A new study by TLP Advisory has highlighted structural and regulatory hurdles that continue to prevent Nigeria’s high-growth startups from listing on the Nigerian Exchange (NGX), even after the launch of the NGX Technology Board in 2022.

Titled “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” the report warns that the lack of local listings threatens long-term sustainability and wealth creation within Africa’s largest startup ecosystem.

Knowledge Gaps and Exit Preferences

According to the report, 53% of startup founders admit they lack sufficient information about the NGX listing process. This knowledge gap contributes to a preference for alternative exits:

• 46% of founders prefer acquisitions over initial public offerings (IPOs)
• Only 21% would consider an IPO, often favoring foreign exchanges

These trends highlight a critical disconnect between local capital markets and Nigeria’s growing tech ecosystem.

Currency Mismatch and Structural Challenges

A fundamental barrier identified is currency mismatch. Around 77% of funded Nigerian startups raise capital in US dollars but generate revenue in naira, creating a natural incentive to pursue offshore exits.

Other concerns include:

• Compliance costs and fears of undervaluation (26%)
• Limited market liquidity (16%)

Despite these challenges, the report notes that there is appetite for local listings if reforms are implemented: 42% of founders are open to listing on the NGX, and over half express positive sentiment toward local capital markets.

Calls for Education and Engagement

TLP Advisory emphasizes the need for clarity, practical education, and confidence-building to transform the NGX into a platform for growth-stage startups.

Founder and CEO of AltSchool Africa, Adewale Yusuf, highlighted the importance of engagement: “The NGX needs to actively engage founders and show what’s possible. Many of us don’t fully understand the process or requirements. With clear structures and educational support, confidence in the local market will grow.”

The report concludes that aligning regulators, founders, investors, and policymakers is key to making the NGX a viable exit platform for Nigerian startups.