Nigeria Unlocks New Chapter As Startup Act Gets Formal Assent
Nigeria’s President Muhammadu Buhari has just assented to the Nigeria Startup Bill, according to the country’s Minister of Digital Economy Professor Isa Pantanmi who tweeted that it has now become the Nigeria Startup Act, 2022.
“It was an Executive Bill, initiated by both Office of the Chief of Staff and the Office of the Minister of Comms and Digital Economy. Congratulations to all,” he remarked.
The Nigeria Startup Bill (NSB), a joint initiative by Nigeria’s tech startup ecosystem and the Presidency to harness the potential of the country’s booming digital economy through co-created regulations, has achieved actualisation.
A fresh wave of optimism permeated through the Nigerian startup ecosystem on Wednesday, July 20, as the anticipated NSB passed third reading at the Senate, and less than a week later the Bill also got the approval of the House of Representatives.
The piece of legislation, which took an “open tent” approach when being drafted, ensuring input from all stakeholders (both public and private), was created to provide a clear regulatory framework for all startups in the Nigerian tech industry. Local tech stakeholders including Ventures Platform founder Kola Aina and Future Africa’s Iyin Aboyeji, are among 30 tech industry leaders who have played a part in the process.
It also makes provisions to promote local content and provide the proper infrastructure needed for the growth of startups, all in an effort to position Nigeria as a leader in the African tech space given the flurry of activity the local ecosystem continues to attract.
Nigerian startups drew in well over USD 1 B in funding last year, significantly more than any other country on the continent. More than 300 investors (individuals and institutions) participated in the funding rounds of over 100 Nigerian tech startups in 2021 as the country accounted for around 30 percent of African tech funding.
Nigeria also hosts more unicorns than any other country in Africa, and some of the most exciting startups, hottest markets, and relevant operators on the continent. Its buzzing tech ecosystem could use a more supportive and less-antagonistic environment, which seems to be a goal the NSB has its sights on.
Since its inception in June 2021, the bill is said to have been received with open arms, seeing wide collaboration from all ministries, departments and agencies involved, as well as from both chambers of the National House of Assembly.
It is understood that there were several focus groups and townhalls across different regions, learning series engagements, state rallies, and roundtable discussions all aimed at getting the inputs of stakeholders from different backgrounds and regions within the country.
Now signed into law, Nigeria’s newly minted Startup Act has seen the country join two other African countries: Tunisia and Senegal, which have formally adopted pro-startup legislation with varying degrees of notable impact.
A few other countries, including Mali, Ghana, Ivory Coast, the Democratic Republic of Congo (DRC), Rwanda and Kenya, are either at various stages of enactment or still going through the early parliamentary motions.
The need for more supportive and structured startup regulation in Nigeria’s attractive digital ecosystem is epitomised by notable instances in the recent past where regulatory uncertainty, inadequate structures, or stiff calls by the authorities have destabilised the local tech ecosystem and jeopardised investments. Episodes like the ban on bike-hailing and the obstruction of crypto startups come to mind.
The newly adopted legislation aims to address the lingering concerns. It will ensure that Nigeria’s laws and regulations are clear, planned and work for the tech ecosystem. This, it is hoped, will contribute to the creation of an enabling environment for the growth, attraction and protection of investment in tech startups.
The new law comes with provisions that cater to startup labelling, incubators/accelerators, startup investment funds, training/upskilling, and tax incentives, among other things.
Featured Image Credits: Borg Legal
