Nigeria’s much-celebrated Startup Act is facing growing scrutiny as weak implementation across states limits its impact beyond Abuja, raising fresh concerns about policy execution and investor confidence.
More than four years after its enactment, the law designed to accelerate innovation, improve access to funding, and position Nigeria as a leading digital economy in Africa has yet to translate into meaningful change outside the Federal Capital Territory (FCT) and a handful of major urban centres.
The uneven rollout highlights a widening gap between federal policy ambition and state-level execution, leaving many startups to contend with persistent regulatory and structural constraints.
Industry observers say the ecosystem remains active but constrained.
Adeolu Adewumi-Zer described Nigeria’s startup and SME landscape as one marked by strong entrepreneurial energy but limited by structural bottlenecks. According to her, “Nigeria’s startup and SME ecosystem is vibrant but constrained, with strong entrepreneurial energy limited by access to capital, weak structures, and inconsistent policy implementation.”
Data from the National Bureau of Statistics (NBS) underscores the contradiction. The Information and Communications Technology (ICT) sector contributed between 17 and 20 percent to Nigeria’s GDP in 2024, reinforcing its position as one of the country’s fastest-growing sectors. Yet, this growth has not been matched by the institutional support required to sustain startups across regions.
Most states have yet to domesticate or operationalise the Act, despite federal efforts to establish frameworks such as the National Council for Digital Innovation and Entrepreneurship. The result is a fragmented policy landscape in which startups outside Lagos and Abuja continue to face multiple taxation, weak infrastructure, and regulatory uncertainty.
“There’s been a lot of policy conversation, but not much has filtered down to us at the state level,” said Uzo Azuka, a founder based in southern Nigeria. “We still deal with the same regulatory bottlenecks and limited access to funding.”
The implications extend beyond the tech ecosystem. Persistent execution gaps are beginning to shape political sentiment, particularly among young Nigerians who are increasingly demanding accountability from leaders.
