The Nigeria Start-up Bill overview and Opportunities

A glimpse of the Nigeria Start-up Bill, how it could ignite innovation and how other nations have successfully legislated tech start-up.

Interswitch, Andela, MTN and other thriving companies that we admire in Nigeria today, did not start big, they grew from taking little but firm steps that eventually transformed into giant leaps. These steps were taken with a lot of effort backed by certain factors which yielded a positive result and paved the way for startups.

WHAT IS A STARTUP?

According to the Cambridge Dictionary, a startup is simply “a small business that has just started”

Broadly speaking, a startup is a young company that is created by entrepreneurs who have products or services which they perceive as a necessity in the society. Startups either bring fresh products to customers or aim at enhancing an already existing product that needs an upgrade.

Startups require external financing to keep moving and they usually have the desire to grow at an accelerated speed hence the importance of startup laws or policies.

President Muhammadu Buhari had recently announced that his administration would deliberately give full support to ICT platforms to boost employment and the economy in Nigeria.

He said: “I am proud to announce that several foreign investors are taking advantage of our ranking as one of the leading startup ecosystems in Africa to invest in our digital economy.”

Prior to the president’s announcement, deliberations had been made on the acceptance of the Nigeria Startup Bill (NSB) in December 2021.

NIGERIA STARTUP BILL (NSB)

The introduction of the Nigeria Startup Bill is a positive development to the country and it seems the government is extending a peaceful hand towards technology after its not so friendly history with cryptocurrency, Twitter and CBN’s whip on Fintech companies.

The bill which was forwarded to the Senate on March 1, 2022, is an initiative that will create a favourable, friendly and financially stable environment for the tech ecosystem. Through the bill, the government attempts to create Nigerian regulatory laws that will contribute to the creation and protection of investment in tech startups as well as rank Nigeria’s startup ecosystem as the primary digital technology centre in Africa.

The bill will lessen the regulatory agency burden on startups in Nigeria, boost employment across all sectors and encourage entrepreneurs and investors.

STARTUP BILL IN OTHER COUNTRIES

Other African countries have efficient startup bills. Egypt, South Africa and Kenya are fintech dominating countries that have created bills to regulate the interactions between the government, incubators, start-ups, and investors. These countries have recorded immense growth in innovation through funding of startups and effective tax incentives.

Outside of Africa, Startups in the US were shaken during the pandemic and the government reacted swiftly by rolling out government-backed loans and unemployment schemes. Despite the already existing “Jumpstart Our Business Startups Act” which is a law signed by Former Us President Barrack Obama in 2012 to encourage funding of small businesses in the United States by easing many of the country’s securities regulations, the “LIKE Act’ Bill to encourage entrepreneurs to grow their businesses in the Us was recently proposed in 2022. The bill intends to spark economic growth and create jobs for American workers by enabling immigrants to set up investment capital-backed startup companies in America.

On one hand, the UK government in 2015 paid close attention to Fintech and digital payment platforms by creating startup tax breaks and loans like Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). The UK government is also a major force behind the pace of the Nigeria startup bill.

Spain on the other hand, planned to create its startup law in Dec 2021 and it was approved in 2022. The startup law implemented the elimination of registration fees and streamlined the requirements for creating new companies.

Nigeria should look at the feat of other Nations in encouraging innovation and technological success and learn from them to ensure a consistent alliance between the government, entrepreneurs and foreign investors.

The Nigeria Startup bill is an advantage to the country however, it is not enough to make bills, all hands must be put on deck to ensure the bill is carried out and not just endorsed on paper for documentation’s sake.

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