PwC: Proposed NGX’s Tech Board to Promote Growth of Nigeria’s Tech Ecosystem

*Says Nigeria accounted for 27% of total deal count of $1.2bn in Africa in 2022

Dike Onwuamaeze

A new PwC report has stated that the proposed creation of a technology board by the NGX would enable the capital market enhance the growth of Nigeria’s technology ecosystem and give prominence to tech companies in the market.  

The report observed that in spite of the growing tech-sector in the Nigerian economy and significant private funding secured by African tech start-ups over the years, the tech sector is currently grossly underrepresented in the Nigerian capital market.

It stated further that out of the 157 companies listed on the Nigerian Exchange (NGX), only nine companies with a combined market capitalisation of N11 trillion were technology-based companies (excluding traditional banks which have incorporated technology into their operations).  

The PwC stated this in its new report titled, “Growing the Nigerian Technology Ecosystem through the Capital Markets,” released yesterday, which was authored by a PwC Partner, Ms. Omobolanle Adekoya and Senior Manager, PwC, Ms. Elizabeth Ekpo.

It noted that the launch of the proposed technology board by the NGX, “is expected to promote more listings from African technology companies, create an inclusive environment that would serve as a catalyst for further economic advancements whilst deepening the Nigerian capital market.

“This is also expected to increase the attractiveness of the Nigerian capital market to tech based companies and position the NGX as a preferred exchange hub in Africa.

“In addition, the tech ecosystem would benefit from improved governance, transparency, talent retention, funding and long term sustainability amongst others by listing on the Nigerian Exchange.”

It would also address some, “concerns of these startups about likely pricing/ risk premiums and ongoing regulatory commitments that would follow.”

It stated further that, “a healthy ecosystem that creates a balance for all subsectors of the technology ecosystem and ensures the optimal flow of required funding to innovate and grow while strengthening governance for long term sustainability is fundamental to enhancing economic growth.

“Agri-tech, clean-tech, ed-tech, e-health, recruitment & HR, prop-tech, mobility & logistics etc are equally important and require adequate investments to enhance their capacity to contribute to national and regional development,” the report stated.

According to the report, Nigeria has a fast-growing tech sector mainly driven by the financial services and the telcos.

It, however, pointed out that, “a holistic and inclusive approach must be adopted for the entire tech ecosystem.”

The PwC noted the Nigeria is, “home to over 400 tech startups and ranked 61st out of 100 countries worldwide in the startup ecosystem index9, Nigeria also ranks number one in Africa in terms of venture capital investment destination, leading in both funding and number of equity rounds.

“It accounted for 23 per cent of all equity funding and 27 per cent of the total deal count of $1.2 billion raised in 2022, portraying the country as the preferred investment destination in Africa.”

But despite these impressive performances, the PwC observed that the Nigerian capital market does not optimally reflect the activities of the sector.