Nigeria has emerged as the leader in start-up funding across Africa, raising a total of $4.6 billion since 2019. Despite being ranked fifth in terms of GDP, Nigeria’s population strength and entrepreneurial spirit have positioned it at the top of the funding charts. The country’s economic growth has been hampered by challenges such as the depreciation of the naira, yet it remains the prime destination for start-up investment on the continent.
Kenya follows Nigeria with $3.4 billion raised, demonstrating an impressive performance, particularly considering its seventh-place GDP ranking. Kenya’s overachievement underscores its growing reputation as a start-up hub. Meanwhile, South Africa and Egypt, which hold the first and second spots in terms of GDP, are ranked third and fourth, respectively, in start-up funding.
Further down the list, Ghana and Senegal show notable performance, securing the fifth and sixth positions in start-up funding. These countries, despite not ranking in the top 10 in terms of population or GDP, have attracted significant investment. Tanzania, ranked seventh, and Uganda, ranked tenth, also surpass their economic rankings in terms of start-up funding.
However, some countries with large populations and substantial GDPs, such as Ethiopia, the Democratic Republic of Congo (DRC), and Sudan, are absent from the top 10 in start-up funding. Ethiopia, for example, is ranked sixteenth in funding despite being the second most populous country in Africa. This can be attributed to its relatively recent economic liberalization.
Similarly, the DRC, despite being the fourth most populous country on the continent, ranks thirteenth in start-up funding, closely aligning with its GDP rank. Sudan, ranked eighth in population, fails to make the top 20 in funding, aligning with its GDP ranking as well.
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Côte d’Ivoire, which ranks ninth in terms of GDP, occupies the fourteenth position in start-up funding, showing that it is slightly off the mark but not too far behind. However, Angola stands out as the biggest anomaly. Despite being ranked eighth in GDP and twelfth in population, the country has seen little to no start-up funding activity since 2019.
The findings demonstrate that while economic size and population are important factors, they do not always translate into start-up funding success. Countries like Nigeria, Kenya, and Ghana show that other factors, including innovation and business environment, play a key role in attracting investment in Africa’s growing start-up ecosystem.
