Lagos ranked 10th lowest global cities on tech adoption, infrastructure performance
Nigeria’s urban technology ecosystem experienced significant expansion between 2023 and 2025 as rapid urbanisation, broadband penetration and smart infrastructure investments reshaped Africa’s largest economy, although persistent infrastructure gaps and weak urban governance continued to constrain growth.
According to data from the Nigerian Communications Commission (NCC), Nigeria’s urban population rose from 62.17 per cent in 2023 to 62.98 per cent in 2024 and is projected to approach 63.8 per cent in 2025, reflecting accelerating migration into major cities such as Lagos, Abuja, Port Harcourt and Kano.
Across Africa, the urbanisation rate climbed from roughly 45 per cent in 2023 to an estimated 47 per cent in 2025, intensifying pressure on transport systems, energy infrastructure, housing and digital connectivity.
Internet penetration expanded steadily during the period. Nigeria’s internet users increased from 90.48 million in 2023 to 97.13 million in 2024 and are projected to exceed 103.9 million in 2025. Broadband penetration also improved from about 43 per cent in 2023 to 44.43 per cent in 2024 before rising sharply toward 50.58 per cent in 2025. Broadband subscriptions climbed from roughly 93 million users in 2023 to 109.7 million in 2025, supported by ongoing national fibre expansion projects and the implementation of the country’s 5G policy framework.
Industry analysts said the growth in connectivity has accelerated the expansion of urban-focused technology sectors, particularly fintech, logistics, mobility, climate technology and digital public services.
Africa-wide venture capital data revealed that urban technology-related sectors remained among the continent’s largest investment magnets despite a severe slowdown in startup financing. Total African tech funding declined from approximately $2.9 billion in 2023 to $1.12 billion in 2024 before recovering modestly toward $1.64 billion in 2025.
Nigeria retained its position as West Africa’s leading startup investment destination throughout the period. Startup funding into Nigeria stood at roughly $410 million in 2023, remained near $400 million in 2024 and rebounded to more than $530 million in 2025, accounting for about 16.6 per cent of Africa’s total early-year startup funding activity.
The decline in overall venture capital activity reflected broader global economic tightening. Africa recorded more than 420 funded startups in 2023, but the figure dropped to about 200 in 2024 and 178 in 2025. Active investors on the continent also fell from 527 in 2023 to 330 by 2025 as financiers became more selective and shifted attention toward businesses with clearer revenue models and infrastructure-backed assets.
Fintech remained the dominant investment category across Africa, accounting for roughly 47 per cent of total funding in 2024, while climate technology represented nearly 32 per cent of investments, reflecting growing investor interest in urban energy systems, mobility solutions and sustainable infrastructure.
Nigeria continued to anchor West Africa’s urban technology economy during the period. Regional funding data showed that West Africa attracted about $587 million in startup investments in 2024, with Nigeria accounting for nearly $400 million of the total. Kenya led East Africa with approximately $638 million, while Egypt and South Africa dominated North and Southern Africa respectively.
Major smart city developments also shaped the country’s urban technology narrative. Lagos continued implementation of its 5G and Internet-of-Things infrastructure strategy while the Eko Atlantic project advanced as one of Africa’s most ambitious private smart city developments. Built on approximately 10 square kilometres of reclaimed land, the project includes independent power infrastructure, digital connectivity systems and integrated urban planning frameworks.
Nigeria simultaneously pursued an aggressive national fibre rollout plan targeting about 90,000 kilometres of fibre infrastructure nationwide to deepen broadband access and support digital economic growth.
However, despite the rapid technology expansion, global smart city rankings exposed deep structural weaknesses in Nigeria’s urban management systems.
The 2025 IMD Smart City Index ranked Lagos 138th out of 148 global cities assessed for technology adoption, governance and infrastructure performance. The city received a “D” rating across both technology and structural indicators, highlighting persistent deficits in transport systems, public utilities, housing delivery and institutional coordination.
The report warned that digital adoption alone cannot compensate for weak civic infrastructure and governance systems.
“Across all 148 cities assessed, performance on the Structures pillar, covering physical infrastructure, institutions, governance and public services, is a stronger predictor of overall smart ranking than performance on the Technology pillar,” the IMD report stated.
In contrast, Abuja emerged as one of the few African cities to improve its global standing, rising to 131st position following major infrastructure expansion linked to the 841-hectare Abuja Midtown smart district project supported by private investors and international development partners including the Japan International Cooperation Agency.
Across Africa, urban technology growth remained uneven. Rabat, Cairo and Cape Town ranked ahead of most African cities due to stronger institutional frameworks, large-scale digital governance systems and integrated urban planning models.
Analysts said many African cities still struggle with a widening gap between fast-growing consumer technology adoption and slower investments in public infrastructure.
The United Nations Economic Commission for Africa noted that the continent’s urban population is expected to double from 700 million to 1.4 billion by 2050, making Africa home to the world’s second-largest urban population after Asia.
The commission said the scale of urban growth presents both a major economic opportunity and a structural risk if governments fail to invest adequately in transport, energy, housing and digital governance systems.
Industry stakeholders said the next phase of Nigeria’s urban technology development will depend less on startup valuations and more on the ability of cities to build reliable institutions, modern infrastructure and integrated digital public services capable of supporting rapidly expanding urban populations.
