Impact of US Policies and USAID Suspension on Africa’s Startup Ecosystem – Tech In Africa

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by Grace Ashiru April 30, 2025, 3:27 pm 13 Views
 
Kola Aina, founding partner of Venture Platform, states that the suspension of United States Agency for International Development (USAID) programs and US trade policies have contributed to a slowdown in Africa’s startup ecosystem.
 
Aina made the statement on Monday during the African Private Capital Association (AVCA) press conference in Lagos.
 
On February 2, US President Donald Trump signed economic orders that imposed substantial new tariffs on Canada, Mexico, and China.
 
The Trump administration stated that the tariffs were designed to reduce the inflow of drugs and undocumented immigrants.
 
Aina mentioned that the uncertainty regarding the US government’s policies has dissuaded some investors, which has slowed the momentum that previously boosted startup valuations across Africa.
 
He added, “The uncertainty certainly doesn’t help.”
 
Aina explained, “The startup ecosystem benefited from the participation of US investors, which helped drive valuations, or in some cases, over-evaluations, here in Africa. So, we’ve definitely seen a slowdown as people try to figure out the government’s direction.”
 
Aina stated, “In terms of USAID, I believe a significant portion of the earlier-stage incubation and acceleration activities was partly supported by USAID funding.”
 
Aina added, “Unfortunately, I can point to a few programs that had to cease operations effectively as a result of that.”
 
The founder emphasized that this development highlights the necessity for Africa to focus more on intra-continental trade and investment, rather than relying on external support.
 
Aina added, “We can’t perpetually rely on the benevolence of the US or its partners. The conversation has to shift to trade and investment.”
 
He noted that Nigeria’s government, particularly the Ministry of Trade and Investment, has been placing greater emphasis on this shift, especially within the context of the African Continental Free Trade Area  (AfCFTA).
 
Aina emphasized that much more could be achieved through increased collaboration among African nations.
 
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