Blockchains Adoption and Market Efficiency: Evidence from African Capital Markets

Akomolehin Francis Olugbenga
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Akomolehin Francis Olugbenga: Department of Finance, Afe Babalola University, Ado-Ekiti, Nigeria.

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Abstract: This study examines the effect of blockchain adoption on market efficiency in selected African capital markets from 2014 to 2025. It is motivated by persistent inefficiencies in African stock exchanges, including weak liquidity, information asymmetry, delayed settlement, high transaction costs, and limited digital financial infrastructure. The study adopts a quantitative longitudinal panel design and develops a Blockchain Adoption Index covering blockchain infrastructure, settlement digitisation, fintech ecosystem indicators, and regulatory innovation. Market efficiency is measured using stock return predictability, bid-ask spread, price delay, turnover ratio, and information efficiency indicators, while institutional quality is introduced as a moderating variable. The study applies Dynamic Panel System Generalised Method of Moments estimation to address endogeneity, persistence effects, and unobserved heterogeneity. The findings show that blockchain adoption has a positive and statistically significant effect on market efficiency across African capital markets. Specifically, blockchain adoption improves liquidity, reduces informational frictions, narrows bid-ask spreads, and strengthens price discovery. The interaction result further shows that institutional quality enhances the positive effect of blockchain adoption on market efficiency. The study concludes that blockchain-enabled financial infrastructure can improve capital market performance in Africa when supported by strong governance, credible regulation, and effective digital infrastructure. It recommends increased investment in exchange digitisation, blockchain-based settlement systems, regulatory harmonisation, and institutional capacity development.

Date: 2026-08-21
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Published in Asian Journal of Economics, Finance and Management , 2026, 8 (1), pp.883-908

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