The President of Nigeria, Muhammadu Buhari, has signed into law the Startup Act which is expected to deepen Nigeria’s technology ecosystem and enable the sector even further.
The Act follows the Nigeria Startup Bill project which was launched in May 2021 by Nigeria’s tech ecosystem and the Presidency and has passed all stages of legislation before reaching the Presidency for ascension in October 2021.
BREAKING!
His Excellency, @MBuhari has just assented to Nigeria Start-up Bill. It has now become Nigeria Start-Up Act, 2022. It was an Executive Bill, initiated by both Office of the Chief of Staff & the Office of the Minister of Comms & Digital Economy. Congratulations to all!— Prof. Isa Ali Ibrahim (@ProfIsaPantami) October 19, 2022
According to their Startup Bill website, the project is meant to harness the potential of the country’s digital economy through co-created regulations between the ecosystem and the government.
According to the drafters, the Act will now ensure Nigeria’s laws and regulations are clear, planned, and work for the tech ecosystem. This is expected to contribute to the creation of an enabling environment for the growth, attraction, and protection of investment in tech startups.
One of the motivations behind the Act is to stop instances where the government acts in a way that makes it difficult for startups to flourish, with the February 2021 ban on cryptocurrencies being one such instance.
The Act is also looking to address 3 key challenges in the startup and tech sector, which are:
- A lack of an enabling environment
- Unclear regulatory framework, and
- Inadequate local content support
Other issues the startup Act, now in place, seeks to address include:
- Access to local funding opportunities including a ₦10 billion fund from the federal government
- Incentives for ease of doing business such as tax breaks
- Incentives to attract foreign capital
The Act mandates The Council for Digital Innovation and Entrepreneurship to govern it and ensure that its stipulations are achieved and protected. This Council consists of the following individuals:
- The President
- The Governor of the Central Bank of Nigeria (CBN)
- Representatives of the Startup Consultative Forum
- The Director-General of Nigeria’s information and technology regulator
Amongst their duties is to foster collaboration between startups and policymakers.
Nigeria becomes the third country to have a Startup Act in Africa after Senegal and Tunisia, while Kenya and Ethiopia are also pursuing their own.
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