Last week, the federal government signed the Nigeria Startup Act in a move to strengthen the country’s tech ecosystem. In summary, the Act seeks to create an enabling environment for the growth, attraction, and protection of investment for startups and incentives for investors in the ecosystem.
The Startup Act is a joint initiative by Nigeria’s tech startup ecosystem and the presidency to harness the potential of its digital economy through co-created regulations. The motion for the passage of the bill, followed by a series of consultation and round table discussions has been on since 2021.
The new Act provides the following, a council for digital innovation and entrepreneurship (chaired by the president); the startup support and engagement portal; the startup labelling; the startup investment seed fund; training, capacity building and development; tax and fiscal incentives (for stakeholders); regulations support; accelerators and incubators; and cluster, hubs, innovation parks and technology development zones.
Good as this sounds, there are still concerns that too much involvement of government officials could create bottlenecks in the delivery processes. Ventures Africa has reached out to experts in the legal and tech industries to share their thoughts on the new law.
Oladapo Olowo, Head, Legal Department, Keystone Bank Limited: “The Nigeria Startup Act is one of the boldest moves by the Nigerian government which deliberately attempts to harvest the enormous intellectual and entrepreneurial capacity of young people- who form a larger part of the country’s population.”
“It is longer news that we are now in a knowledge economy, where the biggest and richest companies in the world today are those that leverage information technology. No wonder this Act was midwifed by the Ministry of communication and Digital Economy. I see that the composition of the Council for Digital Innovation and Entrepreneurship is chaired by the President. I hope politics will allow the council to function properly because I’m not sure whether making the President the Chairman of the council is a good decision.”
“The president has many things to deal with, despite the Vice President being the alternate. The involvement of the private sector is key and that should be explored. We should ensure that we do not allow Politics to destroy this lofty idea, as only the best should be tolerated. Merit must always prevail.”
Ikenna Samuel Onyejiaka, Vice President of Technology, Treepz Global (Canada Nigeria, Ghana, & Uganda): “The Act is filled with a whole lot of value for the entire startup ecosystem- from the startup companies themselves, the employees of startup companies, to investors and even the economy. Some of the standouts for me are the sections that are designed to help startups access funding more easily such as the Startup investment seed fund and the incentives extended to startup investors, which I believe would increase the chances of having more investments come into the ecosystem.”
“I also like the tax relief that startups and their employees will enjoy as a result of this Act. There is also provision for human capacity building which is a very great thing to see. If all the stipulations of the Act are followed to the letter, we will have an enabling environment for great innovations to thrive and a tremendous increase in ease of doing business around the startup ecosystem. This, I believe will impact the economy at large. This is a very welcome development.”
Rosemond Phil-Othihiwa, Partner & Head Corporate Commercial Services, Debo Akande LLP: “One of the goals of this Act is to allow for fluidity and seamlessness in processes between key regulators and stakeholders. It opens a ‘one-stop-shop-centre’ for key regulators like SEC, NITDA, NIMC, FIRS, etc., to be in a portal. Independently, each of these organisations has its own bottlenecks and administrative issues. The government needs to ensure that these organisations are in sync. It also needs to ensure that there is effective implementation, eliminating bureaucracy and administrative bottlenecks.”
“Startups are very fast and place a premium on speed. But if you are dealing with government regulators, you cannot control speed. So, this Act should ensure that processes are done faster. Licences are obtained faster. Approvals are done faster. If not, there would be delays and inhibitions to processes for startups.”
Olawale S. Amoussa, Principal Partner, Excelsior Legal Consult: “This is a laudable initiative from the President Muhammadu Buhari administration and if well managed would further foster entrepreneurship in Nigeria. However, steps must be taken to address the two major likely limitations – bureaucracy on the part of the Ministries, MDAs & Agencies of government. Next is enforcement which has been the undoing of several lofty ideas in Nigeria. But it is definitely a move in the right direction.”
Michael Okaredje, CEO, Pickmeup Technologies: “The Nigerian Startup Bill is a step in the right direction and a big win for the tech ecosystem in Nigeria.”