Nigeria’s expertise ecosystem is increasing quickly, but new analysis exhibits that the native capital markets haven’t saved tempo. In keeping with TLP Advisory’s newest report, “Rethinking Funding & Exits: Nigeria’s Lacking IPOs and the NGX,” a big consciousness hole is stopping Nigerian startups from leveraging the Nigerian Change (NGX) as a viable route for development and exits. The findings spotlight structural challenges, foreign money mismatch points, and market frictions that collectively hinder Nigeria’s means to construct a strong pipeline of native IPOs.
Lack of Consciousness Limits NGX Tech Listings
The report identifies a placing data hole: 53% of founders lack adequate consciousness of the NGX itemizing course of, regardless of the launch of the NGX Know-how Board in 2022. This lack of readability considerably reduces curiosity in pursuing native IPOs, whilst Nigeria positions itself as Africa’s main startup hub.
Exit preferences additional illustrate the pattern. 46% of founders want acquisition exits, whereas solely 21% would take into account IPOs — and lots of of these want overseas exchanges with deeper liquidity and world visibility.
Foreign money Mismatch Pushes Startups Towards Offshore Exits
A serious structural rigidity highlighted within the report is that 77% of Nigerian startups elevate capital in {dollars} however earn income in naira. This foreign money mismatch incentivizes offshore exits, as overseas listings and acquisitions provide extra alignment with traders’ expectations and monetary buildings.
Further market frictions embrace:
- 26% citing compliance prices and potential undervaluation
- 16% citing liquidity issues on the NGX
Regardless of this, there may be notable optimism: 42% of founders would take into account itemizing regionally if reforms and improved consciousness initiatives are launched.
Founder and Stakeholder Views
Talking on the report launch throughout the Africa Prosperity Summit (APS), hosted by Ventures Platform, Odunoluwa Longe, Co-founder of TLP Advisory, mentioned:
“Nigeria’s startups have confirmed they’ll construct globally aggressive companies, however an excessive amount of worth nonetheless flows offshore as a result of viable native exit routes are restricted. Our report exhibits the problem isn’t founder ambition or rejection of the NGX; it’s a disconnect propelled by data gaps, perceived illiquidity, and a foreign money mismatch that makes dollar-denominated exits extra enticing for venture-backed firms. With readability, sensible training and confidence-building — and by aligning regulators, founders, traders, and policymakers — we are able to flip the NGX into a real platform for growth-stage innovation and long-term wealth creation in Nigeria.”
The report attracts from in depth desk analysis, founder surveys, and interviews with key trade leaders together with Jude Chiemeka (CEO, NGX), Adekunle Awojobi, Adewale Yusuf, Idris Bello, and Dolapo Morgan. It benchmarks Nigeria’s ecosystem in opposition to peer markets reminiscent of South Africa, Kenya, Egypt, Ghana, India, and Brazil, and mature exchanges just like the UK AIM and the NASDAQ. India’s mannequin of mobilising home capital — powered by pension reform — is highlighted as an actionable instance.
Key Suggestions to Increase Nigeria’s IPO Pipeline
1. Enhancing Schooling & Consciousness
Steady roadshows, workshops, and sensible playbooks can demystify the NGX itemizing course of for founders and traders.
2. Reforming Regulatory & Itemizing Frameworks
Simplified itemizing necessities and improved documentation requirements could make the NGX extra accessible for high-growth startups.
3. Strengthening Market Liquidity
Increasing institutional investor participation, enhancing market-making mechanisms, and incentivizing retail traders will assist create a extra dynamic market.
4. Addressing Foreign money Mismatch
Deepening native capital swimming pools and exploring twin or cross-listings with NASDAQ, AIM, and the JSE can cut back reliance on offshore exits.
Adewale Yusuf, Founder and CEO of AltSchool Africa, emphasised the significance of engagement:
“The NGX must actively interact founders and use them as channels to indicate what’s potential on the alternate. Native traders additionally must step in. Many people don’t absolutely perceive the method or necessities. By placing clear buildings and academic help in place, founders can see precisely what it takes to record, and confidence within the native market will develop.”
TLP Advisory’s Position in Nigeria’s Innovation Ecosystem
Launched in 2014, TLP Advisory has suggested greater than 250 shoppers in Nigeria’s expertise and enterprise ecosystem on M&A, IP, enterprise financing, and worldwide enlargement. The agency co-drafted the landmark 2023 Nigerian Startup Act and helps greater than 200,000 companies by its legal-tech platform DIYLaw.
Supported by companions together with Wimbart and Ventures Platform, the report serves as a name to motion for all stakeholders dedicated to strengthening Nigeria’s digital financial system.
The total report may be downloaded at no cost [link].
