Quick Summary:
- Nigeria is launching a $40 million fund for early-stage tech startups.
- Backed by JICA and NSIA, the fund supports innovation and growth.
- Over 13,000 startups qualify for tax exemptions and investor incentives.
- The initiative aligns with the Nigeria Startup Act to strengthen the ecosystem.
Boosting Startup Growth with Government Funding
The Nigerian government is set to launch a $40 million fund to support early-stage technology startups. This initiative aims to provide much-needed capital to entrepreneurs who have traditionally relied on private investors.
Funding Structure and Key Stakeholders
The fund will be financed equally by the Japan International Cooperation Agency (JICA), Japan’s government agency for overseas development assistance, and the Nigeria Sovereign Investment Authority (NSIA). Kashifu Inuwa Abdullahi, head of the National Information Technology Development Agency (NITDA), confirmed that the final agreement is expected to be signed next month, stating, “Everything has been agreed.”
Aligning with the Nigeria Startup Act
This initiative aligns with the 2022 Nigeria Startup Act, which was designed to boost the country’s startup ecosystem. The NSIA, managing over $2 billion in sovereign wealth fund assets, has been designated to oversee the fund in accordance with the startup law.
Nigeria’s Thriving Startup Ecosystem
Between 2015 and 2022, Nigeria’s startup ecosystem raised over $2 billion, surpassing any other African nation. The country has produced prominent unicorns such as Flutterwave, Andela, and Opay, demonstrating its potential for high-growth startups. The new fund aims to codify lessons from past successes into a sustainable framework that will help new ventures scale.
Implementation of the Startup Law
The NITDA has already registered 13,000 businesses as startups, making them eligible for a three-year income tax exemption. Additionally, investors who back these startups qualify for tax credits on their investments. Despite these benefits, awareness of the startup law remains a challenge. Abdullahi emphasized that the government is working to bridge this gap by engaging all 36 states and Abuja before the year ends.
Strengthening Nigeria’s Innovation Ecosystem
This fund underscores the Nigerian government’s commitment to fostering technological innovation and driving economic growth. By providing structured financial support, Nigeria aims to create a more robust and self-sustaining startup ecosystem, positioning itself as a leader in Africa’s tech industry.
