Kyoto – Africa Startup Ecosystem Meetup

Experience the Forefrontof the Startup Ecosystem in Africa
On July 4, we held an expert lecture and a talk session on the latest developments in Africa, mainly Nigeria, thelargest tech hub on the continent, based on the perspectives of the recent macroeconomic, political, and startup
market trends. The event took place at the Kyoto Chiesangyo Sozonomori, Kyoto City.
The event began with an online message delivered from Nigeria by Mr.
Yakubu Musa Yakubu, Head of the Office for Nigerian Digital Innovation(ONDI). “In Nigeria, there are many innovative startups. To facilitate thestartup ecosystem, the Nigerian government is taking a wide variety ofmeasures, while gaining active cooperation from the Japan International
Cooperation Agency (JICA) as a reliable partner.” Thus stating, he shared
the current situation of the development of the startup ecosystem in
Nigeria, and expressed his expectations on further investment from Japan.
In addition, Ms. Aya Tsuboi of Sunda Technology Global delivered areport from Uganda as a startup that had made inroads from Kyoto, Japanto Africa. The company is committed to solving Africa's water problems byLecture

providing an automatic well water charge collection system using mobilemoney. Ms. Tsuboi spoke enthusiastically about the company’s mission ofcontributing to solvingsocial issues in Africa
through business andits outlook for businessexpansion.

Current Situation of the Startup Ecosystem in Africa
Ahmad Bature

The Office for Nigerian Digital Innovation

Africa is currently experiencing remarkable economic growth,
making the continent an attractive, untapped market for Japanesecompanies. The number of startups and the amount of funding thatthey are raising have been growing exponentially in recent years. Of
particular note is the startup ecosystem in Nigeria, whose attractive
features include technological innovation, market potential, laborforce, policies, and infrastructure development. In terms of technicalinnovation, there are more than 3,000 startups, 60% of which havesuccessfully raised funds. The growth of promising venturecompanies is backed by venture capital and angel investors. In
addition, the government is complementing such private investment
by offering funding programs to invigorate the startup environment.
One good example is iHatch, an entrepreneur development program
established by the Office for Nigerian Digital Innovation, a Nigerian
governmental agency, in cooperation with JICA.
Another factor thatmakes Nigeria an attractive
investment destination is
its abundant labor force.
Nigeria has a population ofover 200 million, themajority comprising young
people, and the country’s

mobile economy alone offers employment opportunities forapproximately 1.6 million people. Moreover, labor development isunder way, as indicated by the NITDA* striving to provide a digitaltraining program for 1 million citizens.
Furthermore, the Nigerian government is adopting a wide varietyof policies to spur the development of startups. The National Digital
Economy Policy and Strategy, the National Broadband Plan, and theNigeria Data Protection Regulations are contributing to the productionof many innovative entrepreneurs. In addition, the Nigerian Startup
Act 2, established in October 2022, has been brought into effect,
raising the expectation that the startup ecosystem will be furtherreinforced.
Since its inauguration in May 2023, Nigeria’s new administration
has been introducing new policies one after another, such as theabolition of fuel subsidies and the devaluation of the Nigeriancurrency the naira (through the abolition of the duel exchangesystem), but it is believed that there will be no serious problems in thelong term. The government is also providing investment privileges,
such as tax exemptions, subsidies, and investment promotion
programs. It is expected that foreign investors will contribute greatly
to the growth of the startup ecosystem in Nigeria.
*National Information Technology Development Agency (NITDA)

TalkSession

Africa’s Potential Noted around the World!
Moderator

Mr. Naonobu Fuwa Startup Ecosystem Expert, Japan International Cooperation Agency (JICA)
Panelists

Mr. Riki Yamauchi Riviera Partners, Founder
Mr. Kota Nakano Deputy General Manager, Strategy & Planning Office, Utility Retail Division, Power Solution Group, Mitsubishi Corporation
Ahmad Bature Innovation Ecosystem Engagement Officer, Office for Nigerian Digital Innovation

Mr. Yamauchi Based in Kenya, we offer advice to Japanese companies
and the Japanese government on investment in and expansion intoAfrica. There is growing interest in Africa. This year alone, we havealready arranged more than 100 meetings between Japanese companies
and African prospective partners, and the number of successful cases isincreasing. The risks of investment in Africa includes scarcity of disclosed
information, as 95% of the companies there are not listed on the stock
exchange. All the more for this reason, it is more valuable to join the local
inner circle in Africa than it is anywhere else in the world. It is extremely
important to visit the local community, connect with the key persons ofventure capital and private equity andthose associated with industrial
conglomerates and the government,
and establish relationships of trust withthem. While Africa has great
fundamental growth potential, it faces
the challenge of lacking infrastructureand strategic partners. I feel that thiswill lead to mutually beneficial
relationships being formed between
Africa and Japanese companies.
Mr. Nakano My company is investing in Bboxx, a startup doing business

in Africa. The company installs distributed power sources in
non-electrified areas, and provides with solar panels, batteries and home
appliances, i.e., lights and televisions etc. as packages. This business isdistinguished in that it provides “life with electricity” to many people withthe system whereby customers can pay their power bills on a daily basis
through mobile payment. I believe that this business is not only forbusiness economics on a sustainable basis, but is also worthwhile andsignificant in both social and environmental terms. Meanwhile, I feel that
it is challenging to do business in Africa, mainly because there are manydifferences in the culture and environment from Japan, and there is a lackof proper understanding among
Japanese people about that reality inAfrica. All that said, support from thegovernments around the world isavailable and also welcomed by thegovernment of Japan. It is importantto build trustful relationships withlocal companies and employees, andrealize business expansion. It's hard
work, but I feel worth doing.

Ahmad Since the new administration took
office this May, the country’s startup
policies have changed in rapid succession
especially the Nigerian Startup Act which iscurrently at the implementation stage. Thechanges include the devaluation of thenaira and the solution of the dual exchangesystem, which had long remained
unchallenged in the country. Behind themlies the government’s aim to earn foreign
currency. Another change is the abolition of fuel subsidies. Under the newadministration, a plan to resume the operation of domestic oil refineries
is under way. If this plan is implemented, oil prices are expected to fall.
Although these changes entail difficulties, I believe that they will benefit
Nigeria in the long run. The government is strongly encouraging
collaboration between foreign companies and domestic startups. For
example, an unprecedented business alliance between Mitsubishi
Corporation and a startup in Nigeria has been realized thanks to support
from the Nigerian government and JICA. This is a successful example of
new business creation through cooperation between reliable partners.
Mr. Fuwa It seems that the remarks from the three speakers havepresented us with key phrases for successful inroads into and investmentin the business ecosystem in Africa. First of all, there is an information
gap. “digital divide.” To close it, Japanese companies need to become“strategic partners,” and how to establish“relationships of trust” to become suchpartners will be a challenge to beaddressed by Japanese companies. I feelthat it is important not merely to form
strategic partnerships between companies,
but also to ensure that the formation isfollowed by the establishment ofrelationships of trust between employees.
In Conclusion

The African market will continue to grow significantly. If Japanesecompanies wish to make inroads into this expanding market, they willdefinitely need to have reliable partners familiar with the local areas. Mr.
Yamauchi of Riviera Partners specializes in matchmaking of various
Japanese companies with reliable African companies, raising theexpectation that many more Japanese companies will expand theirpresence in Africa in the future.