A new report by TLP Advisory, titled “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” identifies systemic barriers and knowledge gaps that prevent Nigeria’s high-growth startups from listing on the local Nigerian Exchange (NGX), posing a risk to long-term wealth creation in Africa’s largest economy. Despite the 2022 launch of the NGX Technology Board, there have been no tech listings to date.
The report, launched at the Africa Prosperity Summit (APS) in Lagos, uncovers a critical disconnect between the venture ecosystem and the local capital market.
The TLP Advisory report details specific challenges and founder preferences that favor offshore exits:
The Core Problem: Disconnect and Currency Mismatch
Odunoluwa Longe, Co-founder of TLP Advisory, noted that the issue is not a rejection of the NGX but a “disconnect propelled by information gaps, perceived illiquidity, and a currency mismatch that makes dollar-denominated exits more attractive for venture-backed companies.”
This sentiment is echoed by Adewale Yusuf, Founder and CEO of AltSchool Africa, who stressed the need for the NGX to actively engage founders and local investors to build confidence and provide clear structures for the listing process.
The report, which benchmarks Nigeria against peer markets like South Africa, India, and Brazil, sets out four practical frameworks to bridge the gap and unlock the Nigerian capital markets:
- Enhancing Education & Awareness: Implement continuous engagement through roadshows, workshops, and practical playbooks to equip founders and investors with the knowledge needed to navigate local listings.
- Reforming Regulatory & Listing Frameworks: Simplify requirements and documentation, while maintaining transparency, to make the NGX more accessible to high-growth startups.
- Market Liquidity & Investor Participation: Strengthen liquidity through market-making mechanisms and incentives for broader institutional and retail investor participation.
- Addressing Currency Mismatch: Deepen local capital pools and explore dual or cross-listing partnerships with mature exchanges like NASDAQ, AIM, and the JSE to reduce reliance on offshore exits.
The study highlights India’s mobilization of domestic capital, supported by pension reform, as a practical blueprint for Nigeria to adapt.