Universities in Nigeria are not doing enough to encourage and support the entrepreneurial development necessary to build a startup ecosystem – and they have fallen behind institutions in Egypt and South Africa.
This arose from a publication entitled the Nigeria Startup Ecosystem Report 2022 published by Disrupt Research in September.
The report presents local ecosystems by analyzing active startups, local support networks and funding over the past seven and a half years.
It is the third country publication after October 2021 Egypt Startup Ecosystem Report and July 2022 South African Startup Ecosystem Report.
As of September 2022, the report finds that there were at least 481 tech startups operating across Nigeria, employing over 19,000 people with fintech the most populous sector, accounting for more than one-third of startups full active technologies.
Almost 50% of Nigerian tech startups have undergone some form of acceleration or incubation, although diversity is an issue as less than 15.6% have a female co-founder.
A strong investment ecosystem supports Nigerian startups with a four-fold increase in total investment between 2020 and 2021, and they are poised to take another big step in 2022.
At least 383 individual tech startups from Nigeria raised a combined US$2,068,709,445 in funding between January 2015 and August 2022, more than any other country in that period.
The report stated that a large number of leading Nigerian universities run courses focused on entrepreneurship, and have established centers of entrepreneurship and innovation, according to the report.
Among them are the universities of Ibadan, Obafemi Awolowo, Nigeria, Lagos, Port Harcourt, as well as Covenant and Pan-Atlantic universities and the Federal University of Technology Akure. The most successful business founders in Nigeria have disproportionately studied at these institutions, according to the report.
This is consistent with the October 2020 report, Ten Year Report of the West African Start-up published by Techpoint Africa, which showed that some Nigerian universities are making progress in developing innovative and entrepreneurial mindsets.
“The Nigerian Student Enterprise Award, established in 2019, works to promote and showcase unique business ideas and entrepreneurship among university students, as well as help bridge the gap between academia and the business community,” the report showed.
Low entrepreneurial activities
The report said: “It is not only in terms of government and corporate involvement that Nigerian start-ups lack the support of their peers in markets such as Egypt and South Africa. In terms of entrepreneurship support from Nigerian universities, activity levels are also relatively low.”
“This low level of activity is in contrast to the likes of the American University in Cairo in Egypt, or the University of Cape Town and the University of Stellenbosch in South Africa, which have dedicated in-house incubators or accelerators for external student start-ups. Some of these, and others, are investing in start-ups – and taking equity stakes in them as well,” the report said.
“This level of engagement is sorely lacking in Nigeria and, as with government and the corporate ranks, more needs to be done if the ecosystem as a whole is to produce the quality of enterprises that justify the size capital that comes into it,” the report concluded.
Dr. Stephen Oluwatobi, founder and board chairman of Hebron Startup Lab at Covenant University in Nigeria said World University News: “I believe there are three categorical skills that universities must ensure their students have mastered before they graduate from school, including technical skills (economics, engineering, and everything they offer as degrees) ; life skills (leadership, negotiation, communication, attitude towards work, resilience, etc); and entrepreneurial skills (which enable students to see problems as opportunities to create prosperity, instead of something to complain about).
“Nigeria desperately needs graduates with entrepreneurial skills to create prosperity from its problems. But, if the universities don’t see that, they would only be adding to the number of unemployed graduates, who only have ‘light’ technical skills, but who don’t have the life and entrepreneurial skills to get through the world, ” said Oluwatobi, who is also the co-founder of Quanta Africa-Innovative Tech Social Enterprise Innovations.
“Therefore, to enhance the role of Nigerian universities in establishing an effective and innovative startup ecosystem, first, the universities and their leaders must be students. They must learn how to ‘create’ 21st century graduates who will be relevant in the current digital and entrepreneurial age. If they cannot get this, they will still be producing graduates for a world that no longer exists,” Oluwatobi added.
“Some Nigerian universities are making efforts and trying to develop an innovative and entrepreneurial spirit through strategic measures; but not many are getting (right),” he said.
“Nigerian Universities must also work towards driving strong university-industry relationships,” Oluwatobi suggested.
“This exposes the educators and students to today’s problems that would challenge their entrepreneurial minds instead of the old textbooks,” he explained.
“Such relationships should also provide opportunities for faculty members to do internships and get their sabbaticals in the industry where the real problems are.
“When they return to the classroom, they will be challenging their students to engage their entrepreneurial minds as well as raise better students.
“It is for a king to raise another king; a slave cannot make a king. Teachers and lecturers need an entrepreneurial mindset to help students develop their own,” said Oluwatobi.
“My experience directing the Center for Entrepreneurship Development Studies at Covenant University also showed the importance of entrepreneurs facilitating entrepreneurship classes instead of teachers who are reading to teach,” said Oluwatobi.
“We also greatly leveraged our alumni network of entrepreneurs, who helped facilitate entrepreneurship classes and mentored aspiring entrepreneurs. Part of the mentoring process was direct intervention with the entrepreneurs and founders during their long vacations,” he said.
“I founded the Hebron Startup Lab in 2016 to enable Covenant University students to express and exercise their entrepreneurial muscles and abilities as well as provide support to take their validated ideas from concept to product, to the market,” explained Oluwatobi.
Over the years, Covenant University graduates have started many viable companies, from Softcom to PiggyVest to Korapay to Earnipay to ThriveAgric, to name a few, he said.
Indicators for measuring university success
Oluwatobi said Nigerian universities should rethink how they measure their success: should it be based on the number of students who pass (can’t get a job) or is it based on the number of first class students (who are still struggling in life) ?
According to him, the success of Nigerian universities should be based on how much their graduates are sought for employment and how many of their graduates are launching high growth startups that solve problems, offer jobs and create wealth.
“The success of a Nigerian university should be about the percentage of the contribution of its graduates to the total gross domestic product, or GDP – the total monetary or market value of all finished goods and services produced within a country’s borders in a period of time particular,” Oluwatobi added.
“If Nigerian universities cannot see the real indicators of success and cannot see beyond the degree, then they are not only void of entrepreneurship, they have failed,” Oluwatobi said.
Oluwatobi is the lead author of a 2019 study titled, ‘Entrepreneurship Ecosystem Matrix (EEM): A proposed framework for Nigerian universities to become start-up factories’, which stated that “universities can often launch start-ups through establish platforms. create value from knowledge (ideas, concepts, prototypes and products) developed by the university community; validate that the value created is an efficient, effective and applicable solution; to develop the entrepreneurial spirit of the university community; and establishing an enabling environment, defined by the incentives, institutional quality, infrastructure, capital, access to markets, workspace, laboratories for experimentation, technology transfer offices, as well as support and industry connections”.