Amid rising concerns over Africa’s capital exit challenges, leveraging the continent’s pool of informal capital alongside innovative technology could help to solve the problems and boost capital market liquidity.
This view was expressed by the Group Managing Director and Chief Executive Officer of Nigerian Exchange Group (NGX Group), Temi Popoola, who spoke on a panel titled “The Exit is This Way” at the just concluded 21st Annual AVCA Conference.
He called for a strategic rethink of Africa’s exit challenges, arguing that the continent’s pool of informal capital estimated at $500 billion, coupled with technology could transform liquidity and private equity exits.
A capital market or private equity exit refers to the process where a private equity firm sells or disposes of its investment in a company after a specific holding period, typically after implementing value-creation strategies, which allows it to realise returns on initial investment.
Popoola also dismissed the notion that weak Initial Public Offering (IPO) markets are the primary barrier, attributing struggles instead to broader economic and structural gaps.
He underscored the need to distinguish between systemic market challenges and specific exit issues, which is vital for recalibrating expectations and strategies, noting that African exchanges’ struggles over the past five to six years stemmed from market-wide underperformance, not exit mechanisms.
“Whether you’re a private equity fund seeking to exit or a family-run business looking for growth, the ecosystem simply didn’t work,” he said.
Highlighting opportunities amid these challenges, Popoola pointed to the vast pool of untapped local capital in Africa, where over $500 billion circulates daily but remains largely inaccessible to capital markets.
“The real question is, how do we channel this local capital into the formal market? The answer lies in technology,” he stated, pointing to NGX Group’s success in leveraging technology during Nigeria’s banking sector recapitalisation exercise in 2024, which streamlined processes and enhanced market participation, mobilising over N2 trillion.
“Once local capital enters the market, you create a two-sided equation, supply meets demand, and exits become sustainable.”
Popoola also highlighted the global trend toward exchanges attracting larger companies, citing Africa Capital Alliance’s (ACA) recent $4 billion asset listing as evidence of progress.
“Markets are now attracting bigger companies. That’s what we’re trying to do,” he said, underscoring the need for scalable, high-quality listings to deepen market liquidity.
The panel, moderated by Katie Hill, Partner and Associate Director at Boston Consulting Group, also featured Albert Alsina, the Founder and CEO, Mediterrania Capital Partners; Steve Olisaemeka Iwenjora, Partner, African Capital Alliance; Chumani Kula, Co-Head, Old Mutual Private Equity; and Adefolarin Ogunsanya, Partner, Development Partners International.
The experts collectively emphasized the need for policy reforms, investor education, and innovative financial instruments to accelerate exits and sustain Africa’s growth trajectory.
As African markets continue to evolve, Popoola’s insights point to a future where the strategic use of technology and a focus on bringing high-quality companies to market will unlock greater liquidity and stronger exit pathways for investors across the continent.
