Nigerian Government to Support Struggling Startups

Sourced from Tech Cabal

The National Information Technology Development Agency (NITDA) wants to provide an exemption for startups providing essential services during the lockdown in Nigeria, writes Tech Cabal.

In keeping with this, the agency created an online form on 5 April to identify services companies.

This move comes one week after the government imposed the lockdown of Lagos, Ogun state and Abuja. The government did not set up a process for companies providing essential services to apply for exemptions ahead of the lockdown. Instead, it granting blanket exemptions across industries.

Many actually essential companies and organizations were confused by this move, including logistic operators who bring in “essential humanitarian items” into the country.

NITDA is trying to correct this confusion with this move, which forms part of a broader plan for the tech ecosystem.

COVID-19 continues to wreak havoc on the global economy and Nigeria is no exception. Even with the Nigerian government stepping in to aid the many tech-driven companies that have seen consumer-demand plummet due to recent events, many of these companies are still expected to fail.

On 1 April, NITDA set forth a 10-member advisory committee in a bid to steer the agency on ways it can support the tech ecosystem. At the committee’s head is Tomi Davies, chairman of the Innovation Support Network (ISN) and president of the African Business Angels Network (ABAN).

Tech Cabal states that the committee is aiming to try and cushion the impact of the pandemic on the operations and survival of tech businesses.

The committee comprises of a host of tech heavyweights, including Amal Hassan, CEO, Outsource Global; Bosun Tijani, CEO, CCHub; Juliet Anammah, Head of International Affairs, Jumia Group; Kola Aina, Founder, Ventures Platform; Musa Ali Baba, CEO, Teasy Pay; Iyinoluwa Aboyeji, Co-Founder Andela and Flutterwave; and Collins Onuegbu, CEO Signal Alliance. Dr. Kalli Zannah, a Special Assistant to the Minister of Communications and Digital Economy is also a member.

“The COVID-19 economic slowdown has greatly increased challenges with access to revenue and capital funding for technology and tech-enabled ventures,” Tomi Davies says, quoted by TechCabal.

“A recent report indicates that over 80% of startups are expected to fail as a result of the recession,” he continues.

Davies says that the new committee is “set out to elicit, review and recommend business continuity support to the emerging tech ecosystem in Nigeria.”

NITDA’s new committee hopes to begin developing strategies to provide affordable Internet for businesses and individuals, with telcos in Nigeria still not adjusting data plans to support people working remotely.

The committee also hopes to build a framework to improve access to finance for tech companies.

“Even high-quality startups are already having challenges raising equity financing and the resulting lack of working capital will mean having to lay off employees,” Davies says.

Finally, the committee will see to the development of measures to improve the adoption of digital services for people to work from home during this crisis period. “Moving a significant percentage of the population online will be critical to reducing physical ways of working prone to person-to-person infection,” Davies concludes.

Edited by Luis Monzon

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