Former President, Institute of Software Practitioners of Nigeria (ISPON) and Chief Executive Officer of Mobile Software Solutions, Chris Uwaje, has re-echoed the need for the establishment of a National Tech-Innovation Startup Investment Fund as a strategic imperative and panacea for accelerated and sustainable tech-innovation model for Nigeria and Africa.
According to Uwaje, the zeal to establish such tech fund in Nigeria, should not be misconstrued, following the recent collapse of the 35 years old Silicon Valley Bank (SVB) in the United States, that served the same purpose of funding startups and tech development across the globe.
Speaking with THISDAY about the March 10, 2023 collapse of the 35 years old Silicon Valley Bank, he said the SVB was set up as a bank to assist founders in the technology innovation space.
He however said the collapse of SVB would not change his earlier advocacy for a special purpose funding vehicle for tech development in Nigeria that is similar to that of Industrial Development Fund of Nigeria.
Uwaje explained that there were many factors responsible for the collapse of SVB, which he listed to include: Excessive demand for technology solutions and services triggered by the global Covid-19 pandemic that spontaneously changed the service model offering and demand for technology innovation solutions and services, a trend that was particularly noticeable in the USA economy; Emergence of new form of work model (remote working model from home) requiring new infrastructural investment to companies such as Zoom and other remote communications platforms; and Survival of the fittest syndrome of intensive competition in the technology ecosystem.
“Accelerated speed for excessive profits on financial returns on investment coupled with oversized salary increase for top high-tech-skills, contributed to the above speed-based short-term tech- activities that were sponsored with long-term investment loan instruments, which were predicated on the assumption that the economic contractions of the unpredictable Covid-19 pandemic will last longer, ”Uwaje said.
According to him, “It must be recognised that Nigeria is still a tech-millipede when compared to the United States tech-ecosystem. For this simple reason, the Nigerian situation is different. Nigeria is an emerging tech- innovation service economy with massive creative pool of tech startup talents whose Intellectual Property (IP) is low cost and available to harvest by foreign investors, without restrictions. Experience from international founders who have invested in the Nigerian digital innovation space and has produced many unicorns, benefitted immensely to the detriment of Nigeria. Indeed, most of those companies are not owned by Nigerians, as they do not control the majority shares.”
Giving insight on what should have been done to prevent the collapse of SVB, Uwaje said SVB would have created multiple safeguards to mitigate the impact of organising, disbursing and managing short-term loan investment and long-term funding instruments of financial returns.
He said some lessons could be learnt by the Nigerian startup community and the Nigerian government from the collapse of SVB, even though there is no specialised Tech-Innovation Bank in Nigeria. He therefore advised government to conduct a national baseline study and align national innovation funding model to the outcome of the study, with a predominant mission to first of all, target the African technology development market landscape.
“Nigeria should among other things, establish the Office of the Information Technology General of the Federation (OITGF) with the responsibility to reengineer empower and monitor the development and maturity of digital innovation and performance security, similar to the Office of the Accountant General of the Federation. Nigeria should also review and re-engineer the defunct Nigeria Technical Aids Corps programme and rebrand it as Nigeria Technology Innovation Corps for Africa (NTICA),” Uwaje advised. Addressing the way forward for Nigeria tech ecosystem, Uwaje said with the mastery of software innovation, “Nigeria is peeping at the threshold of extraordinary self-discovery of her true human potential, adding that there is something beyond imagination in the accumulated creativity and moon-shot expectations of Nigerians with respect to tech-innovation at the speed of thought. Within this 21st Century, a Nigerian IT-Mind will break a world digital innovation record.”