The Nigerian government plans to establish a $40 million fund to invest in early-stage technology startups, partnered with the Japan International Cooperation Agency. This initiative aims to bolster the startup ecosystem in Nigeria under the 2022 Nigeria Startup Act. Although the startup environment has grown significantly, challenges remain in raising awareness about the benefits of the law, prompting outreach efforts across the states.
The Nigerian government is preparing to launch a $40 million fund aimed at investing in early-stage technology startups. This initiative represents a significant effort by Abuja to enhance support for entrepreneurs who have historically depended on private investors. Half of the funding will be provided by the Japan International Cooperation Agency, while the Nigerian Sovereign Investment Authority (NSIA) will match this amount, according to Kashifu Inuwa Abdullahi, head of the National Information Technology Development Agency (NITDA).
Abdullahi confirmed an imminent signing of the final agreement next month, stating, “We are going to sign the final agreement next month. Everything has been agreed.” This fund aligns with Nigeria’s commitment to bolster its startup ecosystem under the 2022 Nigeria Startup Act, and the NSIA will manage the fund as mandated by this legislation.
Previously, Nigeria’s startup ecosystem had demonstrated substantial growth, attracting over $2 billion in investments between 2015 and 2022, according to Disrupt Africa. Prominent companies such as Paystack, Flutterwave, Andela, and Opay established their positions as leading brands on the continent long before the introduction of the startup law in 2022.
The startup law was established to transfer lessons learned over the past decade into a structured framework that assists new entrants in achieving success. Following this initiative, approximately 13,000 businesses have registered as startups under NITDA’s criteria, providing them with a three-year income tax exemption and offering tax credits to investors in these startups.
Despite these advancements, a lack of awareness regarding the law’s benefits continues to be a challenge, as noted by Abdullahi: “We have a target to go across the country before the end of this year to ensure each of the 36 states and Abuja is carried along.” The establishment of government venture capital is essential for nurturing startup ecosystems, as it offers patient capital and valuable product feedback without an immediate focus on financial returns.
In summary, the Nigerian government’s upcoming $40 million fund marks a pivotal effort to enhance the country’s early-stage technology startup scene, with considerable support from international partners. The fund, part of the broader Nigeria Startup Act initiative, aims to create a structured environment for new ventures while addressing existing outreach and awareness challenges to maximize benefits across the nation.
Original Source: www.semafor.com
