Africa’s Top Startup City: Lagos overtakes Nairobi, Enugu hits global map

Lagos, Nigeria’s most populous city, has surpassed Nairobi and is now the highest ranking city in Africa, gaining 5 spots to 122nd, according to the latest Global Startup Ecosystem Index.

Source: Startup Ecosystem Report 2021 by StartupBlink

The report released by StartupBlink, Nigeria, ranked 63, has increased significantly, gaining 5 spots, globally.

Global top 10 startup cities:

Globally, San Francisco is the leading city in the startup ecosystem, scoring 328.96, which is almost 3 times higher compared to New York’s 110.77.

The researchers observed that the top 5 countries have all maintained their rank from last year. However, there are several deep changes and interesting insights. ­ For instance, the United States maintains a massive lead over the 2nd ranked United Kingdom, showing a strong and dominant innovation scene across the 267 USA cities ranked in the report.

Source: Startup Ecosystem Report 2021 by StartupBlink

Last year, the UK had a relatively large lead over the 3rd ranked country Israel, but this difference has now narrowed substantially with the UK and Israel having almost the same total score.

For the first time since 2017, it seems that Brexit does have some negative influence on the UK ecosystem, which can also be seen in the rankings decline of London.

One more interesting development is a change in the group which we refer to as the “Big 4” Startup Ecosystems: the US, UK, Israel, and Canada. Canada is still ranked 4th, but it is now much closer to the solid ecosystem of Germany at the 5th spot than to the UK and Israel.

A notable increase in Africa is Nigeria, which leapt 5 spots to now rank 63rd globally. The Arab world had a great year and has continued a positive trend with Jordan increasing 3 spots to rank 64th, Bahrain moving up 9 spots to rank 66th, Egypt climbing 11 spots to rank 70th, and Saudi Arabia jumping 17 spots to rank 71st.

However, the African giant still remains 3rd in Africa behind South Africa and Kenya.

Regional outlook shows Africa’s resilience

The report also explored the regions in general, North America no longer produces the highest number of ranked ecosystems globally as the European region now has the most cities with 386 cities while North America has a total of 297 startups in the global top 1,000.

Source: Startup Ecosystem Report 2021 by StartupBlink

The Middle East and Africa region saw very positive momentum in the rankings this year. The region has a total of 74 startup ecosystems represented in the global top 1,000 cities ranking, up from 55 during the previous year.

Meanwhile, West Africa had a good year, where all ranked countries (Nigeria, Ghana, and Cape Verde) improved their rankings. Eastern Africa grew from 4 to 6 countries in the global top 100 while Northern Africa kept its three representatives. However, two of the three nations (Tunisia and Morocco) declined in rank.

Southern Africa had a good year. South Africa broke into the global top 50, but a second Southern African country, Namibia joined the rankings. Central Africa still has no representation in the rankings.

Source: Startup Ecosystem Report 2021 by StartupBlink

The increase in startups ranked in the region further affirms analyst and investors prediction on the immense potential of the region. The continuous influx of foreign investment into the continent’s major tech hubs is also evident.

Nigeria:

Source: Startup Ecosystem Report 2021 by StartupBlink

Nigeria gained the highest ranking in Western Africa and the 3rd highest ranking country in Africa.

Lagos is also ranked in the global top 50 cities for E-commerce & Retail Technology and in the global top 100 for both Transportation Technology and Education Technology.

Source: Startup Ecosystem Report 2021 by StartupBlink

The report shows that Enugu has become bullish, emerging for the first time, in the Global ranking.

Ibadan saw a massive increase in ranking, jumping 601 spots to 353rd globally and 2nd in Nigeria, surpassing the Nigerian capital of Abuja.

The latter, ranked 3rd nationally, fell 12 spots to 466th, while Port Harcourt decreased by 6 spots to 906th.

The newest Nigerian city in the rankings, Enugu, ranks 978th globally and 5th nationally.

Benin City has increased 9 spots to 979th, while Kano jumped 14 spots to 981st. In total, Nigeria has 7 cities in the global top 1000 and continues to have the highest number of ranked cities of any African nation.

Nevertheless, the report recognizes that Nigeria faces some major challenges, such as a lack of financing options and even a lack of broadband internet infrastructure.

Government entrepreneurship programs are present but need to be developed, as does legislation and public sector support, the report recognizes.

This also resonates with a recent article by the Director, Corporate Planning & Strategy Department, National Information Technology Development Agency (NITDA), Abuja, Nigeria, Dr Agu Collins, titled: Digital Transformation Odysseys via TICED Program; he called on the government to recognize the importance of Technology Innovation and Incubation, institutions of higher learning as platforms to nurture activities such as policy measures, infrastructure support, entrepreneurial training, IPR facilitation, and creation of a framework to nurture technology innovation and incubation.

Source: Startup Ecosystem Report 2021 by StartupBlink

In conclusion, the Startup Ecosystem overview views Nigeria as having a massive consumer market and more than 500 active startups hence the country has become one of the largest startup ecosystems in Africa.

The country has even nurtured a unicorn called Jumia, an online shop for electronics, phones, and fashion and the report recognizes another unicorn, Flutterwave.