FG to unlock $5bn annual funding for Nigerian startups with launch of Digital Trade Desk

The Nigerian government has unveiled the Technology Export and Digital Trade Desk structured to push the annual funding for Nigerian startups to $5 billion. The initiative is aimed at creating more limelight for the country’s tech sector and various startup funding.

Launched by the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani on Monday, he pointed out that the initiative was launched in collaboration with the Federal Ministry of Industry, Trade and Investment.

The minister highlighted that trade, which is the 5th Pillar of the Ministry’s strategic blueprint, brings a golden chance to enhance Nigerian technology export. 

Tijani added that the launch of the Trade Desk brings a strong foundation to offer significant support to local technology companies. This in turn enables them to access and compete in markets across Africa and beyond.

“With a bold vision, the initiative seeks to increase the technology sector’s contribution to Nigeria’s GDP from the current 14–18% to 21% within the next three years. Additionally, the Desk aims to amplify annual funding for Nigerian startups, scaling up from $1 billion to $5 billion over the same period, thereby fostering innovation, entrepreneurship, and global competitiveness,” the minister said.

Bosun Tijani, Nigeria’s Minister of Communications, Innovation and Digital Economy

The Minister mentioned that this project marked a significant milestone in the Ministry’s efforts to strengthen the contribution of information communication technology (ICT) to Nigeria’s Economy.

Tijani said the development reflects a critical component of President Bola Tinubu’s ambitious goal of achieving a $1 trillion Nigerian economy rooted in innovation, investment, and international trade.

Additionally, he explained that the creation of the Trade Desk aligns with Nigeria’s ambition to improve its position in the Economic Complexity Index (ECI). The ECI is a ranking system that assesses a country’s productive knowledge and the complexity and diversity of its exports.

Countries with a high ECI have a range of specialized capabilities and can produce a wide variety of complex products. As of 2022, Nigeria’s ECI was -1.67, placing it in 127th rank out of 133 countries.

Through the initiative creating growth mediums such as partnerships, and policy-driven interventions, the minister believes that Nigeria will have the chance to advance its position in the global digital economy and diversify its trade.

Nigeria startup funding position in Africa

The new initiative by the Federal Government is coming at a time when Nigeria came second in Africa’s startup funding rankings. 

According to a report by African venture funding analytics company, Africa the Big Deal., Nigeria emerged a distant second, with startups in the country raising $410 million in the year under review. Nigeria’s total represents 18.6 per cent of the $2.2 billion raised on the continent in 2024.

On the top of the leaderboard was the East African country Kenya where startups in the country raised $638 million, representing 29 per cent of the total $2.2 billion raised on the continent in 2024. The report saw Kenya now emerge as Africa’s preferred startup investment destination for two consecutive years (2023 and 2024).

Despite not having a new unicorn, Kenya’s successful run in 2024 was powered by large deals, mostly in the climate tech space. This includes d.light’s $176 million securitization facility in July, SunCulture’s oversubscribed $27.5 million series B funding round, and Basigo’s $44.5m series A funding targeted at delivering 1,000 e-buses across East Africa over the next three years.

Egypt followed closely behind Nigeria, with $400 million of the total $2.2 billion in funding raised by startups on the continent. This indicates an 18.2 per cent contribution by the largest tech market in North Africa.

Meanwhile, as of the end of the third quarter (September 2024), Nigeria was in third position behind Egypt, having attracted just 15 per cent of the $1.463 billion raised then. 

Notably at that time, Kenya was in poll position, being responsible for an impressive 31 per cent of the total. This indicates that while Kenya had finished rather weaker, Nigeria finished stronger, powered by Moniepoint’s $110 million unicorn-making raise in October. This further indicates the possibility of a stronger 2025.

In fourth position was South Africa, having raised $394 million which represented 17.9 per cent of the continental total.

With Nigeria finishing strong in startup investment, the Technology Export and Digital Trade Desk initiative of the Nigerian government that seeks to strengthen this directive further shapes a promising 2025. 

Also Read: Startup funding: Kenya is Africa’s most preferred destination in 2024.

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