Lagos emerges best startup’s ecosystem in Africa

Lagos has emerged as the best startup’s ecosystem in Africa. It ranked ahead of Nairobi (Kenya), and Cape Town (South Africa).

According to StartupBlink’s 2019 Global Startup Ecosystem Rankings report that analyses startup ecosystems in 1,000 cities and 100 countries, Lagos has the best startup ecosystem in Africa, followed by Nairobi and Cape Town.

Lagos polled 8.044, and ranked 99, ahead of Nairobi (7.918), which ranked 105. Cape Town is third in Africa (7.527), at 157th position globally. Cairo (7.177) is 177th position; Tunis (6.712) is 223; Kigali (6.19) 232; Accra (3.983) 244; Johannesburg (3.417) 248; Kampala (3.196) 279; and Casablanca (3.195) at 284 globally.

The report noted that Lagos, jumped 120 spots to 99th, and is now a top 100 city! Two other cities, Abuja and Ikeja have increased by 143 and 354 spots, respectively, and Ikeja has placed itself in the top three nationally after moving up two positions since 2017.  Port Harcourt (653rd) has also made its first.

The report noted that Nigeria entered startup scene later than Kenya, South Africa, and Egypt, but has accelerated quickly and even nurtured a unicorn called, Jumia, an online shop for electronics, phones, and fashion.

According to it, the main challenges that Nigeria faces concern inadequate infrastructure, resulting in unreliable power, and poor Internet connections.

“We are confident that if infrastructure is improved, Nigerian founders will be able to move forward for the benefit of their country and economy. Relatively stable after climbing one spot in the global rankings, Nigeria seems to be enjoying good momentum,” the report stated.

Speaking on Kenya, the report observed that the capital city of Nairobi has sprinted to 105th (passing 86 cities worldwide), and thus remains the only Kenyan city on the list.

According to the report, since 2007, Kenya’s startup ecosystem has been revolutionising mobile payments with such startups as m-Pesa. It noted that Kenya’s government has been involved in startup ecosystem development since 2013, with the launch of Konzo Techno City, a tech park project built outside of Nairobi.

The StartupBlink’s report said global tech giants like Google, Microsoft, Samsung, and Intel are also located in the capital city.

However, the report noted that despite being one of Africa’s well-established startup ecosystems, Kenya still has room to improve. The country receives far less global funding and investment, and has fewer helpful government initiatives, than are present in higher ranked countries. Kenya is now very close to overtaking South Africa as the highest ranked African country, and now ranks at 52nd.

Speaking on South Africa, the report said the potential of the country is extremely high, and it is better positioned than its African counterparts to become a global startup hub, and has even managed to produce several unicorns.

It stressed that more active and positive government support is needed to reduce the difficulties facing startups and to simplify laws, helping entrepreneurs focus on what really matters – their business.

South Africa currently has only one city in the top 200; Cape Town is ranked 157th after dropping 17 spots, while Johannesburg is ranked 248th after increasing 22 spots. South Africa is still the highest ranked African country, but is no longer in the top 50 club after dropping 13 spots.

In the ranking of cities, StartupBlink’s report said three issues were considered, including the quantity of startups and other supporting organisations; quality of startups and other supporting organisation, and business environment and critical mass.