Monday, June 17, 2024

Nigeria Government Sets $5bn Target for Startups

Nigeria has set a plan to help startups raise their total yearly funding rounds to $5bn by 2027.

This was disclosed by the Minister of Communications, Innovation and Digital Economy, Bosun Tijani, on Monday in a document titled, ‘Accelerating our Collective Prosperity through Technical Efficiency: A Strategic Plan for the Federal Ministry of Communications, Innovation & Digital Economy.’

The minister highlighted that in today’s global technology landscape, innovation, entrepreneurship, and access to capital are critical components of a strong digital economy. He stated that the primary objective of the ministry as regards this will be to stimulate the growth and sustainability of startups, with a specific focus on those developing innovative solutions for critical sectors of the economy.

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Tijani said, “Recognising the critical role of patient capital in the growth of startups, we are committed to increasing the local availability of patient capital. We intend to create an environment for startups to raise the funding they require to thrive locally and promote the domiciliation of startups within our nation.”

Describing how the ministry would measure if its plan were working, he added, “Increase capital raised by Nigerian tech startups 50 per cent year-on-year from ~$1bn/yr in 2022 to $5bn/yr in 2027.”

Amid a funding drought, Nigerian startups raised $1.2bn in 2022, according to Africa The Big Deal (an African funding data insight firm). African startups raised $5.4bn according to Briter Bridges in 2022.

He further declared that the ministry would establish an active sandbox environment to encourage and empower innovators and entrepreneurs to develop unique solutions for sectors considered to have limited exposure to technological innovation.

Tijani also noted that the country is hoping to increase the domiciliation of local technology startups from <1 per cent to 25 per cent by 2027, increasing their benefits to the economy.

According to Tijani, “Digital transformation and innovation are fast becoming a catalyst for economic progress,” and the “intersection of a strong digital economy and our innovative and youthful population presents us with a unique opportunity to chart a course towards prosperity, inclusion, and global relevance.”

Commenting on Artificial Intelligence, the minister stated that this technology will usher in a new era of technological and economic transformation over the next two decades. Nigeria needs to formulate a far-reaching national strategy to harness the potential of AI inclusively and responsibly, Tijani pointed out.

He said, “The implementation of the strategy amongst other things is expected to elevate Nigeria as a top 10 location for AI model training and talents globally. In addition, we will position Nigeria as a global leader in accelerating inclusivity in AI dataset.”

He added that the country plans to create over 50,000 jobs in the AI industry in the next couple of years.

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