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Nigeria launches $672m fund to boost tech, creative sectors
Nigeria has launched a $672 million fund to support young investors in the technology and creative sectors. The fund targets individuals between the ages of 15 and 35, who are currently struggling to raise capital in Africa’s largest economy.
This announcement comes at a time when there is growing concern about the failure of SVB Financial Group, a United States-based lender that has supported start-ups in Nigeria.
Although some start-ups in Nigeria, such as cross-border payments company Chipper Cash, have had success with SVB, many others, including e-commerce firm Jumia and fintech firm Flutterwave, have had no exposure to the bank. As a result, there is a growing need for alternative sources of funding for start-ups in Nigeria.
The $672 million fund, launched under the Digital and Creative Enterprises Programme (DCEP), is a government initiative designed to promote innovation and entrepreneurship in the digital tech and creative industries, with a particular focus on job creation.
The African Development Bank will contribute $170 million, Agence Francaise de Developpement will provide $116 million, and the Islamic Development Bank will contribute $70 million. The Nigerian government, through the Bank of Industry, will provide $45 million, while the private sector has pledged $271 million.
The fund is expected to provide a significant boost to Nigeria’s start-up ecosystem, which has the largest number of start-ups in Africa, primarily in tech and fintech. Despite this, many start-ups still struggle to attract funding, as banks often require collateral that start-ups do not have.
Speaking at the launch of the fund, Vice President Yemi Osinbajo stated that the DCEP was an important initiative that would help to support innovation and entrepreneurship in Nigeria’s tech and creative industries. He noted that the government was committed to creating an enabling environment for start-ups and that the fund would play an important role in achieving this goal.
The launch of the $672 million fund has been widely welcomed by Nigeria’s start-up community, with many entrepreneurs expressing hope that it will provide much-needed support to young investors in the tech and creative sectors. Some have noted that the fund could also help to address the issue of brain drain, which has seen many talented Nigerian entrepreneurs leave the country in search of funding and better opportunities.
Overall, the launch of the $672 million fund is a significant step forward for Nigeria’s start-up ecosystem, providing a much-needed source of funding and support for young investors in the tech and creative sectors. As Nigeria continues to position itself as a hub for innovation and entrepreneurship in Africa, initiatives like the DCEP will be critical to supporting the growth and success of the country’s start-up ecosystem.
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