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Nigeria wants its tech champions to list at home. The prevailing view is simple: fix liquidity, and the IPOs will come.

But that framing misses a deeper issue. Even with more capital in the market, many venture-backed tech companies may still struggle to list locally, not because the market cannot absorb them, but because they are not structurally built for it.

The dominant assumption is that the main obstacle is liquidity: deepen the market, attract more institutional capital, and local listings will follow.

There is merit to that argument. Nigeria’s equity market remains relatively shallow, with limited institutional depth and trading activity still heavily influenced by retail participation.

But focusing on liquidity alone risks overlooking a more structural constraint. Discussions around whether companies like Flutterwave or Andela could eventually pursue local listings have largely centred on market depth and exit optionality.

An equally important question receives far less attention: are these companies structurally aligned with the governance expectations of public markets?

Corporate governance is often treated as a box to be checked at IPO. In reality, it is a system that shapes investor confidence long before listing, and one that cannot be fundamentally reworked at the point of entry into the public market.

The liquidity argument is not misplaced. For any public offering to succeed, the market must be able to absorb a significant volume of shares without destabilising price discovery.

In Nigeria, this remains a challenge. Institutional investors, particularly pension funds, tend to be conservative in equity exposure, while retail investors dominate trading activity.

For large, venture-backed companies seeking meaningful capital raises, the concern is legitimate: Is there sufficient depth to support both the offering and post-listing trading?

Without adequate liquidity, IPOs risk under-subscription, price volatility increases, and early investors face constrained exit options.

This is particularly relevant for companies that have scaled through multiple funding rounds, where early backers may eventually seek structured exit opportunities.

However, liquidity is not purely a function of available capital. It is also a function of investor willingness to participate, and that willingness depends on confidence. Confidence, in turn, is largely driven by governance.

The limits of “fixing governance at IPO” 

A common response is that governance concerns are overstated because listing requirements impose discipline. Companies must meet disclosure standards, adopt governance codes, and satisfy regulatory scrutiny before being admitted to the market. This is true, but only to a point.

IPO processes are primarily evaluative, not transformative. They assess whether a company meets minimum standards; they do not fundamentally reconstruct how it is governed.

By the time a company reaches this stage, its ownership structure is already defined, often with layered investor rights and preferences. Its board composition reflects years of investor influence, not necessarily independence. And its governance culture, including disclosure practices and internal accountability, is already embedded.

These elements are not easily unwound in the final stages of listing without significant cost or disruption. In practical terms, the IPO does not create governance quality; it exposes it.

The more fundamental issue is the mismatch between how venture-backed companies are governed and what public markets require.

In private markets, governance frameworks are designed to protect a small group of sophisticated investors operating in high-risk environments. This typically results in concentrated control rights, extensive investor veto mechanisms, controlled information flows, and boards dominated