In December 2024, the African tech ecosystem celebrated its tenth unicorn. It was a good headline. It was also, if we are honest with ourselves, a strange thing to celebrate on a continent where roughly 1.7 million graduates pour out of Nigeria’s universities and polytechnics every year into an economy that cannot absorb them, where 93 percent of all employment is informal, and where four in ten people live below the poverty line. We have built a scoreboard that measures the wrong game, and then we cheer when the numbers go up.
I write this as someone inside the room, not outside throwing stones. I have invested in startups. I have built companies. I have stood in the incubators, sat on the panels, and watched the demo days. And it is precisely because I have spent two decades in this ecosystem that I can no longer pretend the emperor is fully clothed. Nigeria’s and Africa’s dominant approach to entrepreneurial development is wrong. Not slightly miscalibrated. Wrong in its foundational assumption about what kind of problem we are trying to solve.
We imported the costume, not the body
For fifteen years, we have copied Silicon Valley with the devotion of converts. The accelerators, the pitch competitions, the seed rounds, the “fail fast” mantras, the obsession with valuations and unicorn status, we adopted all of it, faithfully, as though the form alone would summon the substance.
But Silicon Valley is the visible tip of an enormous, invisible iceberg. Beneath the founders and the funding rounds sits a substrate built over a century: the deepest capital markets on earth, world-class universities feeding a defensible intellectual-property pipeline, reliable power and logistics, dense networks of acquirers, and crucially, a vast economy of large, established firms that absorb labour and buy from startups at scale. We imported the costume. We did not import the body underneath it. And then we wondered why it did not move the way it does in California.
The results are not ambiguous. African startups raised about 2.2 billion dollars in equity in 2024 — a figure that, for context, is less than what a single mid-sized American company might spend on research in a year, spread across an entire continent of 1.4 billion people. Of that, by the measure of Africa: The Big Deal, fintech alone took 47 percent; by Partech’s broader count, closer to 60 percent. The top five startups absorbed 45 percent of all venture funding. And 92 percent of the continent’s tech investment, the World Economic Forum reports, flows to just four countries: Nigeria, Kenya, South Africa, and Egypt. This is not a broad-based engine of development. It is a narrow, concentrated bet, dressed in the language of mass transformation.
And the bet mostly loses. Statista put the African startup failure rate at 54 percent as far back as 2020; the African Development Bank estimates that about 80 percent of African startups fail within five years. The 2024 Startup Graveyard report found that 58 percent of them die primarily for one reason they run out of money in a capital pool too shallow to catch them when they fall.
The exception that proves the rule
There is one genuine success story, and we should study it carefully, because it does not mean what we think it means.
Fintech worked. It produced most of our unicorns — Flutterwave, Moniepoint, Interswitch, the digital banks. But ask why it worked, and the answer dismantles the broader thesis rather than supporting it. Fintech succeeded because it is the one sector that did not have to build its own substrate. It rode on rails that already existed: a regulated banking system, established telecom networks, central-bank infrastructure, and payment standards. It was infrastructure-adjacent from birth. It plugged into a body that was already there.
That is not a template for the rest of the economy. It is a warning. The lesson of fintech is not “do more startups.” It is “things scale in Africa when they attach to existing institutional infrastructure, and most of our economy has no such infrastructure to attach to.” Worse, even this winner is shrinking: fintech funding has fallen every single year since 2021, from 2.4 billion dollars to roughly 1 billion. Our best-case sector is contracting. We are doubling down on the one game we are winning, even as the prize gets smaller.
Going to war with babies
Here is the heart of it.
The defining challenge of Nigeria and most of Africa is not a shortage of clever apps. It is the need to put tens of millions of young people into productive, dignified, formal work and to build the industrial base that a populous, underdeveloped economy requires to feed, clothe, house, and power itself. That is a problem of scale and capacity. It is a factories-and-corporations problem. It is industries problem.
You cannot solve industries problems with slide decks.
Asking a continent’s startups to close that gap is like going to war with babies. I do not say that to mock young founders, I say it to indict the rest of us who sent them. The problem is not the babies. The problem is that we handed children a general’s mission and then blamed them when they could not win it. We took bright, ambitious twenty-six-year-olds, gave them a deck and a three-month incubation, and told them to solve unemployment, food insecurity, and de-industrialization. Then we wrote think-pieces about their “resilience” when they collapsed.
Unemployment and underdevelopment are not solved by experimentation. They are solved by execution at scale by operators who have already been to war and carry the scars: people who know how to build a factory, manage ten thousand workers, survive a currency collapse, navigate a hostile regulator, and still make payroll. We do not need more experimenters. We need more soldiers. And we are starving the soldiers to feed an endless supply of recruits.
Slide decks don’t build nations
Consider the arithmetic of absorption.
The Dangote Group employs more than 30,000 people directly. Its refinery and fertilizer complex alone is credited with some 150,000 direct and indirect jobs, making the group the second-largest employer of labour in Nigeria after the federal government itself. Tony Elumelu’s UBA employs around 20,000 people and serves 45 million customers across 20 African countries. Behind them stand the others — Abdul Samad Rabiu’s BUA in cement, sugar, and food; Mike Adenuga’s Globacom carrying a national telecom network; the constellation of industrialists who actually move physical goods and physical labour at physical scale.
One Dangote refinery project absorbs more Nigerians than a decade of celebrated startup exits. Set the entire continent’s 2.2-billion-dollar startup ecosystem against that single industrial undertaking, and the comparison is almost embarrassing.
Now lift your eyes to the regions that have actually industrialized. Walmart employs about 2.1 million people — the largest private workforce on earth. Amazon employs roughly 1.56 million. In India, a country with a development trajectory far closer to ours than America’s, the Tata Group employs over one million people across thirty companies, and Reliance employs around 347,000. These are not apps. They are labour sponges — vast, integrated industrial and commercial enterprises that soak up millions of workers and build the productive backbone of a nation. A continent of demo days cannot manufacture them. Slide decks don’t build nations. Factories, corporations, and the hardened operators who run them do.
This is what economists call the missing middle. Africa has a teeming base of informal microenterprises at the bottom – the hawkers, the one-person hustles and a thin, precious layer of true giants at the top. What it lacks is the dense middle of scaling firms that grow from hundreds of employees to tens of thousands. That hollow middle is where mass formal employment is supposed to be manufactured. And our entrepreneurial development strategy, almost by design, does nothing to fill it. We fund the birth of microenterprises, and we admire the giants, but we have no deliberate machine for turning the former into the latter.
The objections and they are serious
I am not naive about what I am proposing, and anyone who has watched Nigeria closely will already be reaching for the obvious rebuttals. They deserve real answers, not dismissal.
“More industrialists just means more captured monopolies.” This is the strongest objection, and it is fair. Nigeria’s history with industrial policy is littered with white elephants, rent-seeking, import-license cronyism, and national champions who used scale to extract rather than to build. A bigger Dangote can mean more cement-pricing power, not more competition. I concede this entirely, which is why the prescription is not “pick winners and hand them protection.” It is to build a transparent, competitive pipeline for scaling firms: capital and policy support tied to employment, exports, and productivity benchmarks, awarded by performance rather than proximity to power. The goal is not one champion per sector. There are fifty contenders per sector, competing hard. Industrial policy done badly is a curse; refusing to do it at all is also a choice, and it is the choice that left us here.
“Startups build the talent and tools that the industry runs on.” True, and I am not calling for their abolition. The engineers, the payment systems, the logistics software, the data layers, much of that comes from the startup world, and industry needs it. That is exactly why the answer is rebalancing, not elimination.
“Capital allocation isn’t a government dial VC is private money chasing returns.” Also true. But the state, development-finance institutions, sovereign wealth funds, and pension capital are not neutral bystanders; they shape where private money flows through guarantees, co-investment, tax treatment, and the signals they send. We have spent a decade pointing those public instruments at incubation and seed-stage experimentation. We can point them somewhere else.
“Automation means modern industry won’t absorb labour as it used to.” A real and growing concern. Mega-industry is more capital-intensive than it was in Walmart’s heyday. But even a discounted absorption rate from industrialization dwarfs what a startup ecosystem delivers, and the supplier networks, logistics chains, and service economies that grow around large industry remain powerfully labour-generating. Imperfect absorption still beats negligible absorption.
None of these objections survives as a reason to keep doing what we are doing. They survive only as guardrails for doing the new thing well.
The 70/30 reallocation
So here is the concrete proposal, and it is deliberately uncomfortable.
Africa’s entrepreneurial development effort its policy attention, its patient capital, its public instruments, its talent pipelines, and its convening energy should direct 70 to 80 percent toward aggressively scaling companies and entrepreneurs that already have a five-to-ten-year track record and a real growth trajectory. These are the firms with proven management, surviving models, and the absorptive capacity to add thousands of jobs if given fuel. And it should direct the remaining 20 to 30 percent toward startups that have demonstrated genuine early traction, not ideas on a deck, but ventures with real customers and real revenue.
In practice, this means development-finance institutions and sovereign funds building dedicated “scale-up” facilities growth capital, not seed capital for established mid-market firms ready to industrialize. It means government programmes that measure success in jobs absorbed and goods produced, not startups incubated. It means tax and credit instruments that reward the firm going from 500 employees to 15,000, because that journey, the filling of the missing middle, is where a nation’s employment is actually made. And it means redirecting a meaningful share of the prestige, the press, and the policy attention away from the pitch stage and toward the scaling stage, because attention follows money and money follows attention.
We have inverted the ratio. Today, we pour the overwhelming majority of our entrepreneurial energy into the 20 percent of the problem that startups can address, and we starve the 80 percent that only industrial scale can solve.
The unfinished business
Africa was sold a seductive story: that we could leapfrog industrialization entirely, skip the factories and the smokestacks, and digitize our way directly into prosperity. It is a beautiful narrative. It is also, for the central problem of mass employment, a category error. No populous nation in history has lifted its people into broad prosperity without building industries that employ them by the million. The leapfrog narrative lets us feel modern while skipping the hard, unglamorous, decades-long work of building productive capacity.
We do not need fewer entrepreneurs. We need a different theory of which entrepreneurs we are trying to build, and which ones we are trying to scale. We need tens and hundreds more Dangotes, Elumelus, Rabius, and Adenugas — not as folk heroes to admire from a distance, but as the deliberate, repeatable output of a system designed to manufacture them.
The babies were never going to win this war. It was never their war to fight. It is ours. And it is time we sent in the soldiers.
Taopheek A. BABAYEJU
Author | Keynote Speaker | PMI Eric Jenett Person of the Year (2024)
CEO, iCentra.com | Founder, The TAB Foundation
SM @taopheek | taopheek.com
Sources: Africa: The Big Deal and Partech (2024 funding and sector concentration); Condia (top-five funding share); World Economic Forum (geographic concentration of tech investment); Statista and the African Development Bank (startup failure rates); the 2024 Startup Graveyard report (causes of failure); Nigeria’s National Bureau of Statistics and the ILO (labour-force, informality, and poverty figures); Dangote Group, Vanguard, and UBA (Nigerian employment figures); and company filings via Statista, Capital.com, and Business Standard (Walmart, Amazon, Tata, and Reliance employment figures).