….Startups Raise Dollars, Earn Naira
Abiodun JIMOH
Nigeria’s high-growth startups continue to avoid listing on the Nigerian Exchange (NGX), raising concerns about the long-term development and sustainability of the country’s capital market. Despite government and regulatory efforts, including the launch of the NGX Technology Board in 2022, many local firms are choosing acquisitions or foreign markets over domestic initial public offerings (IPOs), a new report by TLP Advisory reveals.
Titled “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” the report highlights deep-rooted structural and regulatory barriers that prevent startups from accessing local capital markets. A key finding is that a majority of founders are not sufficiently informed about the NGX listing process. More than half of surveyed startup founders admitted they lacked adequate knowledge of what it takes to go public, while nearly half preferred acquisitions or offshore exits. Only 21% expressed interest in pursuing a domestic IPO.
The report points to structural issues beyond knowledge gaps. Currency mismatch remains a major concern, as approximately 77% of Nigerian startups raise funding in US dollars but generate revenue in naira. This imbalance creates a strong incentive to list abroad, where returns are dollar-denominated. Other factors include high compliance costs, fears of undervaluation, and limited market liquidity, which collectively make local listings less attractive. Still, the study finds that interest exists if reforms are implemented, with 42% of founders willing to consider listing on the NGX under improved conditions.
Speaking at the report’s launch during the Africa Prosperity Summit hosted by Ventures Platform, TLP Advisory Co-founder Odunoluwa Longe emphasized that the issue is not a lack of ambition among founders. “Nigeria’s startups are capable of building globally competitive businesses, but too much value is flowing offshore because local exit routes remain limited,” Longe said. She stressed the importance of regulatory clarity, practical education, and better alignment between policymakers, investors, and founders to build confidence in domestic listings.
Adewale Yusuf, Founder and CEO of AltSchool Africa, echoed the need for active engagement by the NGX. “Many founders do not fully understand the listing process or the requirements. With clear guidance and educational support, confidence in the local market will grow,” he said.
The report highlights a disconnect between policy intent and implementation. In 2023, the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, announced plans to work with the NGX to stimulate startup listings through the NGX Technology Board. At the same event, NGX CEO Temi Popoola emphasized the Exchange’s commitment to fostering innovation and attracting mature tech companies. Yet, two years later, the anticipated surge in domestic listings has not materialized.
TLP Advisory’s findings underscore a pressing concern: Nigeria’s capital market risks missing out on a generation of homegrown tech wealth. Without deliberate reforms, education, and incentives, much of the economic value generated by local startups will continue to flow offshore, leaving the NGX underutilized and the domestic market weaker for it
