The Nigerian government is poised to launch a $40 million fund aimed at investing in early-stage technology startups, with the goal of enhancing support for entrepreneurs who have historically relied on private investors for funding. According to Semafor, the fund will be financed equally, with half of the amount provided by the Japan International Cooperation Agency (JICA), which is the Japanese government’s agency for overseas development assistance.
The other half will be matched by the Nigeria Sovereign Investment Authority (NSIA). Kashifu Inuwa Abdullahi, the head of the National Information Technology Development Agency (NITDA), confirmed that the final agreement for the fund is expected to be signed next month, stating, “Everything has been agreed.”
This initiative is part of Nigeria’s broader commitment to invest in its startup ecosystem, as outlined in the 2022 Nigeria Startup Act. The NSIA, which manages Nigeria’s sovereign wealth fund with assets exceeding $2 billion, has been designated to oversee the $40 million fund in accordance with the startup law.
Between 2015 and 2022, Nigeria’s startup ecosystem experienced remarkable growth, raising over $2 billion—more than any other African nation during that timeframe. Prominent companies such as Flutterwave, Andela, and Opay have achieved billion-dollar valuations, largely based on their operations in Nigeria. The startup law and the accompanying investment fund aim to codify the lessons learned from the past decade into a reliable framework that will assist new ventures in scaling and replicating their success.
The establishment of this new fund represents a significant advancement in the implementation of the startup law, which was collaboratively designed by local investors, entrepreneurs, government agencies, and international advisors. To date, approximately 13,000 businesses have been registered as startups under NITDA’s criteria, allowing them to benefit from a three-year income tax exemption.
Additionally, investors who contribute to these startups are eligible for tax credits on their investments. However, there remains a challenge regarding the lack of awareness about the benefits provided by the new law. Abdullahi emphasized the government’s commitment to addressing this issue, stating, “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.”
This development highlights the Nigerian government’s proactive stance in supporting its burgeoning technology industry and fostering an environment that encourages innovation and economic growth. By establishing this fund, the government aims to create a more robust ecosystem for startups, ultimately contributing to the country’s overall economic development.
