Research Article

Impact of Covid-19 Pandemic on Nigerian Capital Market: The Imperative of Testing the Efficacy of Efficient Market Hypothesis

Hamza Zubairu Kofarbai1*, Mohammed Sani Umar2, Usman Muhmmad Dakingari3
1 Department of Business Administration, Alqalam University Katsina, Nigeria
2 Department of Business Administration, Usmanu Danfodio University Sokoto, Nigeria
3 Bursary Department, University of Science and Technology Aliero, Kebbi State
* Corresponding author: hamzazubairukofarbai@femsbukjournals.org.ng
Published: Nov, 2026
DOI: 10.67894/bbr.2026.fcznc7yp
Pages: 308-330
Views: 27
Downloads: 5

Abstract

In this paper we reviewed the efficacy of Efficient Market Hypothesis (EMH) on the outbreak of Covid-19 on Nigerian Capital Market. The EMH is a theory based on informational efficiency by the capital markets owing to their quick and instantaneous incorporation of new information. The study tested the market in two parameters: to confirm the randomness (efficiency of the market) using run-test, and to confirm the effect of Covid-19 protocols on some economic fundamentals using regression analysis. The result of the run-test of the daily Nigerian capital market data (April, 2020 to July 2020) revealed randomness within the period under review. The regression analysis however revealed significant relationship between the markets and some economic fundamental indicators (inflation and international price of crude oil) of the economy. The paper concluded that the Nigerian Capital Markets revealed randomness signifying a weak form of EMH as news about the Corona Virus was incorporated slowly but not instantaneously during the period under review, and hence, the pandemic did affect the market. The study also posited that EMH can be tested and validated not only from economic or finance point of view but also from public health view of the outbreak of Corona Virus. The paper recommended that policy makers in the country should devise a proper hedging mechanism to be put in place to mitigate any unforeseen negative market reactions in future as a result of any health pandemic.

Keywords

Corona Virus (Covid-19) Efficient Market Hypothesis (EMH) Run-test Randomness Informational efficiency.

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How to Cite

Kofarbai, H. Z., Umar, M. S., & Dakingari, U. M. (2026). Impact of Covid-19 Pandemic on Nigerian Capital Market: The Imperative of Testing the Efficacy of Efficient Market Hypothesis. Bayero Business Review, 6(2), 308-330. https://doi.org/10.67894/bbr.2026.fcznc7yp

H. Z. Kofarbai, M. S. Umar, and U. M. Dakingari, "Impact of Covid-19 Pandemic on Nigerian Capital Market: The Imperative of Testing the Efficacy of Efficient Market Hypothesis," Bayero Business Review, vol. 6, no. 2, pp. 308-330, November 2026. doi: 10.67894/bbr.2026.fcznc7yp

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