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.
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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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What have we ever positioned ourselves proactively to benefit from? We always think incrementally, looking to patch things up, or refurbish/repaint old stuff; we are never great at revolutionising things at institutional level.
When you are poor and still afraid of taking risks, you stand no chance of changing your status.
Soludo showed up at CBN and moved bank’s capitalisation from N2 billion to N25 billion, it wasn’t 4, 6 or 10 billion, but N25 billion! Ask yourself, in this present day Nigeria, who could be that bold and how much of political support would that person get? We knew what happened back then in 2004, the Senate wasn’t in support, they even suggested creating three tiers of banks, but Soludo remained convinced on what he wanted to achieve.
This stock exchange that has become an afterthought in the minds of many Nigerians used to be loud and exciting, when Onyiuke was there, until 2009 meltdown happened, and then many people gave up on the sector. What has been done to reignite the flame? What has been reinvented or revolutionised to make it attractive for new rainmakers in the tech space and their acolytes? Too much schooling and certification, but no ground-breaking innovation.
We are not just good enough.