The African Development Bank (AfDB) has approved a loan of $170 million to finance a digital and creative enterprises program in Nigeria.
The investment in Digital and Creative Enterprises Program (i-DICE) is a Federal Government of Nigeria initiative promoting investment in digital and creative industries. It is part of Nigeria’s efforts to build back better, greener, and more inclusively, to create more sustainable jobs for the teeming youthful population.
The program targets more than 68 million Nigerians aged 15 to 35 years who are recognized as leaders of innovative, early-stage, technology-enabled start-ups or as leaders of creative sector micro, small and medium sized enterprises. The program is co-financed by the Agence Française de Développement (AFD) and the Islamic Development Bank (IsDB).
“Governments have a much greater role than just policy making. They need to be innovative and create an enabling environment that includes infrastructure and de-risking to harness private sector investments in key growth sectors,” said African Development Bank President Akinwumi A. Adesina.
The investment in Digital and Creative Enterprises Program will also support the leaders through enterprise support organizations – groups that support, train, and sometimes fund entrepreneurs – including innovation hubs, accelerators, venture capital and private equity firms. Bank financing of i-DICE will help the Government initiative further consolidate Nigeria’s position as Africa’s leading start-up investment destination and as a youth entrepreneurship hub.
“This program is among the latest series of our operations meant to bolster the implementation of the Bank’s Jobs for Youth in Africa Strategy. Given that tech-enabled enterprises cut across all the economic growth sectors, the program’s focus on the digital sector will deepen Nigeria’s job creation efforts,” said Beth Dunford, Bank Vice President for Agriculture, Human and Social Development.
The initiative will stimulate investments in 226 technology and creative start-ups and provide non-financial services to 451 digital technology and small and medium enterprises. The program is expected to create 6.1 million direct and indirect jobs, of which the Bank’s financing will support the creation of about 850,000 jobs. The value added to the Nigerian economy connected to the program is estimated at $6.4 billion.
The program will boost Nigeria’s venture capital market through independently managed funds focusing on digital and creative enterprise. These funds aim to attract an initial capitalization of $433 million in private and public sector financing.
“This program will generate significant economic benefits to Nigeria,” said Lamin Barrow, Director General of the Bank’s Nigeria Country Department. “The program interventions will help respond to the challenges of youth employment in Nigeria, which could intensify without scalable interventions. I want to recognize the strong country ownership, under the leadership of Vice President Osinbajo,” he added.
The African Development Bank’s active portfolio in Nigeria comprises 57 operations across 30 public and 27 private sector operations, valued at about $4.61 billion. The i-DICE Program aligns well with the Bank’s strategic priority areas, better known as the High 5s – specifically, “Industrialize Africa,” “Improve the quality of life for the people of Africa,” and “Feed Africa.”
Nigeria has quite a vibrant startup ecosystem. These startups have in the third quarter of 2021 raised an estimated $248.6 million funding representing an increase of 103% compared to $122.76 million raised in the second quarter of the year.