In October 2022, Nigeria’s President Muhammadu Buhari signed the Nigeria Startup Act into law, exactly on October 19, 2022. For many in the tech ecosystem, it was more than a symbolic gesture.
It promised what had long been missing: clear regulations, investment protection, tax incentives, and above all, recognition that startups were not fringe players but national infrastructure.
It was co-created between June and September 2021 by over 30 ecosystem leaders working alongside policymakers, a level of consultation almost unprecedented in Nigeria’s legislative process.
By April 2024, the country began to see some of the results. The Startup Portal reported 12,948 startups registered for labelling, alongside 912 venture capitalists, 1,735 angel investors, and 925 accelerators, incubators, and hubs onboarded under the Act.
In November 2023, the Startup Support and Engagement Portal was opened, and by mid-2024, the Labelling Committee had begun its work. Complementing this, state institutions expanded their commitments: the iHatch Cohort 4 programme set out to support 185 startups and 37 innovation hubs, while the Tertiary Education Trust Fund announced plans for 48 innovation centres nationwide, with 12 already operational, 18 in final procurement stages, and another 18 expected by 2025.
Yet the numbers tell a more layered story. In funding terms, Nigeria has remained Africa’s heavyweight. Startups in the country raised US$410 million in 2024, with companies like Moniepoint and Moove each securing US$110 million.
In the first quarter of 2025 alone, more than US$100 million flowed into Nigerian startups, led by LemFi’s US$53 million Series B and Raenest’s US$11 million Series A extension. By the middle of the year, just five Nigerian startups had collectively pulled in US$640 million, accounting for nearly 45% of all startup investment across the continent.
But for every success, there has been a cautionary note.
Between 2023 and 2025, at least 15 Nigerian startups shut down after raising more than US$100 million in total, with names like Okra (US$16.5 million), 54gene (US$45 million), and Vibra (US$6 million) fading from the ecosystem. Public exits remain rare. African startups recorded just 22 exits in 2024, only a modest uptick from 20 in 2023.
Two years on, the Startup Act has clearly brought structure, visibility, and momentum to Nigeria’s tech space, anchoring it with verifiable figures and new institutional commitments. But the question remains as to whether it has truly shifted the ecosystem from legislation on paper to thriving tech hubs on the ground.
The answer, for now, is mixed.
Policy gains and growing expectations
The Startup Act didn’t emerge from nowhere. It was the result of months of consultation, where ecosystem leaders, regulators, civil society, and government agencies debated line by line before finally producing a draft.
By October 2022, it had become law, harvesting unanimous hope that Nigeria could finally match policy with ambition.
One of the most vocal early voices was Oluwatomi Solanke, CEO of Trove Finance. On the eve of the Act’s passage, he said: “Nigeria has one of the most vibrant tech ecosystems in the world … However, the Nigerian tech ecosystem pales in comparison to other ecosystems in developed markets due to several reasons, one being Government policies …” He went on: “Startup Act will birth many more tech startups in Nigeria.”
Another strong endorsement came from Tunji Andrews, CEO of Awabah, during a webinar on “Nigeria Startup Act and Tech Investment: Exploring Possibilities.” Addressing fears of brain drain, he argued:
“I’m not really against brain drain in the tech ecosystem. If people feel that they need to move on to a different environment to access better whatever it is, all the better.” For him, the bigger issue was ensuring the “conveyor belt of talents … keeps working seamlessly,” and he believed the Act’s support for education and mentorship could help achieve that.
Experts also point to practical wins: fiscal incentives for startups and investors, regulatory support that reduces operational burdens, and the creation of a special startup fund. But many caution that what looks good on paper doesn’t always translate on the ground.
Awareness is low, implementation lags, especially at state levels, and the promised Startup Investment Seed Fund (SISF), designed to support startups and hubs, remains under‑capitalised and under‑deployed.
Tech hubs: From pockets of innovation to ecosystem anchors
These gaps matter because the Act was never meant to exist in isolation. Its real test lies in how it powers the spaces where innovation happens daily – Nigeria’s growing network of tech hubs.
Long before the Startup Act, hubs had been the lifeblood of the ecosystem. In Yaba, often dubbed “Yabacon Valley,” coworking spaces, accelerators, and incubators provided the first real community for founders to meet, prototype ideas, and nurture early‑stage ventures.
What the Startup Act offers is the chance to take those scattered efforts and systematise them – scaling up, linking networks, and making sure hubs can deliver more than just WiFi and desks.
For hub founders, the Act’s promise is twofold: less red tape on permits and registration, and more certainty around funding. One study even highlighted explicit provisions for “technology laboratories, accelerators, incubators and hubs in Nigeria.”
But the reality so far has been uneven. A recent policy review found that while startup registrations surged under the Act, ecosystem resilience and tangible hub growth have lagged. The SISF is not yet fully functional, so many hubs still operate under financial strain, uncertain of the support that was promised.
Still, some bright spots are emerging.
A partnership between the Nigerian Sovereign Investment Authority (NSIA) and the Japan International Cooperation Agency (JICA) has produced a fund for early‑stage startups, a grant to establish a hub in Abuja, and a social impact programme.
These initiatives don’t yet fulfil every promise of the Act, but they show momentum. And across the country, hub managers working to decentralise innovation are beginning to see geography expand: from Lagos to Abuja, and slowly into smaller cities where talent is abundant but often overlooked.
Challenges, contradictions, and what comes next
The road ahead is harder than signing a law. Several core promises of the Startup Act remain works in progress.
Funding shortfalls remain a sore point. The SISF, intended to be a domestic, annual fund of at least ₦10 billion, isn’t fully functional. Capitalisation has been slow, leaving hubs and startups in limbo. In the meantime, foreign‑backed initiatives are filling some of the gaps, but that shifts the nature of what was supposed to be sovereign, state‑driven support.
Beyond money, there is the challenge of awareness. Many startups outside Lagos or Abuja still don’t know what benefits the Act provides. Some haven’t seen or engaged with the implementation agencies at all. Experts argue that until state governments adopt and localise the Act’s framework, its effects will remain concentrated in a few cities.
And even where awareness exists, paper frameworks still collide with real‑world friction. Approvals are slow, regulatory overlaps confuse founders, and enforcement is uneven. Incentives are on the books, but how to access them isn’t always clear.
All this breeds a gap between expectations and reality. The Act raised hopes of a sudden flood of capital and support. Instead, the impact has been uneven: well‑connected startups feel the benefits first, while others wait at the margins.
Despite these frustrations, many in the ecosystem remain cautiously optimistic. They see the Startup Act not as a finished structure, but as a necessary foundation. Its true value lies in legitimacy: giving government agencies something to be held accountable to, and creating pathways so that a hub in Owerri or Bauchi can aspire to the same recognition as one in Lagos or Abuja.
To shift from policy to ecosystem, from Act to thriving hubs, certain non‑negotiables stand out: a functional and transparent Startup Investment Seed Fund; multi‑stakeholder accountability involving states, founders, and hub managers; decentralisation to spread opportunities beyond the big cities; deeper capacity building to match funding with operational know‑how; and visible success stories that show the ecosystem’s value outside the echo chamber.
The Startup Act is Nigeria’s wake‑up call. Policy, when co‑created with the people it affects, can unlock potential. But law is only the beginning. It takes hubs, founders, and communities on the ground to bring it to life.
Nigeria is no longer only dreaming of being Africa’s leading tech ecosystem. The real test is whether its policies and infrastructure can deliver not just promises, but sustainable impact: jobs that endure, startups that outlast hype, and hubs that thrive in both the noise of Lagos and the quiet of Owerri.
Oluwatomi Solanke’s hopeful prediction that “Startup Act will birth many more tech startups in Nigeria” may yet become less aspirational and more descriptive.
For many hub founders, the greatest impact will not be in the halls of government, but in the neighbourhoods where they build, where they mentor, and where they launch ventures that last.