Why 74% of Nigerian Companies Are Taking Their Businesses to the US

Why 74% of Nigerian Companies Are Taking Their Businesses to the US

A growing number of Nigerian companies are establishing corporate ties with the United States, the United Kingdom and the United Arab Emirates as economic pressures, currency instability and limited access to domestic investment opportunities push businesses to seek international markets.

A new report by TLP Advisory, titled Home & Away: Tracking African Tech’s Global Footprints, has revealed that 74 per cent of Nigerian companies maintain affiliations with the United States, largely for corporate incorporation and access to international funding.

The report, unveiled in Lagos on Saturday, disclosed that Nigerian technology startups attracted $572m in venture capital funding in 2025, representing approximately 14 per cent of total funding raised across Africa.

However, despite the significant investment inflows, currency depreciation, limited domestic exit opportunities and the demands of international investors are increasingly forcing Nigerian founders to establish corporate structures outside the country.

According to the report, the United States remains the preferred destination for foreign corporate affiliations among Nigerian companies, particularly for holding structures and fundraising purposes, while the United Kingdom offers a broader combination of business operations, regulatory licensing and commercial activities.

The study examined 100 technology companies across Nigeria, Kenya, South Africa, Egypt, Ghana and Morocco, assessing their corporate connections to the US, UK and UAE and the business opportunities driving those decisions.

It found that 81 per cent of US affiliations were exclusively linked to holding structures, while companies with connections to the UK and UAE were more likely to pursue operational expansion, licensing and regulatory engagement.

Among companies with UK affiliations, 84 per cent had incorporated there, 47 per cent maintained an operational presence, while 19 per cent held regulatory licences.

By comparison, only three per cent of US-affiliated companies and four per cent of UAE-affiliated companies held regulatory licences.

The report also identified the UAE as an increasingly important destination for companies seeking an operational base and access to markets across the Middle East.

Explaining the economic pressures behind the trend, the report pointed to the naira's sharp depreciation following the Central Bank of Nigeria's exchange-rate reforms and unification of foreign exchange windows in June 2023.

The naira weakened from approximately N461 to the dollar to about N1,540 by early 2025 before closing the year at around N1,450.

The situation has placed additional pressure on startups, particularly as 76.5 per cent of funded Nigerian technology companies reportedly raise investment in US dollars while generating revenue predominantly in naira.

This currency mismatch has increased the cost of servicing dollar-denominated obligations and complicated financial planning for businesses operating locally.

Despite the growing international corporate presence, the report noted that the operational foundations of many Nigerian technology companies remain firmly within the country, with their engineering teams, customers and core business activities largely based at home.

Flutterwave Founder and Chief Executive Officer, Olugbenga Agboola, said international expansion had become necessary for African companies seeking access to global capital, talent and business opportunities.

He explained that although Africa remained the company's primary market, building a business capable of operating at scale required access to resources beyond the continent.

Agboola added that generating revenue across different markets and currencies had helped the company manage foreign exchange risks and sustain investment in its African operations during difficult economic periods.

However, industry experts have cautioned founders against rushing into international expansion without adequate financial preparation.

The Head of Growth at Moniepoint Group, Dolapo Omotoso, warned that establishing a presence in Western markets, particularly the United Kingdom, could expose companies to significant operational expenses and demanding compliance requirements.

According to him, the costs of initial investments and customer acquisition could quickly undermine a company's finances, particularly where aggressive promotional campaigns are deployed without a sustainable business model.

Meanwhile, the Head of Middle East and Africa, Primary Markets at the London Stock Exchange, Abi Ajayi, said London offered African businesses access to a broad range of international investors.

Ajayi explained that the city's financial ecosystem connects companies with emerging-market funds, frontier-market investors, sovereign wealth funds and mainstream institutional investors.

He added that London should be viewed by African entrepreneurs not merely as a destination for stock market listings but also as a platform for accessing capital at different stages of business growth.