The Nigerian government plans to introduce a $40 million fund for early-stage tech startups, with half funded by the Japan International Cooperation Agency. This initiative, part of the 2022 Nigeria Startup Act, aims to enhance support for entrepreneurs, building on the country’s previous successes. The fund is managed by the Nigeria Sovereign Investment Authority and seeks to increase awareness about the startup law’s benefits across the nation.
The Nigerian government is poised to launch a $40 million fund dedicated to early-stage technology startups, aiming to strengthen support for entrepreneurs traditionally reliant on private investments. The Japan International Cooperation Agency will contribute half of the fund, while the Nigeria Sovereign Investment Authority will match this investment. Kashifu Inuwa Abdullahi, the head of the National Information Technology Development Agency, confirmed that the final agreement will be signed next month, indicating that all necessary terms have been settled.
This initiative aligns with Nigeria’s commitment to nurturing its startup ecosystem as outlined in the 2022 Nigeria Startup Act. The Nigeria Sovereign Investment Authority, which manages over $2 billion in assets, will administer the fund, ensuring adherence to the startup legislation’s stipulations. Historically, Nigeria’s startup ecosystem has thrived, garnering over $2 billion in funding from 2015 to 2022, surpassing any other African country during that timeframe.
Prominent Nigerian companies such as Paystack, Flutterwave, Andela, and Opay have achieved significant valuation milestones and recognition, primarily due to their successful operations within Nigeria. The establishment of the startup law and its investment fund aims to create a structured framework utilizing insights gained over the last decade, facilitating growth for new entrants in the tech industry.
The new fund represents a critical advancement in the execution of the startup law, a collaborative effort devised by local investors, entrepreneurs, and governmental entities alongside international consultants. Since the law’s enactment, approximately 13,000 businesses have qualified as startups under the criteria set by NITDA, benefitting from a three-year income tax exemption and enabling investors to claim tax credits for their contributions.
Nevertheless, there remains a challenge in raising awareness regarding the advantages offered by the new law. Abdullahi stated, “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,” highlighting the effort to promote outreach and understanding of the law’s benefits.
It is widely acknowledged that government-backed venture capital is essential for strengthening startup ecosystems, as it provides crucial patient capital and valuable product feedback without an immediate focus on financial returns.
In conclusion, the Nigerian government’s initiative to establish a $40 million startup fund, supported by the Japan International Cooperation Agency and the Nigeria Sovereign Investment Authority, marks a significant step forward in bolstering the country’s nascent tech ecosystem. This fund, part of the framework introduced by the 2022 Nigeria Startup Act, is designed to attract and nurture new talent while leveraging the successes of established firms. Raising awareness of the law’s benefits remains a crucial undertaking as Nigeria seeks to enhance its entrepreneurial landscape across all states.
Original Source: www.semafor.com
