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The difficulty of doing business in Lagos is driving out tech startups

Reuters/Joe Penney
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  • Yomi Kazeem
By Yomi Kazeem

Africa reporter

Published Last updated on

When East-African motorcycle-hailing startup SafeBoda announced its expansion to Nigeria last year, the initial plan was to launch in Lagos—the major economic hub. But that soon changed.

The startup’s proposed expansion came in the thick of regulatory tensions between Lagos’ state government and motorcycle-hailing startups that had grown ubiquitous on the premise of offering flexible, faster and on-demand transport in a congested city home to 21 million residents. Lagos’ proposals for expensive licenses as well as episodes of harassment faced by other startups at the hands of local transport unions ultimately proved defining for SafeBoda which instead chose to launch in Ibadan, a major city in Nigeria’s southwest that’s two and a half hours from Lagos.

It’s a snapshot of the simmering sentiments among industry stakeholders as they rethink the merits of setting up shop in Lagos amid the state government’s increasingly costly regulatory environment.

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