By Dr. Charles Obiajulu Ugwu
Prologue: When Generators, Diaspora & Code Collide
It was late 2018 in a small shared office in Yaba, Lagos: a group of young engineers hovered around a router as the 5 p.m. city grid shut down its last vestiges of electricity. Rather than pause, they switched to mobile data tethered across fragile links, ran backup systems, and continued deployment of a payments module. When investors abroad asked whether poor infrastructure was a risk, they shrugged, “It’s our cost of entry.”
Today, that same resolve has produced global companies: Flutterwave, Moniepoint, Paystack, Andela. These founded in adversity not in spite of it. But adversity is not architecture. What Yaba has thus far achieved through improvisation must be consolidated through design. The difference between a cluster and a capability ecosystem lies in whether the improviser becomes the builder of enduring infrastructure.
This essay argues: if Nigeria treats Yabacon Valley as the kernel of sovereign development capacity investing in public goods, regulatory scaffolding, capital retention, talent pipelines it can trigger a continental renaissance. Not metaphorically, but measured: new unicorns, more retained value, export revenues, deep tech, manufacturing, and institutions strong enough to survive political cycles.
The Scale of What Has Been Built and Its Gaps
Before leaping ahead, we must examine what really exists in numbers and where the gaps sear.
Recent Funding, Unicorns & the Momentum
Between 2019 and 2024, Lagos alone has attracted over US$6 billion in tech startup funding. Governor Babajide Sanwo-Olu has called Lagos “Africa’s innovation nerve centre,” citing that over 70% of Nigeria’s total tech investment inflows in that period go to Lagos.
In 2024, Nigerian tech startups raised ~US$410 million roughly the same as in 2023. The big deals included Moove’s US$110 million and Moniepoint’s US$110 million Series C.
Over the last five years, Nigeria has produced five unicorns: Flutterwave, Interswitch, Andela, Opay, and most recently Moniepoint. Together they contributed to Nigeria raising ~US$4.6 billion over that period roughly 29% of total startup funding in Africa across the same time.
These numbers show that despite turbulence (exchange rate crises, inflation, policy swings), there is capital belief in Nigeria and Lagos specifically as a high-stakes field of innovation.
But on closer look: the cracks beneath the shine
In 2024, Nigeria raised US$331.6 million across 39 startups, making up about 29.6% of Africa’s startup funding for that year. But many of these are early-stage; few Series B/C rounds; very few exits.
AI startups in Nigeria, as of mid-2025, had raised only US$47.3 million across 34 firms, averaging about US$1.39 million per firm far below comparable averages in Kenya (~US$12.8 million) and Tunisia (~US$27.2 million). This suggests deep tech and frontier tech are underfunded relative to fintech and “easier” software niches.
While Lagos draws capital, business density, and talent, infrastructure remains a heavy drag. FT recently pointed out in “Lagos offers start-ups ‘immediate scale’ but challenges remain” that physical infrastructure, power, transport, and living conditions are pushing some talent outward and making rapid scaling harder.
What Has Worked and the Patterns to Institutionalize
From the raw carnage of failure have emerged patterns. These are what must be scaled, formalized, and protected.
1. Diaspora Networks as Implicit Capital & Credibility Engines
Andela: co-founders used diaspora relationships to get early contracts, mentorship, and capital infusion. Their graduates work remotely for companies in US/Europe, and that flow of value and validation has circulated back.
Moniepoint: secured US$110 million in 2024 in part via global venture capital firms, including Google’s Africa Investment Fund. That gave it unicorn status. Local users gained trust because global firms had vetted them.
Remittances: Nigeria is among the top recipients globally; the central bank has floated plans for diaspora bonds targeting US$1 billion monthly remittances. Such financial flows already enhance liquidity, but with appropriate instruments could be converted into domestic investment capital.
2. Demand Pull & Pain-Driven Innovation
Moove: saw that many ride-hail/logistics operators cannot access financing because they lack collateral. Moove instead based credit on revenue streams, allowing vehicle financing tied to weekly income. That is solving a deep pain under infrastructure gap. (Also, Moove aims to bring 45,000 new vehicles on its platform as it scales globally. )
Moniepoint: initially built payment infrastructure for banks and institutions, then expanded into banking services, FX, credit all because of demand gaps in underserved population segments. The inclusion demand shapes product direction.
3. Cluster Effects & Urban Scale
Lagos, with an estimated population of ~20 million in its metropolitan area, provides immediate scale. FT notes that 23 of Nigeria’s 28 fastest-growing firms (on Financial Times’ African ranking) are based in Lagos. That concentration means startup founders test and refine under pressure: users are diverse, infrastructure inconsistent, regulation patchy. But if you succeed here, you often succeed elsewhere.
Co-working spaces, universities, tech hubs (“slots” of space in Yaba and Ikeja) have allowed shared risk: when generators fail, multiple startups suffer; they share fuel, backups; when internet is throttled, they coordinate VPNs or alternative links. These informal risk-sharing arrangements are part of Yaba’s resilient architecture.
Dimensions of Impact: What Losing, What Gaining
What gets lost if this moment is mishandled; what gets gained if the strategy is pursued properly. Five dimensions of impact.
Dimension
Risk If Neglected
Gain If Reinforced
Economic Value Capture
High exit migration (founders domiciling abroad), profits flowing to offshore entities, weak local capital markets so that value is extracted rather than anchored in Nigeria.
More retained wealth, higher GDP contribution, stronger tax base, capital recycling into new ventures.
Human Capital & Brain Circulation
Talent flight: once infrastructure or regulation fails, people leave; second generation of startups struggle to recruit. Skills drain and lower wage premiums suppressed.
Robust pipelines, better salaries, more on-shore senior roles, even exports of services and IP.
Institutional Maturity
Regulatory whiplash, policy reversal, opaque decision-making deter serious investment; fragile contracts.
Predictability, legal enforceability, efficient payments infrastructure, ID/KYC systems, strong physical infrastructure.
Sectoral Depth & Diversification
Overreliance on fintech and mobility; weak presence in agriculture, health-tech, deep tech, manufacturing.
Diversified economy across software, hardware, logistics, agritech, renewable tech build supply chains, exportable goods, better resilience.
Geographic & Social Inclusion
Lagos becomes the only place that matters; rural or non-coastal areas remain excluded; inequalities deepen.
Distributed hubs, apprenticeship programs, greater participation from different states, more inclusive prosperity.
Mutual Leaps, How the Key Structural Enablers Support Each Other
The success of the agenda depends not on isolated reforms but on integration how one lever amplifies another. Each structural move must be seen as part of a web of mutually reinforcing systems.
Leap 1 → Public Railways of Data & Finance → Leap 2
If Nigeria builds a Digital Public Goods Stack (digital identity, open KYC, payments switch, tax APIs), that rails infrastructure reduces friction for startups, lowers cost of entry, improves compliance, and makes scale easier. But its value is limited unless scale capital is present. Hence, establishing a Sovereign Scale Fund (leap 2) helps startups use the rails to grow domestically rather than reincorporate abroad.
Example: Moniepoint’s recent Series C (US$110 million) comes when digital payments infrastructure is maturing locally. The foundation of active payment rails, consumer trust in fintech, and regulatory tolerance helped make Moniepoint a credible bet for global investors.
Leap 3 → Reliable Infrastructure Enables Manufacturing & Deep Tech
Energy corridors / microgrids (leap 3) are expensive and complex, but without them, deep tech, data centers, light manufacturing remain border cases. Imagine agritech labs needing refrigeration, processing; AI startups needing GPU farms; hardware startups needing stable electricity. Without power certainty, founders build risk buffers (higher costs, backups, redundancies) that eat margins or make scale impossible.
Leap 4 → Talent + Demand → Sectoral Diversification
Procurement demand (leap 4) and a national skills pipeline (leap 5) together press startups into solving real, locally meaningful problems health, agriculture, energy not just payment or transport. With demand from government contracts or public services, startups in those sectors have guaranteed buyers, which complements talent capable of delivering. A health-tech startup with coders from a talent compact and clients via procurement lanes can scale in ways fintechs have if given the push.
Leap 6 & Leap 7 → Keeping Value Home via Capital Markets & Retention
Regulatory certainty (leap 7) and local capital markets reform (leap 9 in earlier outline) are mutually reinforcing. If rule of law is weak, even good laws, the capital markets will underperform because investors fear expropriation or policy reversal. Conversely, depth in domestic capital markets gives regulators less leeway to impose arbitrary controls, because markets signal. If founders see credible IPO or listing options in Lagos or Abuja, then headquarters and high-order jobs are likelier to stay.
Leap 8 → Diaspora + Exit Paths
Diaspora investment channels (lever 8) are more effective if coupled with simplified exit paths and domestic capital markets. A diaspora person investing in Nigeria is more willing if they believe equity can be liquidated in domestic exchanges without needing Delaware or London shell companies. This increases the flow not only of small checks but of significant LP commitments.
Strategic Agenda with Integrated Cases
Below are fleshed, interconnected interventions, each illustrated with case sketches, expected measurable outcomes, and interdependencies. These are presented not as options but as stages of a multi-modal orchestration.
A. Digital Public Goods Stack + Regulatory Certainty
Case in point: Kenya’s UPI-like payments system and India’s Aadhaar/UPI backbone. UPI in India handled over 46 billion transactions in 2021 alone; Aadhaar has given over 1.3 billion IDs. The open rails reduced costs, spurred growth in fintechs like Paytm, PhonePe. Nigeria’s analog is the current proliferation of fintechs that must piece together payment API, bank integrations, KYC each a cost and a point of failure.
Actions:
National digital ID tied to utility usage, telecom data, or biometrics trusted, secure, with privacy safeguards.
A payments switch under CBN that enforces interoperable standards.
Legislation for regulatory forbearance for new fintech categories (crypto bridging, AI fintech, etc.).
Outcomes:
Startups’ onboarding time cut by perhaps 30-50%.
Transaction fees drop; financial inclusion rises.
Investor risk perceptions fall; Series B/C rounds improve.
B. Sovereign Fund & Talent Compact
Case: Moniepoint and Moove show that when scale capital is available, companies can fulfill pan-African promises: Moove, using US$100 million Series B, plans expansion to 16 global markets. But often seed and early rounds are plentiful while “scale‐up” capital is thin.
A Talent Compact (like Andela but national, decentralized) ensures supply of engineers, data scientists, designers, close to production ready.
Actions:
Create a blended capital fund seeded by Sovereign Wealth Fund, DFIs, diaspora LPs, earmarked for Series B/C in priority sectors.
Create apprenticeships, modular certification programs in collaboration with universities, tech hubs, employers.
Outcomes:
Number of scale-stage rounds with Nigerian lead investors rises.
Female and regional representation in tech increases.
AI & deep tech startups can access both funding and talent to build proof-of-concepts.
C. Infrastructure: Microgrids & Logistics Micro-Hubs
Case: In Nairobi, Konza City’s microgrid + innovation node ambition; in Kigali Innovation City power reliability is comparatively high, attracting multinational ICT companies. These show how reliable power plus good real estate + law → magnet for global capital.
Actions:
Designate zones (e.g. Yaba-Ikeja corridor, university campuses) for reliable power via solar + storage microgrids.
Build light manufacturing hubs adjacent to ports/airports (for export), with customs facilitation, bonded zones.
Outcomes:
Lower cost of goods, reduced downtime, increased manufacturing outputs.
Startups in hardware / agritech / energy storage move from prototypes to scale.
D. Procurement & Government Demand + Local Capital Markets
Case: Rwanda’s government use of procurement to scale agricultural technologies; Estonia’s e-governance platforms procured domestically then exported.
Actions:
Create reserves in procurement contracts for domestic tech innovators.
Simplify government RFPs / procedural red tape for SMEs.
Reform securities regulations so tech firms can list on Nigerian Stock Exchange with reasonable requirements.
Outcomes:
Number of contracts awarded to local startups rises; revenue stream for growth.
More IPOs / listings; more domestic investor participation (pension funds, retail).
E. Diaspora Bonds & Regional Integration
Case: Israel issued diaspora bonds to finance early state infrastructure; more recently Ethiopia has mobilized diaspora for both real estate and industry investment; remittance flows from Nigeria remain very large.
Actions:
Issue well-structured, transparent diaspora bonds for infrastructure (power, roads, labs).
Harmonize regulatory standards across ECOWAS / AfCFTA for payments, data, cross-listing.
Outcomes:
Remittances partially converted into investment.
Nigerian startups find scaling across borders legally less costly.
The Necessary Integrations and Institutional Architecture
An ambitious strategic frontier demands an architecture of institutions that can pull strings together.
Yaba Renaissance Commission: A permanent convening body with public & private chairs, tasked with oversight of all interconnected levers: digital infrastructure, regulatory reform, fund performance, procurement policy, infrastructure zones.
Performance Scorecards & Data Transparency: Quarterly public reporting on metrics: funding per sector, number of Series B/C rounds, uptime in selected microgrids, procurement awarded to local firms, export value, talent placements.
Legislative Anchoring: Key reforms (digital ID law, payments law, capital markets reforms) must be codified via legislation, not left to executive decrees. Law gives time-horizons and remove risk of abrupt reversal.
Blended Finance Platforms: Use DFIs, philanthropic grants, impact capital to share risk in infrastructure, in deep tech (AI, biotech), and in underserved geography. This lets early movers build and others follow.
Cross-Sector Collaboration: Tech policy cannot be siloed. Integration with energy policy (for microgrids), urban planning (for hubs), education policy (for talent), trade policy (for AfCFTA integration), judicial reform (for contract / IP law enforcement).
Risks, Countermeasures & Strategic Mindsets
This frontier is full of landmines. Handling them requires careful thought.
Policy Reversals & Regulatory Whiplash: Nigeria has a history of abruptly changing rules around FX, fintech licensing, data regulation. Mitigation: built-in legal protections, “sunset clauses,” stable regulators; public commitment via law.
Capital Flight & Early Exits: Founders may still relocate, list abroad, domicile in foreign jurisdictions. Counter: incentives to stay onshore (tax breaks, favorable regulations), local scale funds, national exit pathways.
Corruption & Rent Capture: As infrastructure contracts, procurement, and fund allocations scale, risk of capture rises. Counter: enforce transparency (public dashboards, open procurement), civil-society / diaspora oversight, competitive tendering, performance metrics.
Unequal Inclusion: Lagos dominates; states and rural areas risk being left behind. Counter: distributed hubs, mandated inclusion in talent compacts, incentives for decentralized platforms and regional centers.
Capital Crunch & Global Downturns: Global VC has pulled back. Nigeria’s $410 million in 2024 is steady but modest. Risks tempered by leaning on domestic capital, diaspora investment, pension funds.
A Vision of the Potential: Concrete Scenarios by 2030
If the agenda is adopted with coherence, Nigeria by 2030 could see:
20 Nigerian firms achieving annual revenues over US$50 million, with HQs and board majorities in Nigeria.
Three or more new unicorns coming not just from fintech but from agritech, energy tech, AI.
Export revenues from tech and light manufacturing rising from single digits to 10–15% of total exports.
Domestic capital market with 10-15 tech IPOs / cross-listings, increased pension fund participation, more local LPs in VC.
Talent pipelines delivering perhaps 100,000 certified tech workers, with strong gender, regional representation.
Globally: Nigeria becomes a pole in Africa that investors view as comparable (on risk-adjusted terms) to India or Southeast Asia in its early 2010s phase.
A Call to the Builders: Global & Local Stakes
For local actors founders, government, investors the moment demands three things:
Ambition with patience: build not for exit, but for foundational capability.
Coalition across sectors: tech people must sit at energy, trade, education, justice tables.
Standards & discipline: in procurement, regulation, contract enforcement.
For global actors investors, development finance agencies, multinational companies the opportunity is urgent:
Nigeria is the fastest-growing large market in Africa, with 200+ million people, the largest youth cohort, and rising smartphone penetration.
Investing early in infrastructure and institutions yields returns multiplied by scale: the difference between backing a fintech that serves 1 million versus 50 million users.
Partners who help build public goods (digital rails, power grids, open data) will be remembered, will see returns, and will help define the next emergent order of global economy.
On the Horizon of an African Renaissance
Yabacon Valley today is half-made. The courage, coding skill, diaspora networks, venture investments exist. But a Renaissance is not an epiphany: it is the result of deliberate scaffolding. The leap from cluster to capability is a matter of design: how public goods, capital, regulation, infrastructure, human capital knit together.
Nigeria’s path must now choose between two futures:
One where Yaba remains a dazzling set of icons: Flutterwave, Paystack, maybe one or two more but where much of the economy is still hitching on oil, imports, and rent-seeking.
Another where Yaba becomes the seed of an ecosystem that scales: factories in Ogun, data centres in Kano, health-tech in Calabar; thousands of small firms scaled, enabling Nigeria to produce not just software but hardware, not just services but exports, not just ambition but delivery.
For investors, founders, statesmen: this is the strategic frontier. You are either part of building the backbone, or part of observing it from the sidelines.
When Yabacon Valley becomes what it has the potential to be Nigeria’s sovereign engine of innovation then the African Renaissance is no longer a dream. It is economic gravity.
About the Author
Dr. Charles Obiajulu Ugwu writes from Lagos
