Nigeria is launching a $40 million fund for early-stage tech startups, with half from Japan’s aid agency and the rest from Nigeria’s sovereign wealth fund. This initiative is part of the 2022 Nigeria Startup Act’s aims to strengthen the startup ecosystem. Awareness-building efforts are necessary to maximize the law’s benefits across the nation.
The Nigerian government is establishing a $40 million fund aimed at investing in early-stage technology startups. This initiative aims to enhance support for entrepreneurs who have primarily relied on private investments, with half of the funding sourced from the Japan International Cooperation Agency and the remainder matched by the Nigeria Sovereign Investment Authority (NSIA). Kashifu Inuwa Abdullahi, head of the National Information Technology Development Agency (NITDA), confirmed the agreement will be signed next month.
This fund is part of Nigeria’s commitment to the startup ecosystem outlined in the 2022 Nigeria Startup Act. The NSIA, which oversees Nigeria’s sovereign wealth fund exceeding $2 billion, will manage the new fund in compliance with the startup law, ensuring structured support for the ecosystem.
Prior to the startup law’s enactment, Nigeria’s startup landscape flourished, raising over $2 billion from 2015 to 2022, as reported by Disrupt Africa. Noteworthy companies such as Paystack and Flutterwave achieved billion-dollar valuations critiqued for their Nigerian operations, making them prominent names on the continent before the 2022 legislation.
The fund represents a substantial move toward implementing the startup law, collaboratively designed by local stakeholders and international advisors. To date, about 13,000 businesses have been registered as startups under NITDA’s criteria, allowing them a three-year income tax exemption and enabling tax credits for investors contributing to these businesses.
However, there remains a challenge in raising awareness about the law’s benefits. Abdullahi stated there are efforts to ensure outreach across all 36 states and Abuja by year-end. He noted that government venture capital is essential in providing stable funding and invaluable feedback for product development without an immediate focus on financial returns.
The establishment of Nigeria’s $40 million startup fund marks a significant commitment to bolstering the entrepreneurial landscape, particularly in technology. With support from the Japan International Cooperation Agency and the NSIA, this initiative aims to enhance the startup ecosystem established by the 2022 Nigeria Startup Act. The fund will offer financial incentives for new ventures and encourage investment, while efforts to improve awareness and outreach will be crucial to its success.
Original Source: www.semafor.com
