Emerging technological firms will soon have opportunity to raise funds and list their shares through the formal securities exchange.
Capital market stakeholders are fine-tuning a specialised listing board that will enable tech firms to access funding and list their shares on the Nigerian Exchange (NGX).
Chief executive Officer, Nigerian Exchange (NGX), Mr Temi Popoola said the new “specialised technology board” for tech firms is aimed at encouraging the listing of companies in the technology space and thus provide them with increased transparency and visibility on foreign investment activities in tech companies and local tech startups.
He said the tech board is being developed by the NGX in conjunction with other major stakeholders such as Securities and Exchange Commission (SEC), Central Bank of Nigeria ( CBN), Central Securities Clearing Systems (CSCS) and Pension Fund Operations Association of Nigeria (PenOp).
The African tech sector is fast growing with startups raising over $4 billion between 2015 and 2021 with combined valuations surpassing $20 billion according to a Disrupt Africa report.
To promote the idea of inclusive access of tech firms to the capital market, the NGX organised a webinar with the theme “Enabling the Next Wave of Growth for Technology Companies in Africa”,
Chairman, Nigerian Exchange (NGX), Abubakar Mahmoud, who was represented by NGX board member, Erelu Angela Adebayo, said that Nigeria is home to several unicorns like Flutterwave, Andela, Jumia and Opay which have valuations surpassing $1 billion.
“As a sustainable exchange championing Africa’s growth, NGX is positioned to support the growth of the next wave of technology companies. It is stimulating the capital market, providing a tailored platform for tech companies in Nigeria and wider Africa to access growth capital whilst providing exit opportunities for all investors.
“The next wave of growth for home-bred technology companies needs to be anchored on sustainability, agility, collaboration and digital innovation and these are elements that NGX represents,” Mahmoud said.
Read Also: Nigerian stocks lose N858b in biggest daily loss
Director General, Securities Exchange Commission (SEC), Mr Lamido Yuguda, who was represented by Dayo Obisan, Executive Commissioner, Operations, SEC, noted that with the several developments recorded in the technology space, Africa remains a continent with the highest potential when it comes to tech and innovations.
He said Africa’s ability to determine its future digitally must be accelerated by strengthening its technological capabilities.
According to him, Africa has the potential to grow into a technological giant with the right enablement and SEC will support laudable initiatives aimed at improving on the capacity of the market to develop a robust ecosystem for the Nigerian capital market.
Deputy Governor, Financial Systems Stability Directorate, Central Bank of Nigeria (CBN), Mrs Aisha Ahmad pointed out that tech had grown from an enabler of business to a fully-fledged sector as some of the largest companies in the world like Meta and Google.
“Africa is a $2.7 trillion economy and for this growth to translate into broader economic impacts, we need more local investor participation and I’m particularly excited about the NGX’s Technology Board plan which will help grow the listings of Nigerian and Africa tech companies. It will aid price discovery of tech industry valuations, and channel capital to tech and other sectors,” Ahmad said.
Popoola said the webinar was consistent with NGX’s bid to strengthen the diversity of the capital market by redefining it as an attractive destination for technology companies, adding that the comprehensive discussions at the sessions would help to drive cogent actions to develop African technology.
Panellists at webinar agreed that the proposed launch of NGX Technology Board is timely as it addresses challenges startups face with funding and capital formation during their developmental stage. Additionally, they noted that having major stakeholders like NGX, SEC and CBN champion the board would attract foreign investor participation, especially in terms of liquidity.
Panellists also highlighted policies and the right standards as key factors to creating an enabling environment for tech listings and Investor protection.
They noted that regulators should be concerned about the companies listed, the governance structure, evaluations, returns and their positive impact on Nigeria’s economy, such as the introduction of new founders to the market and the creation of employment for Nigerians.