The Lagos State Government is preparing to inject over $20 million into innovation, startups, and research, according to its draft Lagos Innovation Bill. The allocation represents 1.5% of the state’s $1.35 billion capital expenditure in the 2025 budget. If enacted, the bill could reshape funding for over 600 startups, researchers, and innovation hubs in Nigeria’s commercial capital.
Establishing the RD&I Fund
At the heart of the proposal is a Research, Development, and Innovation (RD&I) Fund. This fund would support scientific research, finance innovation hubs and technology parks, and provide risk capital for businesses developing innovative products. The bill outlines multiple funding sources, including donations, grants, royalties, innovation bonds, and private contributions, with allocations set to increase to 2% of capital spending within a decade.
Moving Beyond Fragmented Funding
Lagos has previously supported innovation through smaller schemes like the ₦1 billion Lagos State Science Research and Innovation Council (LASRIC) fund. However, the new bill signals a shift toward a larger, pooled investment vehicle capable of sustaining wider innovation activities. This approach aims to provide a lifeline to local startups at a time when foreign venture investment into Nigeria’s tech ecosystem is in decline.
Safeguards Against Mismanagement
The draft bill introduces strict accountability measures to ensure proper use of funds. Misappropriation could attract fines up to three times the amount received, imprisonment of no less than three years, or both. In addition, falsification of research or misuse of grants may lead to blacklisting, disqualification, and full refunds.
Broader Innovation Agenda
The bill is designed to extend support well beyond startups to include research institutions, higher education, technology parks, and businesses developing frontier technologies. It emphasizes Lagos’ ambition to position itself as a hub for scalable scientific innovation. Tax incentives, doctoral and post-doctoral sponsorships, procurement preferences for local innovators, and commercialization programmes form part of the package.
Inclusivity and Talent Retention
Around 20% of the innovation grants are earmarked for women and youth-led initiatives. The bill also provides support for returning founders and researchers from abroad, seeking to reverse the brain drain that has affected Nigeria’s tech ecosystem. Beneficiaries will be required to register on the Lagos Science Research and Innovation Portal to access grants, waivers, low-interest financing, and reimbursement of up to 70% of research costs.
Governance and Oversight
A new Commission, led by a governing board with private-sector or technology expertise of at least 20 years, will oversee the fund. The board will be responsible for Lagos’ five-year research and development plan, ensuring the city-state builds capacity in areas such as advanced science and emerging technologies. Although independent, the Commission will collaborate closely with the Ministry of Science, Innovation, and Technology to align strategy and policy.
Fund Management and Private Sector Role
The RD&I Fund will be managed by a licensed fund manager with at least 20 years of experience, under the supervision of the Commission’s board. In addition to grants and risk capital, part of the fund will be channelled into private equity and venture capital firms that commit at least 30% of their funds to Lagos-based startups. The bill also encourages private-sector participation to expand the fund’s reach and impact.
Policy Alignment with the Startup Act
In 2024, Lagos announced plans to domesticate the Nigeria Startup Act, adapting it to its unique ecosystem. Commissioner for Science, Innovation, and Technology Tubosun Alake emphasized that the new bill is not only about supporting startups but also encouraging large companies to drive innovation. With Lagos startups attracting more than $252 million in 2024, the proposed bill aims to ensure sustainable growth and stronger government involvement in the tech ecosystem.
Currently under public review, the Lagos Innovation Bill is expected to be considered by the state’s executive council, the House of Assembly, and the governor for approval. If passed, it will mark one of the most ambitious government-led innovation funding initiatives in Nigeria. By consolidating resources and enforcing accountability, Lagos aims to build a resilient and inclusive innovation economy capable of competing on a global stage.
Source: Techcabal