The newly enacted Start-up Act in Senegal is expected to boost female-led businesses in the country, by providing tax breaks and other benefits to innovative businesses in fields from agriculture to mobile banking.reneurs
The law, drafted in a hackathon by more than 60 key Senegalese entrepreneurs in 2018, is expected to take effect later this year. It is targeted at female and youth-run businesses in particular, as well as other start-up businesses that are doing good.
Providing a guide to business operations in the country, the Act is expected to promote innovation and entrepreneurship, and encourage data collection and sharing among entrepreneurs to help them develop better business plans as well as looking into tax policies, startup financing, and labelling.
Over the years, the start-up scene in the Francofonic country has been dominated by men. Also, the tax burden and complexity of the laws are reasons many talented business-women shy away from creating companies.
“They tell themselves: ‘It is too scary, I don’t understand the system, I can’t afford it,’” said Seynabou Thiam, the founder of Kepaarel, a cafe and co-working space geared toward mothers in Senegal’s capital Dakar. More so, dozens of Senegalese start-ups have been sent packing when they no longer meet up with the taxes levied on them. This has posed a lot of threats to the social impact in the country.
In this regard, the government hopes to support local businesses with its reforms, prioritizing digital technology in the country. Though Senegal is far behind countries with bigger economies such as Ghana and Nigeria, it is the leader among Francophone countries in Africa and sees itself as a future tech and entrepreneurship hub for the continent.
Francophone Africa has lagged behind English speaking African countries like Kenya and Nigeria in terms of technology and entrepreneurship, which experts say it is as a result of ease of doing business.
A report by the global investment firm Partech indicates only 5 percent of the $1.2 billion in 2018 raised for tech start-ups in Africa was disbursed to French-speaking countries, with Senegal having the highest.
According to the project manager at Senegal’s $50 million state fund for start-ups, Thierno Sakho, the law will unleash the talent of young entrepreneurs to have a real social impact. “We want solutions that address poverty, Malnutrition, and financial inclusion,” said Thierno.
The tax breaks which have been signed into law will grant companies that fit the criteria three tax-free years as well as training, though, the government is yet to create a platform to register businesses.
By Ahmed Iyanda.