Africa’s tech growth is facing unsettling wage divide crisis. In Lagos, the traffic begins before sunrise. By the time generators hum to life across Yaba, Ikeja and Lekki, thousands of young engineers are already online, pushing code to repositories hosted in Europe, debugging payment rails used across Africa, building compliance tools for markets they may never physically see. The city is widely described as Africa’s leading startup hub. It has produced unicorns, attracted global venture capital, and positioned itself as the continent’s most visible tech ecosystem. But beneath the valuations and headlines sits a quieter reality: the average software developer in Lagos now earns just $7,500 a year.
That figure, from the 2025 Global Startup Ecosystem Report by Startup Genome, places Lagos among the lowest-paying major tech hubs in the world. The global average developer salary stands at $52,000. In Nairobi, developers earn about $14,700. In Johannesburg, Africa’s highest-paying ecosystem, the average is $42,000. In Silicon Valley, it is $156,000. Lagos, despite leading sub-Saharan Africa in startup funding and producing unicorns such as Flutterwave, Andela, Interswitch, OPay, and eTranzact, pays its technical workforce a fraction of global rates.
This is definitely not a wage story. It is an infrastructure story. For more than a decade, Nigeria’s startup narrative has been built on capital inflows and valuation milestones. Lagos consistently ranks high in ecosystem performance and investor activity. Founders have learned to navigate global venture networks. International accelerators court Nigerian fintech and logistics startups. Yet developer compensation has stagnated and, in recent data, declined. The contradiction reveals something structural about how value is created and captured in Africa’s digital economy.
Nigeria’s startup ecosystem operates in a context shaped by currency volatility, inflation, and fragile public infrastructure. Many startups price services in dollars but pay salaries in naira. When the currency depreciates, local earnings shrink in real terms. Venture capital, largely denominated in foreign currency, is deployed with expectations of rapid growth and lean cost structures. Labour becomes one of the few controllable variables.
There is also a deeper asymmetry. Most African startups serve regional or emerging markets where purchasing power is lower than in North America or Europe. Revenue ceilings are tighter. Exit opportunities are fewer. In such an environment, founders often prioritise runway over wage expansion. Developer salaries become compressed because the economic system around them cannot consistently support higher pay.
The global downturn compounds this pressure. Startup Genome’s report notes that total ecosystem value worldwide declined by 31% in 2025. Sub-Saharan Africa fared somewhat better, with a 17% contraction. Nigeria’s ecosystem saw a 5% contraction since 2020 – modest relative to peers, but still indicative of tightening capital conditions. In downturns, companies reduce burn. Hiring slows. Salary growth pauses.
Meanwhile, global startup geography is shifting. Asian ecosystems have gained ground, with Beijing, Shanghai, Shenzhen and others climbing rankings. AI and Big Data now attract roughly 40% of global venture funding, and 90% of AI capital flows to startups in the United States and China. The infrastructure advantage – compute capacity, research institutions, capital depth – remains concentrated.
Read also: FinTech Reort: Top Fintech Cities in Africa for 2024 and 2025
African developers operate in that shadow. Many work on outsourced contracts for foreign firms. Others build local fintech and commerce tools that solve real infrastructure gaps — payments interoperability, informal logistics, credit access. But the financial returns generated by these systems do not always circulate proportionally back to the engineers building them.
There is a historical parallel here. In earlier waves of globalisation, emerging markets provided labour while developed markets captured intellectual property and platform rents. The digital economy promised a flattening of that structure. Remote work was supposed to equalise compensation. In practice, geography still shapes pay. A developer in Lagos may write code for a product used globally, but local wage benchmarks remain anchored to domestic economic realities.
The risk is not immediate collapse. Lagos continues to produce founders and attract investors. Nigerian engineers remain globally competitive. But over time, sustained wage disparity creates incentives for migration. Talented developers relocate physically or digitally, contracting directly with foreign employers who pay in dollars. The ecosystem loses institutional knowledge. Startups face higher churn. The cost of rebuilding teams rises.
There is also a question of inclusivity. If Africa’s tech boom generates billion-dollar valuations but leaves average engineers economically strained, the broader social contract weakens. The promise of technology as a pathway to middle-class stability becomes harder to sustain. Infrastructure, in this sense, includes human capital retention.
Addressing the gap requires more than higher salaries. It requires deeper local capital markets so startups are not wholly dependent on foreign venture cycles. It requires stronger regional revenue integration so African products can scale across borders without regulatory friction. It may require new ownership structures that allow employees to capture equity value meaningfully rather than relying solely on base pay.
The Lagos paradox – unicorns alongside underpaid developers – reflects a young ecosystem still negotiating its economic foundations. Capital arrived quickly. Infrastructure, both physical and financial, is still catching up. The engineers logging on each morning are building Africa’s digital rails: payment gateways, credit scoring engines, compliance software, logistics algorithms. Whether the system evolves to reward them proportionately will shape the next decade of the continent’s tech story.
Africa’s startup boom has proven that global investors see value here. The next phase will test whether that value can be retained locally not just in company valuations, but in the incomes and stability of the people writing the code.
