Over the years, Yaba, a suburb located on the mainland area of Lagos State has been referred to as Nigeria’s tech valley, housing many start-ups, tertiary institutions, incubation companies, and busy markets.
Known as Yabacon Valley, the community today struggles to keep with the lofty standards characteristic of a thriving tech ecosystem, compared to popular hubs in other African countries like the Kenyan Silicon Savannah.
BusinessDay research shows that most founders in Yaba choose the location because of its closeness to institutions like the University of Lagos, Yaba College of Technology, and Nigeria Institute of Medical Research, among others.
Jolaoluwa Olatunji, product designer at NaeroSpace located at Yaba, said that Yaba was touted as the big tech hub in Nigeria, with its vibrant startup scene and growing tech community but faced serious struggles to keep going.
According to him, Yaba was facing a number of challenges that were holding them back from reaching its full potential ranging from infrastructure, quality of life, safety, and security, and access to capital, among others.
“Yaba lacks well-developed infrastructure, with poor roads, limited access to utilities, and limited transportation options which makes it difficult for tech companies to do business effectively and attract talent. Also, the quality of life in Yaba is not up to the standard of what many tech workers would prefer, with limited housing options, shopping, dining, and entertainment options.
“Also, safety and security concerns in Yaba are higher compared to other areas. This can be a major concern for tech companies and workers,” he said.
Similarly, he disclosed that the financial district in Yaba is not as robust as other areas. He further noted Yaba has limited investment firms and banks, making it harder for tech startups to access capital.
He pointed to inadequate support from the government and the absence of strong international connections as a major struggle faced by Yaba as a tech hub in Nigeria.
“The government has not shown a strong commitment to promoting Yaba as a tech hub, with limited tax incentives and other support measures in place. Also, the tech industry is not growing as quickly in Yaba as in other areas.
The area lacks strong connections to the global tech industry, with limited international tech firms and investors taking notice of the area. This means that the potential for continued growth and development as a tech hub is limited in Yaba, with limited opportunities for investment, innovation, and collaboration in the future,”
The product designer said that Yaba once had potential as a tech hub but the numerous challenges have prevented it from reaching its full potential. He said, “To establish itself as a thriving tech hub, Yaba will need to address these issues and create an environment that is attractive to tech companies and workers.”
However, Tosin Osunkoya, founder, The Bulb Africa said there are various obstacles that impair startups and tech companies’ ability to operate efficiently and effectively in Yaba, stifling growth and development.
“The absence of a supportive ecosystem, such as co-working spaces, incubators, and accelerators, makes it difficult for startups to thrive. Also, there is limited government support, with a lack of policies and initiatives aimed at fostering the growth of the tech industry.
“The lack of infrastructure development in the area caused companies to move to areas like Victoria Island and Lekki where rapid development was taking place to create a business district. Therefore, startups like Patricia, Bankly, and Brass decided to set up in this area. Although there were efforts by both the private and public sector to develop infrastructure in the area with projects such as i-HQ, the results are still yet to be seen.” Osunkoya said.
According to him, despite these obstacles, Yabacon Valley continues to be a centre of innovation and technology, with a thriving community of entrepreneurs and technology firms.
For Frank Ezeji, the CEO of TDS, a Hi-Tech company in Lagos, Yaba being Nigeria’s tech hub comes mostly from people’s perspective as it houses a number of startups.
“You could have many startups in Yaba because of the cost of doing business in the area. I think Yaba provides them with low-cost accommodation and that basically makes SMEs concentrate in that particular place.
“For example, if one trader opens a shop and starts selling clothes in a particular area and people see that the business is moving, they will begin to open shops there. I think it might just be the same case with Yaba. It is where it started and people now have the mindset that when one talks about tech innovation, then the next thought is Yaba,” Ezeji said.
Read also: How proposed Yaba Technology Park will benefit communities in Lagos
According to Ezeji, Yaba becoming Nigeria’s potential tech hub is going to evolve with time if the appropriate investment is considered in those areas.
Meanwhile, the Lagos State government in 2021 said it was building one of the biggest technology infrastructure in Yaba in partnership with tech giants like Google, Facebook, and Microsoft.
Babajide Sanwolu, governor of Lagos State said the proposed Yaba Technology Park project named KITE, representing Knowledge, Innovation, Technology, and Entrepreneurship, will create a home for startups, tech investors, and innovators within and outside the state.
“The project is supposed to be a campus where all can come, think and innovate everything you can imagine with any kind of campus of its status anywhere in the World,” Sanwo-Olu said.
The governor said that the park will have free internet and an opportunity for the startup ecosystem to come and do great work, adding that 23,000 square metres of land have been mapped out for the construction of the project at Yaba.
According to partech analysis, Nigeria’s tech startup industry already attracts millions of dollars in venture capital investment more than any other country in Africa. In 2019 the industry attracted $747 million in investments, in 38 deals. While in 2020 it received $307 million in 71 deals.
Some of these seed funding are received from Y combinator, an American seed funding for startups. Fintech startups that have benefited include Flutterwave, Termii, Paystack, Blueloop, and many others.
Osunkoya said that the funding and revenue generated by the tech sector could go a long way towards cementing Lagos’ position as Africa’s fifth-largest economy.
“A supportive government and the business community is critical because it can provide the funding and infrastructure required for tech companies to grow and succeed,” he said.
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