Victor EzejaThe United States Consul General in Nigeria, Will Stevens, has disclosed that U.S. investors have continued to invest massively in African startups because they see high potential for returns, adding that the continent has a rapidly growing market.
Stevens, who spoke at the Global Tech Africa Conference held on Friday in Lekki, Lagos, observed that African entrepreneurs have impressive qualities, and “investors are confident in their ability to build successful businesses that provide solutions to not only African problems but global problems.”
Speaking on the theme: “Africa’s Development and the Future of Tech: The U.S. Role,” the Consul General observed that given the vast talents found in the continent, especially among the Youth, “African technology ecosystem is a beacon of hope, a testament to the potential of a diverse continent, and a beaming light revealing what Africa could become,” in future.
He highlighted various roles the United States has played over the years in different areas in education, healthcare, agriculture, trade, and other vital areas of development and economic growth in Africa, adding that technology is playing an ever-increasing role in deepening their relationships across the continent.
According to him, up to 60 percent of African startups are incorporated in the United States out of which 80 per cent of them are of Nigerian origin.
He said the U.S. private sector plays a vital role in promoting technology in all sectors of the African economy.
He added that U.S. venture capital firms are investing heavily in African tech startups with over 60 and 40 percent of venture capital funding in Nigeria and Africa respectively coming from the United States.
“U.S. venture capital firms are investing heavily in African tech startups with over 60 and 40 percent of venture capital funding in Nigeria and Africa respectively coming from the United States,” the Consul General stated.
“Up to 60 percent of African startups are incorporated in the United States – this figure is 80 percent when considering Nigeria alone. In 2021, African startups raised $4.8 billion, this translates to an average of over $1 million every 2 hours! The United States accounted for over 40 percent of Africa’s VC funding in 2022 with over $2 billion injected into local startups.”
He added that even as venture capital investments have declined globally this year, “U.S. investors like Techstars, Y-Combinator, and 500 have closed over 100 major deals within the first nine months of the year.
“By these numbers, it is indicative we have a strong interest in supporting the growth of the digital economy of the continent and clearly, Nigeria is a key market. As a whole, the U.S.-Africa startup/venture capital scene continues to be an immensely important mutually beneficial bilateral corridor.
“At the Consulate here in Lagos, we work with numerous startups to facilitate their participation in incubator and accelerator programs, thereby connecting these Nigerian startups with global markets,” he stated.
Impact of the Investments
Stevens noted that the U.S. investments in African startups are having a positive impact on the continent as the startups not only create jobs, but also boost economic growth, and advance innovation.
He said the United States believes that a digital transformation is underway in Africa, and is consciously seeking to strengthen collaboration with talents from the continent, adding that that informed the decision of the President Biden administration to launch the Digital Transformation with Africa (DTA) initiative at the U.S.-Africa Business Forum in December 2022. “The Digital Transformation with Africa (DTA) initiative seeks partnerships with African countries to expand digital access, increase U.S.-Africa commercial relations, support increased digital literacy, and strengthen digital enabling environments across the continent in line with the African Union’s Digital Transformation Strategy and the U.S. Strategy Toward Sub-Saharan Africa. This initiative emphasizes ‘with’ – Digital Transformation ‘with’ Africa, not ‘for’ Africa; as we believe Africa brings tremendous value to the global table.”
While revealing that the U.S. government has invested $350 million into digital programming and intends to invest millions more under the initiative, he asserted that “DTA will also facilitate more than $450 million in financing to develop an inclusive and resilient digital ecosystem in Africa; harness the tools and capabilities of 18 U.S. government departments and agencies; and partner with African governments and a wide variety of other actors – such as the private sector and civil society – to make these investments transformative.”
He concluded by stating that the United States is committed to supporting Nigeria and Africa on its journey to prosperity, adding that the continent’s success is the world’s success.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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