The Nigerian government is set to establish a $40 million fund to invest in early-stage technology startups, aiming to bolster support for entrepreneurs who have traditionally depended on private investors.
Per Semafor, half of the fund will be provided by the Japan International Cooperation Agency (JICA), the Japanese government’s overseas development assistance arm, with the remaining half matched by the Nigeria Sovereign Investment Authority (NSIA). Kashifu Inuwa Abdullahi, head of the National Information Technology Development Agency (NITDA), confirmed that the final agreement is scheduled to be signed next month, stating, “Everything has been agreed.”
This initiative is part of Nigeria’s commitment to invest in the country’s startup ecosystem under the 2022 Nigeria Startup Act. The NSIA, which manages Nigeria’s sovereign wealth fund with assets worth more than $2 billion, will oversee the $40 million fund as mandated by the startup law.
Between 2015 and 2022, Nigeria’s startup ecosystem thrived, raising more than $2 billion—more than any other African country during that period.
Notable companies such as Flutterwave, Andela, and Opay, achieved billion-dollar valuations primarily based on their Nigerian operations. The startup law and its associated investment fund aim to codify lessons from the past decade into a reliable framework to help new ventures grow and replicate success.
The new fund represents a significant step toward fully implementing the startup law, which was designed by local investors, entrepreneurs, government agencies, and international advisers. To date, approximately 13,000 businesses have been registered as startups under NITDA’s criteria, granting them a three-year income tax exemption.
Additionally, investors in these startups are eligible for tax credits on the funds they inject. However, a lack of awareness about the benefits of the new law remains a challenge. Abdullahi noted, “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 underscores the Nigerian government’s proactive approach to supporting its burgeoning tech industry and fostering an environment conducive to innovation and economic growth.
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Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
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