The African Development Bank (AfDB) has disclosed that Nigeria, Egypt, Kenya and South Africa account for about a third of the incubators and accelerators and 80 per cent of investment in Africa.
The Bank made this known in a new report titled ‘Entrepreneurship and Free Trade Volume II – Towards a New Narrative of Building Resilience’ released over the weekend.
This new report, which is a sequel to an earlier report ‘Entrepreneurship and Free Trade: Africa’s Catalysts for a New Era of Economic Prosperity’, examined the state of African entrepreneurship within a global lens, while highlighting developments, and suggesting future directions for entrepreneurship in Africa.
The report revealed further that Nigeria and three other countries dominate the market in terms of the amount of incubators and accelerators alongside the percentage of investments.
According to it, “All regions and populations have differing degrees of entrepreneurship, and this is true in Africa as elsewhere. For instance, Egypt, Kenya, Nigeria and South Africa account for about a third of the incubators and accelerators and 80 per cent of investment on the continent.
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“Although this is not the only measure of entrepreneurship, there are reasons to explain why some countries push ahead faster with startups, ecosystem development, and commercialization. In the cases of these four countries, their economies and populations are larger than most African countries.”
The report further read that Nigeria and two other counties were among the top three attracting foreign direct investment in the past 10 years, adding that they dominate the African portfolio investment market.
It said: “An additional consideration is levels of foreign direct investment and development of financial systems. The four countries that show the greatest investment in startups generally have higher FDI and are among the few countries able to access the limited portfolio investment that is made in Africa.
“In fact, Egypt, Nigeria and South Africa ranked as the top three countries on the continent in terms of attracting FDI over the past decade. They also tend to dominate the African portfolio investment market.”
The report stated that Nigeria attracted FDI worth about $45.1bn from 2011 – 2020, saying majority of the biggest firms in Africa were state-owned, which is consequential as it drains fiscal resources.
It urged that there should be a restructuring and commercialisation of state-owned enterprises, adding that certain countries, including Nigeria, needed to note this advice.