Addis Ababa Close to Joining Billion-Dollar Timbuktu Startup Initiative

Addis Ababa is inching closer to becoming the ninth hub of UNDP’s Timbuktu Initiative, a pan-African program with a one-billion-dollar innovation fund to empower startups.

Announced by Ahunna Eziakonwa, Assistant Secretary-General and Director of UNDP’s Regional Bureau for Africa, at a discussion held at the Startup Ethiopia Event, the inclusion is based on meeting some requirements from UNDP.

The discussion explored what Timbuktu could mean for Ethiopia’s startup ecosystem, as well as what Ethiopia can offer to Timbuktu.

Continuous support for the growth trajectory and scaling of startups, access to larger specialized markets, absorption of local talent, and outsourcing talent beyond Ethiopia, along with de-risking early-stage capital and access to a broader investor pool, were among the points raised as benefits of joining the initiative during the discussion.

The Timbuktu Initiative, launched in January 2024, is an ambitious plan to mobilize and invest one billion dollars to nurture entrepreneurial ventures across Africa.

The Initiative represents a new model of development. It convenes key stakeholders to tackle multiple challenges simultaneously, from startup-friendly legislation and “world-class” development programs to mitigating investment risks. Initiatives like UniPods—University Innovation Pods—established across Africa are central to this approach.

According to the initial plan, Timbuktu operates in eight key African cities: Lagos, Cairo, Kigali, Nairobi, Cape Town, Casablanca, Dakar, and Accra, Ghana. Each privately managed hub focuses on a specific industry, such as Healthtech, Fintech, or Tourismtech.

However, the latest announcement suggests Addis Ababa could join the initiative.

“We believe that Ethiopia is really close to becoming the Ninth country of the Timbuktu initiative,” said the Secretary-General.

According to Brook Taye, Director General of the Ethiopian Capital Market Authority, being part of this huge continental initiative allows Ethiopia to learn and grow its capital. And as the seat of the AU; having Timbuktu in Addis Ababa is an indicator that this is an African initiative. 

According to highlights from the discussion, UNDP requires some preliminary actions or reforms from the government.

Their requirements include the availing of a historic building in city center proximity spanning 3,000 sqm and 3–5-million-dollar funding facilitated through a state financial institution. Additionally, they seek tax incentives such as a 5-year corporate tax exemption for startups and corporate tax exemption for Node and Fund(s).

Immigration-related needs encompass Startup Visas, renewable for 12 months, for startup founders, and Expat Labor Work Permits for non-founder staff.

Duty exemptions are also requested for equipment, applicable to both startups and the Hub. Regulatory requirements entail the implementation of a Startup Act and startup-friendly legislation, the establishment of a dedicated startup focal agency, and the provision of a regulatory sandbox lasting 3 years for startups to operate within.

Earlier this month, at the same Startup Ethiopia event, the Ethiopian government announced a comprehensive set of nine policy changes designed to bolster the nation’s startup ecosystem. These reforms address longstanding challenges faced by Ethiopian innovators, from basic office requirements to foreign exchange access.

The Timbuktu approach utilizes a “blended capital” model, combining commercial and catalytic funds. This aims to reduce private investor risk and foster a thriving startup environment.

The ambitious plan seeks to transform the lives of 100 million people and create 10 million dignified new jobs.