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Why don't more Nigerian billionaires invest in tech startups?

Utụtụ ọma, That’s “good morning” in IgboJim Ovia’s book “Africa Rise and Shine” details how the Niger
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Why don't more Nigerian billionaires invest in tech startups?
By get.Africa Weekly • Issue #30 • View online
Utụtụ ọma,
That’s “good morning” in Igbo
Jim Ovia’s book “Africa Rise and Shine” details how the Nigerian tycoon built a $16billion business mostly in finance, but it was his investments in technology companies that stood out for me.
Ovia founded Cyberspace, an ISP, in 1995, and Visafone, a telecommunications company, in 2007. Then last year, he invested $5.5m in Series A funding in TeamApt, a fintech startup.
This level of investment in technology companies is uncommon among Nigeria’s billionaire class.
Government support
Most Nigerian billionaires made their fortune in either of two ways: The first is inextricably linked to the government, via contracts, holding political office or by taking advantage of lucrative sectors of the economy being privatized.
Ovia, for one, benefited from the deregulation of the banking sector in the late 1980s.
When the Nigerian government undertook a similar exercise in the telecom sector in 2001, it presented a safe enough entry point for would-be investors.
In contrast, most tech companies, especially startups, thrive despite government policies, not because of them, a level of risk that might be unacceptable.
Knowledge gap
The other way that Nigeria’s HNIs made their billions is in commodities, where the priority is usually to build family dynasties around businesses that they know like the back of their hand.
Nothing typifies the general outlook of this type of business person than Aliko Dangote’s number 1 rule for investment:
“You must understand the business from A to Z”.
But almost contrary to his own philosophy, Africa’s commodities king currently sits on the board of Endeavor Nigeria, a fund for high-impact tech startups.
The truth is that you don’t need to know all of the alphabets before investing in technology companies.
The Ovia approach was to found companies, but there are other avenues for HNIs to add value to the ecosystem, meet its players halfway and potentially make new billions.

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