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The top 10 countries that experienced the highest shutdown rates among start-ups were Ethiopia (75%), Rwanda (75%), Ghana (73.91%), Zimbabwe (66.7%), The Democratic Republic of the Congo (66.7%), Tanzania (62.50%), Nigeria (61.05%), Senegal (58.3%), Somalia (60.0%), and Kenya (58.7%)
The failure rate for start-ups in Nigeria, Africa’s biggest economy, has averaged 61% from 2010 – 2018, according to the latest The Better Africa report, by Weetracker, an African digital media company.
The top 10 countries that experienced the highest shutdown rates among start-ups were Ethiopia (75%), Rwanda (75%), Ghana (73.91%), Zimbabwe (66.7%), The Democratic Republic of the Congo (66.7%), Tanzania (62.50%), Nigeria (61.05%), Senegal (58.3%), Somalia (60.0%), and Kenya (58.7%).
GreenTec Capital Africa Foundation used a sample of 500 start-ups either headquartered or operating in Africa. The sampled start-ups founded in or after 2010 were from 32 African countries spanning 23 industries.
According to Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON), the inconsistency of government policies, not having the right skills, insufficient access to funding, high cost of registering businesses are the major reasons for the failure rate of Nigerian start-ups.
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The report also pointed out that the Government policies are not stable and this has been limiting the success rate of start-up businesses. The high poverty rate in Nigeria also makes many start-ups not go for the right businesses and right skills. The weak economy of Nigeria has made it difficult to access funding and the infrastructure to help businesses has not been enough. Also, the government has not given soft incentives like tax holidays, reliefs and intervention loans to businesses, Egbesola further said.
