African Companies Are Raising Billions In London. Now, The UK Wants To Atrract More
The UK wants more African companies to choose London when raising money on the stock market, a British trade official told Semafor. Tracey Austin, a senior director at the Department for Business and Trade (DBT), said attracting more African IPOs has become a top priority.
“The UK is trying to be more inventive to sell London as a financial services center from where companies can attract global capital, not just a place to do business in and leave,” Austin said.
African Companies Are Already Raising Billions in London
Between 2010 and 2020, over 100 African companies raised over £17 billion ($27 billion) on the London Stock Exchange (LSE).
The latest listing in recent months was from Africa Finance Corporation, the Lagos-headquartered infrastructure investor, which listed a $500 million eurobond in March, and Guaranty Trust Holding Company (GTCO), the parent of one of Nigeria’s largest banks, raised $100 million in an initial public offering last month. GTCO became the first Nigerian bank owner to go public on the LSE.
Encouraging Future Listings
For nearly four years, UK officials have collaborated with private advisers to encourage African firms to list on the London Stock Exchange. They’ve held meetings with private equity and venture capital firms across Africa, urging them to consider London as an exit route for their portfolio companies instead of waiting years to reach billion-dollar “unicorn” valuations.
Revised listing rules, introduced last year, are now part of the pitch. Austin said the DBT has been talking mainly to pan-African and tech firms, while also seeing interest in artificial intelligence, biotech, and clean technology. AI and deep-tech companies are primarily located in North Africa, particularly in Tunisia. Ghana, Tanzania, Nigeria, and South Africa have also shown interesting ventures, according to Austin.
How the London Listing Process Works
Going public in London usually takes about three years. Companies can choose from four different sub-markets, depending on their size and maturity.
One of the easiest entry points is the Alternative Investment Market (AIM), set up three decades ago to give smaller companies easier access to public capital.
Companies listed on AIM, along with those on other LSE markets, are tracked by the FTSE UK Listed Africa Index, which measures the performance of African firms on the exchange. As of July, Nigeria’s GTCO ranked second on that index.
Image: Emmanuel Ikwuegbu
