Recently, I wrote about the most critical factors to consider before creating a startup hub in Nigeria. While any state government can actually make this happen, there are particularly some cities that could get it done faster within just a couple of years.

As Paul Graham, the most respected authority on startups put it: For the price of a football stadium, any town that was decent to live in could make itself one of the biggest startup hubs in the world. What’s more, it wouldn’t take very long. You could probably do it in five years during the term of one mayor (or governor).

Granted, most of the state governors claim to have ICT development plans but have hardly harnessed the economic benefits and potentials of a technology & business startup culture in certain cities.

With so much attention on diversifying the Nigerian economy from over-dependence on oil, to tourism, agriculture, and other sectors, what better time to focus on developing the “knowledge economy” driven by massive ICT infrastructure development in any given state or city.

According to a post over at LaptopJudge, a “Knowledge Economy” will naturally give birth to a new generation of technology-savvy entrepreneurs with a rare business culture – one that can support the vision of creating a startup hub in any city in the world.

Today, Internet and technology companies such as Google, Yahoo and Microsoft have become some of the largest employers of labour in the United States and have generated huge streams of revenue that has successfully driven the U.S economy.

Can this success be replicated in Nigeria?

Yes. But it would require a lot of effort and investment from the government and the private sector. Interestingly, there are a few states or cities in Nigeria I’ve identified where a “technology” startup hub could easily be created.

I’ll be profiling and analyzing five of these states and cities in this post, so in no particular order, here are 5 best places to grow a startup industry in Nigeria.

1. Ogun State

Located in south-western Nigeria, Ogun State has a 2005 population estimate of over 4 million inhabitants, with Abeokuta as the capital and largest city.

The state has the largest number of universities in Nigeria such as Crescent University, Abeokuta, Covenant University, Ota, Babcock University, Ilisan Remo, Bell University of Technology, Ota, and polytechnics such as Abraham Adesanya ICT Polytechnic, Ijebu Igbo, Gateway ICT Polytechnic in Saapade and Igbesa.

With heavy investment in education, ICT development and infrastructure and an on-going solar power e-learning project, Ogun state looks like a great place for startups to thrive. It had a GDP of $10.47 billion in 2007 and per capita income of $2,740.

Besides, the cost of living and doing business in Ogun state is relatively low compared to Lagos state. For instance, you could get an affordable flat (for office space) in towns such as Mowe-Ofada, Ota or even Abeokuta.

Personally, I think that Ogun state is one of the best places to create a startup hub in Nigeria as it is gradually developing and investing in – infrastructure, ICT and education – some of the key factors needed to create a startup chain reaction.

2. Enugu State

With a population estimate of about 5.6 million people (2005), Enugu state is home to Nigeria’s first indigenous university, University of Nigeria Nsukka (UNN).

An inland state in south-eastern Nigeria, Enugu also hosts the Enugu State University of Science & Technology (ESUT), Institute of Management and Technology (IMT), Enugu State College of Education Technical, Caritas University, Amorji-Nike, Renaissance University, Ugbawka, Our Saviour’s Institute of Science and Technology amongst other learning institutions.

Enugu had a coal industry that use to be one of the biggest employers of labour. In fact, coal was first discovered in the Udi Ridge in the 1900s, led by a British mining engineer named Albert Ernest Kitson, after which Frederick Lugard took keen interest in the discovery and by 1914, the first shipment of coal was made to Britain. Little wonder, Enugu is described as the “Coal City”.

The energy needs of the state could be made a permanent solution with the development of the coal industry and the reactivation of the Oji River Power Station located in Enugu (which used to supply electricity to all of Eastern Nigeria). Even so much so that the proximity of the Enugu coal mines to the power station is only a driving distance of about 20 minutes.

With recent investments in ICT development, infrastructure and a WiFi Internet access project embarked on by the state government with support from Zinox Technologies, Enugu state could become a great startup hub in the future.

3. Lagos State

As the commercial capital city of Nigeria with a population estimated at 18 million inhabitants and the vision to transform into a mega city by 2015, Lagos state is certainly one of the best places to create a startup hub.

No doubt, Lagos has the people – entrepreneurs, investors, researchers, consultants, technology enthusiasts, etc – who could spark up a chain reaction for technology startups in the next few years. Again, the state’s GDP as of 2007 was $33.68 billion and a per capita income of $3,649 which makes it the largest economy in Nigeria.

The University of Lagos at Akoka, Yaba is well-renowned for research and development in technology and innovation and has produced some of the best talents in Nigeria such as Fola Adeola, Dele Olojede, Richard Mofe Damijo and Matilda Kerry.

Lagos also has a well-renowned Business School (LBS), ranked among the top 55 Business Schools in the world by the Financial Times of London (2009), as well as several other institutions around the metropolis, which naturally makes it a place with a business culture.

Even though Lagos is densely populated, cities and towns such as Lekki and Badagry, surrounded by the Lagos Lagoon, bay and beaches, are gradually experiencing property and infrastructural development with expansion plans for Transport, Airport, Free Trade Zone and Golf course, which could eventually make these cities a great startup hub in the future.

Personally, I’d love to see Internet companies headquartered in the Lekki Pennisula (Lekki Bay Area, as I call it) as well as Badagry, Victoria Island and Ikoyi within the next 10-15 years.

4. Cross River State

The state of Cross River with its capital city, Calabar has been acknowledged as the leading eco-friendly tourism spot in Nigeria. With a 2005 population estimate of over 3 million inhabitants and a 2007 GDP of $9.29 billion and per capita of $3, 150, this coastal state located in southeastern Nigeria is a wonderful place to live and build a startup.

The state is home to the University of Calabar and several other institutions and is gradually transforming itself into a world tourist attraction, especially with landmarks such as the Obudu Ranch Resort, Tinapa Business Resort, Calabar Free Trade Zone and the Calabar Sea and Airports which all present great opportunities for business and trade within the region.

Besides, the Cross River State Information Technology Village in collaboration with Microsoft offers the Microsoft Unlimited Potential Programme for the South-South geo-political zone which is delivering IT training to students and inhabitants to keep pace with the technology in today’s competitive business environment.

Tinapa, the first world-class integrated business and leisure resort in Nigeria, located in Calabar with world class facilities and Free Trade Zone could become one of the biggest technology startup hubs in Africa.

5. Rivers State

Rivers State is the second largest economy in Nigeria after Lagos state with GDP of over $21 billion and per capita of $3,965, according to the 2007 CGIDD figures, particularly due to the fact that it is the chief oil-producing and refining state.

The capital city, Port Harcourt which is the main hub of the oil and gas industry in Nigeria as well as the West African sub-region, has a population estimated at 2.7 million for the Urban Area, while the Greater Port Harcourt Area is estimated at about 3.7 million, according to a 2007 population estimate.

The city is home to the Rivers State University of Science and Technology, University of Port Harcourt, an international airport, two seaports (F.O.T Onne and Port Harcourt Wharf), two stadiums (Sharks Stadium and Liberation Stadium) and two refineries.

However, the activities of several armed militants in recent times have made life and commerce in the once peaceful town a dangerous place to live and operate a business. Again, the city has a very high standard of living that could make it difficult for startups to thrive and survive, especially in their first year.

But startups that decide to move there can take advantage of the oil-rich economy and wealthy individuals who reside there, as this could help create a Venture Capital industry.

Besides, with the development of the Greater Port Harcourt which would provide economic growth poles with strong lateral linkages and exerting a positive impact on the economy and leading to a sustained increase of incomes of the New Town regions, the city could grow to become a great startup hub.

My final thoughts

Creating a startup hub in any of these cities will definitely take some time. It would start with each state government recognising the future economic benefits of creating a startup hub and harnessing its early potentials and development.

However, any individual or group of individuals that could start or build an online venture, create auto title loans, secure funding from investors or sell a percentage stake to a global or local technology company, and move to any of these cities could very well cause a sustainable chain reaction for the development of a startup hub.

By the time more and more startups move into an ideal and decent city or town, it could attract a critical mass of people and investors, thereby creating a Venture Capital industry that could drive any startup hub in Nigeria.

Personally, I would love to wake up one morning in the year 2020, tune to CNBC Africa and listen to the news that a local Internet company has been listed on the New York Stock Exchange (NYSE) and the price of the company’s stock has eventually risen 30% to $467.23 per share.

If you find this post helpful, Read my next article – “how to buy a good laptop stand for desk” I’ll be discussing five more potential startup hubs in a future post.

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