State of play-Nigeria’s Technology Ecosystem

       

Nigeria is part of a list that has managed to grab the attention of venture capitalist funding for the last few years. The other countries are Kenya, South Africa, Egypt. While looking at Uganda, we recognized the importance of competitions in the creation and birthing of a healthy technology ecosystem, we also noted the value of Non Governmental Organization in the creation of several different paths that those who are looking to learn can take to become part of the ecosystem. By this we mean for example United Nations in its various manifestations coming up with say population hackathon for ideas around demographics, or development ideas for the UNDP or climate change innovations or maybe even health innovation with WHO. We also noted the importance of having a very focused approach for each technology hub where the actual learning takes place. With South Africa, we see the value of Geographies in the creation of effective ecosystems-this we saw in the way in which the South African ecosystem varies from site to site and is very relevant based on where it is located. Additionally is the value that the South Africans place in partnership with great Universities something that is also reflected in Silicon Valley. 

Population 

This is one of the most important cosiderations in the technology ecosystem in Nigeria. You cannot go against the sheer numbers that can be gained by those who develop solutions for the different types of markets in Nigeria. Based on UN data Nigeria has a current population of 214,769,314 people as of March 13, 2022. Nigeria’s most attractive technology city, Lagos on the other hand has a population of 14,862,000 people. Whatever the focus is of your solutions these numbers are great and present endless possibilities. From the numbers, we also gather that by 2020 43% of Nigerian population comprised children 0-14 years, 19% 15-24 years and about 62% below the age of 25 years. The numbers also show that of the whole population, 51% of Nigerian adults are using formal financial services such as banks, microfinance banks, mobile money, insurance or pension accounts. 

This leads us to the next point that makes the ecosystem attractive and that is:

Financial literacy

The numbers are in favour of Nigerians. The idea that so many people exist amongst the populace that have fluency in finance means that there is a market for products that are based on this single need for services. In an article by https://www.makemoney.ng (top startups to watch in 2022) we find that a half of the applications mentioned in the piece are fintech products. Paystack-payment processing startup, PiggyVest-was developed to enable Nigerians to save money, Carbon (Paylater)-quick loans without collateral, Migo (KwikMoney)-loans without collateral, and Quidax (crypto)-allows Nigerians access to Crypto using Naira. So there is a market for fintech products in the country and those who have designed with this in mind. 

The source of Nigeria’s development

Olumuyima Olowogboyega (https://notadeepdive.com) wrote a piece that he titled Nigeria’s Startup Ecosystem in made in America. In it he talks about the idea that most Nigerian startups have the banking based in America and that this therefore limits them. For example, the startup that has its finances based in America will often have to deal with regulations that come the American system. To make matters worse, there is often a limitation to the banking system because the bank that you use can often be dependent on another bank. This bank that depends on another then faces the limitations that occur with regulations that the bigger bank may have. This means that when the foreign bank sees any transactions that are not familiar or that are too regular or that exceed a certain amount, one could find their startup shut down because of these issues. While this is a disadvantage, it can also be seen as an advantage because at the moment the bulk of all VC funding comes from the U.S.A. So it would makes sense to align to the system where the bulk of the money comes from. 

Development and infrastructure

The lack of development is a great hinderance. But it can also be a great opportunity for the creation of new things and innovation. An article from http://www.qz.com by Tolu Olasoji refers to an fDi report that was written a few months ago. And quotes directly from the report stating that, 

"Although Lagos is renowned for its start-up ecosystem, there is a significant disconnect between the city's tech ecosystem, its surroundings and the wider country and the wider country, which suffers from chronically poor infrastructure and education, and recurring political instability and security issues,” the report highlighted."

Quartz Africa noted that promising start-ups with plenty of potential to contribute significantly to the economy such as Bike-hailing apps, popular alternatives to Lagos's traffic jams and poorly maintained road networks were banned for security purposes by the Lagos state government, while the central bank craacked down on crypto stat-ups. 

The Leading Tech Hubs

African Vibes a site that is devoted to Contemporary African Connection has a list it compiled of the leading technology hubs in Africa and this list has two NIgerian firms featuring. The first is Wennovation Hub in Nigeria. They hub brings people together through social spaces, events, shared workspaces, and digital networks. It was established in 2010 and focuses on infrastructure, clean energy, education, healthcare and agriculture. The hub reaches four locations Kaduna, Ibadan, Abuja, Ikeja. It works with both growing start-ups or established enterprises. Start-ups supported by Wennovation Hub include Crop2Cash, Reliance HMO, ProNov, Afrimash and FarmMonie.

The second that is featured in the piece is Co-creation Hub. It is an incubator that functions as a multi-purpose space that catalyzes creative social technology ventures. Co-creation hub promotes collaborations among impact investors, tech companies, social entrepreneurs and technologists in and around Lagos, Nigeria. Founded in 2010 has has so far supported 95 ventures that are using technology to solve social problems. Start-ups accelerated by CcHUB include Doctoora, E-health ltd.,DoLessons, Embinix. 

The advantage that exists in showcasing these hubs is that you tend to get the attention of VC funding as well as the counter result which is the encouragement of younger developers to be part of the ecosystem.

    

 fDi Intelligence and Briter Bridges report 

The report highlights the work that is done in both South Africa and Kenya as top performers in the tech space. With Nigeria though, the focus of this article, the country was ranked 6th in the list of top 17 tech ecosystems in Africa overall. Nigeria however did not make it to the list of the top 10 ecosystems when it comes to connectivity, the country did not make it to the list of 8 that have a great Foreign Direct Investment Strategy (part of this is because they are probably still working on better legislation and policy to guide local and foreign investors as well as start-ups), Challenges regionally and in the nation also meant that the country did not make it on the list of attractive ecosystems when it comes to lifestyle and human capital, However on the list of start-up status the country ranked 2nd .On the list of business friendliness Nigeria was 6th. On the list of top 10 most cost effective ecosystems Nigeria was nowhere to be seen, while on the list of Economic potential Nigeria was 4th.