Nigeria’s FG Established a $268 Million Fund for Tech Entrepreneurs

The Federal Government of Nigeria has approved a $268 million fund that is going to be disbursed to try and support young tech innovators.

Meeting with Prof Yemi Osinbajo

During a meeting, an executive announced a $20 million tech fund for young innovators. This was approved by the Bank of Industry. He also announced a $248 million soft loan facility for smaller enterprises. This is going to be disbursed through the CBN. These funds are going to be in furtherance for the government’s drive to try and support MSMEs. It’s also going to increase productivity in industries that do not operate around oil. Of course, this would not be the first story about a large amount of funding being given to small tech businesses. Investors and philanthropists such as Tej Kohli have also devoted millions to industries such as AI.

” Nigerian start-ups attracted $122 million out of the $492 million in funding to the African start-up sector in 2019. For example, Kobo360 which aggregates end-to-end haulage operations raised $30m in a Series A round led by Goldman Sachs and Nigerian commercial banks “- Yemi osinbajo

The Finance Act was brought into law. One of the provisions exempted early start-ups who had annual revenue that was less than N25 million. This meant that they did not have to pay taxes.

This is not the first time that a government has created funds for the tech industry or even SMEs. In 2018, soon after visiting tech start-ups and hubs, Silicon Valley disclosed that they were in talks with the AfDB, or the African Development Bank. They wanted to try and establish $500 million to try and fund the creative sector.

The final turnout of this is yet to be known but some say that it really boosting the industry as a whole. According to EchoVC Partners, the government in Nigeria did not honor a $10 million technology fund that they created to try and give African tech companies the support they needed to fund their business.

There are also doubts that the funds will be managed or even disbursed in this instance as well. These are not far-fetched to say the least. It looks like Nigeria has a very long history of government funds being diverted to other things or even being embezzled.

There aren’t any details regarding how the funds are going to be disbursed yet but there is hope that it will be quite different and that it will not go in the same way that other funds have.

We can only wait and see but so far it looks like a lot of work is being put in to make sure that the funds are going to go to the right companies. If this was to happen then it would make it much easier for start-up companies to get the position they need to really make a difference and to also really rocket their success.

The government has helped other companies in the past and the funding is a great way for the country to boost a tech industry that is currently thriving. Who knows what potential could be unlocked in the future, but right now things are moving in the right direction.

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