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In an effort to bolster the presence of fintech companies in the stock market and leverage their fundraising potential to enhance liquidity, the Federal Government of Nigeria, through the Ministry of Communications, Innovation, and Digital Economy, has unveiled plans to create a conducive regulatory framework and enhance digital infrastructure. These measures aim to facilitate fintechs’ access to funds, particularly from angel investors.
The government is also committed to supporting the export of technology products and services and collaborating with the Nigerian Exchange Limited (NGX) to establish customized listing options for startups through the exchange’s technology board.
Speaking at a tech event themed “Invest in Africa’s Future – Let’s Talk About Exits,” hosted by the Ministry, NGX, and Future Africa in New York, Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, emphasized the administration’s dedication to prioritizing innovation and fostering entrepreneurship. He highlighted that Nigeria is now open to investments and is eager to empower its technology companies to export their products, starting with a focus on the African market.
In December 2022, the Securities and Exchange Commission (SEC) approved the listing rules for NGX’s tech board, aimed at boosting investments in indigenous fintech companies across Africa and providing greater visibility for these companies.
Recent findings indicate that Nigerian fintech firms have been actively approaching investors and securing funding, particularly from venture capitalists in countries such as the United States, United Kingdom, Switzerland, and Belgium. These offshore investments have totaled over $876.5 million between 2016 and 2022. Notably, Nigerian fintechs raised approximately $600 million in funding from 2014 to 2020, with 2019 alone accounting for $122 million of this total, making Nigeria the second-largest recipient of funding in Africa after Kenya.
The African fintech sector witnessed substantial growth in 2022, attracting $1.45 billion in funding, a 39.3% increase from the previous year. Fintech was the most appealing sector for investors, representing 43.4% of all startup investments ($3.3 billion) on the continent.
Minister Tijani reiterated the government’s commitment to supporting technology companies in exporting their products, with a primary focus on Africa and eventual expansion to global markets. He stressed that diversifying the economy away from over-dependence on the oil sector requires increased productivity in other sectors, driven by technological innovation.
Temi Popoola, CEO of NGX, affirmed the exchange’s dedication to fostering innovation that attracts a larger pool of investors and mature tech firms to list on its platform. Popoola highlighted that the demand for private capital currently exceeds public capital and that discussions are ongoing with the Securities and Exchange Commission to enable NGX to engage with non-listed companies like startups.
Olugbenga Agboola, CEO of Flutterwave, emphasized the company’s commitment to the Nigerian market and its readiness to capitalize on opportunities to scale and deliver value to investors.
Bolaji Balogun, CEO of Chapel Hill Denham, encouraged Nigerians to participate in the ongoing capital formation within the tech sector to prevent foreign control of the space.
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