Nigeria’s technology startup scene is heating up with more pitching competitions and incubators being launched this year, but experts say key challenges hinder innovation in the country.

Popular Nigerian technology blog TechCabal.com last month launched its ‘Battlefield’ startup pitching competition that saw examination preparation business Prepclass.com.ng walk away with $20,000 in funding.

At the event, a tech incubator called ‘LeadPath’ was also launched, the latest in a series of innovation hubs to spring up in Lagos along with the likes of the Co-Creation Hub.

But as starting a startup appears to be the ‘in-thing’ in Nigeria, the reality on the ground is that budding technology entrepreneurs face huge challenges.

Nigeria could overtake South Africa to become Africa’s biggest economy this year, as the continent’s most populous nation -- with over 160 million people -- updates its gross domestic product measurements.

But despite Nigeria’s buzzing economic environment large inequalities exist between it and South Africa’s business spheres.

For example, the World Bank’s ‘Ease of Doing Business’ survey in June 2013 ranked Nigeria at 147. In contrast, South Africa was ranked at 41 in the survey.

Overarching economic factors such as these aren’t the only factors challenging Nigerian startups.

“The biggest challenges include policy, actual capacity, connecting ideas to resources, and starting ages,” said Gbenga Sesan, Nigeria technology expert, commentator and ICT for Development (ICT4D) consultant.

“Policy environment is getting better for tech but getting a startup moving isn't helped by structural policy challenges around bank financing, multiple interactions with government agencies, etc,” he said.

Sesan told ITWeb Africa that while startup ideas are receiving more resources, “the path isn't as clear as it should be.”

“A mapping exercise that would allow each young person or startup enthusiast to know where and who to go to for various stages would be extremely helpful,” Sesan told ITWeb Africa.

Sesan also told ITWeb Africa that budding entrepreneurs in Nigeria need to start working on their ideas as young as possible.

“Startups work better when the age at which the founder or team start hacking away at the idea. We currently have folks starting after graduation and when life's distractions are setting in, but we need younger starting ages, right from campuses, so that they can experiment earlier without the fear of the next meal,” Sesan told ITWeb Africa.

Editor-in-chief for TechCabal and the brains behind the ‘Battlefield’ pitching competition earlier this year, Bankole Oluwafemi, has told ITWeb Africa that support from big business and government has already helped startups climb the ladder faster.

Partners of the TechCabal competition included the likes of Stanbic, a division of Africa’s largest bank Standard Bank Group.

”Aside from the obvious task of building out critical broadband infrastructure, the ministry of communications technology has entered into quite a few active partnerships with companies like Microsoft, Google, IBM and more, leading to initiatives like iDEA and the TechLauchpad accelerator,” Oluwafemi told ITWeb Africa.

“Nigeria's technology ecosystem has been better for the activities of quite a few international technology interests that have been operating in the country for up to a decade or more. As the market matures, they have begun to ramp up their activities and increase their footprint in the country.

“However, we have reached the point where the biggest stakeholder in local innovation, the government organ that oversees the technology sector, has assumed increased responsibility for stimulating innovation, and has deployed myriad creative stratagems to address the startup scene's biggest problems -- infrastructure and funding,” added Oluwafemi.

With the advances made in the face of stiff challenges, Nigeria’s up-and-coming business community has the benefit of being in an environment where economic growth has averaged over 6% over the last decade.

Nigeria is also firmly positioned among the hottest economic grouping after the BRICS, that is ‘MINT’ (Mexico, Indonesia, Nigeria and Turkey).

From an outsider’s perspective, then, Nigeria’s startup space has a lot of potential, says South African Kabelo Makwane who is the new Microsoft Nigeria country manager.

“We’ve seen that there’s a very large developer community that sits in Nigeria, but they really require support and nurturing in order for them to actually create viable enterprises,” Makwane told ITWeb Africa.

“Some of the top apps on Microsoft (Windows) store come from Nigeria.

“There’s a very concerted effort going into incubation, startup incubation,” Makwane added.

Makwane; though, listed several challenges that he has picked up on from travelling to the country.

“What becomes quite prominent is access to information.

“In such a vast country, it’s always a challenge to make sure the word gets out there, or the resources are available for people to tap into for the purpose of driving commercial enterprise.

“Access to platforms for them to develop interesting software and applications is also another area where I think there is a lot of opportunity,” said Makwane.

Ultimately, though, regardless of any challenge, the entrepreneurial spirit of Nigeria is set to grow even more, and with the right help it could become a great global force to be reckoned with.

“While startups are now sexy, there's still a major gap in actual capacity,” Sesan told ITWeb Africa.

“It's one thing to say you're a good developer, and another to get the chance to be better because of competition. We need that capacity building gap fixed for better (wo)manpower for startups,” he concluded.