Nigeria is pushing to give local investors a greater stake in the country’s fast-growing fintech industry as companies such as OPay and PalmPay consider tapping overseas capital markets.
The debate comes as Nigerian Exchange Group Chief Executive Officer Temi Popoola urges the government to consider policies that would encourage companies with substantial operations in Nigeria to list on the local exchange, even if they also seek listings abroad.
While we encourage free and open markets, let’s make sure our locals can also benefit. As they list abroad, they should also list in our country,” Popoola said during a recent engagement with President Bola Tinubu in Abuja.
The proposal highlights a tension facing Nigeria’s capital market: the country is home to one of Africa’s largest and fastest-growing digital economies, but many of the companies benefiting from that growth remain privately owned and financed largely by international investors.
OPay, which began operations in Nigeria in 2018, has grown from a mobile payment platform into one of the country’s largest fintech companies, serving consumers, merchants and agents across its payments ecosystem.
Bloomberg reported in May that OPay was working with Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co. on preparations for a potential US initial public offering. The company was considering a valuation of about $4bn, although the plans were not final.
The potential transaction would give OPay access to a deeper pool of international investors and potentially greater liquidity than the Nigerian market can currently offer.
PalmPay has followed a similar expansion path. The company launched in Nigeria in 2019 and has raised millions of dollars from investors including Transsion Holdings, the Chinese electronics group behind Tecno, Infinix and itel, as well as MediaTek and other backers.
PalmPay has expanded beyond Nigeria and is building an international business spanning Africa and Asia. The company has established Hong Kong as a base for its global operations, though that does not necessarily mean it will pursue an IPO there.
The potential overseas listings come as Nigeria’s digital-payments market continues to expand. The country’s large population, relatively low formal financial-services penetration and widespread use of mobile phones have created fertile ground for fintech companies. Digital wallets, agent banking, electronic transfers and point-of-sale payments have become increasingly important channels for consumers and businesses.
That growth has also made Nigeria an important market for international technology investors seeking exposure to Africa.
A listing on the Nigerian Exchange would allow pension funds, asset managers and individual investors to take direct equity positions in major fintech companies. It could also broaden the technology representation of the local stock market, which remains dominated by banks, industrial companies and consumer businesses.
Popoola’s proposal is not necessarily aimed at preventing companies from raising money abroad. The executive argued that companies with significant Nigerian operations should have a route to give domestic investors access to their shares while retaining the ability to tap deeper international pools of capital.