Nigerian tech startups have failed to carry out Initial Public Listings (IPOs) on the Nigerian Exchange (NGX) Limited largely due to the weakness of the Naira, according to a new survey carried out by TLP Advisory.
The new report Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX is the first Nigeria-focused assessment of startup readiness for local listings.
The report shared with Business Post noted that systemic barriers prevent Nigeria’s high-growth startups from listing on the local exchange, posing a risk to long-term sustainability and local wealth creation in Africa’s largest economy, which also has the highest number of unicorns on the continent.
Despite the launch of the NGX Technology Board in 2022, which features easier rules, including the absence of a minimum profit and earnings benchmark and a lower free-float requirement, there have been no tech listings to date.
Meanwhile, in three years to 2024, “the NGX recorded over 10 listings with most of them from traditional sectors,” TPL said in the report.
The survey found that more than two-thirds of startups cited “currency and foreign exchange mismatch” as the reason for not listing on the local bourse.
“Early stage venture investors deploying dollars expect dollar denominator exits to avoid devaluation risks,” the report said, adding that “When 76.5% of Nigeria-funded startups hold dollar capital, exchange rate instability makes listing an exercise in foreign exchange risk management.”
Also, surveyed founders point to a clear knowledge gap as another reason, with a majority (53 per cent) stating they are not sufficiently aware of the NGX listing process. This information gap is compounded by exit preferences, with nearly half (46 per cent) favouring acquisitions, compared with about one in five (21 per cent) who would consider an IPO – many of whom aspire to list on foreign exchanges.
The TLP Advisory report found that structural challenges amplify the issue with majority (77 per cent) of funded startups raise in Dollars but earn revenue in naira, creating a strong incentive for offshore exits.
Furthermore, a minority cite market frictions: 26 per cent point to compliance costs and potential undervaluation, while a smaller share (16 per cent) highlight limited market liquidity as a key concern. Yet, there is appetite for a local solution, with around two in five (42 per cent) open to an NGX listing if the right reforms are in place, and more than half expressing positive sentiment overall.
TLP then urged the Nigerian Exchange to explore dual or cross-listing partnerships for startups with exchanges like NASDAQ, the London Stock Exchange AIM and the Johannesburg Stock Exchange.
Spwaking on the report, Ms Odunoluwa Longe, Co-founder of TLP Advisory, said: “With clarity, practical education and confidence-building – and by aligning regulators, founders, investors, and policymakers – we can turn the NGX into a genuine platform for growth-stage innovation and long-term wealth creation in Nigeria.”
On his part, Mr Adewale Yusuf, Founder and CEO of AltSchool Africa, emphasising the need for greater awareness, said, “The NGX needs to actively engage founders and use them as channels to show what’s possible on the exchange. Local investors also need to step in. Many of us don’t fully understand the process or requirements. By putting clear structures and educational support in place, founders can see exactly what it takes to list, and confidence in the local market will grow.”