediately. This happens when matching shares are available at your selected price.
- Your order remains pending. If there isn’t a matching seller, your order stays in the market until it’s matched, expires, or you cancel it.
- Your order is partially executed. Sometimes only part of the requested quantity is available, so only a portion of your order is filled while the rest remains pending.
Once your trade is successfully executed, you’ll receive a notification, and your portfolio will be updated to reflect your new investment.
This process happens behind the scenes, but it’s useful to understand that every trade requires a buyer and a seller. You’re not purchasing shares directly from the company—you are buying them from another investor in the secondary market.
8. Understand the Costs of Buying and Selling Stocks in Nigeria
One question many first-time investors ask after placing their first order is:
“Why did I pay slightly more than the value of the shares?”
The answer is simple.
When you buy and sell stocks in Nigeria, the total amount you pay isn’t limited to the cost of the shares alone. Every transaction attracts certain statutory and brokerage charges.
These may include:
Brokerage Fee: This is the fee charged by your stockbroker for executing your trade on the Nigerian Exchange.
Nigerian Exchange (NGX) Charges: The Exchange charges a transaction fee for facilitating trades on its platform.
SEC Fees: The Securities and Exchange Commission (SEC) also charges regulatory fees on qualifying transactions.
CSCS Fees: Since the Central Securities Clearing System records and settles trades electronically, a small fee is charged for its services.
VAT and Other Applicable Charges: Depending on the type of transaction, Value Added Tax (VAT) and other statutory charges may apply.
The good news is that reputable trading platforms provide a breakdown of these charges before you confirm your transaction, so you know exactly what you’re paying.
Understanding these costs helps you make more informed investment decisions and prevents surprises after your trade has been executed.
Step 9: Monitor Your Portfolio
Buying shares is only the beginning.
Successful investing isn’t about constantly buying and selling. It’s about tracking your investments and making informed decisions over time.
Most investment platforms allow you to monitor your portfolio from one dashboard, making it easy to see:
- The companies you own
- Your portfolio’s current value
- Gains or losses on your investments
- Recent transactions
- Dividend payments, where applicable
It’s also a good idea to stay informed about the companies you’ve invested in.
Pay attention to:
- Quarterly and annual financial results
- Dividend announcements
- Bonus issues
- Rights issues
- Major company news
- Broader market developments
Monitoring your investments doesn’t mean checking prices every hour. In fact, constantly reacting to short-term price movements often leads to emotional decisions.
Instead, review your portfolio periodically and focus on whether your investments still align with your long-term financial goals.
Buy and sell stocks on the Zedcrest Wealth app
By now, you’ve seen that investing in Nigerian stocks isn’t as complicated as it first appears. Once you understand how the market works, the process becomes straightforward. The next step now is choosing a platform that makes the entire experience simple.
The Zedcrest Wealth App gives you everything you need to buy and sell stocks in Nigeria from one place. Through Zedcrest Securities, a licensed dealing member of the Nigerian Exchange, you can trade shares in 150+ NGX-listed companies with confidence, knowing your transactions are executed through a regulated stockbroker.
Beyond trading, you’ll also enjoy:
- A seamless digital onboarding process
- Easy funding of your trading account
- Real-time portfolio monitoring
- A secure and intuitive investing experience
- Access to a growing suite of wealth-building products—all within one app
Whether you’re investing for long-term wealth, dividend income, or to build a diversified portfolio, getting started has never been easier.
Download the Zedcrest Wealth App today.
