Understanding the barriers stopping Nigerian fintechs from embracing local stock market listings.
Why Nigerian fintechs avoid listing has become a pressing question as more founders express hesitation toward the Nigerian Stock Exchange. Many tech leaders say they simply do not understand how listing on NGX works, while others point to deeper issues like currency instability, limited liquidity, and concerns about stricter regulatory oversight. Recent research by TLP Advisory reveals just how wide the gap has become between startups and the local capital market.
A major insight from the report is that more than half of startup founders admit they do not fully understand the NGX listing process. With 53% saying they lack adequate knowledge and only 21% even considering the idea of listing, the appetite for going public remains extremely low. A significant number prefer foreign exchanges or aim for exits through acquisitions instead of public offerings.
The study notes that founders rarely receive direct communication or support from NGX itself. Many have never been guided through requirements, timelines, or strategic pathways for going public. This disconnect has created what the report calls an “awareness gap,” which can only be fixed through consistent engagement, educational workshops, simplified playbooks, and targeted advisory programs. Strengthening understanding, the report says, is the first step toward creating a healthier listing environment.
However, awareness is only part of the challenge. Industry experts argue that founders must also be prepared for the increased transparency that comes with going public. Investors are calling for better reporting discipline, more openness, and a move away from the “fake it till you make it” culture that can exist in fast-growing startup ecosystems. Without solid financial practices and reliable data, public scrutiny becomes a major barrier.
Valuation challenges also complicate the picture. During the years of abundant global venture funding, several Nigerian startups secured investments at inflated valuations despite low local revenue. Now, if those companies attempt to list, their real market value may be significantly lower than their previous fundraising numbers. A drop from a $50 million valuation to $10 million at listing could severely impact earlier investors, making founders hesitant to pursue public markets.
Currency instability is another major concern. Over two-thirds of surveyed startups blame foreign exchange mismatches for avoiding NGX listings. Many tech companies operate using the US dollar because their investors are foreign. Listing in naira exposes them to exchange rate volatility, especially after the currency lost more than 65% of its value since 2023. This makes a local listing feel like additional FX risk rather than a growth opportunity.
Liquidity limitations on the NGX also weigh heavily on founders’ minds. Compared to global exchanges like the NYSE, the Nigerian market is far smaller and less liquid, reducing confidence that shares will move efficiently once listed. Some founders highlight compliance costs and the potential for unfavorable valuations as further disincentives.
The report recommends exploring dual or cross-listing options with larger exchanges to bring foreign capital while maintaining a Nigerian presence. It also stresses the need to grow local investment sources to reduce reliance on dollar-denominated funding. Strengthening domestic participation could help stabilize valuations and build long-term confidence across the ecosystem.
Ultimately, solving why Nigerian fintechs avoid listing requires efforts from both sides. Startups must embrace better governance and financial transparency, while NGX must improve communication, education, and support for tech companies. Bridging this divide could unlock a richer, more vibrant capital market for Nigeria’s fast-growing digital economy.
