Seven Nigerian tech companies defied economic hardships to become some of Africa's fastest-growing businesses, according to the Financial Times' (FT) prestigious "Africa's Fastest Growing Companies 2024" list.
The FT's ranking, in its third year, focused on how companies navigated the challenges of the COVID-19 pandemic and Africa's economic struggles. Partnering with Statista and BusinessDay, the FT compiled data from companies that submitted revenue figures verified by senior leadership. The ranking acknowledges it doesn't encompass every company on the continent.
Prioritizing Compound Annual Growth Rate (CAGR) in revenue between 2019 and 2022, the list included seven Nigerian tech companies among 125 African businesses. These high-performers include Afex, Moniepoint, Paga, Omniretail, ThriveAgric, Seamlesshr, and FairMoney, employing roughly 3,386 people collectively.
Nigeria's recent economic climate has been tough. A pandemic-induced recession and plummeting oil prices created a difficult backdrop. The World Bank reports the early stages of the pandemic resulted in Nigeria's deepest recession since the 1980s. Oil, representing over 80% of the country's exports and over half of government revenue, saw its price tumble over 60% between February and May 2020. The pandemic's ripple effects pushed over five million Nigerians into poverty by 2022.
The IMF's head of the Africa department, Abebe Selassie, expressed concern about "the effect the pandemic has had on poverty." The IMF reports Africa's overall economic growth in 2023 reached 3.2%, lagging behind Asia's nearly 5% growth. Considering Africa's rapid population expansion, this underperformance translates to even starker per capita figures. The FT notes that Africa is falling further behind wealthier regions instead of narrowing the gap.
Nigeria, Africa's largest economy in 2022, was recently knocked down to fourth place due to currency devaluations. Despite this setback, Nigeria boasts the second-highest number of companies on the ranking. The FT describes Nigeria grappling with economic crisis in 2023, including inflation and a plummeting naira.
Nigerian startups are demonstrating resilience by optimizing operations and prioritizing customer needs. A 39% decline in startup funding to Africa in 2023 underscores the importance of generating revenue.
Tosin Eniolorunda, group CEO of Moniepoint, a company featured on the list, highlights the value of sustained growth. "Achieving rapid growth is fantastic, but maintaining it year-on-year is even better," Eniolorunda said.
Andrew Mori, CEO of Deimos, a South African firm on the FT's list, believes the overall revenue growth reflects Africa's embrace of technological solutions. "Our growth reflects Africa's technological progress," Mori said.
This FT recognition shines a light on the tenacity and potential of Nigeria's tech sector, proving its ability to thrive even in challenging economic conditions.
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