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BD Insider 239: Kenya allocates $125.3 million for ICT annual budget

In this letter, we explore; Kenya allocates $125.3 million for ICT annual budget, Lagos state govt injects ₦1 billion for startup funding & innovation research, Safaricom Ethiopia initiates a $1.5 billion investment.

In this letter, we explore:

Kenya allocates $125.3 million for ICT annual budget
Lagos state govt injects ₦1 billion for startup funding & innovation research
Safaricom Ethiopia initiates a $1.5 billion investment.

We also curated updates on startup funding in Africa, other noteworthy information, and several opportunities.

The big three!

Kenya Allocates $125.3 Million to Boost ICT Sector in FY 2024/25 Budget

Photo Credit: TechTrendsKE

The Kenyan government has allocated Ksh. 16.3 billion (approximately $125.3 million) to support various information and communication technology (ICT) initiatives for the 2024/2025 financial year.

What it Means: The funds have been allocated to several government projects under the ICT Ministry. These include Ksh. 1.1 billion ($8.5 million) for government-shared services, Ksh. 704 million ($5.4 million) for the digital superhighway initiative, and Ksh. 2.3 billion ($1.7 million) for constructing the Kenya Advanced Institute of Science and Technology at Konza Technopolis.

The allocation also includes Ksh. 5 billion ($38.6 million) for the Hustler Fund, a government digital lending initiative designed to improve access to responsible finance for micro, small, and medium-sized enterprises (MSMEs) and individuals.

The government emphasises that investments in the ICT sector will create job opportunities for the youth.

Context: The budgetary allocations align with the Kenyan government's "Bottom-Up Economic Transformation Agenda," which prioritises digital solutions and youth empowerment to drive inclusive economic growth. The 2024/25 ICT budget allocation of Ksh. 16.3 billion represents a slight increase compared to the Ksh. 15.1 billion allocated in FY 2023/24.

Zoom In: Despite the renewed funding, the Hustler Fund faces challenges with loan defaults. This year's allocation is half last year's (Ksh. 10 billion). Konza Technopolis City is expected to benefit significantly, with allocations of Ksh. 1.5 billion for Phase I of horizontal infrastructure and Ksh. 5.2 billion for the development of a data centre and smart city facilities. The budget also prioritises the maintenance and rehabilitation of the Last Mile County Connectivity Network, with an allocation of Ksh. 2.8 billion.

Lagos state govt injects ₦1 billion for startup funding and innovation research

Lagos state government has approved the allocation of ₦1 billion ($680,000) to provide seed funding for startups, research on innovation and STEM programmes for school children.

Context: The ₦1 billion fund will be administered by a newly formed 13-member LASRIC council which includes Sulaimon Abubakar, CEO of Sterling Bank, Peter Bamkole Chief Operating Officer at Pan Atlantic University, Folashade Ogunsola Vice Chancellor, University of Lagos among others. The ₦1 billion in funding marks an astronomical increase in allocation to the initiative based on previous precedents, the initiative kicked off with a ₦170 million allocation in 2019, which was increased in 2022 to ₦340 million.

Why it matters: This investment in innovation is a strategic move to diversify the economy, solve local problems, and position Lagos as a leader in Africa's technological revolution. The small investment will shore up investment in the startup space, which has slowed down in recent times due to factors such as inflation and rising interest rates.

Zoom out: LASRIC takes after similar initiatives by other African governments such as the Rwanda Innovation Fund (2009) and Senegal Teranga Startup Initiative (2018), which seek to support its promising young entrepreneurs and early-stage ventures, which struggle to receive funding.

Dig Deeper: Read this article to learn more about this initiative and how beneficiaries will be selected.

Safaricom Ethiopia embarks on major network expansion with locally made towers

Safaricom Ethiopia, a leading telecommunications operator, has initiated a significant $1.5 billion investment to bolster its network infrastructure. This ambitious project hinges on acquiring and deploying 5,000 new telecommunication towers across Ethiopia over the next three years.

Why it Matters: The expansion aims to significantly improve Ethiopia's mobile network coverage and capacity. This will provide Ethiopians with stronger and more reliable connections, fostering better communication and facilitating access to information and services.

A key aspect of this project is the partnership with Woda plc, a pioneering Ethiopian company that manufactures network towers. This collaboration supports Safaricom Ethiopia's expansion plans with cost-effective solutions contributes to the growth of the domestic telecommunications industry and promotes job creation within Ethiopia.

Context: Ethiopia boasts a rapidly growing internet user base, with nearly 25 million users as of January 1, 2024. This surge in demand for mobile connectivity highlights the need for significant network upgrades to ensure quality service and cater to the population's evolving needs.

Safaricom Ethiopia currently operates around 2,800 towers. While this is a significant number, this investment reflects the company's commitment to addressing the growing demand for reliable mobile services across the nation.

💰 State of Funding in Africa

Here’s a roundup of African startups that secured funding last week:

Egyptian pharmaceutical distribution startup i’SUPPLY has raised a pre-Series A funding round. The undisclosed funding round saw participation from several prominent investment funds, including Disruptech Ventures, OneStop Capital, Axian Investment CVC and Egypt Ventures, among others.
Cairo-based startup Sahl has raised US$6 million in Series A and seed funding. The funding round was led by Ayady for Investment and Development, with participation from existing investors Egypt Pay, Delta Electronic Systems, and E-Finance.
Egypt-based podcast production company Potcast Productions has secured an undisclosed pre-seed funding round from Innovative Media Productions (IMP).

📚 Noteworthy

Here are other important stories in the media:

Apple overtakes Microsoft as the world’s most valuable company at $3.29 trillion valuation: Apple became the world’s most valuable company as its market valuation hits $3.29 trillion.
“We think the worst should be behind us,” says MultiChoice CEO on its $217 million loss in Nigeria: MultiChoice is facing stiff economic drawbacks in Nigeria, with a reduction in consumer spending.
Meta trims Lagos office space after layoffs: Meta is trimming its office space in Lagos following workforce reductions.
Bank of Ghana partners with Singaporean monetary authority in testing the use of digital currency for cross-border trade: The Bank of Ghana and the Monetary Authority of Singapore recently completed their first Proof-of-Concept for the project Digital Economy Semi-fungible Token (DESFT).
Sierra Leone takes hundredth spot on Starlink's global radar: Elon Musk’s satellite internet service, Starlink, has gone live in Sierra Leone.