The Government of Nigeria is set to launch a $15 million venture capital fund to fund high potential businesses in the Information & Communications Technology (ICT) sector. The National Information Development Agency (NITDA) is expected to commit about $3.6 million in funding while the rest of the funds would be raised from the private sector.
In a meeting with the press yesterday, the country’s Information and Communications Technology Minister, Mrs. Omobola Johnson said:
“The fund will be managed by independent fund managers who would, working with the ICT incubation team, will identify projects or initiative that we believe are great ideas that will be commercially successful. We will use those capital venture fund to fund them because there is no collateral we are taking a risk.
“We use those capital development fund to fund the development of those ideas until they get a commercial viability. Basically, the reward is when they get a commercial viability and you sell them off or you do an IPO like they do with Facebook and all those companies where the returns go to the investors and the fund. The fund is initially $15 million and as we get more successful we will raise additional money. But the anchor investor in that fund is going to be Federal Government.”
As access to funding has oft been cited as one of the major factors militating the success of Nigerian ICT startups, the move is a welcome one in the country which is currently one of Africa’s leading ICT markets.