Some positive developments are about to occur in the Nigerian startup ecosystem, the most pressing of which is the Nigeria Startup Bill. It has been touted as the most important piece of legislature in recent times. Frankly, I agree with this assessment. And for what it’s worth, I view the Nigeria Startup Bill as an olive branch both to the government and the private sector (particularly the ecosystem) after years of literally being at odds with each other. Indeed, it will be a historic occasion when the bill is passed into law.
When news began circulating about the bill around May 2021, I deliberately kept my silence for several reasons. Being Nigerians, we naturally have our reservations when the government enacts new policies. So between then and now, what has changed? Before I go into that, I need to provide context, mainly for the sake of those who seem not to understand the hype around the Nigeria Startup Bill. If you fall into this category, I have chosen to explore the subject in this piece just for you.
In my articles on the ICT Clinic column, I try not to shy away from calling out government policies that threaten or outrightly stifle innovation in the country’s vibrant startup ecosystem. When you consider the ban on bike-hailing platforms, cryptocurrency trading, Twitter, and let’s not forget the central bank’s aggressive move on fintech companies, it appears that the government has an axe to grind with its tech innovators. In such a scenario, foreign investors would think twice about getting mixed up in that feud; for them, it will be more like an “operation to find another investment destination.”
So, where does a sparkling new Startup Bill fit into the narrative? Nigeria takes pride in its position as the undisputed leader, racing ahead of other African countries in innovation and funding. Despite weak frameworks, unfavourable regulatory conditions, and little government support for early-stage and established startups, Nigeria’s startup ecosystem continues to flourish. Like the slogan that says, “If you can’t beat them, join them,” the government is on a long-awaited collaborative mission with players in the tech space. Hence, the birth of the Nigeria Startup Bill.
Having approved the Nigeria Startup Bill on Tuesday, March 1, 2022, the President, Major General Muhammadu Buhari, forwarded the bill to the Senate. The President had said, “The Nigeria Startup Bill, 2021 aims to position Nigeria’s startup ecosystem as the leading digital technology centre in Africa, having excellent innovators with cutting-edge skills and exportable capacity.”
In simple terms, the Nigeria Startup Bill is a joint initiative by the Presidency and Nigeria’s tech startup ecosystem that will promote and implement clear, feasible, and innovation-friendly laws and regulations for the tech ecosystem. Its entire existence is to provide an enabling environment for the establishment, development, and operation of startups in Nigeria; place Nigeria’s startup ecosystem as the leading digital technology hub in Africa, and accelerate the development and growth of tech talents in the country.
What is in the bill?
The Nigeria Startup Bill will establish a governing council containing all players in the ecosystem to streamline the regulations for startups.
A cursory reading of the bill shows it to be an ambitious one. In essence, it aims to address the highest number of the issues faced by startups through access to funding, support initiatives, incentives for investors, talent development, accountability, and governance, among others. Let me dwell a bit on each of these.
Funding
Most importantly, the bill gives attention to funding labelled startups. It states that there will be an established fund called the Startup Investment Seed Fund which is to be managed by the Nigeria Sovereign Investment Authority. The fund will provide early-stage finance for a labelled startup. It will also be used to fund technology laboratories, accelerators, incubators, and hubs.
Regulatory support
The bill will reduce the difficulties that startup founders experience during transactions at the Corporate Affairs Commission. It will also help to protect the intellectual property of startups.
The bill makes further provision for a pioneer status incentive scheme, which offers discounted prices on the incorporation and registration of intellectual property.
Incentives
The bill includes many incentives, such as tax incentives for startups, investors, and employees working in startups. It also includes grants for new startups while providing tax relief for all stakeholders.
Other incentives include ease of access to obtaining credit, the right to paid vacation, government support, access to private and public support/funding, implementation of capacity-building measures, and facilitating the grant or revocation of patents.
Training and capacity-building
As outlined in the Bill, the National Information Technology Development Agency (Secretariat of the Council) will design and implement a training and capacity-building program for startups. The agency will also collaborate with tertiary institutions in Nigeria to develop modules, programs, and workshops to help groom young students on how to establish and run successful startups.
Also, the secretariat shall establish centres for the acquisition of digital technology in the six geopolitical zones of Nigeria to promote the use of digital technology, strengthen digital technology management capacity, and information systems.
The bottom line
The Nigeria Startup Bill promises to be a game-changer for Nigeria’s startup landscape. However, it is not a grand panacea for all that ails the sector in general. Legislation indeed allows startups to operate within a clear framework, giving them a measure of certainty. Sadly, our legislative system is one where ideas and bills are passed but get lost in the myriad of fragmented systems, having little or no impact on the economy or ecosystem for which they were created. Hence, the need for all members of the startup ecosystem to learn about the Nigeria Startup Bill
Whether you are a techie or not, knowledge of the bill will help you understand how every citizen can benefit from its implementation. Even more, it could stimulate your desire to launch your innovative solution to local problems.
During this period, the bill is undergoing legislative processing. To ensure a positive outcome, we need to show our support and engage with lawmakers, relevant organisations, groups and stakeholders to ensure that we get this bill across the finished line between now and the end of the current administration.
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