A new trade agreement between the United States and Nigeria could serve as a catalyst for growth within Nigeria’s vibrant startup ecosystem, especially amid a global capital funding slowdown. Signed in July 2024, the U.S.-Nigeria Commercial and Investment Partnership (CIP) aims to eliminate barriers, foster private investment, and enhance access to American venture capital; an essential boost for Nigeria’s burgeoning tech sector.
An Opportunity for Growth and Collaboration
“The CIP process brings government and business stakeholders together to identify and remove obstacles to trade,” said U.S. Ambassador to Nigeria Richard M. Mills during a fireside chat at Lagos Business School. “Collaborating to promote our shared economic interests will create jobs, stimulate innovation, and unlock new opportunities on both sides of the Atlantic.”
Central to this five-year partnership is a renewed commitment to deepen access to U.S. capital markets, which are valued at over $120 trillion. It also aims to expand the flow of venture funding to Nigerian startups, which has already shown positive momentum. In 2024, Nigerian startups raised approximately $410 million, marking a 17% increase from $398.2 million in 2023, according to Africa: The Big Deal.
Addressing Challenges and Unlocking Opportunities
The slowdown in investment reflects global uncertainties alongside local challenges such as regulatory instability, currency volatility, and high operational costs. The CIP, formalized by Nigeria’s Minister of Industry, Trade, and Investment Doris Uzoka-Anite and U.S. Secretary of Commerce Gina Raimondo at the 2024 AGOA Forum in Washington, D.C., is designed to reverse these trends. It positions Nigeria as a key hub for digital innovation and investment.
Discussions to activate the partnership will commence in Abuja this July, involving sector-specific working groups focused on technology, agriculture, and infrastructure. These groups, composed of U.S. and Nigerian stakeholders, will identify non-tariff barriers, regulatory friction points, and opportunities to streamline investment processes.
“This collaborative approach will involve a thorough review of each sector’s regulatory landscape,” Mills explained. “Both governments will listen to private sector feedback to determine practical steps forward.”
Building Bridges Through Programs and Diaspora Ties
Programs such as SelectUSA and Networking with the USA will provide Nigerian startups with vital access to U.S. accelerators, enterprise partners, and funding networks—facilitating product scaling, market expansion, and knowledge transfer.
These efforts are exemplified by Nigerian-founded startups like Flutterwave, Andela, and Esusu—many of whom are educated or operate across the U.S. and Nigeria. Mills highlighted these companies as shining examples of the deep personal and professional ties that underpin U.S.-Nigeria relations.
Beyond the business ecosystem, Nigeria’s diasporic community—comprising over 750,000 Americans and the largest African student population in the U.S.—serves as a vital bridge for mentorship, cross-border talent exchange, and soft infrastructure development.
Navigating Complexities and Shaping Nigeria’s Future
While the U.S.-Nigeria trade relationship offers promising opportunities, it is not without complexities. Recently, a 14% tariff on Nigerian non-oil exports has raised concerns about potential impacts on the sector. Reductions in foreign exchange earnings could weaken the naira, increasing the cost of imported hardware, cloud services, and other essential inputs.
Ambassador Mills acknowledged this challenge: “There is still a perception among U.S. investors that Nigeria is a risky environment,” he said. “It is important for Nigeria’s successful diaspora and business leaders to tell a compelling story and dispel those misconceptions.”
He also emphasized that tariffs are intended to promote reciprocity rather than punitive measures. “The goal is to achieve balanced trade relations,” Mills explained.
A Long-Term Vision for Nigeria’s Tech Ecosystem
The CIP’s true strength lies in its structural focus—reducing bureaucratic red tape, encouraging infrastructure investment, and fostering private-sector innovation. Nigeria remains one of only five African nations with such an agreement, underlining Washington’s recognition of Nigeria as a long-term partner in digital transformation.
If implemented strategically, this partnership has the potential to leverage Nigeria’s youthful population, vibrant diaspora, and entrepreneurial spirit. With momentum building, Nigeria’s future as a global leader in innovation could become a reality sooner than anticipated.
“Nigeria is the present and the future,” Mills concluded. And with the U.S.-Nigeria CIP in motion, that future is indeed within reach.
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