The African Development Bank said that Nigeria, Egypt, Kenya and South Africa account for about a third of the incubators and accelerators and 80 per cent of investments in Africa.
This is according to the new report titled: ‘Entrepreneurship and Free Trade Volume II – Towards a New Narrative of Building Resilience,’ published by the African Development Bank (AfDB).
This 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.
While looking at the various degrees of entrepreneurship across Africa, the survey found that Nigeria and three other nations dominate the market in terms of incubators and accelerators as well as investment percentages.
The report read in part, ”Entrepreneurship in Africa highlighted that the study of entrepreneurship is multifaceted and influenced by economic resource availability and constraints, political and governance systems, and related socio-economic factors touching on education and culture. 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 percent of investment on the continent. 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.Other populous countries like Ethiopia, the Democratic Republic of Congo and Tanzania have not attracted comparable levels of investment activity for startups, suggesting more is required than population levels. Likewise, island states with higher per capita incomes like Mauritius and Seychelles have not developed critical mass in innovative activities despite having higher levels of wealth and legal and institutional environments for business that are typically more highly rated than their peers in Africa.”
The report also noted that Egypt, Nigeria and South Africa ranked as the top three countries on the continent in terms of attracting FDI over the past decade. The countries also tend to dominate the African portfolio investment market.
Egypt attracted FDI of about $56.2 billion between 2011-2020, Nigeria followed in the second position with about $45.1 billion and then South Africa with about $41.3 billion in the same period.