To create conducive environment, funding for Nigerian startups; halt face-off with tech innovators
The Federal Executive Council (FEC) on Wednesday approved a bill that will see the easing of regulatory hurdles, offer tax incentives and make it easier for startups to raise capital.
The bill, which will be sent to the Nigerian parliament for debate, was created as a substitute to the much criticised national digital innovation entrepreneurship and startup policy, to bring about a conducive business environment for entrepreneurs to innovate and startups to scale in Nigeria.
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Isa Pantami, minister of communications and digital economy, disclosed that the bill will be sent to the National Assembly, with support from the attorney-general of the federation and minister of justice office.
He also said that the Startup Investment Seed Fund will make capital available for budding entrepreneurs and innovators who are cash-strapped to develop their ideas.
“The bill also addresses [the] startup levelling process, where a startup is going to be labelled. And after that, there is eligibility for the grant. If a startup is looking for a government grant, there is a process to follow, which is very easy, and in the end, the government will be able to provide the grant and also there is a process of issuance, this certificate of levelling for the startup.
“The bill, also, will establish the startup investment seed fund, where there is going to be a dedicated fund to be provided by the federal government for our young innovators all over the country to apply for the startup investment Seed Fund to begin their own process if they need that,” Pantami said at the close of the executive council meeting in Abuja on Wednesday.
Business A.M. understands that the Nigerian Startup Bill has been in the works since the start of the year and would create a government fund to support startups and tax holidays of up to four years, among other incentives for investors.
Nigeria has the most number of startups in Africa which stands at more than 1,200, according to Briter Bridges Intelligence, a London-based firm that tracks investments into Africa. But a major hurdle to the success of startups from this region has been cited to be government regulation, weak infrastructure and difficulties accessing capital, among other major obstacles. Although fundraising on the continent prints $44.8 billion in 2021 so far, more still needs to be done to create a thriving environment for these startups to attract investors into the space, as well as boost the economy’s gross domestic product (GDP).
Meanwhile, Africa-focused payments startups, Flutterwave and Paystack (now acquired by Stripe), are some of the companies that were founded in Nigeria and have grown to offer services beyond the country’s borders.
Elsewhere, part of the highlights from the eleven chapters bill put up together by the startup industry to set the industry standard, limiting the continuous face-off between the government and innovators, who have always been ahead of government regulations, was the room given for national council for digital innovation and entrepreneurship in the startup industry, which will be led by the president and Vice President Yemi Osinbajo. Also, the council will also comprise the minister of communications and digital economy, as well as other relevant ministers and heads of government parastatals.
“This council is going to be chaired by Mr President himself, and part of the council he will be supported also by the Vice President and I will also support both of them and many relevant ministers and government parastatals are part of the council,” Pantami said.