iDICE: Nigeria’s $600M Bet on Innovation and the Youth Economy

Youth unemployment is at record lows in Nigeria. According to the World Bank, the rate of youth unemployment in Nigeria more than halved — from 10.9% to 5.1% — between 2020 and 2025. Nigeria's youth unemployment rate sits below the USA and 500 basis points below Africa's as a whole. However, these surface level statistics are not encapsulating of a darker reality. The truth is that 92% of Nigerian workers are under informal, unsustainable employment. This harsh fact is part of the reason that the Nigerian federal government announced the iDICE initiative in February 2023.

What is iDICE?

iDICE (Investment in Digital and Creative Enterprise Program); funded by the Nigerian federal government, the African development bank, the Islamic Development Bank and the French development agency; aims to promote investment in digital and creative industries. The initiative has an estimated cost of over $600M and is aimed towards the youth in a bid to create sustainable employment opportunities and increase start-up funding.

The project has three main components: Skills and Enterprise Development, Access to Appropriate Financing for tech and creative start-ups, and 'Enabling Environment and Institutional support'. Let's unpack what each of these actually mean.

Skills and Enterprise Development: This program pledges to provide 175,000 youths across the 36 states in Nigeria with a variety of digital skills training programs across Artificial Intelligence, Gaming, Animation, and Robotics. The training will be offered through various tertiary educational institutions. Currently the University of Lagos, Covenant University, and Taraba State University are part of the list of schools under evaluation for readiness to deliver the iDICE program.

Access to Appropriate Financing for tech and creative start-ups: The program also outlines the establishment of the DICE fund. This will be a venture capitalist style investment arm owned by the federal government. These funds will support creative and digital enterprises through equity and quasi equity capital, loans, training, support grants, and capacity building. According to the African Development Bank, fund managers will be chosen through a competitive process. In addition, private investors are welcome to invest in the DICE Funds as equal limited partners alongside the government. Private investors must fill out the form on the iDICE website.

Environment and Institutional support: The wider objective of iDICE is to cultivate an environment of innovation and creativity. iDICE seeks to achieve this by working with various government bodies to pass legislation which protects creative and tech startups. An example of this in action already is the Request for Expression of interest, submitted by iDICE, aiming to educate government regulators on Ai, tech, and the fourth Industrial Revolution.

Opportunities for Nigeria

If iDICE is a success, the program could give rise to more similar initiatives in Nigeria and Africa as a whole. A fulfilment of the promises made in the plan would tackle many choke points in the current landscape of the Nigerian economy:

Firstly, it would address issues of capital access for SME's in the country. In a 2024 report, 52% of Nigerian SME respondents identified access to affordable finance as their primary barrier to growth. While banks usually require businesses to provide collateral for loans, many tech companies posses mostly intangible assets. By financing start-ups through grants and equity capital, the iDICE program may catalyse major growth of SME's which could then allow them to scale up and provide more reliable jobs for Nigerians and specifically the youth.

Secondly, it reduces occupational immobility within the country by training key skills and making Nigeria's workforce more competitive. A more competitive labour market could attract long term macro-economic capital flows in the form of Foreign Direct Investment. Foreign Direct Investment in the tech space in Nigeria doesn't just mean jobs and capital, it means global expertise, modern technology, and market access; signalling a complete re-landscaping of global innovation.

Lastly, the programs' pledge to work with government bodies in passing innovation friendly legislation helps diversify the nations focus away from oil and towards the future. Educating lawmakers on the potential of AI encourages them to act now rather than later when it's too late. This proactive approach to policy may ensure that Nigeria does not miss out on the spoils of yet another industrial revolution.

Possible risks

In a country with the corruption record of Nigeria, every new initiative comes with the possible risk of mismanagement and siphoned funds. Both the governments of President Goodluck Jonathan and Muhammadu Buhari launched similar initiatives (YouWiN and YouWiNConnect). Critics say that both of these programs failed to achieve the desired effect. In theory, just like iDICE, YouWin was a genius initiative, and the project had a net positive effect on the Nigerian economy. However, the masterplan also saw irregularities at the operational level which hindered it from reaching the potential originally envisioned. Young entrepreneurs were promised grants which they never received despite being named as beneficiaries: The Auditor-General later flagged serious discrepancies, stating that many funds were diverted to ghost companies. This project was relaunched by the Buhari administration as YouWin!Connect, however, similar oddities arose. In 2017 the Auditor-General confirmed that billions of Naira worth of payments had been sent to unverified or ineligible companies. Additionally, a House of Representatives investigation revealed that a number of grants had been given based on nepotism rather than merit. While these cases are concerning, it must be noted that the iDICE proposal is structured in a way that suggest it may not have the same fate its predecessors. For example, this program is backed by both international bodies and private investors, which suggests that the distribution of funds is likely to be under grater scrutiny from many different parties.

A Similar Initiative

If iDICE is to be successful it should look to align itself with the 'Start-up Chile' program launched in 2010. This was a government incentive which gave talented — foreign and native — founders seed funding between $4ok-100k. 15 years later the scheme has repaid itself tenfold, with 2000+ startups accelerated, $2B+ raised in outside funding for programme alumnus, and thousands of jobs created for Chileans. Start-up Chile didn't work because of luck or one-off grants it worked because of transparent processes, strong international branding, lifecycle funding, and autonomy from direct political capture.

Final Word

Ultimately, if iDICE can show the signs of transparency and reliability it could prove as a solid venture for private investors and a catalyst for change in the nature of Nigerian youth employment. If iDICE begins to follow in the footsteps of it's predecessors it will go down as nothing more than another well-funded but wasted opportunity, remembered for promises instead of impact.