Lagos State has firmly placed itself on the global map after it braced all odds to emerge regional leader in the Africa start-up ecosystem, leaving cities like Nairobi, Kenya; Johannesburg, South Africa; Dakar, Senegal and Accra, Ghana trailing in influence and in start-up funding.
This is also as 35 states of Nigeria and the Federal Capital city, Abuja, are struggling to catch up with the pace of development in terms of start-up economy.
The state alone is home to over 400 start-ups, representing about 88 per cent of the total number of start-ups in the country.
A 2023 global start-up ecosystem report by Startup Genome revealed that in 2022, Lagos became the regional leader in ecosystem values and early-stage funding.
According to the report, in the ecosystem values, Lagos led these regions with a total of $8.43 billion, while Nairobi, Johannesburg, Dakar and Accra got $7 billion, $3 billion, $2 billion and $1 billion respectively.
Also in early-stage funding, Lagos led with 0.82 billion, while Nairobi, Johannesbourg, Darkar and Accra respectively pitched at 0.34 billion, 0.27 billion, 0.00 billion and 0.04 billion each.
Meanwhile, the report noted that Lagos city with its population of 24 million residents boasts of over 400 startups and is home to approximately 88 percent of Nigeria’s startups. The city’s dynamic ecosystem has attracted significant attention from investors, leading to the emergence of numerous innovative ventures.
The report said: “Lagos, with a population of about 24 million residents, boasts of over 400 startups and is home to approximately 88 per cent of Nigeria’s startups. The state also holds its place in the 51–60 range of the Emerging Ecosystems ranking.
“The deals that boosted this rise included OPay’s $400 million Series C in August 2021 which was the region’s biggest deal, and Flutterwave’s $250 million Series D in February 2022.”
Different tech experts both within and outside Nigeria have commended the report, asking Nigeria to ensure favourable policies and conditions that can enable the country to replicate the Lagos feat in other states in the country.
They advised that the Nigeria Startup Act, enacted in October 2022 should be depended upon to see that the Lagos’ feat is replicated nationally.
Managing Partner, Nubia Capital, Mr Davidson Oturu, said: “The government should implement the Nigeria Startup Act, a comprehensive law that can transform the startup ecosystem in Nigeria. The government can also play a major role in digital transformation by integrating digital technology into all areas of business, fundamentally changing how startups operate and deliver value to customers.
“Another one is to strengthen infrastructure, including reliable internet access, consistent power supply and efficient transportation systems. Improvements in these areas can make a significant difference in a startup’s ability to operate effectively.
“Improved access to capital: Startups need funding to grow and scale. The government could establish more venture capital funds, offer low-interest loans for startups, or provide tax incentives for investors who support start-ups” he added.
Suggesting how the other 35 Nigerian states and FCT should catch up with Lagos, Chief Revenue and Data Officer at Enterprise Business Information systems, Mr Wale Awosokanre, said: “Lagos has excelled due to key reasons including being the commercial hub, allowing cross fertilisation of skills, needs and opportunities.
“Many start-ups are able to engage commercial enterprises like banks, telecommunication operators, Telcos to integrate and test their solutions which may not be available in other states.
“Knowledge transfer in Lagos is huge as there are many ICT fairs, symposiums, workshops and summer classes, boot camps where experts are able to share knowledge with upcoming developers, architects and would-be start-ups in a friendly, conducive environment.
“Also, most developers migrate to Lagos because of the salary and opportunities to earn much better income as most high paying start-ups are based in Lagos.
“Each State will need to imbibe all the above to ensure growth of start-ups in their states while Lagos needs to increase the existing hub not just in Yaba and Victoria Island but extend same to Agege, Ikorodu, Epe and other locations within the state,” Awosokanre added.
In his opinion, another tech expert, Executive Director at Paradigm Initiative, Mr. Gbenga Sesan said: “This feat was achieved in spite of government, and even in some cases, despite government attempt to frustrate some of the efforts. So the first lesson here is that government should stay out of the way of success except they’re helping.
“A second lesson would be to listen and find out how we got here, and how exactly they can support with a policy environment that can then make this keep happening and possibly get better.”
A lot more initiatives such as this are needed for aspiring women tech entrepreneurs in Africa.”