How do I buy shares, and which companies can I invest in?

You can buy Nigerian shares through a licensed stockbroker, and companies you can research include MTN Nigeria, Dangote Cement, Zenith Bank and GTCO. These are examples to study, not a recommendation to buy all of them or buy at any price.

Let me explain what you are buying before we discuss the steps.

Imagine Mama Ngozi owns a tomato business and divides its ownership into 1,000 equal parts. If you buy 10 parts, you own 1% of that business. You are now a part-owner, not somebody lending her money.

That is the basic idea behind shares. When you buy shares in a company, you own a small part of it. However, ownership does not mean you can walk into its office and collect money whenever you want.

You may earn money if the company pays shareholders part of its profit, called a dividend. You may also make a profit if you sell your shares for more than you paid. Neither is guaranteed. Share prices can fall, and dividends can be reduced or stopped.

Here is how to get started in Nigeria.

1. Choose a licensed stockbroker.

A stockbroker is the middleman who helps you buy and sell shares on the Nigerian Exchange, also called NGX.

Before sending money, check the firm’s registration through the Securities and Exchange Commission Nigeria at sec.gov.ng. You can also check NGX’s list of trading licence holders through ngxgroup.com. If you use an investment app, find out which licensed broker handles its Nigerian share transactions.

Compare the fees, customer support and minimum funding requirements. Do not pay into someone’s personal account because they promise to buy shares for you.

2. Open your investment account.

You will usually need identification, your BVN, bank details and contact information. The exact documents depend on the broker, so ask for its current requirements.

Your broker should also help arrange your Central Securities Clearing System, or CSCS, account details. Think of CSCS as the system that keeps the electronic record of the Nigerian shares you own. Ask for your CSCS account number and Clearing House Number, commonly called CHN, and how to check your holdings independently.

3. Fund the account and place your order.

Transfer money using the broker’s official payment instructions. Then choose the company and the number of shares you want.

For illustration only, if a share costs ₦20, buying 100 shares would cost ₦2,000 before transaction charges. That is not a current price for any company. Check the actual price and total charges before confirming.

Submitting an order does not always mean you have bought the shares immediately. It must find a matching seller. Once the purchase is completed, check your trade confirmation and ownership record.

4. Set up your dividends and keep records.

Ask your broker how to complete e-dividend registration so that any cash dividends due to you can reach your bank account. Keep your purchase records and check company announcements and financial results.

When you want to sell, you place a sell order through your broker. After the sale is completed and settled, you can withdraw the proceeds according to the broker’s process. You may receive less than you originally invested.

Now, which company should you choose?

Start with a business you can explain in your own words. MTN Nigeria provides telecom services. Dangote Cement sells cement. Zenith Bank provides banking services. GTCO is a financial services holding company. Confirm their current trading details and company disclosures through NGX and their official investor relations pages before buying.

But knowing a company’s name is only the beginning. Mama Ngozi would not buy another tomato shop simply because its signboard is popular. She would ask whether it makes money, what it owes and whether the asking price makes sense.

Apply the same thinking to shares. Check whether the company has made profits over several years, whether its debts are manageable, and whether its share price is reasonable compared with its earnings. A good company can still be an expensive investment if you pay too much.

Also, a ₦5 share is not automatically cheaper in value than a ₦50 share. The price of one share alone does not tell you whether you are getting a good deal.

Start with an amount you can afford to leave invested for several years, not rent, school fees or emergency money. Build gradually and spread your money across different businesses over time. A large, familiar company can still lose value.

Your first practical move is to compare two or three verified brokers, ask for their account-opening requirements and full charges, then study a few companies before placing your first small order. You do not need to rush to become a shareholder. You need to understand what you are becoming an owner of.