The Nigerian government is stepping up its support for tech startups with a new $40 million fund aimed at early-stage companies.
For years, Nigeria’s booming tech scene has relied on private investors, but this move signals a more structured government-backed approach to fueling innovation.
Nigeria has been the dominant startup hub in Africa, attracting over $2 billion in funding between 2015 and 2022. This fund is a major step under the 2022 Nigeria Startup Act, designed to keep the momentum going and provide a clear investment framework for emerging companies.
The Breakdown
So, where’s the money coming from? Here’s how it’s structured:
| Source | Contribution |
|---|---|
| Japan International Cooperation Agency (JICA) | $20 million |
| Nigeria Sovereign Investment Authority (NSIA) | $20 million |
The NSIA, which manages over $2 billion in Nigeria’s sovereign wealth, will be in charge of the fund as outlined in the startup law. According to Kashifu Inuwa Abdullahi, the head of the National Information Technology Development Agency (NITDA), the final agreement is set to be signed next month.
Putting It Into Perspective
Nigeria has already produced some of Africa’s biggest tech successes. Companies like Paystack (acquired by Stripe), Flutterwave, Andela, and Opay all reached billion-dollar valuations, largely driven by their operations in Nigeria. The startup law aims to build on this by creating a smoother, more predictable path for new startups to thrive.
What’s Already Happening
One major outcome of the startup law is the formal registration of around 13,000 businesses as startups under NITDA’s guidelines. These registered startups enjoy perks such as:
- A three-year income tax exemption
- Tax credits for their investors
These incentives are designed to ease financial pressures on new businesses and encourage more investment in Nigeria’s growing tech ecosystem.
What Comes Next
While the fund is a promising step, awareness remains a challenge. Many entrepreneurs across Nigeria still don’t know about these opportunities. To address this, NITDA plans to visit all 36 states and Abuja before the end of the year, ensuring that startups nationwide can access the fund and other benefits.
With structured government backing, tax incentives, and a growing pool of startups, Nigeria’s tech ecosystem is set for another big leap forward. The key question now is whether awareness efforts will be enough to help entrepreneurs take full advantage of these opportunities.
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