The Nigerian government is preparing to launch a $40 million fund to support early-stage tech startups. This initiative aims to strengthen a sector that has historically relied heavily on private investment.
The move is significant because Nigeria has been a leading startup hub in Africa, raising over $2 billion between 2015 and 2022. This government-backed fund is designed to maintain that momentum and create a more structured investment environment, as outlined in the 2022 Nigeria Startup Act.
Funding Details
Half of the $40 million fund will come from the Japan International Cooperation Agency, with the Nigeria Sovereign Investment Authority (NSIA) matching that contribution. The 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 Bigger Picture
Nigeria has already produced successful tech companies, including Stripe-owned Paystack, Flutterwave, Andela, and Opay, all of which achieved valuations of over a billion dollars and largely from their Nigerian operations. The startup law aims to build on this success by offering a more predictable pathway for emerging ventures.
The Startup Act’s Impact
The startup law has already resulted in approximately 13,000 businesses registering as startups under NITDA’s guidelines. These startups benefit from a three-year income tax exemption, while investors in these ventures receive tax credits.
What’s Next?
Awareness of the fund and its benefits remains a key focus. NITDA plans to engage with all 36 states and Abuja before the end of the year to ensure entrepreneurs across the country can access the fund and its associated advantages.
