Nigeria’s recent slip in the 2025 Global Startup Ecosystem Index has cast a spotlight on the country’s much-celebrated policy efforts to boost innovation and entrepreneurship.
Despite the introduction of the Nigerian Startup Act and the rollout of initiatives like the Startup Investment Seed Fund, the country dropped two places to rank 66th globally, raising questions about the effectiveness and pace of implementation of these reforms.
The StartupBlink index, which evaluates countries based on startup activity, ecosystem impact, and support infrastructure, also showed Nigeria falling to fourth place in Africa, its lowest regional position in years. Among the top seven African countries ranked, Nigeria recorded the weakest growth rate at under six per cent.
This performance is seen by analysts as a litmus test for the policies introduced in recent years to reinvigorate Nigeria’s startup ecosystem. The Nigerian Startup Act, signed into law in 2022, was touted as a transformative piece of legislation aimed at creating a robust legal and institutional framework for startups. It promised to unlock growth through regulatory clarity, tax incentives, talent development, and easier access to capital.
Complementing the Act was the Startup Investment Seed Fund, a government-backed vehicle intended to support early-stage startups and catalyse private sector co-investment. Additionally, the National Council for Digital Innovation and Entrepreneurship was launched to ensure stakeholder coordination and monitor implementation.
Yet, the latest global rankings suggest that Nigeria’s startup environment may be struggling to translate policy into palpable progress. While the country remains the clear leader in West Africa, holding that position since 2021 and continues to host six of the region’s top 10 startup cities, momentum appears to be slowing. Of those six cities in the global top 1,000, most experienced a decline in rank, including Lagos, the country’s flagship startup hub.
Lagos, widely regarded as the heart of Nigeria’s tech scene, dropped six spots to rank 76th globally, losing the ground it gained in 2024 when it cracked the top 70 for the first time. Though it remains Africa’s largest startup ecosystem,11.8 times the size of Abuja’s, the drop underscores growing concerns about sustaining growth amid infrastructure constraints, limited access to capital, and a tightening investment climate.
Meanwhile, Abuja offered a glimmer of hope. The federal capital was the only Nigerian city to improve its global standing, jumping over 50 per cent to rank 399th. This growth is seen as an early indicator of diversification in Nigeria’s startup landscape, a trend further underscored by Ilorin’s debut in the global top 1,000.
Still, these bright spots have yet to offset the broader challenges confronting Nigeria’s tech sector. “The foundation is there with the Startup Act and related initiatives, but implementation is where the real test lies. Global competitiveness will require sustained effort, deeper funding pools, and more agile regulatory responses,” said a tech analyst, Jide Awe.
However, the StartupBlink report highlights Nigeria’s young, tech-savvy population of over 200 million; a growing mobile and digital economy; and a strong base of fintech success stories as the country’s inherent advantages. Companies like Flutterwave, OPay, and Jumia continue to headline Africa’s startup narrative, reinforcing Nigeria’s place as the continent’s unicorn factory.
The report also flags persistent structural weaknesses, which are low consumer purchasing power, limited financing options for early-stage ventures, erratic power supply, and digital infrastructure gaps. Despite policy intentions, many entrepreneurs still struggle with bureaucratic hurdles, taxation burdens, and inconsistent regulatory enforcement.
The report noted that the country’s startup ecosystem is “backed by a mix of public and private support,” including initiatives from organisations like the Lagos Angel Network, Ventures Platform, and Greenhouse Capital, which provide funding and mentorship. Nonprofits such as the FATE Foundation are also playing a key role in grassroots capacity-building through training and advisory programs.
On the international front, Nigeria has sought to strengthen its innovation pipeline through partnerships like the co-funded investment initiative with the Japan International Cooperation Agency (JICA), signaling a growing appetite for global collaboration.
As global and regional rankings apply increasing pressure, experts say Nigeria must now focus on execution. The Startup Act and related frameworks will only yield long-term benefits if they are enforced consistently, resourced adequately, and adapted to meet the real-time needs of founders and investors.
“Laws and funding mechanisms are only part of the equation. What startups really need are reliable infrastructure, transparent governance, and quick access to markets. That is what will ultimately drive ecosystem growth and help Nigeria climb back up the rankings,” a startup owner, Mathew Olori told LEADERSHIP.
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