As the Federal Government, through the Ministry of Communications, Innovation and Digital Economy, disclosed plans to create an appropriate regulatory environment and improve digital infrastructure that would enable fintech to access funds, especially from angel investors, efforts to draw fintechs to the stock market and capitalize on their fundraising prowess to boost liquidity may have made some headway.
Additionally, the government stated that it will work with the NGX to provide customized listing alternatives for startups via the exchange technology board, as well as to promote the export of tech-related goods and services.
Speaking at a tech event over the weekend with the theme “Invest in Africa’s Future – Let us Talk About Exits,” which was organized jointly by the Ministry, NGX, and Future Africa in New York with support from Stanbic IBTC, CardinalStone Partners, and Chapel Hill Denham, Minister of Communications, Innovation, and Digital Economy Bosun Tijani stated that the current administration is prepared to prioritize innovation and encourage entrepreneurs, adding that Nigeria is open for investments.
The SEC adopted the NGX Tech Board listing guidelines in December 2022 with the goal of increasing investment in locally owned, technologically advanced financial enterprises throughout Africa and giving them more exposure.
According to research, Nigerian fintech companies are reaching out to investors and receiving funding, particularly from venture capitalists (VC) in the US, UK, Switzerland, and Belgium. Between 2016 and 2022, fintech companies raised about $876.5 million from these offshore locations.
For example, fintechs raised approximately $600 million in capital between 2014 and 2020. This amounted to 25% ($122 million) of the $491.6 million raised by digital firms in Africa in 2019 alone, with Kenya drawing the highest amount at $149 million.
The fintech industry in Africa raised $1.45 billion in funding for 2022, a 39.3% rise from the year before. This industry attracted the greatest attention from investors last year, accounting for 43.4 percent of all start-up investments ($3.3 billion) made on the continent.
“Indications also emerged that 205 fintech start-ups raised funding, with Nigerian fintech making up almost 40 percent of startups and 46 percent of fintech funding,” it said.
Experts contend that by making significant financial investments in up-and-coming financial services startups, these venture capitalists have enabled fintech companies to expand and obtain more funding from sources outside of the country.
The potential of our technological firms to export goods is something we want to prioritize. We are starting in Africa and will eventually expand to the rest of the world, according to Tijani. If we as a nation do not highlight innovation and support entrepreneurs in their endeavors, we will be unable to accomplish all of this. Investments are now welcome in Nigeria.
He emphasized that diversifying away from an excessive reliance on a single sector necessitates raising productivity in other areas and mentioned that Nigeria had been struggling with an excessive reliance on oil in recent years.
However, he went on to say that innovation and technological advancement can help achieve this.
Speaking at the same event, Temi Popoola, the CEO of NGX, said that the Exchange will work tirelessly to support the goals of the incoming administration. She also mentioned that NGX is committed to promoting innovation in order to draw in a bigger group of investors and more established tech businesses to list on its platform.
He noted that the need for private money is currently greater than that for public capital, and he added that the NGX and the Securities and Exchange Commission (SEC) are currently having discussions about private markets in order to allow the exchange to transact with startups and other non-listed businesses.
Olugbenga Agboola, the CEO of Flutterwave, stated that his organization is concentrated on the Nigeria project because the majority of its investible cash has been allocated to Nigeria since the company’s founding.
Additionally, he said that the business is prepared to take advantage of market possibilities to grow and continue providing investors with value.
Furthermore, in his speech, Bolaji Balogun, the CEO of Chapel Hill Denham, advised Nigerians to seize the chance to contribute to the capital development occurring in the digital sector rather than letting foreigners dominate the industry.
