Growth opportunity for tech-based startups as Nigeria Startup Bill becomes law
By Chisom Nwatu
The Nigeria Startup Bill, which seeks to create and develop an enabling environment for technology-enabled startups in the country, has been signed into law. It is now the Nigeria Startup Act, 2022.
Nigeria’s President Muhammadu Buhari signed the Bill on Wednesday, Isa Pantami, minister of communications and digital economy, announced via a tweet.
The law seeks to tackle three main challenges for Nigerian startups – lack of an enabling environment, unclear regulatory framework, and inadequate local content support.
It also seeks to “position Nigeria’s startup ecosystem as the leading digital technology centre in Africa, having excellent innovators with cutting-edge skills and exportable capacity”. It further makes provision for “the development and growth of technology-related talent”.
The law also pushes for protection and incentives like tax breaks, incentives to attract foreign capital and access to an exclusive list of public and private-led local funding opportunities, including a N10 billion fund from the federal government.
With the new legislation now in force, growth opportunities beckon on startups in Nigeria as they now have a legal and institutional framework to launch, develop, and scale their products. They can also access the special seed fund created under the law.
However, companies will be required to obtain a certificate, known as the ‘startup label’, before they can be regarded as a startup entity. The special seed fund will provide labelled startups with finance and relief to technology laboratories, accelerators, incubators and hubs.
The startup law began its journey in May 2021 when the presidency, in collaboration with a group of tech leaders and several government bodies, launched the Nigeria Startup Bill to govern how startups and regulatory bodies operate and collaborate in the multi-billion-dollar tech ecosystem. It was approved by the Federal Executive Council (FEC) in December, sent to the National Assembly by President Buhari in February, and okayed by the lawmakers in July.
The startup law will help to increase the value of creatives and foster Nigerian youths’ dominance in the economic environment, Oswald Osaretin Guobadia, senior special assistant to the president on digital transformation, said in Abuja at a co-creation workshop for digital transformation organised by the Nigerian Economic Summit Group (NESG) in collaboration with the Policy Innovation Centre (PIC).
“What we have is, you know, we have a large number, a huge population of demographical young people in our country, and they are very talented and very creative; hence, what we must do is create that enabling environment for them to thrive, for them to be successful, in fact, I will even dare for them to dominate and that is the intention,” he said.
He also said 10 states of the federation had shown interest in adopting the bill, listing Kaduna, Anambra, and Edo States as the forerunners.
The law will be governed by the Council for Digital Innovation and Entrepreneurship, comprising the president, the governor of Nigeria’s central bank (CBN), representatives of the Startup Consultative Forum, the director-general of Nigeria’s information and technology regulator, and other key government and private officials. They will oversee policy guidelines and realization of the law’s objectives, which include fostering collaboration between startups and policymakers and ensuring that Nigeria’s laws and regulations are clear, planned and work for the tech ecosystem.