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Lagos houses 400 start-ups in Nigeria

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By Mercy Kelani

88 percent of the country’s start-ups are located in the state.

Upon emergence of Lagos State as regional leader in the Africa start-up ecosystem which left cities like Nairobi, Kenya; Dakar, Senegal; Johannesburg, South Africa; and Accra, Ghana, it now has a firm place on the global map. Other 35 states in Nigeria, including the Federal Capital Territory (FCT), are finding it difficult to level up with the development pace of this economy. Lagos State alone has more than 400 start-ups, accounting for 88 percent of the country’s total number. A 2023 global ecosystem report on this economy divulged the current rank of Lagos State in this field.

The report stated that Lagos State surpassed other regions with an estimated $8.43 billion; Nairobi, $7 billion; Johannesburg, $3 billion; Dakar, $2 billion; and Accra, $1 billion. Regarding early-stage funding, the Nigerian state also led with 0.82 billion; Nairobi, 0.34 billion; Johannesburg, 0.27 billion; Dakar, 0.00 billion; and Accra, 0.04 billion. The leading city has a population of 24 million with a dynamic ecosystem that has gained the attention of investors, thereby, birthing several innovative ventures.

Experts urged the country to put in place favourable policies.

In the 51-60 ratings of the Emerging Ecosystems ranking, Lagos State has also secured a position. This rise was fueled by the $400 million Series C of OPay in August 2021 and the $250 million Series D of Flutterwave in February 2022. The report have been applauded by various tech professionals in and out of Nigeria. They have also urged the country to put in place favourable policies and conditions that will ensure replications Lagos’ achievement in its other 35 states.

Furthermore, experts advised that the Nigeria Startup Act, enacted in October 2022 should be implemented to ensure the national replication of the feat. Managing Partner at Nubia Capital, Mr. Davidson Oturu, said that the government deploy this comprehensive law to enable the transformation of its startup ecosystem. Through integration of digital technology into all aspects of business, the government would also be playing a vital role in digital transformation, while improving the operation of startups and their value delivery to customers.

There is a massive transfer of knowledge in Lagos.

It was also advised that infrastructure should be strengthened, without excluding access to reliable internet, efficient transportation systems and constant power supply. With improvements in these aspects, a significant difference will be effected in the ability of a startup to have an effective operation. There also has to be an improvement in access to capital to provide funding for these economies to grow to scale. The government should see to establishment of more venture capital funds while offering low-interest loans.

Chief Revenue and Data Officer at Enterprise Business Information systems, Mr. Wale Awosokanre, stated that the excellence of Lagos is attributed to its status as a commercial hub for its permission of cross fertilization of skills, opportunities and needs. Majority of these businesses are able to attract commercial enterprises like telecommunication operators, banks and telecoms for integration and test of solutions — an opportunity that might not be found in other Nigerian states. There is a massive transfer of knowledge in Lagos as there are several symposiums, summer classes, ICT fairs and workshops where experts tutor developers in training.

Other 35 states should work towards achieving the same feat.

Additionally, many developers relocate to Lagos as a result of the salary payment and opportunity to gain better remuneration as many start-ups who pay well are located in Lagos. Awosokanre advised the other 35 states to emulate actions taken by Lagos state in order to achieve the same feat. Executive Director at Paradigm Initiative, Mr. Gbenga Sesan, asserted that the achievement was possible despite attempts by the government to frustrate some of the state’s efforts. He added that more of these kinds of initiatives are needed for budding African women tech entrepreneurs.

Related Link

Startup list: Website

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