Despite Nigeria’s seemingly vibrant tech ecosystem, the country has been ranked 5th in the inaugural fDi report on African Tech Ecosystems of the Future.
The report notes that Nigeria performed poorly due to the unfriendly Lagos business environment and lack of infrastructure/insecurity in other parts of the country.
“Lagos is renowned for its startup ecosystem, but there is a significant disconnect between the city’s tech ecosystem, its surroundings, and the wider country, which suffers from chronically poor infrastructure and education, and recurring political instability and security issues.
“This challenging environment prevents Nigeria from excelling in any specific category of the fDi Tech Ecosystems of the Future ranking.
When you juxtapose these, Nigeria really stands no chance even though “it topped all locations for number of startups, with many of them operating within the fintech sector, taking advantage of the under-provision of banking services in the country.”
Meanwhile, South Africa which is home to one of the most developed VC networks and the oldest startup incubator on the continent, the Cape Innovation and Technology Initiative took first place. The incubator according to the fDi report is credited with supporting more than 3000 entrepreneurs in its two-decade history. With ready access to VC funds, government grants, incubators and tech talent, South Africa is a vision of what other tech ecosystems could become.
Following behind South Africa, Kenya took second place, both overall and in economic potential. The country has the highest number of coding schools on the continent, according to Briter Bridges, a sure sign of the level of investment and interest in the country’s tech ecosystem.
Kenya is also home to arguably the most famous fintech to emerge from the continent, mobile banking sensation M-Pesa. The creation of M-Pesa in 2007 revolutionised banking across Africa and brought financial inclusion to millions by providing access to banking services through legacy mobile phones. The platform’s success launched Kenya’s tech ecosystem into the spotlight, with incubators, hubs and VC subsequently flowing to the country.
Over the years, Kenya has seen significant growth in the fintech start-up sector, with financial inclusion soaring in recent decades. In 2019, Kenya launched a Digital Blueprint, which targets more than 600 million people in 24 countries across Africa. The blueprint lays out a framework to transform the region into a sustainable digital ecosystem.
For its inaugural African Tech Ecosystems of the Future rankings, fDi has teamed up with research company Briter Bridges to map the continent’s nascent tech ecosystems and explore their potential moving forward. The results provide a first look at the lively tech realities developing around Africa’s biggest cities, where talent is finally able to find growing pools of capital to evolve their ideas into successful business ventures.