Nigeria to Establish Startup Hub in San Francisco

In a statement released on Tuesday, Bosun Tijani, the Minister of Communication, Innovation, and Digital Economy, revealed significant updates. Tijani announced that the ministry has obtained two approvals poised to provide substantial benefits for Nigerians overall.

Highlighting the first approval, Tijani unveiled plans for establishing a startup hub in the US. Additionally, he disclosed the second approval, which involves extending an extra 90,000 kilometers of fiber optic cable to enhance the current connectivity infrastructure.

Discussing the startup hub initiative, the minister emphasized its potential to greatly enhance the influx of foreign direct investments into the country.

“As we work towards achieving key elements of our Trade and IEC strategic blueprint pillars, the Nigerian Startup House will play a critical role in promoting Nigeria’s economic interest, attracting foreign direct investment and improving the visibility and positioning of Nigeria’s startup ecosystem to attract funding and expertise from global markets and organisations represented in the San Francisco Bay Area and beyond,” he said.

“The San Francisco Bay Area, and nearby Silicon Valley, is recognised globally as a major source of startup ecosystem funding, with a combined GDP value of just over $929 billion and is home to over 200 of the largest companies in the world by revenue.

“In addition, most of the $1.3 billion funding sourced by Nigerian technology startups in 2023 alone came from Venture Capital funds in the Bay Area.”

Tijani clarified that although the federal government will retain ownership of the Nigeria Startup House, its day-to-day management will be entrusted to a consortium comprising Nigerian digital technology firms. This consortium will be responsible for providing private funding to sustain the operations of the startup house.

Regarding the provision of the 90,000 kilometers of fiber optic cable, Tijani announced that the Federal Executive Council (FEC) has greenlit the establishment of a special purpose vehicle (SPV). This SPV will facilitate the implementation of the project, enabling the deployment of the additional fiber optic infrastructure.

He said the cables will complement Nigeria’s existing connectivity infrastructure and deliver a stronger national backbone for universal access to the internet across Nigeria.

“Over the last few months, we have put in extensive groundwork to set up this SPV which will be modelled in governance and operations similarly to some of the best public-private partnership setups in Nigeria, such as NIBSS and NLNG,” the minister said.

“Working with partners and stakeholders from the government and private sector, this SPV will build the additional fibre optic coverage required to take Nigeria’s connectivity backbone to a minimum of 125,000km, from the current coverage of about 35,000km.

“Upon delivery, this will become Africa’s 3rd longest terrestrial fibre optic backbone, after Egypt and South Africa.”

The minister further emphasized that the expansion of fiber optic infrastructure will empower the country to fully leverage the distinctive advantage of possessing eight submarine cables. This initiative aims to stimulate greater utilization of the data capacity provided by these cables, surpassing the current utilization rate of only 10 percent.

According to him, this endeavor will result in enhanced connectivity, bridging the existing gap in internet usage by linking over 200,000 educational, healthcare, and social institutions nationwide. Consequently, a broader segment of society will gain access to the benefits of internet connectivity, promoting inclusivity and societal advancement.

“Some of these immediate benefits include; Increasing internet penetration in Nigeria to over 70%, potential reduction of the cost of access to internet by over 60%, inclusion of at least 50% of the 33 million Nigerians currently excluded from access to the internet,” he added.

Tijani said the optic cables would help deliver up to 1.5 percent of the country’s gross domestic product (GDP) growth per capita and raise the GDP from $472.6 billion (2022) to $502 billion over the next four years.

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