Why Large Nigerian Companies Should Seek Local Funding Before Foreign Listings

I believe Nigeria loses an important source of foreign exchange when companies that grew large in the country bypass the local market to raise capital abroad. Profitable companies listed on the Nigerian Exchange can attract local and foreign investors, while dividend payments and trading activity can deepen the domestic capital market. When more corporate ownership and profits remain within Nigeria, there is greater potential for reinvestment in local businesses, pension funds and other financial assets. A local-currency listing would also give more Nigerian investors an opportunity to own shares in companies whose products and services they support. The most troubling part is that a company may overlook millions of its own customers while seeking funding from foreign investors. Many of those customers have pension and investment savings that could benefit from owning shares in successful companies. I think regulators and government should create stronger incentives, and possibly requirements, for dominant companies with large Nigerian market shares to list locally before going abroad. A foreign listing may bring a higher valuation, but long-term value still depends on revenue, profitability, the local market and good management.

Use The App To Win ₦1m

Stories are shared by community members. This article does not represent the official view of NaijaWorld — the author is solely responsible for its content.