The influx of investments from global venture capitalists into Nigeria’s tech landscape is creating a buzz among startup founders and local investors. In more recent times, Nigerian startups have attracted noteworthy investments from some of the world’s biggest VC players the likes of SoftBank, Sequoia Capital, Tiger Global and Target Global among others.
Having raked in over $1.5bn investment in 2021 (more than a third of total funding into Africa), it is safe to say that investors are vying to own stakes in Nigeria’s bustling tech space. That is a sign of growing maturity in terms of innovation and the calibre of products, founders are building to solve local problems. What is most peculiar is that while Nigeria as a whole is gaining more and more recognition as Africa’s leading technology powerhouse only one state truly shines as the centre of technological activities – Lagos, one of Nigeria’s South-Western states.
Lagos, though a commercial capital, still has a characteristically strong hold over all business sectors in Nigeria. Many business owners do not consider themselves “seen” or “heard” unless they are operating in the bustling metropolis. At the risk of sounding like a broken record, let me reiterate that Lagos alone does not have to be the happening place for all things tech. If we were to focus on Lagos alone, we’d miss out on talents in other parts of Nigeria.
Let’s look at the North and the South-East, two regions that may not readily come to mind where tech is concerned. Although multiple factors contribute to the disrepute of the regions, there are a number of other positive developments. So, while Abuja might be the most obvious example when it comes to startup development, states like Plateau, Kaduna and Kano are also showing signs of a budding tech ecosystem. Two examples that readily come to mind are Jos-based Elesaro, a Defi crowdfunding startup and Sudo Africa, a Kaduna-based API fintech startup that recently secured $3.7m in pre-seed funding.
On the other hand, the South-Eastern part of Nigeria is quite known for its commerce, industry prowess, manufacturing and entrepreneurial spirit. A case in point is Anambra state which has over six million inhabitants (half of whom are youths) and on all economic and human indicators performs among the top five percentile of all the states in Nigeria.
Despite this, one would think that the state would be bursting at the seams with investments. The reality is that the state, alongside the rest of the South East, has consistently been overlooked as a destination for investment capital. This is to be expected as the region continues to experience slow growth in tech adoption since 2016.
My sincerest belief is that the narrative is about to change, at least one state at a time. As many are aware, Anambra State celebrated the birth of a new administration led by Governor Charles Soludo on Thursday, March 17, 2022.
The question is, can all our leaders do more to support the country’s ever-expanding tech space? Absolutely! State governments need to show more commitment, play an active role in exploring private-public partnerships to address issues of non-existent power supply, Internet penetration, brain drain, and poor infrastructure.
Bigger opportunities for founders and investors
I have always argued that to ensure an even economic development across Nigeria, opportunities that come with technology should be decentralised rather than concentrated in one location. Granted, infrastructure and talent are easy to come by when startups operate in Lagos. However, in this post-Covid era, remote working options have been found to improve talent mobility and startup culture.
Nigeria is home to over 750 startups, with more than 500 operating out of Lagos. To say that competition is fierce would be putting it mildly. While competition is not necessarily a bad thing, it can be frustrating to young startups that have to compete with more mature businesses. Entrepreneurs in states with fewer startups have more problems to solve and as some of the lowest hanging fruits, they can leverage first-mover advantage unlike those competing in more saturated markets. After gaining a foothold, the next plan will be towards market expansion.
Massive education programme
Although we live in the digital transformation era, there are still youths that lack basic digital skills. It also does not help that these ones are not thinking in terms of technology and innovation because of not having enough finance, education or interest.
In areas where there are more entrepreneurial young people as we have in the eastern part of Nigeria, with many aspiring to start their own businesses. As such, digitalised systems of trading, commerce, and apprenticeship can be introduced to traditional merchants to foster innovation. New it might be to them, this process would be helping people adapt to technology while using familiar concepts.
There are still those who do not understand the whole idea of launching a startup or how to leverage digital tools to grow their modest business. Across the country, several local initiatives and innovation centres such as the well-known IG Hub, Genesys Hub, nHub have sprung in their respective regions to address this knowledge gap through conferences, hackathons, and capacity development, offering participants mentorships, funding and the needed business support to thrive, stay within and develop their communities. We still need more of them.
Government’s readiness
In the struggle to develop the ecosystem, tech leaders strongly believe that governments need to provide an enabling environment for startups to thrive. The same is true of stakeholders in the ecosystem who unanimously agree that government should partner with the private sector to provide the infrastructure that will serve as a catalyst for combined growth.
The Information and Communications Technology sector continues to dominate other sectors as the biggest contributor to Nigeria’s GDP. In light of this, Nigerian lawmakers should prioritise the passing of the Startup Bill which will lead to increased innovation. Looking ahead, we should collectively demand for a set of leaders ready to develop and invest in a digitally savvy community of problem solvers and innovators.
CFA is co-founder of techbuild.africa & blockbuild.africa, platforms deepening Africa’s tech ecosystem & creativespace.ng, a social enterprise supporting innovation in Africa.
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