Nigeria Startup Bill will address startup regulation, operation and bans

Tunisia lead the way in the introduction of the Startup Act in 2018 where a legal framework was created to establish and encourage a culture of innovative thinking and entrepreneurship. Tunisia was the first country in Africa to pass and take effect a startup bill in October 2018 with Senegal being the second country. Pre 2019, all years before 2019, Tunisia raised 18.7Million USD in funding. In 2019 alone, Tunisia raised 21.8Million USD, and in 2020 (a year paralyzed by the COVID-19 pandemic), Tunisia raised 23.3Million USD. Of all the companies that have registered under the Tunisia Startup Bill as a startup, 22% are female-founded.

The Startup Bills are meant to serve as a legalized framework that enables the development of startups and provides added value at a national as well as international level. It encourages the creation, development, management, and operations of startups through monetary and non-monetary means. In Tunisia for example, the bill stipulates that the salary of founders will be provided by the government so that they can focus on new startups. The goal in other words is to create an enabling, incentivized but regulated environment.

In Nigeria, a collaboration between the tech startup ecosystem as well as the presidency has drafted the Nigerian Startup Bill. The Bill which is stipulated to be the highest-ranking in Africa (based on depth) was approved by the Nigerian Federal Executive Council in 2021 and will be submitted to the National Assembly by the President this year. Although there is no publicly available copy of the
drafted bill, there is information that is publicly available.

The Nigerian Startup Bill will apply to all companies that are registered as Innovation Driven Entrepreneurship (also known as Startups) in Nigeria. The Federal Ministry of Communications and Digital Economy will be the regulator in charge of ensuring the legislation is implemented. There will also be a committee set up; the National Council for Digital Innovation and Entrepreneurship, for the review of policies and directives from ministers, departments, and agencies within the country. This committee will consist of the President, Vice President, select Ministers, the Central Bank Governor, the Director-General of the National Information Technology Development Agency (NITDA) as well as representatives of the Startup Consultant Forum.

For example, the ban of motorcycles in February 2020 in Lagos state which affected motorcycle hailing platforms will have to be reviewed by this committee before the Governor takes action. The Bill will also allow for incentives such as tax rebates, it will protect intellectual property and create a platform for interaction and communication between the government, incubators, and stakeholders. The tech community is holding their breath and hoping for the same results in the National Assembly as seen in Senegal with 90% voting in favor of their startup bill and they are hoping that in Nigeria as early as Q2 2022, the bill takes effect.

This article is courtesy Versa Research.