The Nigerian government is set to roll out a $40 million fund to support early-stage tech startups, aiming to strengthen a sector that has long depended on private investors.
Why it matters
Nigeria has been Africa’s leading startup hub, raising over $2 billion between 2015 and 2022. The fund marks a significant government-backed effort to sustain this momentum and create a structured investment framework under the 2022 Nigeria Startup Act.
Details
- Half of the fund comes from the Japan International Cooperation Agency, with the Nigeria Sovereign Investment Authority (NSIA) matching the contribution.
- NSIA, which manages over $2 billion in sovereign wealth, will oversee the fund as mandated by the startup law.
- “We are going to sign the final agreement next month,” said Kashifu Inuwa Abdullahi, head of the National Information Technology Development Agency (NITDA).
The big picture
- Nigeria has already produced major tech successes, including Stripe-owned Paystack, Flutterwave, Andela, and Opay, all of which reached billion-dollar valuations largely from their Nigerian operations.
- The startup law seeks to formalize and build on these successes by providing a more predictable growth path for emerging ventures.
Zoom out
The startup law has already led to the registration of around 13,000 businesses as startups under NITDA’s criteria. These startups benefit from a three-year income tax exemption, while investors in them receive tax credits.
What’s next
Awareness remains a challenge. NITDA plans to engage all 36 states and Abuja before the end of the year to ensure entrepreneurs nationwide can tap into the fund and associated benefits.
Source: Semafor
