President Buhari Seeking to Establish Council on Startups
Nigerian President Muhammadu Buhari is seeking to establish a council on startups in Nigeria. And according to reports, the president has sent the bill to the national assembly.
According to the president, the bill is will seek the establishment of a council for digital innovation in Nigeria. President Buhari’s request is contained in a letter read by Senate President Ahmad Lawan on the floor of the legislative chamber on Tuesday, 2nd March.
Buhari disclosed that the bill will position Nigeria’s startup ecosystem as “the leading digital technology centre in Africa.”
The president’s letter to the national assembly reads: “Pursuant to section 58 (2) of the 1999 constitution of the federal republic of Nigeria as amended, I hereby forward the Nigeria startup bill 2021 for the kind consideration of the senate. The Nigeria start-up bill aims to position the Nigeria start-up ecosystem as the leading digital technology centre in Africa. The bill seeks to establish a council for digital innovation. While hoping that this submission will receive the usual expeditious consideration of the senate, please accept, distinguished senate president, the assurances of my personal regards.”
The Nigerian startup space is one that is unarguably flourishing with innovative solutions that make everyday living easier. Nigerian Startup founders are being recognised globally and investors are readily signing heavy checks for startups to expand their reach and their products.
Only recently, a Nigerian Fintech platform, Flutterwave earned a valuation of $3 billion after raising $250m in a funding round. In January 2022, 9 startups from Nigeria raised over $30 million with the number rising to 13 startups raising over $300 million as of February ending. With this number, it becomes clear that there is a need for setting up a Startup Council. Also when you consider that the Federal Executive Council (FEC) has approved the Nigerian Startup Bill last December 2021, it becomes more important to establish the council being sought out by the president.
However, given Nigeria’s history with execution especially as it concerns non-governmental parastatals, one can only hope that this is a move that will not only benefit the startups and startup founders but the country at large.
Tony Elumelu Funded Entrepreneurs Generated $2.3 Billion Revenue in 8 Years
Entrepreneurs trained and funded by the Tony Elumelu Foundation (TEF) have generated a combined $2.3 billion in revenue in the last 8 years, according to the Foundation.
In a brochure made available at the 60th birthday celebration of Tony Elumelu, the founder of TEF and Chairman of the United Bank for Africa (UBA), TEF has trained about 1.5 million African entrepreneurs since launched 13 years ago.
The Foundation has also disbursed $100 million in seed capital to over 18,000 entrepreneurs across the African continent, with 25% of the beneficiaries getting additional investments to expand their businesses.
Since its establishment, over 400,000 direct and indirect jobs have been created by TEF entrepreneurs with female-owned businesses creating 58% of the total jobs.
The Foundation explained that it increased women’s employment to 52% from 24% in 2015 and has empowered more than 7,000 women with 85% of those women leading their businesses.
Speaking on its ability to reach entrepreneurs across the African continent, the Foundation said, “The robust ability of the foundation to reach entrepreneurs across geographies and sectors has enabled it to conduct innovative partnerships with the European Union, United Nations Development Programme, the International Committee of the Red Cross, the United States Government via the United States African Development Fund and others with bespoke programmes including targeting female empowerment and growth in fragile states.”
On his part, Tony Elumelu said “I engage public and private sector players across my world. My message is always simple; let us partner on poverty alleviation, job creation and women’s economic empowerment in Africa.”
Investors King understands that Elumelu holds about 7% or 2.3 billion shares in United Bank for Africa and another 2.1% stake in Transnational Corporation of Nigeria.
In a Facebook post in January 2023, the CEO of the defunct Standard Bank had attributed his early success to hard work and luck, adding that the two variables are imperative in success.
He said “I owed my accelerated career and successes to two things: hard work and luck, and I know firsthand how these factors are inextricable in success.”
“My successes – and yes failures – have always driven me to create opportunities for young people. I believe that our young have the talent and the zeal to transform our world.”
TLG Capital Partners One Pipe, Provides N2.25 billion Collateralized Credit Facility to Expand Operations
Private investment firm which invests in small and medium-sized enterprises (SMEs) across sub-Saharan Africa TLG Capital has closed a N2.25 billion deal with One Capital, a startup that powers digital financial services, to expand its operations.
The deal which had reportedly been in the works since the third quarter of last year will power One capital’s inventory finance solution for small businesses.
Speaking on the investment made to One Pipe, investment professional at TLG Isaac Marshall said, “Despite contributing $220 billion per year in economic activity, micro-enterprises that deal in cash are Nigeria’s most neglected business segment. Fintechs tend to prefer more digitally integrated clients and traditional financiers tend to prefer bigger clients.
“With a clever product to help these small shops to obtain both credit and better purchasing terms on their goods, OnePipe has pioneered a model that can provide sustainable income growth to tens of millions of micro-enterprises.”
This investment will enable OnePipe to grow its business and work towards its goal of being Nigeria’s top supplier of financial services to small businesses. Its partnership with several banks and fintech has provided the startup with the underlying infrastructure.
OnePipe helps organizations integrate financial services within their value chains to create customer loyalty & improve overall business operations. Since its launch in 2018, OnePipe has raised at least $9.2 million.
Investors King understands that the Techstars-backed company is one of the African companies that has also garnered the support and partnerships of several banks and businesses. This includes, Flutterwave, Quickteller, Fidelity Bank, Migo, Polaris Bank, SunTrust Bank, Providus Bank, Paystack, and Quickteller.
The startup was also exposed to the fall of Silicon Valley Bank; with about $829,000 in the bank which represented 70% of their cash position. Onepipe’s funding announcement also comes as the company has laid off about 20% of its employees, as it seeks to navigate the current economic downturn and adjust to the macroeconomic headwinds.
African Development Bank And Partners Support Nigeria’s Digital And Creative Industries With $618 Million
The African Development Bank (AFDB) and its partners have launched a $618 million investment in the Digital and Creative Enterprises (iDiCE) program to support Nigeria’s digital and creative industries.
The $618 million fund is made up of $170 million from the African Development Bank (AFDB), and $100 million from the Agence Française de Dévelopment, a public financial institution that implements policy defined by the French Government, while the Islamic Development Bank (IsDB) will provide $70 million in co-financing.
Also, the Federal government of Nigeria through the Bank of Industry (BOI) which will lead the iDiCE program, will back the fund with $45 million as a counterpart contribution to be availed through loans for qualifying startups and $271 million from the private sector and institutional investors.
Speaking at the launch of the event at the state capital Abuja on Tuesday, Nigeria’s Vice President Prof. Yemi Osinbajo lauded the inflow of capital to tech startups in the country which he stated has contributed significantly to Nigeria’s GDP.
In his words, “This influx of private capital has enabled start-ups to expand operations and create new jobs while contributing significantly towards our GDP growth. It is now imperative to commence a coordinated approach towards innovation on the continent, bringing together all stakeholders to coordinate efforts at scaling up investments and building programs that provide the right enabling environment and produce talent pipelines that support the growth of innovation on the continent”.
Also speaking at the event is African Development Bank President Akinwunmi Adesina who emphasized the need to leverage the huge potential of iDiCE for sustainable job creation and economic transformation.
He said, “we are retooling Nigeria to be more competitive in an increasingly digital world. We are creating hope for a new Nigeria, driven by the power of the youth”.
Mr. Adesina further disclosed that the iDiCE fund will create 6.1 million direct and indirect jobs and equip more than 175,000 young people with technology startups, 226 creative enterprises, and 75 enterprise support organizations will be supported by the fund.
The i-DiCE model will be rolled out in other regional member countries through AFDB’s Youth Entrepreneurship Investment Bank Initiative, which will be designed to create a financial and non-financial services ecosystem to support startups run by young Africans and to create jobs.
It is also set to improve regulatory policy frameworks, including the 2022 start-up act, and establish a DICE fund, a venture capital fund managed independently to provide access to financing.
Investors King understands that Nigeria is the most popular tech startup investment destination in Africa. Between 2015 and 2022, 383 tech startups raised a combined US$2,068,709,445. The country also attracts the highest number of investors more than any other African country.
Hence, it is not far-fetched to say that the continuous influx of investments in Nigerian startups will no doubt solidify the country’s position as the premier hub for young entrepreneurs and start-up investments in Africa.
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