Nigeria and Japan Launch Groundbreaking Naira-Denominated VC Fund for High-Growth Startups

In a landmark move to stimulate innovation and reduce foreign exchange vulnerability in Nigeria’s startup ecosystem, the Nigerian and Japanese governments have jointly launched a strategic venture capital initiative offering Naira-denominated financing to high-growth firms.

This bold strategy was cemented during a high-level meeting in Abuja, where Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, engaged with representatives from the Japan International Cooperation Agency (JICA) and the Nigeria Sovereign Investment Authority (NSIA) to finalize the framework for the fund. With the Japanese government now fully endorsing the initiative, the program is set for launch in the coming weeks.

According to Mr. Edun, the fund aligns perfectly with the economic objectives of the Tinubu administration’s Renewed Hope Agenda, which prioritizes inclusive growth, local industry development, and macroeconomic resilience. He emphasized the importance of the fund in delivering flexible, long-term concessional finance—support that is both adaptive and protective in the face of Nigeria’s ongoing currency volatility.

Aminu Umar-Sadiq, CEO of NSIA, highlighted two core features of the initiative. First, the fund includes first-loss or grant capital, which helps de-risk investments and attract private capital. Second, it addresses exchange rate instability by offering financing in Naira, shielding entrepreneurs from the volatility of foreign currency liabilities. With JICA’s cooperation, the fund is now fully structured and ready for implementation.

Takao Shimokawa, JICA’s Director General, noted that diplomatic agreements are expected to be finalized within weeks, paving the way for full-scale rollout. The fund is being hailed as a pioneering model for venture capital in Africa, blending international concessional funds with local currency stability—a structure designed to empower Nigerian startups and fuel innovation in sectors critical to economic transformation.

While this collaboration points to brighter prospects for Nigeria’s entrepreneurial scene, broader signals of recovery are also emerging in the financial market.

In a recent investor note dated April 2, 2025, JP Morgan—a leading global investment bank—maintained a positive outlook on Nigeria’s economy. The firm cited two key developments as catalysts: the release of Nigeria’s net foreign exchange reserves (NFER) and the reshuffling of leadership at the Nigerian National Petroleum Company (NNPC) by President Tinubu.

JP Morgan regards these moves as confidence boosters, especially amid global economic uncertainty. The bank highlighted the resilience of Nigeria’s market, emphasizing that it remains largely insulated from slowdowns in the U.S. economy. They anticipate continued strong performance from Nigerian T-Bills, attributing this to improved investor confidence and enhanced transparency by the Central Bank of Nigeria (CBN).

Despite these positive indicators, the naira continues to face pressure. On March 25, 2025, the Nigerian Autonomous Foreign Exchange Market (NAFEM) recorded a slight depreciation, with the naira closing at ₦1,533.66 per US dollar, down ₦1.37 from the previous day’s rate.

Nevertheless, analysts suggest that the new venture capital structure, coupled with strong fiscal and monetary signals, may offer a stabilizing influence over time. With improved transparency, strategic partnerships, and currency-conscious investments, Nigeria appears to be crafting a more resilient and innovation-driven future.