Group Managing Director and CEO of Nigerian Exchange Group (NGX Group), Temi Popoola, has dismissed the conventional views on Africa’s private equity exit challenges, urging stakeholders to look beyond initial public offer (IPO) market weaknesses and address deeper structural and economic hurdles.
Speaking during a high-level panel discussion titled ‘The Exit is This Way’, at the 21st Annual AVCA Conference, Popoola argued that Africa’s difficulties in generating consistent and effective exit routes stem not from a lack of market mechanisms, but from broader systemic inefficiencies that have long hindered investor confidence and participation.
He noted that African stock exchanges have faced underwhelming performance over the past five to six years, impactingtheir ability to serve as viable exit channels not because exit tools are lacking, but because the wider market ecosystem has not been functional.
“Whether you’re a private equity firm trying to exit or a family-run business looking to scale, the ecosystem simply didn’t work,” Popoola said, underscoring the importance of distinguishing between broader market health and specific exit strategies.
According to him, addressing the right problem is the first step toward building durable solutions. Central to his argument was the untapped potential of local capital. Popoola pointed out that Africa is home to a vast reservoir of informal capital estimated at over $500 billion that circulates daily but rarely finds its way into formal financial markets.
Unlocking this capital, he asserted, could be a game changer for the continent’s liquidity and investment landscape.
“The real question is, how do we channel this local capital into the formal market? The answer lies in technology,” he stated.He illustrated this with the NGX Group’s recent experience during Nigeria’s 2024 banking sector recapitalisation program, where technology played a pivotal role in simplifying transactions, expanding access, and ultimately mobilising over N2 trillion into the capital market.
This, he explained, showed how tech-driven market structures could enable local participation, bridge liquidity gaps, and create the conditions necessary for sustainable exits. Once local capital enters the market, you create a two-sided equation—supply meets demand—and exits become sustainable,” he added.
Popoola also highlighted the shifting global dynamic where capital markets are becoming magnets for larger, higher-quality companies, a trend Africa must embrace to attract both domestic and foreign investors.
