The impact of recent US policies on Africa’s startup ecosystem was highlighted by Kola Aina, founding partner of Venture Platform, during the African Private Capital Association (AVCA) press conference in Lagos. Aina pointed out that the suspension of United States Agency for International Development (USAID) programs and trade policies have contributed to a slowdown in the growth of startups across the continent.
The economic orders signed by US President Donald Trump on February 2, imposing new tariffs on Canada, Mexico, and China, have created uncertainty in the global market. The Trump administration cited reasons such as reducing the inflow of drugs and undocumented immigrants for these tariffs.
Aina expressed concern over the impact of these policies on investor confidence, leading to a slowdown in startup valuations in Africa. He emphasized that the participation of US investors had played a significant role in driving valuations, which are now experiencing a deceleration as investors navigate the uncertainty surrounding US government policies.
Furthermore, Aina mentioned the role of USAID in supporting early-stage incubation and acceleration activities in the startup ecosystem. The suspension of USAID programs has forced some initiatives to cease operations, underscoring the importance of Africa focusing on intra-continental trade and investment rather than relying on external support.
Aina stressed the need for African nations to collaborate more closely to drive economic growth and innovation. He commended Nigeria’s Ministry of Trade and Investment for prioritizing trade and investment, particularly within the framework of the African Continental Free Trade Area (AfCFTA).
In conclusion, Aina emphasized the shift towards self-reliance and regional cooperation as crucial for Africa’s sustainable development. The current challenges posed by US policies serve as a reminder of the importance of building a resilient and interconnected startup ecosystem within the continent.
