U.S. Envoy Advocates Enabling Environment, Access To Capital For Young Start-ups

By Rukayat Moisemhe

Michael Ervin, Senior Foreign Service Officer, United States Consulate, Lagos, says access to capital for young companies and an enabling environment for technology start-ups will enable new perspectives to Nigeria’s economic growth and development.

Ervin made the call at the American Business Council (ABC) Economic Update on Tuesday in Lagos with theme; “Navigating the Start-up Landscape in Nigeria amidst Economic Challenges”.

He described start-ups as the lifeblood of any thriving economy and pioneers that carve new paths into uncharted markets.

He added that these set of businesses were the engine of job creation and the launch pad for the next generation of groundbreaking technologies.

Ervin noted that while start-ups might be small at first, their growth potential was tremendous, particularly as they hired local talent, injecting a surge of energy and opportunity into the Nigerian communities.

“So, what more can we do? How do we continuously leverage this vital force for social well-being and economic development?

“We need an environment that fosters risk-taking. We need access to capital for these young companies. We need to celebrate not just the successes, but the journey itself, the audacious spirit that dares us to dream big,” he said.

Ervin stated that in view of the above, the U.S. mission and ABC in 2023, launched an associate membership category for U.S. incorporated startups, admitting them into a community of established global businesses where opportunities could be expanded.

He noted that in 2023, the technology sector contributed over 17 per cent to Nigeria’s Gross Domestic Product (GDP), almost doubling the revenues from oil and gas.

According to him, U.S. venture capital firms have invested heavily in African tech startups, with over 60 and 40 per cent of venture capital funding in Nigeria and Africa, respectively, coming from the United States.

This, he said, meant that technology was a driving force, a fundamental force of Nigeria’s prosperity.

He urged all start-ups registered in the United States to join the American Business Council and leverage the opportunities that exist therein.

Ervin affirmed that the United States had been committed to fostering collaboration with Nigeria across the sectors of agriculture, education, healthcare, power, technology, and other vital areas for development and economic growth.

“Up to 60 per cent of African start-ups are incorporated in the United States, and this figure jumps to 80 per cent when considering Nigeria alone.

“In 2022, African start-ups raised 4.6 billion dollars, translating to an average of over one million dollars every two hours.

“In spite of the global downturn in Venture Capital funding last year in 2023, the United States still accounted for about 40 per cent of the nearly three billion dolars raised by African star-tups last year.

“These numbers indicate that we have a strong interest in supporting the growth of not just the start-up ecosystem, but the digital economy of Nigeria, of Africa, and clearly Nigeria is a key market in that equation,” he said.

Mrs Magaret Olele, Chief Executive Officer, ABC, noted that they were various opportunities for economic growth through the start-up space.

She said the council was committed to recognising and identifying these start-ups, understanding their challenges, point them to opportunities and show them the agencies to go, to help them upscale.

“We are training them to build more employability with banks and other spaces, thereby closing the gap in terms of employment and having exportable talents.

“We are also committed to building parameters that would engender female inclusion in the start-up ecosystem to foster gender equality and equity in the technology space,” she said.

Mrs Folashade Ambrose Mebedem, Commissioner for Commerce, Cooperatives, Trade and Investment, Lagos State, noted that the state boasted of quite a number of unicorns that had been birthed in it.

The commissioner said the state continued to provide support to a number of start-ups, particularly given the current challenging economic situation.

According to her, the Governor of Lagos, Mr Babajide Sanwo-Olu, has disbursed about N500 million to start-ups and continues to engage with them to identify their areas of needs and investments.

“Under the THEMES Plus agenda, the Lagos State government is committed to driving economic prosperity and growth by strengthening the organised private sector, alongside women and youth owned businesses.

“We would continue to identify formidable partners to work with, to drive women inclusion and achieve great successes in the start-up space,” she said.

Mrs Omoboye Odu, Head, Global Corporate Division, Ecobank, said the Nigerian entrepreneurial spirit was undeniable as brilliant minds came together on a daily basis to form ideas that shape the future of the country.

Odu noted that the dynamic environment had the potential to be engines of the future which required more than just a brilliant idea.

“This is where institutions like Ecobank steps in, in recognising the transformative power of start-ups.

“Our renowned partnership offers loans, advisory services for business and job creation across the continent and we remain committed to providing crucial financial and advisory support,” she said.

Mrs Yemi Keri, Founder, Rising Tide Africa, an Angel Network with Investment Pieces, said the firm had invested $1.98 million in about 35 start-ups.

She, however, noted that Nigeria was still at the surface, in terms of technology, stating that there existed massive opportunities not just for traditional but for emerging technologies.

“In terms of the Start-up Act, the implementation is where we are at now and some of the policies in the Act have not really identified and looked at the gender lens in the way we expected it to.

“Government needs to improve on the ease of doing business, while we encourage more women to become angel investors and hand-hold many female start-ups founders and guide them in the ecosystem,” she said.

Mr Yakubu Musa, Acting National Coordinator, office for Nigerian Digital Innovation, National Information Technology Development Agency (NITDA), said over 12000 start-ups have registered under the National Start-up Act.

Musa added that there were also over 1,000 angel investors and the next phase under the Act was to create profiles, verify stakeholders and engage several state governments to domesticate the Act. (NAN)(www.nannews.ng)

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Edited by Olawunmi Ashafa