Nigeria Launches $40M Fund to Boost Startup Growth Amid Funding Slowdown
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Nigeria, home to one of Africa’s most dynamic tech ecosystems, is taking bold steps to support early-stage startups as a slowdown in funding threatens innovation. In response, the government plans to launch a $40 million fund to provide crucial financial support and reduce startups’ dependence on private investors.
The fund will be jointly financed by the Japan International Cooperation Agency (JICA) and the Nigeria Sovereign Investment Authority (NSIA), which oversees the country’s sovereign wealth fund. According to Kashifu Inuwa Abdullahi, director of the National Information Technology Development Agency (NITDA), the final agreement is set to be signed within the next month.
This initiative aligns with Nigeria’s Startup Act, enacted in October 2022, which aims to create a more favorable environment for startups through tax incentives and financial support. The act also established a 10 billion naira ($8.6 million) annual fund to provide certified startups with access to seed funding, grants, and loans.
Despite Nigeria’s dominance in Africa’s tech investment landscape—attracting over $2 billion between 2015 and 2022—funding has plummeted in recent years. Investments dropped from over $1 billion in 2021 to $531 million in 2022, and further to just $224 million in 2023. This decline underscores the urgent need for government intervention to sustain growth.
Currently, 12,948 companies are registered under the Startup Act, benefiting from a three-year tax exemption. However, limited awareness of these benefits has prompted the government to launch a nationwide campaign to inform entrepreneurs.
By improving access to funding, this initiative is set to strengthen Nigeria’s tech sector, nurture innovation, and solidify the country’s position as a leading digital hub in Africa.
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