HomeEconomyEconomyAdvancement of African start-up ecosystems crucial

Advancement of African start-up ecosystems crucial

Ceteris Paribus
A global agency focused on start-ups, Start-up Blink, recently published The Global Start-up Ecosystem Index 2021, a global report which ranks nations and cities around the world on the basis of the efficacy of their start-up ecosystems. A top 100 list is compiled for nations globally and a top 1 000 is tallied for cities the world over.

Start-up Blink defines a start-up as any business that applies an innovative solution which validates a scalable economical model.

The report assesses several key boxes for start-ups: a strong digital infrastructure, cost of living, and the availability of top tech talent. It also evaluates the presence of successful accelerators and incubators, as well as several Venture Capital (VC) funding opportunities for local early-stage founders. Here, African states trail their international counterparts.

According to the report, the Middle East & Africa region has a total of 74 start-up ecosystems represented in the global top 1 000 cities ranking, spread across 22 nations in the global top 100. Lagos occupies Africa’s top ecosystem spot, ranked 122nd after switching places with Nairobi, Kenya, which now ranks 136th.

For the first time since this report was published, we have an African country in the top 50. South Africa increased four spots to be ranked 48th globally. A notable increase in Africa is Nigeria, which leapt five spots to now rank 63rd globally with Egypt climbing 11 spots to rank 70th, while Mauritius scooped the 73rd spot. For the first time in the ranking, and completing the top 100, Namibia is ranked 99th and the vibrant seed ecosystem of Ethiopia is ranked 100th globally.

Cape Town increased by one spot to 145th globally and the 3rd highest ranked city in Africa. Cape Town also excels in Education Technology, Software & Data, and Transportation Technology ranking in the global top 100 for all three industries.  Johannesburg is a Fintech hub that ranks 4th regionally, after jumping eight spots to 152nd globally while Pretoria ranks 490th and Durban 568th.

Harare managed to rank in the global top 1 000 start-up ecosystems for cities even though Zimbabwe did not make it into the national rankings coming in at position 934, moving up 28 positions.

In an exclusive, Gateway Stream technical service manager: Isheanesu Makambira gave an aerial perspective on Africa on the subject: “African start-ups have raised over US$2,9 billion in 2021 according to BFA Global, a VC with African investments. Most start-ups who are attracting Venture Capital are alumni of American incubators such as ‘Y Combinator’ and ‘Techstars’ who will equip founders with all the skills and networks to run successful ventures. A few of these incubators are starting to appear in Africa, hence the growth. A vibrant ecosystem will have support structures from universities, incubators, VC firms, large corporates and a community of supportive entrepreneurs.”

Comparatively, TechCrunch.com notes that Latin America’s start-ups have raised US$9,3 billion in just the first half of 2021, almost double the amount in all of 2020, and mega-rounds are a growing trend.

Remarkably, Latin America’s market has evolved over a very long time and has a global outlook, spectacular universities, a diverse population and an army of entrepreneurs.

Tech expert and entrepreneur Blessmore Tsingoziva made a submission for Zimbabwe:

“Start-ups need to collaborate with established tech-businesses to build a digital ecosystem that drives economic growth … To support the growth of Zimbabwe’s start-up ecosystem, investor friendly policies are needed.”

The Eyetrodigital founder and editor buttressed the same line of thought: “Our African governments are not doing enough to support start-ups in terms of funding, nurturing and positioning of upcoming businesses for growth.”

Africa has more than 600 tech hubs, with Kenya, Nigeria, Egypt, and Morocco accounting for the highest concentration — Global Systems for Mobile Communication Association (GSMA).

Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis.net

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