3 African Countries That Are Likely Next To Enact A Startup Act After Tunisia & Senegal

In 2012, Italy became the first country to introduce a startup act globally.

In 2018, Tunisia — a country in North Africa that is not exactly one of the hotbeds or usual suspects when it comes startup matters in Africa — laid down a marker when it surprised the rest of the continent by becoming the first African nation to enact and officially enforce a Startup Act.

The signing of the Startup Act into law was the culmination of discussions that began some two years prior. In April 2018, Earlier this year, Tunisia passed the ‘Startup Act’ after two years of deliberation. And In October of the same year, the Tunisian Startup Act was officially implemented — thereby becoming law.

The Act promises a bundle of benefits including exemption of startups from corporate taxes for up to eight years, special customs procedures, exemption from capital gains tax on investments made in startups.

It also offers up to one year of time off from the current jobs (for both private and public sector employees), and salary for up to three founders during the first year of operations.

In simple terms, the Tunisian government is determined to support homegrown startups as much as possible, becoming some sort of national-scale incubator.

And following in the footsteps of Tunisia, Senegal — a country in West Africa which, like Tunisia, is not always part of the big conversations about Africa’s startup ecosystem — is in line to become the second African country to adopt official pro-startup legislation.

Come next month, the Senegal Startup Act will be going before the country’s National Assembly to be passed into law, following the consideration and adoption of the bill by President Macky Sall’s council of ministers.

The Startup Act, which has just been passed by the country’s cabinet, was drafted in 2018 by more than 60 key players in the Senegalese innovation ecosystem at the i4policy hackathon.

The Senegal Startup Act contains laws to guide business operations in the country. The Act will promote innovation and entrepreneurship, and encourage data collection and sharing amongst entrepreneurs to help them develop better business plans. It also has provisions for tax policies, startup financing, and labeling.

By all accounts, Senegal is taking its startups very seriously, having identified them as vehicles for country-wide development.

It’s kind of odd, though, that countries like Tunisia and Senegal — not exactly among the biggest players in the ecosystem — are the ones pioneering this move.

And in truth, this trend seems unlikely to change anytime soon as the African countries that are most likely next in line to consider and adopt official startup legislation are Mali, Ghana, and probably Rwanda.

The heavyweights — Nigeria, South Africa, Egypt, Kenya — all appear to either be lukewarm about pro-startup legislation or are simply uninterested.

In April 2019, the government of Mali put together a document to allow stakeholders to analyse the policies that will make up the country’s first Startup Act.

This was made known by Mali’s minister of the digital economy and communication, Arouna Modibo Touré at an inaugural Francophone Africa Early Stage Investor Summit (FAIS) in Bamako.

Also, i4Policy is currently assisting the development of a Ghanaian Startup Act. Plus the progressive nature of President Paul Kagame’s administration, and the fact that a catalyst at i4Policy, Jon Stever, is also the co-founder and managing director of Impact Hub Kigali, means that it won’t be long before Rwanda gets in on the act.

Again, those three countries — Mali, Ghana, and Rwanda — are not among the heavyweights in the African startup ecosystem; all of which seem to be sleeping on this even as it can be argued that a Startup Act would really help the many promising startups in those countries; startups that often have to manage on their own while finding their way around obstacles set up by the government themselves. (See this story.)

Featured Image Courtesy: MindSky