The United Arab Emirates (UAE) is of firm belief that Nigeria startup ecosystem offers a lot of potential, but that government of the Africa’s largest economy still needs to do more work to harness benefits of startups ecosystem.
A report by Weetracker revealed startup failure rate of 61.07 percent, positioning Nigeria at the apex among the three prominent tech ecosystems and investment hubs in Africa. The data indicated that only 39 per cent of startups in Nigeria manage to endure beyond their initial years of operation.
In 2022, Nigeria obtained 2.15 points in the startup ecosystem index, according to data provided by StartupBlink. Nigeria ranked 61st out of 100 countries worldwide considering this indicator. In Africa, it was the second-leading country for startups after South Africa.
Speaking to BusinessDay at the ongoing GITEX GLOBAL event in Dubai, Khalfan Belhoul, CEO, Dubai Future Foundation (DFF) urged Nigeria’s government not to see the private sector as it’s competitor, but should leverage the expertise and experience of private sector operators to grow the local economy.
Belhoul noted that Dubai Future Foundation (DFF) is shaping the future of the Arab Emirates, adding that “We reimagine, inspire and design Dubai’s future in collaboration with our public and private sector partners. Our aim is to make Dubai one of the world’s foremost future cities”.
With at least 481 startups active across the country as of August 2022, Nigeria is one of Africa’s “big four” startup ecosystems alongside Egypt, Kenya, and Nigeria. The number of startups in Nigeria was estimated to have exceeded 3,360 in 2022, the highest number in Africa. To follow, Kenya and South Africa counted approximately 1,000 and over 660 startups in the same year, respectively. Other key African markets for startups were Ghana, Morocco, Tunisia, and Rwanda.
As part of his administration’s plan to position Nigeria as a significant player in the global technology landscape, President Bola Ahmed Tinubu earlier this year approved the conversion of an existing property of the Federal Government in San Francisco, USA to a Nigerian Digital Technology Exchange Programme Hub (Nigeria Startup House).
This was one of the several resolutions arrived at during the Federal Executive Council (FEC) meeting in May presided over by President Tinubu.
“As we work towards achieving key elements of our Trade and IEC Strategic Blueprint Pillars, the Nigerian Startup House will play a critical role in promoting Nigeria’s economic interest, attracting Foreign Direct Investment and improving the visibility and positioning of Nigeria’s Startup Ecosystem to attract funding and expertise from global markets and organisations represented in the San Francisco Bay Area and beyond,” said ‘Bosun Tijani, Nigeria’s Minister of Communications, Innovation & Digital Economy.
“The San Francisco Bay Area, and nearby Silicon Valley, is recognised globally as a major source of startup ecosystem funding, with a combined GDP value of just over $929 billion and is home to over 200 of the largest companies in the world by revenue. In addition, most of the $1.3 billion funding sourced by Nigerian technology startups in 2023 alone came from Venture Capital funds in the Bay Area,” Tijani added.
Also, the Federal Government recently announced the launch of a N100 million AI Fund. The initiative through the National Centre for Artificial Intelligence and Robotics (NCAIR) in collaboration with Google is aimed to support Nigerian startups that are leveraging Artificial Intelligence, AI to develop innovative solutions across various sectors.
The fund aims to provide up to N10 million in funding to selected startups, along with access to Google’s AI tools, mentorship, and global network.
Read also: UAE accounts for 36% of MENA region’s Venture Capital deals in H1
Meanwhile, stakeholders in the Nigerian tech space said that the issue of forex overshadowed the various tech policies introduced by Tinubu’s administration in the last one year as they struggled to meet forex obligations.
Speaking further, Belhoul told BusinessDay that Dubai Future Foundation recently launched “The Future of Progress” report which makes the case for a new global measurement of national success that goes beyond the traditional concept of gross domestic product (GDP).
He said DFF had previously raised the notion of new definitions of success in the Future Opportunities Report: The Global 50, launched earlier in 2023, delving deeper to enable a more nuanced and comprehensive conversation about the future measures of national progress.
The new report explores possible scenarios and pathways for the transition beyond GDP as a foundation for global dialogue. The report aims to contribute to the many significant global efforts that have already been achieved as there is still no internationally agreed standard for moving beyond GDP.
GDP has been the primary indicator of national progress since it was first adopted nearly 80 years ago. It is based on the value of goods and services produced and consumed, savings and investments, government expenditure, tax revenue, and net exports.
It is considered the global standard for determining national progress and development; but swift advances in technology and the emergence of global imperatives such as climate change and social development needs have exposed limitations in GDP as a measure of prosperity.
The first half of 2024 witnessed substantial investment in the global startup ecosystem with total venture capital funding estimated at over $230billion,” said Mohammed Al Khoori, head marketing, HUB71.
The UAE’s startup ecosystem in 2024 is thriving, driven by strategic government initiatives, substantial venture capital investment, and a focus on key sectors like AI, Fintech, and green technologies.
Investors, world’s largest technology enterprises alongside governments, experts, startups, academia, and researchers are currently at Dubai World Trade Centre (DWTC) for the 44th edition of the world’s largest tech and startup event, GITEX GLOBAL.
This year’s edition is expected to redefine the world’s digital economy and AI ecosystem as global startups, tech firms connect with investors and venture capitalists with over $1.2 trillion in Assets Under Management (AUM).
The six-day event themed “Global Collaboration to Forge a Future AI Economy” also connects the most innovative global founders with new markets, enterprise customers, and an influential pool of investors and venture capitalists. These include SOSV, Bessemer Ventures, Lightrock, Sinovation Ventures, and the European Innovation Fund.
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