TLP Advisory Report Explains Why Nigerian Startups Steer Clear of NGX Listings

A new study by TLP Advisory has uncovered the key challenges preventing Nigeria’s high-growth startups from going public on the Nigerian Exchange (NGX), even after the establishment 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 poses a significant risk to long-term sustainability and wealth creation within Africa’s largest startup ecosystem.

Information Gaps and Preference for Acquisitions

The report shows that 53% of startup founders are not fully aware of the NGX listing requirements, driving a preference for alternative exit strategies:

• 46% favour acquisitions over IPOs
• Only 21% consider an IPO, with many leaning toward foreign exchanges

These findings underline a disconnect between Nigeria’s capital markets and its fast-growing tech ecosystem.

Structural Challenges: Currency and Compliance Issues

A major barrier is currency mismatch, with about 77% of Nigerian startups raising capital in US dollars but generating revenue in naira, incentivising offshore exits.

Other notable concerns include:

• Compliance costs and fears of undervaluation (26%)
• Limited liquidity in local markets (16%)

Despite these obstacles, the study finds that 42% of founders are open to NGX listings, and over half express a generally positive view of local capital markets if reforms are introduced.

Need for Education and Active Engagement

TLP Advisory calls for better education, practical guidance, and confidence-building to position the NGX as a credible platform for growth-stage startups.

Adewale Yusuf, Founder and CEO of AltSchool Africa, stressed the importance of engagement:

“The NGX must actively educate founders and showcase opportunities. Clear guidance and structured support can help build confidence in the local market.”

The report concludes that collaboration between regulators, investors, founders, and policymakers is essential to make the NGX a viable and attractive exit platform for Nigerian startups.