Itana and AFC look to create Africa’s Silicon Valley with Nigeria’s first digital economic zone. This partnership was announced yesterday at the Global Africa Business Initiative (GABI), held on the sidelines of the United Nations General Assembly.
The AFC will lead the financing of the first phase of the Itana project valued at $100 million and already works with Itana, Future Africa, PwC Nigeria, and Charter Cities Institute as technical advisers to the Initiative for the Promotion of Digital Economic Zones in Nigeria (DiFZIN).
In August 2024, the Nigerian government inaugurated a steering committee for the establishment of digital economic zones.
Chaired by President Bola Ahmed Tinubu, the committee also has the ministers of finance and justice as members. Others include the ministers for industry, trade, and investment and communications, innovation, and digital economy.
Africa’s digital economy has been growing at an astronomical rate over the last decade. The number of Internet users has grown three times from 216 million in 2015 to 728 million in 2024.
Meanwhile, funding for African startups has also grown tremendously. Startups on the continent have gone from raising less than $200 million in 2015 to $4 billion in 2023, signifying an uptick in investor interest.
Despite these growth stories, African startups have largely grown in spite of government regulations and not because of them. An uncertain regulatory environment in startup hubs such as Nigeria has caused investors and entrepreneurs to reassess their plans, but Itana hopes to spur more developments in the digital economy.
People behind Itana
Cofounded by Luqman Edu (CEO), Coco Liu (COO), and Iyinoluwa Aboyeji, co-founder of Future Africa, Itana is building a digital economic zone located in Lagos, Nigeria, and targeting tech, finance, and service-based businesses seeking to operate across Africa.
Free zones are not novel, with some of the earliest free zones starting around the turn of the 20th century. These economic areas provide regulatory incentives to businesses, such as lower or absent taxes, full foreign ownership, flexible labour laws, and simplified business registration.
Businesses that register as a free zone enterprise with Itana will be exempted from Nigerian tax requirements such as the corporate income tax and value-added tax. They would also be exempt from paying import duties for physical products and be free to receive payments in any currency of their choice.
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“Itana intends to be to Nigeria and Africa what Delaware & Silicon Valley is to the U.S., the DIFC is to Dubai, and e-Estonia is to the European Union. Itana is poised as the gateway to doing business in Africa. Local and international businesses looking to expand their operations across Africa will naturally look to Itana as their point of entry,” Edu said in a statement.
Money raised since inception
Since inception, Itana has raised $2 million from investors including Aboyeji’s Future Africa, Promonos Capital, and LocalGlobe. Phase 1 of the Itana project will include the building of a tech campus in Nigeria that should house close to 5,000 people.
It already has over 2,000 digital members, while a few businesses have received licences to operate in the region, with more at different stages of the application process.
It has also launched the Itana app, a one-stop shop for company registration and business banking. In the future, it plans to enable visa processing and tax filing capabilities. For less than $2,000, companies can register as a free zone enterprise on the Itana app.
“AFC is proud to be a pioneer alongside Itana in building Africa’s first digital economic zone. This unprecedented initiative marks a pivotal step towards creating a thriving hub for the African digital economy, cementing the Corporation’s commitment to driving innovation, job creation, and sustainable economic development across the continent,” Samaila Zubairu, President & CEO, Africa Finance Corporation, said.
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