Economy
African Startups Funding Drops 21% to $4.1bn in 2023
By Adedapo Adesanya
The total value of funds secured by African startups dropped 21 per cent to $4.1 billion in 2023 from $5.2 billion in 2022 as a result of a wider global slump in funding, a report by Briter Intelligence showed.
According to the Briter Bridges’ Africa Investment Report 2023: Crisis or Adjustment?, after a decade of slow but steady rise, with $1 billion raised, African ecosystems saw a sudden funding spike after COVID-19 in 2021 and 2022, however, this growth halted in 2023.
Briter Bridges, an intelligence and research firm providing data and insights across emerging markets, said the slump in 2023 was due to a global venture investment downturn that impacted Africa’s access to finance, rising concerns around inflated valuations, business sustainability, and increased due diligence and scrutiny from investors.
“2023 was the first year in over a decade where the amount of investment flowing to Africa’s ventures was visibly lower than in previous years,” Mr Dario Giuliani, the founder of the firm said, adding that the trend alarmed investors and founders as “it came at a time when global venture markets took a hit and thousands of companies were forced to shut down.”
The data showed that the number of deals was 11 per cent higher at 1080 compared to 975 deals executed in 2022 while in terms of representation, there was a 30 per cent increase in funding that went to at least 1 female founder, 23 per cent more than 217 in 2022.
Fintechs continued to lead the sector that got the most funding even as there was a growing sector diversification. While fintechs got 32 per cent of the funding in 2023, others including mobility, jobs, health and biotech, agri and agritech, cleantech, education, e-commerce, and logistics & supply chain also had a piece of the pie.
Cleantech recorded 14 per cent of the fundraises, logistics (8 per cent), e-commerce (8 per cent), and jobs (6 per cent) among others.
Briter Intelligence showed that out of the $4.1 billion raised in 2023, 1 per cent of all funded companies (based on disclosed deals alone) captured 45 per cent of all funding. These include usual suspects that have built a name across the continent’s ecosystems throughout the past decade: MNT-Halan, M-Kopa, SunKing and Zipline. On the other hand. 99%, or 755+ companies captured about $2 billion in disclosed funding and 220+ companies announced their deals but never disclosed the amount.
The data showed that 68 per cent of the funding went to the top four markets led by Kenya with $805 million followed by Egypt with $675 million. Nigeria came next with $575 million while $565 million went to South Africa.
Emerging markets led by Tunisia raised $460 million followed by Rwanda with $350 million, Benin Republic with $125 million, and Senegal with $70 million.
In 2023, while early-stage deals hit new records, deals above $1 million contracted. More than 50 per cent of all disclosed early-stage investments were under $250,000.
Briter Intelligence noted that the investment contraction led to companies shutting down or significantly reducing their growth trajectory and falling back to their core market or product. Among these were Twiga Foods, Copia, Cellulant, Jumia, Wave, Marketforce, and Renmoney.
The report noted that 2023 saw public investors and Development Finance Institutions (DFIs) play a key role in funding growth rounds as most deals above $50 million involved DFIs, state/private banks, corporations, conglomerates, or foundations.
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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