Abolaji Adebayo 
Industry experts have identified the lack of investor confidence as a significant obstacle to the growth of startups in Nigeria and across Africa.
Industry leaders and financial analysts have highlighted challenges such as inconsistent government policies, infrastructural deficits, and security concerns as key factors undermining investor trust.
According to Olufemi Adedeji, a venture capital consultant, the Nigerian startup ecosystem has immense potential, but investors are deterred by the unpredictability of the market.
“The talent and ideas are here, but the lack of enabling infrastructure, transparency, and stable regulations make it difficult for foreign and local investors to commit substantial resources,” he said.
In recent years, Nigeria has emerged as a tech hub in Africa, with Lagos dubbed the “Silicon Valley of Africa.” However, funding has not matched the pace of innovation.
Reports from Disrupt Africa show that while Africa’s tech startups raised over $5 billion in 2023, Nigeria accounted for only a modest share compared to other leading countries like Kenya, Egypt, and South Africa.
Another concern is the high rate of startup failure, often linked to inadequate business models, limited access to funding, and lack of mentorship.
Startups like Paystack and Flutterwave have demonstrated the potential for global success, but many others struggle to scale due to early-stage funding gaps.
A Ghana-based angel investor, John Mensah, urged governments in Africa to take a more proactive approach in building investor-friendly policies.
“It’s not just about funding. Investors want to see a long-term commitment to policies that protect their investments and encourage growth,” he noted. Despite the challenges, some startups are defying the odds.
Sectors like fintech, agritech, and edtech continue to attract interest, with experts emphasising the need for collaboration between governments, private investors, and international development partners to foster a sustainable ecosystem.
With the right strategies and policies, analysts believe Nigeria could solidify its position as Africa’s leading startup destination, unleashing innovation and creating jobs for its burgeoning youth population.
To attract more foreign investment, startups are charged to build confidence in the investors, while urging governments to make policies that can invite the investors.
A financial expert, Taofeek Olusanya said small scale startups can collaborate to pool tenor resources together, saying the confidence of investors would be boosted if a startup have some financial re sources.
According to him, startups can build confidence in investors if they have some level of resources in terms of fund and staff, adding that this could be achieved when startups come together to pool resources together.
“Apart from the government policies, no investor will put his fund on a startup finTech without a substantive resources. That’s why we advise startups to come together to form a big firm, that way, they can build confidence in investors,” he said.
At a forum recently, the Managing Director, PalmPay Nigeria, Chika Nwosu, stated that “the fintech ecosystem is not saturated but founders need to be mindful of building investor’s confidence amid currency devaluation and rising interest rates.
“We have seen that most of the currencies of sub-Saharan Africa have plummeted against the US dol -lar, including the Egyptian pound, Naira, Rand, Cedi, Congolese franc, and Kenyan shilling.
This devaluation is impacting the value of investments, which in turn, lowers investor’s confidence and makes it difficult for fintech startups to secure funding.”
Nwosu stated that founders could mitigate the challenges by diversifying their revenue streams and expanding into multiple geographical regions.
He noted that relying solely on one market could expose companies to regional economic volatility. “By entering diverse markets, fintechs can spread their risk and minimise the impact of instability in any single region,” he said..
