The Nigeria startup bill has just been signed into law and has now become the Nigeria Startup Act(2022). Nigeria’s Minister of Communications and Digital Economy, Isa Pantami, made the announcement via a tweet on the 19th of October, a year after the initial draft was submitted to the presidency and federal executive council.
How It Started: The Nigerian Startup Bill before now
An average young tech employee in Nigeria fears being apprehended by law enforcement agencies because they are assumed to be internet fraudsters (Yahoo boys). Digital innovators and employees themselves have had to deal with inadequate amenities and policies that work against the growth of the digital economy. And the national economy has been missing out on the impacts that a thriving tech ecosystem can make. All of these stem from this: Startups have not been recognized and backed by proper legislation.
Tech startups and other digital innovations in Nigeria have constantly been denied of a fertile environment to thrive. Between unfavorable regulatory policies and shortage of facilities and amenities, founders have had to devise new (and mostly inconvenient) means to continue operation and make profit. Consequently, Nigeria’s prospective job opportunities and rapid digital growth have been crippled.
However, in June 2021, major stakeholders converged to propose way forward. Comprising 30 tech executives, including Kola Aina (founding partner, Ventures Platform) and Iyin Aboyeji (Founder, Future Africa), as well as Nigerian Technology Development Agency (NITDA) officials, Isa Panatami, and the presidency, the result of this convergence was the draft of the Nigerian Startup Bill which would later be submitted to the presidency and Federal Executive Council in October 2021. Passing through the various reading and assent stages, the bill was finally passed from the House of reps to the president in July 2022 for approval. And on the 19th of October, it was signed into law.
Now The Nigeria Startup Act (2022): changes to expect
Image Credit: Techpoint.Africa
Now that there’s proper recognition and provisions made for startups in the country’s law, what changes do we expect to see?
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Synergy between startups and regulators to ensure that any harmful laws are averted. With the President signing this into law, there’s now a significant backing to startups, and cases like the banning of crypto trading should not occur in future.
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With Governmental recognition, access to capital should become easier because stakeholders, especially foreign investors, will have more confidence in pushing resources into the ecosystem.
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Provision of incentives for startups, such as tax breaks, loans, and credit guarantees, to encourage their establishment, development, and operation in the country. Before now, Startups have had to pay federal, state and even local government tax, especially in Lagos. With proper regulation however, multiple taxation should be curbed. Plus, startups will be encouraged to setup a percentage of their profit that will be fixed into a fund to fund other tech startups. Like Silicon Valley, Startups can belong to such community to provide funds available to grow other innovations.
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Provision of incubation programs, workspace subsidies, and education & training for startup enthusiasts.
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Proper treatment of tech employees who have had to deal with the fear of police brutality out of wrong perception. Now that the industry is reckoned with and backed by law, there should be no justification for prejudice and mistreatment against tech bros/sis.
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To be recognized as a Nigerian Startup and access these benefits, however, you would gave to be registered and get certification from the Nigerian Startup Bill Secretariat. This would allow your company, employees, and investors access to tax breaks.
Hopefully, the changes are effected indeed.
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