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Most Ideal African Cities to Put up a Startup

African cities

Entrepreneurship is an important part of the African heritage.  There is the largest number of women entrepreneur globally. Every single day there are new businesses that are started up across Africa. Furthermore, the continent has been named the next frontier. This means that the most developed global countries are looking to take part in the African growing economic revolution. They aim at doing that by investing their money into the continent. But as all these are taking place throughout the continent, there are several factors that both foreign investors and African entrepreneurs are looking at before getting into the business.

For instance, the question of the best African cities to launch a startup, the kind of decision making does one use, and important factors to look out for are some of the factors that one considers before venturing into entrepreneurship or investment into the continent. We decided to go a little bit deeper and looked at the hotbeds of African startups with factors that make them an ideal location for the growth of startups. To ensure that we come out with relevant information we considered issues such as infrastructure, market access, investment opportunities and regulatory environment among others.  Africa has the highest number of adults who are running businesses globally. According to a report issued out by the United Nations Development Program (UNDP), the Organization for Economic Co-Operation and Development (OECD) and the African Development Bank (AfDB), 80% of Africans see entrepreneurship as an outstanding carrier opportunity.

Moreover, startups with less than less than five years experience and less than 20 employees are the biggest employees in African formal sector. Twenty-two percent of African working age population is venturing into new businesses which are the highest number globally. All this indicates that there are a significant investment and entrepreneurial potential in the continent.

Gaborone, Botswana

Despite have a sparse population, Botswana is one of the countries with the most stable economies globally. Moreover, it has the longest continuing democracies in the current world. Rwanda is working hard to diversify from its reliance on the diamond, and it occupies the 81st position on the Ease of Doing Business rankings carried out by World Bank. The country a quick process of registration compared to other nations despite not having many markets due to its low population of 2.2 million people.

Johannesburg, South Africa

South Africa is the most developed country across the continent. Once one is in a position to get a visa which is quite hard to get one in most of the time, then the country has vast of opportunities. Concerning infrastructure, the country is above everyone in the continent with a steady power supply and high-speed internet connection. Moreover, the country has a larger market offered by its population of 55 million people. The country has regulations that relatively favor anyone. The country went through an unstable political period until the current president Cyril Ramaphosa came into power. Additionally, the country has a good record of protecting minority investors, and it is easy to put up a business in as it was ranked at 82nd position globally by World Bank.

Lagos, Nigeria

The main advantage in the country is the size of the market that is brought by a population of between 198 and 200 million people. Despite having one of the poorest infrastructures in the continent, Nigerian middle-class population offers significant potential for startups looking to put up or expand their businesses. Lagos has a population of 21 million, Nigerian biggest and most active tech hub in Yaba and it has a lot of investment opportunities. The economy of Lagos is believed to be bigger than that of Ghana and Kenya, and there are better regulations developed by the government for registration of businesses. Businesses in Nigeria are also hindered by multiple taxations, poor regulations, and unrest in some parts of the country.

Kigali, Rwanda

People believe that Rwanda has the highest business set up time in East Africa. The country has an outstanding infrastructure compared to many African countries. The most recent development in infrastructure is the recent completion of nationwide 4G coverage. The government of Rwanda has much interest in foreign investment. The Land of Thousand Hills is amongst the most politically stable countries in East Africa. Although there is low market access in the country due to its low population and land area, Rwanda has a favorable regulatory environment for small businesses.

Nairobi, Kenya

The city is the home of the most active ecosystem in East Africa. It is an ideal entry point for any startup looking to set up businesses in East Africa. Financial inclusion rates and high mobile penetration makes the country to offer great access to its 48.5 million people. Moreover, the country has one of the highest average internet speeds globally. The current government is also focusing much on technology by announcing a relatively favorable regulatory environment.

Port Louis, Mauritius

Ranked 25th globally by World Bank in its Ease of Doing Business Index, the country offers great conditions for putting up businesses more so for those who are not dwellers of the country. Mauritius’ government has set up the country’s business registration process to attract foreign investors. It has put up regulations that allow free repatriation is earning, no capital gains tax, no accounting or reporting requirements and no withholding tax on dividends. The Island is also fully connected with fibre with businesses accessible to speeds of up to 100Mbps. The country has a population of 1.26 million offering low markets for startups.

The continent has challenges that cut across. Political instability, lack of market, and poor government regulations are some of the challenges African entrepreneurs are going through.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinafrica.com and we base our discussion on technology in Africa and the rest of the world.
Denis the Tech guru

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