By Jeph Ajobaju, Chief Copy Editor
A third of economic growth incubators and accelerators and 80 per cent of investment in Africa are concentrated in Nigeria, Egypt, Kenya, and South Africa.
“They push ahead faster with startups, ecosystem development, and commercialisation,” says the African Development Bank (AfDB) in a new report.
Nigeria alone attracted about $45.1 billion Foreign Direct Investment (FDI) between 2011 and 2020, the AfDB said.
The report is titled “Entrepreneurship and Free Trade Volume II – Towards a New Narrative of Building Resilience’.
It is sequel to an earlier one titled “Entrepreneurship and Free Trade: Africa’s Catalysts for a New Era of Economic Prosperity” which examined African entrepreneurship through a global lens.
That first report highlighted developments and suggested future directions for entrepreneurship on the continent, per reporting by The PUNCH.
The latest examines the varying levels of entrepreneurship and shows that Nigeria, Egypt, Kenya, and South Africa dominate the market in the amount of incubators and accelerators as well as percentage of investment.
“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,” AfDB said.
“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 commercialisation.
“In the cases of these four countries, their economies and populations are larger than most African countries.”
The report said Egypt, Nigeria, and South Africa were the top three attracting FDI in the past 10 years, and they dominate the African portfolio investment market.
“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.”
Nigeria attracted about $45.1 billion FDI between 2011 and 2020, the AfDB.
It disclosed that the majority of the biggest firms in Africa are state-owned, which is consequential as it drains fiscal resources.
Need to encourage business environment
The report advocated restructuring and commercialisation of state-owned enterprises, stressing that certain countries, including Nigeria, need to note this advice.
AfDB Vice President (Regional Development, Integration and Business Delivery), Khaled Sherif, emphasised the need to encourage and support business environment for entrepreneurs in Africa.
He said entrepreneurs are instrumental to addressing the continent’s economic, social, and environmental concerns.
The continent must provide them with the necessary encouragement and support as the future depends on such, he stressed.
