A new report by TLP Advisory has highlighted significant structural and regulatory hurdles that continue to discourage Nigeria’s high-growth startups from listing on the Nigerian Exchange, despite the introduction of the NGX Technology Board in 2022 to attract tech companies.
The report, titled “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” warns that the persistent absence of local IPOs threatens the long-term sustainability and wealth-creation potential of Africa’s largest startup ecosystem.
It also finds that many startup founders still lack sufficient knowledge about the requirements and processes involved in going public.
The report shows that more than half of surveyed founders (53 per cent) admit they do not fully understand the NGX listing process.
This knowledge gap aligns with current exit preferences, as nearly half of respondents (46 per cent) say they would opt for acquisitions rather than pursuing an initial public offering. Only about one in five founders (21 per cent) would consider an IPO, and many of those prefer to list on foreign exchanges.
The report also points to a deeper structural challenge: currency mismatch. It notes that about 77 per cent of funded Nigerian startups raise capital in US dollars but earn revenue in naira, creating a strong incentive to pursue offshore exits.
Other barriers include high compliance costs and concerns about undervaluation (26 per cent), along with limited market liquidity (16 per cent)
Despite these challenges, the report suggests there is still appetite for local listings if meaningful reforms are implemented, with 42% of founders open to listing on the NGX and more than half expressing generally positive sentiment.
Speaking at the report launch during the Africa Prosperity Summit, hosted by Ventures Platform, TLP Advisory Co-founder Odunoluwa Longe emphasized that the absence of listings is not the result of a lack of ambition.
“Nigeria’s startups have proven they can build globally competitive businesses, but too much value still flows offshore because viable local exit routes are limited.
“The issue isn’t founder ambition or rejection of the NGX; it’s a disconnect propelled by information gaps, perceived illiquidity, and a currency mismatch that makes dollar-denominated exits more attractive,” she said.
Also speaking at the event, AltSchool Africa Founder and CEO Adewale Yusuf echoed the call for stronger education and deeper engagement with founders.
“The NGX needs to actively engage founders and use them as channels to show what’s possible on the exchange,” he said.
“Many of us don’t fully understand the process or requirements. With clear structures and educational support, confidence in the local market will grow,” he added.
In 2023, the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, announced plans to work with Nigerian Exchange Limited to encourage startup listings through the newly established NGX Technology Board.
