By Daily Touch Insights Editorial Team
Editorial Team
View Journalist Profile
BUSINESS & TECHNOLOGY — Nigeria's listed technology companies are increasing investment in infrastructure and equipment, signalling a possible recovery in corporate investment as stronger cash positions give businesses more room to expand.
An analysis of six listed technology companies — Chams Holding Company, CWG, E-Tranzact International, Legend Internet, NCR Nigeria and Omatek Ventures — shows that their combined capital expenditure rose to ₦3.23 billion in the first half of 2026, up from about ₦1.85 billion during the same period in 2025.
That represents an increase of roughly 75% in capital spending within one year. At the same time, combined cash and cash equivalents nearly doubled to ₦37.8 billion from about ₦19 billion a year earlier.
Tech Companies Are Beginning to Spend More
The increase in capital expenditure suggests that some of Nigeria's listed technology companies are becoming more willing to invest in their operations after a period in which high costs and economic uncertainty encouraged businesses to preserve cash.
Capital expenditure can include spending on technology infrastructure, equipment, property and other long-term assets that support future business growth.
The sharp increase therefore provides an early indication that companies may be moving from a defensive approach toward more expansion-focused investment.
Cash Holdings Have Strengthened Significantly
The biggest change is not simply the increase in spending.
Companies also entered the period with considerably more liquidity.
Combined cash and cash equivalents among the six companies almost doubled to ₦37.8 billion in the first half of 2026, compared with approximately ₦19 billion in the first half of 2025. 1
This gives companies a stronger ability to finance expansion from internally generated funds rather than relying heavily on expensive borrowing.
Investment Is Growing More Slowly Than Cash
There is an important detail hidden inside the numbers.
Although capital expenditure increased substantially, cash grew even faster.
The combined CAPEX-to-cash ratio fell from 9.75% in the first half of 2025 to 8.56% in the first half of 2026.
That suggests the companies have accumulated liquidity faster than they have deployed it into physical assets.
In other words, the sector appears to have greater financial capacity than it is currently using.
Why Stronger Cash Positions Matter
Nigerian technology companies continue to face high operating and financing costs.
Many technology products and pieces of equipment are imported, exposing businesses to currency movements and higher procurement costs.
Companies with strong cash reserves can therefore avoid relying entirely on expensive external financing when they need to purchase equipment or expand infrastructure.
This could give financially stronger firms an advantage over competitors with weaker balance sheets.
Nigeria's Economy Is Showing Some Improvement
The increase in corporate investment comes as several macroeconomic indicators have improved.
Nigeria's real GDP expanded by 3.89% year-on-year in the first quarter of 2026, compared with 3.13% in the first quarter of 2025.
Headline inflation also moderated to 15.91% in June.
However, businesses continue to face significant cost pressures, meaning the improvement in the wider economy has not eliminated the challenges facing technology companies. 2
Foreign Investment in IT Remains Relatively Small
Another important factor is the relatively modest amount of foreign capital entering Nigeria's IT-services sector.
National Bureau of Statistics data showed approximately $11.33 million in capital imported into IT Services during the first quarter of 2026.
That makes internally generated cash particularly important for listed technology companies seeking to expand.
Companies capable of generating and retaining cash can continue investing even when foreign financing is limited.
Companies Are Taking Different Approaches
The overall increase in CAPEX does not mean every technology company is pursuing an aggressive expansion strategy.
The figures show substantial differences in how individual companies are allocating their available cash.
Some businesses are investing heavily in infrastructure and equipment, while others are maintaining more conservative capital-allocation strategies.
This suggests that management teams are assessing opportunities and risks differently rather than responding to the economic environment in exactly the same way.
Chams Shows a Major Shift in Capital Allocation
Chams Holding Company recorded one of the most notable changes among the companies examined.
The company increased its capital deployment as its financial position strengthened, demonstrating how improved liquidity can create room for technology companies to invest in future capacity.
Its performance illustrates the broader trend emerging across the listed technology sector.
Technology Infrastructure Requires Long-Term Investment
Technology companies cannot depend entirely on existing infrastructure if they want to grow.
New equipment, digital infrastructure and technology systems can increase capacity and allow businesses to serve more customers.
For companies operating in payments, financial technology, enterprise software and digital services, continued investment can therefore be essential to remaining competitive.
High Costs Still Create a Major Risk
The improvement in investment should not be mistaken for the disappearance of Nigeria's economic challenges.
Imported technology remains expensive, financing costs remain elevated and currency volatility can increase the cost of equipment.
Companies therefore have to balance the need to invest with the need to preserve enough cash to withstand future economic shocks.
More CAPEX Does Not Automatically Mean Better Performance
There is also a danger in interpreting rising capital expenditure as an automatic sign of success.
Investment only creates value when the assets generate additional revenue, improve efficiency or strengthen the company's competitive position.
A company can spend billions on equipment and infrastructure without producing better returns if the investment is poorly planned.
The next question is therefore whether the increased spending will translate into stronger earnings and productivity.
The Real Test Will Come Later
The first-half numbers show that companies have greater willingness and ability to invest.
But the financial impact of those investments may take several years to become visible.
Investors will need to monitor whether increased CAPEX leads to higher revenue, stronger margins, greater market share and improved cash generation.
Those indicators will provide a much stronger measure of recovery than capital spending alone.
What This Means for Nigeria's Technology Sector
If the trend continues, higher investment by listed technology companies could strengthen Nigeria's digital infrastructure and support the expansion of technology-based services.
It could also encourage other businesses to invest if they see evidence that the economic environment is becoming more predictable.
A sustained recovery in corporate investment would be particularly important for Nigeria because technology is increasingly connected to financial services, commerce, communications and other parts of the economy.
Our Perspective
The 75% increase in CAPEX is encouraging, but it should not be celebrated blindly.
The more interesting figure may actually be the nearly doubling of cash reserves. It suggests that the companies have rebuilt financial capacity and are now beginning to deploy part of that strength into expansion.
The real signal of recovery will come if today's investment produces stronger businesses tomorrow. Rising CAPEX is promising, but only productive CAPEX creates lasting economic value.
Conclusion
Nigeria's listed technology companies increased their combined capital expenditure to ₦3.23 billion in the first half of 2026, up roughly 75% from ₦1.85 billion a year earlier. Their combined cash holdings also nearly doubled to ₦37.8 billion. 3
The figures suggest that stronger balance sheets are giving technology companies greater capacity to invest despite continued financing and equipment-cost pressures.
However, the sector's recovery will ultimately depend on whether that investment generates stronger revenues, productivity and long-term shareholder value.
Nigeria's technology sector may be entering a new investment phase — but the next challenge is turning stronger cash positions into productive assets and sustainable growth.
