On October 19, 2022, Nigeria’s President Muhammadu Buhari officially enacted the Nigeria Startup Act, marking a pivotal moment for the nation’s technology sector. This legislation was more than a formal gesture; it represented a long-awaited framework aimed at fostering innovation and growth.
The Act introduced essential elements previously absent in Nigeria’s startup landscape: definitive regulatory guidelines, safeguards for investors, tax reliefs, and, crucially, formal acknowledgment of startups as vital components of the country’s economic infrastructure rather than peripheral entities.
Its development was a collaborative effort spanning from June to September 2021, involving over 30 key figures from the tech ecosystem working closely with government officials-a level of stakeholder engagement rarely seen in Nigeria’s legislative history.
By April 2024, tangible progress was evident. The Startup Portal recorded nearly 13,000 startups registered for official recognition, alongside close to a thousand venture capitalists, over 1,700 angel investors, and nearly a thousand accelerators, incubators, and innovation hubs integrated under the Act’s provisions.
November 2023 saw the launch of the Startup Support and Engagement Portal, and by mid-2024, the Labelling Committee commenced its operations. Complementing federal efforts, state governments intensified their involvement: the iHatch Cohort 4 initiative aimed to back 185 startups and 37 innovation hubs, while the Tertiary Education Trust Fund committed to establishing 48 innovation centers nationwide-12 already functional, 18 in procurement, and the remainder slated for completion by 2025.
Financially, Nigeria continues to dominate Africa’s startup funding scene. In 2024, Nigerian startups amassed approximately US$410 million, with standout companies like Moniepoint and Moove each securing US$110 million in funding rounds.
The momentum continued into early 2025, with over US$100 million invested in the first quarter alone. Notable deals included LemFi‘s US$53 million Series B and Raenest’s US$11 million Series A extension. By mid-2025, just five Nigerian startups had collectively attracted US$640 million, representing nearly 45% of the continent’s total startup investments.
However, alongside these successes, challenges persist.
Between 2023 and 2025, at least 15 Nigerian startups ceased operations despite having raised over US$100 million cumulatively. Companies such as Okra (US$16.5 million), 54gene (US$45 million), and Vibra (US$6 million) have exited the ecosystem. Public exits remain scarce, with African startups recording only 22 exits in 2024, a slight increase from 20 in 2023.
Two years after its enactment, the Startup Act has undeniably introduced structure, enhanced visibility, and generated momentum within Nigeria’s tech ecosystem, supported by concrete data and institutional backing. Yet, the critical question remains: has it effectively transformed legislative intent into vibrant, ground-level tech communities?
The current verdict is nuanced.
Policy Achievements and Rising Anticipations
The Startup Act was not an overnight development. It emerged from extensive consultations involving ecosystem stakeholders, regulators, civil society, and government bodies meticulously reviewing each clause to craft a comprehensive draft.
When it became law in October 2022, it carried widespread optimism that Nigeria could finally align its policies with its tech ambitions.
Oluwatomi Solanke, CEO of Trove Finance, was among the Act’s early advocates. On the eve of its passage, he remarked: “Nigeria boasts one of the most dynamic tech ecosystems globally. Yet, compared to developed markets, it lags due to factors including government policies…” He added, “The Startup Act will catalyze the emergence of numerous new tech startups in Nigeria.”
Similarly, Tunji Andrews, CEO of Awabah, shared his perspective during a webinar titled “Nigeria Startup Act and Tech Investment: Exploring Possibilities.” Addressing concerns about talent migration, he stated:
“I don’t oppose brain drain in tech. If individuals seek better opportunities elsewhere, that’s understandable.” His focus was on maintaining a continuous pipeline of talent, believing the Act’s emphasis on education and mentorship could sustain this flow.
Industry experts highlight tangible benefits such as tax breaks for startups and investors, streamlined regulations easing operational challenges, and the establishment of a dedicated startup fund. Yet, many caution that the Act’s promising provisions have yet to fully materialize in practice.
Awareness remains limited, especially at the state level, and the Startup Investment Seed Fund (SISF), intended to bolster startups and hubs, is still underfunded and underutilized.
Tech Hubs: Evolving from Isolated Innovators to Ecosystem Pillars
The significance of these shortcomings is underscored by the fact that the Startup Act was designed to complement, not replace, the existing innovation landscape-particularly Nigeria’s expanding network of tech hubs.
Long before the Act, hubs in areas like Yaba-often called “Yabacon Valley”-served as vital incubators where entrepreneurs could collaborate, develop prototypes, and nurture fledgling businesses.
The legislation’s potential lies in unifying these dispersed efforts, enabling scale, fostering interconnectivity, and ensuring hubs offer more than just basic amenities like internet access and workspace.
For hub operators, the Act promises two key advantages: reduced bureaucratic hurdles for permits and registrations, and enhanced clarity and access to funding. A recent study even highlights explicit support for “technology laboratories, accelerators, incubators, and hubs” within the Act.
Nonetheless, progress has been inconsistent. A policy analysis revealed that while startup registrations have surged, ecosystem robustness and measurable growth in hubs lag behind. The SISF remains only partially operational, leaving many hubs financially vulnerable and uncertain about promised support.
Still, encouraging developments are underway.
A collaboration between the Nigerian Sovereign Investment Authority (NSIA) and the Japan International Cooperation Agency (JICA) has yielded a fund targeting early-stage startups, a grant to launch a hub in Abuja, and a social impact initiative.
While these efforts don’t yet fulfill all the Act’s promises, they signal forward momentum. Moreover, hub leaders are increasingly working to decentralize innovation, expanding beyond Lagos and Abuja into smaller cities rich with untapped talent.
Obstacles, Inconsistencies, and the Path Forward
Implementing the Startup Act’s vision is proving more complex than enacting the law itself. Several key commitments remain incomplete.
Funding remains a critical bottleneck. The SISF, envisioned as a domestic fund with an annual minimum of ₦10 billion, is not yet fully operational. Slow capital inflows have left startups and hubs in a state of uncertainty. Meanwhile, foreign-funded programs are stepping in to fill some gaps, but this shifts the support away from the originally intended sovereign, government-led model.
Beyond financing, awareness is uneven. Many startups outside major urban centers like Lagos and Abuja remain unaware of the Act’s benefits or have had little interaction with its implementing bodies. Experts emphasize that without adoption and adaptation by state governments, the Act’s impact will remain geographically limited.
Even where knowledge exists, bureaucratic hurdles persist. Slow approval processes, overlapping regulations, and inconsistent enforcement create friction. Although incentives are codified, the pathways to access them are often unclear.
This disconnect between expectations and reality means that while well-connected startups reap early advantages, many others remain on the periphery, awaiting tangible support.
Despite these challenges, optimism endures within the community. Many view the Startup Act not as a completed framework but as a foundational step. Its greatest strength lies in legitimizing the ecosystem, holding government accountable, and creating opportunities for hubs in cities like Owerri or Bauchi to gain recognition comparable to those in Lagos or Abuja.
To transition from policy to practice, and from legislation to thriving innovation centers, several essentials must be prioritized: a fully operational and transparent Startup Investment Seed Fund; inclusive accountability involving states, entrepreneurs, and hub operators; decentralization to broaden access beyond metropolitan hubs; enhanced capacity building to complement financial support; and visible success stories that demonstrate the ecosystem’s value beyond its immediate circles.
The Startup Act serves as Nigeria's clarion call. When crafted collaboratively with those it impacts, policy can unlock immense potential. Yet, legislation is merely the starting point. The true transformation depends on the dedication of hubs, founders, and communities on the ground.
Nigeria is no longer merely aspiring to be Africa’s premier tech ecosystem. The real challenge lies in whether its policies and infrastructure can deliver lasting outcomes: sustainable employment, startups that endure beyond initial hype, and hubs that flourish both in bustling Lagos and quieter cities like Owerri.
Oluwatomi Solanke’s hopeful assertion that “the Startup Act will birth many more tech startups in Nigeria” may soon shift from aspiration to reality.
For many hub founders, the most profound impact will be felt not in government offices, but within the neighborhoods where they nurture talent, mentor entrepreneurs, and launch ventures built to last.