Experts in the technology sector have said that for Nigeria’s tech industry to grow, there is need for more participation from local investors, in addition to the foreign-driven investments.

The experts, who spoke at the DETAIL Private Equity and Tech Business Series on the theme: “Insights: Legal Reforms in the Tech Ecosystem”, reiterated that Nigeria continues to be an attractive tech investment destination in Africa.

Nigeria is said to be the top destination for technology startup capital in Africa, cornering 20 per cent of about $5 million invested in tech startups in the continent in 2022.

The country is poised to continue making progress in the digital space with tech entrepreneurs dotting the landscape.

The experts, including co-founder of Indicina, Yvonne Johnson; Head, Broker Dealer Regulation Department, NGX Regulation Limited, Olufemi Shobanjo; Managing Partner, Consonance Investment Managers, Mobolaji Adeoye; CEO, Big Cabal Media, Tomiwa Aladekomo, and Partner, Emerging Technology, Data & Analytics, KPMG, Ladi Asuni, highlighted the major trends that have impacted and continue to reshape Nigeria’s tech landscape.

These, they said, include funding and capital cycles, evolving customer expectations, and regulatory reforms.

In addition, they said the implementation of the naira redesign policy also created an in-road for agency banking, among other global trends.

The panel session, moderated by Temidayo Ajayi Bello, Partner, DETAIL Commercial Solicitors, took place recently at DCS Place, Lagos.

The panelists identified the key five pillars for market creation, which are major considerations for investment entities to include: human capital, social capital, real assets, digital infrastructure and financial services.

According to them, investors should place structure guardrails and benchmarks for startups in their portfolio investments to comply with, to ensure appropriate governance.

Environmental Social Governance (ESG) also has a key role to play, with governance being more primary within the Nigerian context, to prevent the failure of startups. In addition, the overall role of ESG will ultimately advance the Nigerian tech industry, they said.

“The Nigerian Exchange Limited (NGX) has recently launched a Technology Board with less stringent regulatory requirements for startups with an operational track record and market capitalisation of N425 million,” the experts said.

They said although recent foreign exchange policies have dealt a major blow to players in the tech industry, startups can mitigate this risk by having a global outlook in their products and services offerings, and focus less on regulated industries like banking and insurance.

Startups, according to them, can also expand their global footprint through strategic international partnerships and provide service products such as software-as-a-service.