Nigeria has the highest number of tech startups with many of them operating within the fintech sector but the country tends to fall short in other metrics according to a report: African Tech Ecosystem of the Future 2021/2022 Ranking.
This report was compiled by fDi Intelligence, a specialist division of the Financial Times, in collaboration with research company, Briter Bridges.
New waves of tech entrepreneurship in the world are mounting way beyond the usual powerhouses like Silicon Valley, Boston, and New York in the US, London, etc. Africa, for example, is becoming the fastest-urbanizing region in the world, and it is also one of the most entrepreneurial regions on the planet.
Reports from the African Development Bank showed that 22% of Africa’s working-age population are starting businesses — the highest rate of entrepreneurship in the world.
Top countries on the African tech ecosystem of the future
South Africa ranked at the top with achieving not only first place overall but first place for Economic Potential, Start-Up Status, and Business Friendliness. Home to Naspers, one of the world’s largest investors in tech companies, South Africa recorded the second-highest number of start-ups behind Nigeria.
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.
Nigeria topped all locations for the highest number of start-ups, with many of them operating within the fintech sector, taking advantage of the under-provision of banking services in the country. 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, 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. While Nigeria ranked first as the country with the highest number of startups, it was in sixth place in overall rankings.
In total, 17 African countries were reviewed. The criteria for selection were countries with more than 50 startups, over $500,000 worth of investments in 2019 and 2020, and more than 9 tech hubs.