The Nigerian Exchange Limited (NGX) is firming up efforts to make the conditions around the admission of companies into a new listing category, being proposed and to be called the technology board, attractive enough to draw promising tech firms.
“In that board, there are lots of what you might call structural challenges, that will preclude tech companies from listing, which we look to address – things around the rules, the barriers, the entry for traditional companies, the governance requirements and the like,” CEO Temi Popoola told CNBC Africa on Tuesday.
The NGX plans to mould the technology board after the United States NASDAQ index, which is dominated by some of the biggest tech organisations in the world, apparently to avoid losing most of such companies at home to foreign exchanges, the same way the London Exchange softened rules for them last year to boost activity.
Nigeria’s tech ecosystem has never been more vigorous and its reputation as the tech capital of Africa has drawn overseas venture capitalists seeking investment in markets with potentiality and growth.
Of the aggregate sum the continent drew last year, Nigeria accounted for $1.4 billion or 35 per cent, with Interswitch, OPay and Flutterwave already accorded unicorn status – the elite class of firms with at least $ 1 billion valuation. That compares with a total of seven of such in Africa.
Mr Popoola said the technology board will be designed “fit for purpose” and that the stock market is in talks with Securities and Exchange Commission, the apex regulator, to get the go-ahead without stating when the board will be delivered.
“If you look around you, there is a technology capital formation perhaps every other week … One question we have to naturally ask is how we can make a lot of that capital formation to happen on the exchange,” he said.
A good number of tech start-ups in Nigeria from Paystack to Flutterwave are incorporated in the U.S., with e-commerce powerhouse Jumia (backed by German investors) already listed on the New York Stock Exchange.