Nigerian startups are steering clear of listing on the country’s stock exchange — and the weak naira is the biggest culprit.
A new survey by African-focused law firm TLP Advisory shows founders overwhelmingly see the Nigerian Exchange (NGX) as too risky for exits or fundraising, despite the creation of a tech-friendly listing board meant to attract high-growth companies.
By the numbers
- 0: Startups that have listed on the NGX’s technology board since it launched in 2022.
- ~65%: How much the naira has lost in value since President Bola Tinubu loosened FX controls in 2023.
- 76.5%: Nigeria-funded startups holding dollar-denominated capital, according to TLP.
- >10: New NGX listings between 2021–2024 — none from tech.
- 5: Nigerian-born unicorns (Flutterwave, OPay, Interswitch, Andela, Moniepoint) — all backed by foreign dollar investors.
What’s happening
Founders say a “currency and foreign exchange mismatch” makes a local IPO unappealing. Even with lighter listing rules — no profit thresholds, lower free-float requirements — the NGX technology board hasn’t attracted a single startup.
TLP’s survey shows early-stage VCs, who invest largely in dollars, want exits that protect them from FX losses. A listing in naira would expose them to steep devaluation risks.
Why it matters
Nigeria’s unicorn pipeline keeps growing, but the country’s stock market has yet to benefit. The disconnect leaves:
- Founders seeking offshore exits,
- Investors avoiding naira exposure,
- The NGX missing out on Africa’s most active tech ecosystem.
Between the lines
The naira has gained nearly 10% in the past six months, but its long-term volatility still scares founders. FX unpredictability has become a structural risk — one that local markets haven’t solved.
What they’re saying
“Dollar-denominated investors expect dollar exits,” TLP writes. “Exchange rate instability makes local listings a foreign exchange risk-management exercise.”
What’s next
TLP is urging the NGX to pursue dual- or cross-listing partnerships with:
- NASDAQ
- London Stock Exchange AIM
- Johannesburg Stock Exchange
Such options could give Nigerian startups a path to dollar-based exits while still connecting with local investors.
Source: Bloomberg
