The Nigerian stock market and the players are not ready for the future. The implication is huge: the domicile of Nigeria’s next level of wealth will be outside the nation. Yes, Delaware will remain the legal jurisdiction but Lagos has not demonstrated that it cares. How can eTranzact International Plc be valued at $21 million? CWG is even sub-$10 million.
By 2030, I expect 80% of the richest Nigerians to have made money from technology. Nigeria is having its finest cambrian moment on the formation of enduring companies. The last time we were this bold, on entrepreneurial capitalism, was in the early 1990s when some of Nigeria’s current leading banks were established.
But unlike those banks which today boost the local stock exchange, Nigeria’s future empires may not be found in the local bourse. And that is a challenging economic war ahead. Nigeria has been fixated with 5G, 4G, data, etc without paying attention to what matters: future economic capture.
Comment: Well I don’t quite agree with you on Nigerian stock market not being ready. What I believe is happening is that most of the companies that you are talking about have not yet gotten to where they would list their shares on the exchange. Nigerian exchange have demutualised, the exchange have capacity to raise funds but the new kids on the block do not only need funds. They need partners that would enable them to gain access to the global market. I believe that at a time in their growth they will need the exchange. Nigeria as a country has issues that if unresolved will make listing unattractive to investors. These include foreign exchange policy, insecurity, politicized regulators. These are factors that the exchange have no control over.
My Response: Certainly, I expected this comment since I did not link to the full piece. CWG Plc is worth about $8 million. eTransact about $20 million. Even though they are listed, I will not approve for any of our firms to be listed in Lagos if that is how the market will price them. The issue is not being listed, the issue is the exchange educating the investors and the nation doing what is critical for people to understand technology investments.
ETransact in America would be worth at least $150 million but Lagos cannot even price it up to $25m. The best investors are customers: the customers here are Nigerian people. And we need to get them into this new world.
Paystack was priced by Americans more than Wema, FCMB and Unity Bank combined. Would you have expected Paystack to pick $20million in Lagos compared with the $200 million Americans paid?
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