….Only 31% Familiarity with DLT and AI
By Niyi Jacobs
Nigeria’s capital market is drawing investor concern due to slow adoption of critical digital technologies like Distributed Ledger Technology (DLT) and Artificial Intelligence (AI), with only 31% of market participants reportedly familiar with DLT.
This technology gap threatens to limit market transparency, efficiency, and growth—core factors that underpin investor confidence in today’s digital age.
According to a recent Proshare report, DLT’s implementation, primarily through blockchain, has transformed capital markets globally by offering secure, decentralized transaction records, faster settlement times, and improved fraud prevention.
However, Nigeria’s limited exposure to DLT leaves its capital market unable to fully capitalize on these advantages, making it less attractive for local and international investors.
DLT could drastically improve Nigeria’s trade clearing and settlement processes, which remain bogged down by slow, manual methods. In more tech-forward markets, blockchain-based smart contracts enable real-time trade execution, reducing both settlement times and costs.
Nigeria’s reluctance to embrace this technology, however, limits operational efficiency and transparency in ways that increasingly frustrate investors.
Beyond DLT, AI also offers potential to reshape the market by automating trade analysis, regulatory compliance, and risk management. AI-driven insights help identify market trends and regulatory patterns, making the investment environment more responsive to changes. But Nigeria’s capital market is hampered by a regulatory approach that has yet to fully engage with AI’s capabilities, which other global markets are using to stay competitive.
Recent report indicates that capital markets in many non-African countries have quickly adopted DLT and AI to gain efficiencies, while several African countries lag. Nigeria’s slow pace, however, stems not only from cautious market operators but also from insufficient guidance on regulatory frameworks for emerging technologies.
This lack of progress could have long-term implications for Nigeria’s capital market. At a time when global and regional investors are increasingly prioritizing markets that offer digital transparency and ease of transactions, Nigeria risks being left behind, as these investors may shift focus to markets more attuned to technological advancements.
Proshare’s analysis suggests that for Nigeria to remain competitive, regulators must promote an adaptive regulatory framework and collaborate closely with market operators to drive digital literacy and innovation. The sector’s evolution into a digitally-enabled market is no longer a question of preference but of necessity if Nigeria’s capital market is to maintain and grow its investor base.
As a younger generation of investors emerges, the demand for digital solutions continues to rise. These investors prioritize transparency, speed, and innovation—qualities that Nigeria’s market cannot fully offer under its current technological constraints. Unless market operators and regulators address this gap, Nigeria’s capital market could fall further behind
