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What It’s Really Like Working at a Startup in Africa: Salaries, Equity & Reality

by Kevin Mwangi July 24, 2025, 3:48 am 338 Views

Salaries vary widely by role and location: Developers in Johannesburg earn about $42,000 annually, while those in Lagos make $11,000. Remote work for international companies can significantly boost earnings (e.g., $53,658 for Nigerian developers).
Equity is a key part of compensation: Startups often allocate 10-20% of their equity to employees, with senior roles getting a larger share. Vesting schedules (usually four years with a one-year cliff) are standard.
Benefits are evolving: Flexible work options, health support, and professional development are becoming more common, though many startups still struggle to offer competitive packages.
Challenges include: Job insecurity (90% of startups fail within a year), talent retention issues, and infrastructure problems like unreliable power and internet.
Opportunities abound for growth: Employees gain diverse skills, leadership experience, and access to networking opportunities, making startup roles a springboard for future careers.

For job seekers, it’s essential to evaluate the full compensation package, understand equity terms, and research local salary benchmarks. For founders, balancing limited resources with attractive compensation is key to building a strong team.

Salary Structures in African Tech Startups

Average Salaries by Role and Location

Salaries in African tech startups vary widely depending on the role and location. Among the countries, South Africa offers the highest pay, with emerging hubs presenting more modest compensation. For instance, tech developers in Johannesburg earn an average of $42,000 annually. While this brings South African developers closer to global pay standards, it still falls short of the $47,000 global average for tech developers. Nairobi ranks second, with developers earning $14,000 annually, followed by Lagos at $11,000.

City	Average Developer Salary (USD)
Johannesburg, South Africa	$42,000
Nairobi, Kenya	$14,000
Lagos, Nigeria	$11,000
Tunis, Tunisia	$10,300
Accra, Ghana	$5,000
Addis Ababa, Ethiopia	$4,000

Leadership roles display even greater disparities. CEOs in South Africa earn an average of $65,714, while their counterparts in Kenya make $64,500, in Nigeria $21,818, and in Ghana just $15,769. This means South African CEOs earn over four times more than those in Ghana and about three times more than Nigerian CEOs.

In Lagos, salaries vary significantly depending on the role. Software developers earn around ₦1,650,000 annually (approximately $11,000). Data analysts can expect between ₦2,500,000 and ₦5,000,000 (about $16,700–$33,400), while UI/UX designers typically earn ₦3,000,000 to ₦6,000,000 ($20,000–$40,000). IT support specialists earn between ₦2,000,000 and ₦4,000,000 annually ($13,400–$26,700).

Remote work has significantly boosted salaries for African developers. For example, Nigerian software engineers working remotely for international companies earn an average of $53,658 annually, nearly five times the local startup average. Across the continent, remote developers see a median salary of $56,926 per year.

"As more institutional funding comes into African markets, that means larger funds can be set up. Larger funds have larger management fees, and they can then pay higher salaries. Secondly, as there is more international understanding of the continent, more international funds will come and compete, which drives salary increases." – Mark Kleyner, Co-founder and Co-CEO of Dream VC

The venture capital sector also highlights regional salary gaps. African VC analysts earn $21,000 on average, compared to $28,000 internationally, while associates earn $26,000 versus $38,000 abroad.

What Affects Your Pay

Several factors influence salary levels in African startups, with funding stage being one of the most critical. Startups with greater funding can afford more competitive compensation. For example, African startups raised $5.2 billion in 2021 – a staggering 264% increase from $1.43 billion in 2020. By 2025, venture capital investment in Africa is expected to surpass $10 billion.

Location plays a significant role as well. Established hubs like Lagos, Nairobi, and Cape Town consistently offer higher salaries compared to newer ecosystems. However, local factors such as cost of living, housing, and currency fluctuations can greatly affect the real value of these salaries. To address these differences, startups are increasingly tailoring their pay structures to account for regional economic conditions.

The growing demand for technical skills – particularly in software development, cloud computing, AI, and cybersecurity – has also driven up salaries. With competition for skilled talent intensifying, companies are offering higher wages to attract and retain top professionals. Remote work arrangements further impact pay, as remote roles often allow employees to tap into global markets and earn higher salaries than local positions.

Other factors, like company stage and industry focus, also weigh heavily on pay scales. Fintech startups, for instance, tend to offer more competitive salaries than those in less developed sectors. Similarly, later-stage companies with established revenue streams are more likely to provide higher base salaries, whereas early-stage startups often rely on equity as part of their compensation packages.

Regional salary growth trends suggest steady progress. In 2024, North Africa led with a 7.8% increase, followed by East Africa at 6.9%, West Africa at 5.9%, Southern Africa at 5.2%, and Central Africa at 4.9%. Projections for 2025 predict an overall salary budget increase of 6.7% across Africa, indicating consistent upward pressure on wages as the ecosystem continues to mature.

Regions with better internet access and infrastructure tend to offer higher salaries, while emerging markets often compensate for lower pay with equity or additional benefits.

Equity and Benefits in African Startups

How Equity is Distributed

Equity in African startups is typically granted through Employee Stock Ownership Plans (ESOPs). Startups often set aside 10% to 20% of total equity for employees, depending on their stage of growth and funding requirements. The allocation is structured hierarchically, with senior roles receiving larger shares. Here’s a breakdown:

Role	Equity Range
C-suite executives	0.8% to 5%
Vice presidents	0.3% to 2%
Directors	0.4% to 1%
Independent board members	1%
Managers	0.2% to 0.33%
Junior-level employees	0% to 0.2%

Employees who join early in a startup’s lifecycle are often granted more equity to compensate for the higher risks involved. This approach balances lower initial salaries with the potential for substantial future rewards.

The type of industry also shapes equity allocation. For instance, consumer-focused startups might reserve 8% to 10% for employees, while SaaS companies allocate around 10% to 15%. AI startups typically set aside 15%, healthcare companies range between 15% and 20%, and biotech startups may go as high as 20%. Most startups follow a four-year vesting schedule with a one-year cliff, meaning employees earn no equity until completing one year, after which it vests incrementally. To manage this process effectively, startups maintain a cap table, ensuring a balance between equity grants and cash compensation.

Benefits Beyond Equity

Equity isn’t the only way African startups are enhancing compensation packages. Many now offer a range of benefits aimed at improving employee well-being and job satisfaction. Flexible work arrangements, such as remote work options and adjustable schedules, are becoming common, helping to reduce stress and improve work-life balance.

Health and wellness benefits are also evolving. While traditional packages often emphasized onsite medical care, newer trends focus on mental health. For example, about one-third of companies are considering stress management and resilience programs, a quarter are exploring mental health and addiction support, and approximately 23% are looking into health coaching services.

Other perks include:

Paid leave and health insurance
Free meals or snacks
Online coaching and mental health services
Employee discounts and childcare support
Retirement plans and tuition assistance
Professional development programs
Performance-based financial incentives

Despite these offerings, only 17% of African employers feel their benefits strategies are effective, indicating room for improvement. As urban populations grow and workforce demands shift, the need for more comprehensive benefits packages will likely increase.

Legal and Local Factors

To ensure equity and benefits structures are transparent and compliant, startups must navigate legal frameworks carefully. Consulting with qualified legal professionals is essential to draft fair agreements and align with local regulations.

"Good counsel, you can just pick up the phone and call, and they can tell you whether or not what you’re being asked for is in market or not. They can also explain to you what you’re being asked. They can also explain to you different options, or what questions you should ask." – Rossie Turman III, Partner and Chair, International Finance; Co-chair, Africa Practice

Founder agreements play a critical role in defining collaboration methods, equity management, and conflict resolution. These agreements should include vesting schedules to protect against early departures, which can otherwise lead to disputes or leave substantial equity in the hands of inactive founders.

"Founders leave for various reasons – career changes, personal challenges, or even conflicts within the team. If the founders lack a structured exit plan, such departures can lead to disputes, create operational bottlenecks, or leave significant equity in the hands of an inactive founder or one whose values no longer aligns with that of the other members of the team." – Kabbiz Legal

Other legal considerations include intellectual property rights and regulatory compliance, particularly for fintech startups. Cultural dynamics also shape the adoption of equity compensation. In regions where employee ownership is less common, startups must clearly explain concepts like company valuation, equity dilution, and long-term benefits. Additionally, founders should evaluate the Total Addressable Market (TAM) to highlight growth potential, as this is a key factor for investors. These legal and cultural nuances underscore the importance of aligning equity strategies with local economic and regulatory conditions.

Work Culture: Challenges and Opportunities

What Startup Work is Actually Like

Working at an African startup often means wearing multiple hats and navigating a landscape of unpredictability. The fast-paced nature of these environments demands adaptability, especially when unreliable internet and electricity disrupt daily operations. These disruptions not only slow down productivity but can also deter user adoption and delay product development. Such challenges highlight the realities of startup life across the continent.

Another pressing issue is talent retention. Many skilled professionals are looking for opportunities abroad, drawn by higher salaries and remote work options. A Nigerian coding boot camp educator shared:

"90% of our applicants expect to get international remote jobs".

This constant turnover forces startups to repeatedly train new hires, only to lose them again to better-paying remote roles.

Job security is also a major concern. In 2024, African startups raised just $2.2 billion, and a staggering 90% of them fail within their first year . To add to the uncertainty, startups must contend with shifting regulations that can change without notice, often causing project delays or requiring costly adjustments.

Growth and Learning Opportunities

Despite these challenges, working at an African startup offers unmatched learning experiences. The growing demand for digital skills presents a unique opportunity. According to the African Development Bank, 230 million jobs in Africa will require digital expertise by 2030.

To address this skills gap, many startups prioritize employee development. Mentorship programs are common, pairing emerging talent with experienced professionals . Additionally, 70% of top-performing African companies use learning analytics to standardize digital training. Mobile-first microlearning platforms are becoming popular, allowing employees to upskill even in areas with connectivity issues. Soft skills are also a key focus, with 89% of recruiters citing their absence as a major hiring challenge.

One employee praised the impact of a career readiness program:

"The program facilitated numerous networking events and webinars, which allowed me to connect with industry professionals and peers. These interactions expanded my professional network, opening up new opportunities for collaboration and career advancement." – Lizel Njeri, Thirdway Partners, Kenya

Another perspective underscored the importance of locally tailored training:

"There’s plenty of training content and tools available online, but very little is tailored to the African context. That’s what makes AMI stand out. The facilitators and participants bring local insights into every discussion, ensuring that feedback and guidance are relevant and practical." – Boris Maguire, VP Operations, Workpay

These stories and solutions highlight the balance between the challenges and rewards of working in African startups.

Pros and Cons of African Startup Jobs

Working at an African startup comes with its own set of trade-offs, which can vary depending on individual career goals and priorities.

Advantages	Disadvantages
Rapid skill development – Gain diverse experience across roles and technologies.	Lower compensation – Salaries often fall short of international standards.
High growth potential – Opportunities to shape company strategy and direction.	Job insecurity – High failure rates, with 90% of startups folding within a year.
Equity opportunities – Possibility of significant returns through ESOPs.	Infrastructure challenges – Internet and power issues can disrupt work.
Local impact – Build solutions that address local market needs.	Talent drain – High turnover as employees opt for remote jobs abroad.
Networking access – Work closely with founders, investors, and industry leaders.	Regulatory uncertainty – Policy changes can derail operations.
Freedom to innovate – Experiment and implement ideas quickly.	Limited resources – Scarcity of tools, training, and development opportunities.
Leadership opportunities – Fast-tracked advancement into management roles.	Work-life balance – Long hours and high-pressure environments.

The financial dynamics can be tricky. While equity compensation offers long-term potential, immediate cash flow challenges – exacerbated by currency devaluation – can strain day-to-day finances. However, the opportunity for accelerated career progression often outweighs these hurdles.

Cultural understanding is also critical. Building personal relationships is essential in African business settings and often requires extra time to connect with colleagues and stakeholders. While this consensus-driven approach can slow decision-making, it frequently results in stronger commitment to final outcomes.

Ultimately, the steep learning curve of African startups equips employees with invaluable skills – adapting to shifting priorities, managing tight budgets, and solving problems creatively. These abilities are increasingly sought after in the global job market, making the experience both challenging and rewarding.

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Employee and Founder Stories

What Employees Say

Employee experiences in African startups vary widely depending on the company’s stage, leadership style, and industry focus. However, certain themes consistently emerge around pay, professional growth, and workplace culture.

Compensation and Benefits

At Safaricom in Kenya, employees appreciate the combination of competitive salaries, extensive health insurance, wellness initiatives, and solid pension plans. Similarly, Access Bank Nigeria stands out for its family-oriented perks, offering maternity, paternity, and adoption leave alongside financial education programs. Research shows that offering comprehensive benefits can cut employee turnover by up to 50%.

Understanding Equity

Equity compensation can be confusing for some employees initially. To address this, many companies hold regular "ESOP 101" sessions to explain key concepts like vesting schedules, strike prices, and dilution. Transparency plays a critical role here – 78% of employees are more likely to stay with companies that demonstrate a commitment to pay equity.

Work-Life Balance

PwC South Africa takes the lead in offering flexible work arrangements and robust training opportunities. Across the continent, nearly 78% of professionals rank benefits as a key factor when considering job opportunities, with work-life balance topping their list of priorities.

These insights from employees shed light on the challenges and opportunities founders face when crafting compensation packages.

What Founders Think

For founders, the challenge lies in balancing the need to attract top talent with the reality of limited resources. They aim to create a mix of competitive salaries, appealing equity offers, and a strong workplace culture.

Equity as a Recruitment Tool

Equity compensation is a cornerstone of many startups’ strategies. Typically, 10%–20% of a company’s equity is reserved for employees, with higher allocations for C-level executives, top engineers, and other in-demand professionals. Founders often link equity’s value to the company’s progress, using meetings to explain potential financial outcomes and providing personalized equity statements that outline various valuation scenarios.

Shaping Culture Through Compensation

Compensation strategies don’t just attract talent – they also help define company culture. Startups with robust employee benefits report a 21% boost in engagement and productivity. Although startups often face financial constraints – spending heavily on hiring, training, and retention – they use creative benefits to offer employees something beyond money: autonomy, mastery, and a sense of security. By reducing perceived risks and aligning compensation with long-term goals, founders attract individuals who share their mission and vision.

Together, these perspectives from employees and founders highlight the evolving dynamics of compensation in African tech startups.

Key Takeaways for Job Seekers and Entrepreneurs

How to Navigate African Startup Careers

Evaluate Equity Offers Carefully

When considering equity offers, focus on the percentage rather than the number of shares. A large number of shares can mean very little if the total pool is massive. Angel investor Justin Stanford sums it up well:

"At the end of the day equity is just a special kind of bonus incentive"

It’s also important to understand how vesting works. Most startups follow a four-year vesting schedule with a one-year cliff. Adrian Dommisse from Dommisse Attorneys highlights a key point:

"Expect your shares to be restricted – this means that you won’t be able to sell them for a period of time. So even if they vest, you won’t be able to sell them for, say, five years or until the date of the exit."

Take the time to thoroughly review the equity details alongside the rest of your compensation package.

Assess the Complete Package

Beyond equity, look at the full scope of what’s being offered. This includes base salary, tech stipends, reimbursements for co-working spaces, and benefits like health and mental health support. Benefits are a significant factor for nearly 78% of African professionals when evaluating job offers.

Keep in mind that startup roles often demand long hours – 50 to 60 hours per week isn’t uncommon. Consider whether the company’s culture promotes work-life balance and sustainable practices before committing.

Finally, understand how local market conditions influence salaries and benefits.

Research Market Conditions

Compensation varies widely across Africa’s tech hubs. For instance, in 2025, software developers in Lagos earn about $7,500 annually, while their counterparts in Johannesburg make around $42,000. Research local benchmarks to ensure you’re negotiating effectively.

The Future of Pay and Equity in Africa

As startups in Africa evolve, compensation practices are shifting toward greater transparency and flexibility.

Salary Growth Trends

Salaries across Africa grew by 6.1% in 2024 and are forecasted to rise by 6.7% in 2025. However, these increases often fail to keep pace with inflation. For example, Nigeria’s inflation rate hit 28.92% in December 2023. To address this, startups are experimenting with flexible pay structures, performance-based bonuses, and non-monetary perks.

Transparency and Pay Equity

The push for pay transparency is gaining traction. Many startups now conduct regular salary reviews and benchmark pay against industry standards. This approach not only sets clear expectations but also helps reduce turnover caused by dissatisfaction with compensation.

Evolving Equity Practices

Equity compensation is becoming more refined as the African startup ecosystem matures. Companies are making efforts to educate employees about equity through sessions like "ESOP 101" and personalized equity statements. Additionally, SAFEs (Simple Agreements for Future Equity) are becoming a popular funding tool, which could influence how equity is structured for employees.

Final Thoughts

These insights shed light on the opportunities and challenges within Africa’s startup ecosystem. While Nigeria, South Africa, Egypt, and Kenya attract 67% of the region’s equity funding, emerging hubs also hold promise.

For job seekers, thorough research and realistic expectations are essential. Focus on long-term opportunities rather than short-term gains. For entrepreneurs, the challenge lies in attracting top talent with limited resources. Comprehensive compensation packages, including benefits, can make a big difference. Companies that invest in employee well-being often see a 21% boost in engagement and productivity.

Approaching African startup opportunities requires a mix of optimism and careful planning. The potential for growth is immense, but success demands patience and a thorough evaluation of each opportunity’s specifics.

Episode 32 : Let’s talk about salaries – Pay Transparency | Salary Transparency | Pay Equity

FAQs

How does equity compensation at African startups compare to traditional companies, and what should you keep in mind when reviewing these offers?

Equity compensation at African startups often involves stock options, equity shares, or incentive units. These can offer the chance for significant financial growth, but they also come with higher risks compared to equity in more established companies. Startups, being smaller, typically offer less diluted equity, but the ultimate value of that equity hinges entirely on the company’s success.

When assessing an equity offer, there are several key points to weigh. Start with the vesting schedule – this determines when you actually gain ownership of the equity. Then, think about potential tax implications, the company’s growth potential, and the inherent risk of failure. Keep in mind that startup equity often takes years to become liquid, and there’s no guarantee it will hold any value. Striking a balance between the possible rewards and the uncertainty is essential for making a well-informed decision.

What factors affect salaries in African tech hubs, and how can job seekers use this information to negotiate better pay?

Salaries in Africa’s tech hubs depend on a mix of factors such as experience, location, industry trends, specialized skills, currency exchange rates, inflation, and the cost of living in different areas. For instance, professionals in cities like Lagos or Nairobi might earn more because these are key tech centers, but higher salaries often come with increased living costs.

If you’re looking to negotiate, start by researching local salary standards and staying updated on economic trends in the region. Emphasizing sought-after skills or certifications that align with the company’s needs can set you apart. Make sure your negotiation strategy reflects both your expertise and the realities of the local job market.

How can employees in African startups handle job insecurity and grow their careers despite the high failure rate?

Working at a startup in Africa often comes with its fair share of unpredictability, but there are ways to navigate the challenges and thrive in your career. One key approach is to focus on developing your skills continuously. Seek out mentors who can guide you, take full advantage of learning opportunities that come with your role, and stay open to adapting as your responsibilities evolve.

Another essential step is to build a strong professional network. Connecting with others in your industry and maintaining a clear personal brand can help you discover new opportunities and create a sense of job security. Networking isn’t just about meeting people – it’s about making meaningful connections that could lead to your next career move.

You can also benefit from investing in capacity-building efforts. Look into mentorship programs – whether local or international – or explore industry-specific training to sharpen your expertise. Staying informed about emerging trends and high-growth sectors will help you remain competitive and prepared for changes in the market.

By staying proactive and flexible, you can turn the uncertainties of startup life into stepping stones for remarkable career growth.