“It is not surprising that Lagos is the top start-up hub in Africa,” Andrew S Nevin, Partner/Chief Economist, PwC, Nigeria said.This is because, according to Nevin, “There are big challenges to solve on a massive scale,” and “it’s only solvable with innovation.”
The country’s top economic performer has one of Nigeria’s highest urbanisation rates as more people arrive in search of opportunity, creating demand for accommodation, financial service products, roads, health care and electricity, amongst other things.
Although Lagos is Nigeria’s smallest by land area, the centre of excellence is Africa’s largest, a densely-packed megalopolis that is home to an estimated 21 million people. Nigeria’s most populous.
On its own, Nigeria’s economic capital would rank as Africa’s seventh-largest economy. Known for its traffic gridlock and entrepreneurial dynamism, Lagos alone is responsible for about 30 percent of Nigeria’s gross domestic product. If Lagos was a country, its economy which is worth over $136-billion would not only be the seventh-largest in Africa, it would be ahead of Cote D’Ivoire and Kenya.
A breakdown of the report by StartupBlink, one of the world’s most comprehensive startup ecosystem map and research centres revealed that Lagos was also ranked in the global top 50 cities for E-commerce & Retail Technology and in the global top 100 for both Transportation Technology and Education Technology, a natural by-product of the pandemic’s digital acceleration.
Ibadan was another city that saw a massive increase in ranking, jumping 601 spots to 353rd globally and 2nd in Nigeria, surpassing the Nigerian capital of Abuja. The latter ranked 3rd nationally, fell 12 spots to 466th on the global ranking, while Port Harcourt decreased by 6 spots to 906th.
The newest Nigerian city in the rankings, Enugu, came out at the 978th spot globally and 5th nationally. Benin City increased 9 spots to 979th, while Kano jumped 14 spots to 981st. In total, Nigeria now has seven cities in the global top 1000 and continues to have the highest number of ranked cities of any African nation.
As a result, Nigeria reported one of the notable increases in Africa, it leapt 5 spots to now rank 63rd globally. It is the highest-ranking country in Western Africa and the 3rd highest-ranking country in Africa.
“Nigeria has increased significantly, gaining 5 spots to rank 63rd globally. It is the highest-ranking country in Western Africa and the 3rd highest-ranking country in Africa,” research analysts at StartupBlink, said.
Within Africa, the Global Startup Ecosystem Index 2021 showed that there were differences among sub-regions. Central Africa had no representation in the rankings; Eastern Africa grew from 4 to 6 countries in the global top 100. Northern Africa kept its three representatives in the global top 100, yet two of the three nations (Tunisia and Morocco) declined in rank.
Southern Africa had a good year; not only did South Africa join the global top 50 this year, but a second Southern African country (Namibia) joined the rankings.
It was a good year for Western Africa as all ranked countries (Nigeria, Ghana, and Cape Verde) improved their rankings.
Despite nurturing unicorns like Jumia, an online shop for electronics, phones, and fashion, Nigeria, according to StartupBlink, faces some major challenges, such as a lack of financing options and even a lack of broadband internet infrastructure.
“Government entrepreneurship programs are present but need to be developed, as does legislation and public sector support,” the report said.
Nigerian and Kenyan start-ups accounted for over 77 percent of the total investment attracted in 2020. Nigeria alone was estimated to have been backed by more than $600 million in venture capital funding in 2019.
Access to funding for many of the smaller start-ups in Africa’s largest economy remains a key challenge that is crippling growth.