The Nigerian Federal Executive Committee (FEC) has approved the Nigerian Startup Bill and it will be sent to the National Assembly for legislation. This was revealed by Dr Isa Pantami, the Minister of Communications and Digital Economy while at a virtual State House briefing.
The 11-chapter bill was the outcome of a process in which the government listened to the complaints of the mainly young innovators across the country and replaces the National Investment and Startup Policy.
Dr Pantami will now liaise with the Attorney General of Nigeria and Minister of Justice, Abubakar Malami and the National Assembly to convert it into a bill.
Provisions Of The Bill
The bill will create the National Council for Digital Innovation and Entrepreneurship that will be chaired by the President of Nigeria, who will be assisted by the Vice President and ministers from relevant ministries and government parastatals.
There will also be an operational structure of the council where relevant institutions that provide an enabling environment for Nigerian startups to thrive will have a role to play.
The bill will also establish the Startup Investment Safe Fund, a fund that will be dedicated to young innovators and their startups, provided by the government. Innovators will be able to apply for this fund to begin their own companies.
Similarly, there will be a grant and all eligible startups can apply and bolster their operations. Eligible startups will have to be registered in Nigeria. The bill will have an elaborate startup labelling process and a way to apply for this grant.
There is a chapter that is dedicated to regulators. Young innovators in Nigeria have faced a problem of regulators who come up with initiatives that are restricting instead of helping. This chapter spells out exactly what developmental regulation is, and how it come help with the growth of startups.
The bill also has tax and fiscal incentives for the startups. The government will give tax holidays to young startups and support them to liaise with international or multi-tech giants globally. There are also chapters on data protection, intellectual property and the establishment of national hubs across the country.
About The Nigerian Startup Ecosystem
Nigeria has one of Africa’s more developed startup ecosystems. With an estimated 108.8 million internet users in 2021, which are projected to reach 136.7 million in 2025 by Statista, it is the most attractive destination for startup funding on the continent, especially in Fintechs.
Fintechs in Nigeria have raised USD 1.68 Bn across from 2018 and as of November 2021 which accounts for 56 percent of all fintech funding in Africa across that period. In OPay, Flutterwave, Interswitch and Andela, it boasts of 4 of Africa’s six unicorns. In 2020, global giant Stripe paid over USD 200 Mn to acquire local payments startup Paystack. This was on the back of VISA paying USD 200 Mn to acquire a 20 percent stake in Interswitch in 2019.
About 7 other African countries have enacted or are in the process of enacting a startup bill. These include Tunisia, Senegal, Kenya, Rwanda, Ethiopia, Ghana and Mali.