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The Nigeria Startup Bill has been passed by the National Assembly. It only awaits the assent of President Muhammadu Buhari to become law and finally institutionalize legal frameworks that will enhance the growth of startups, or aptly put, small and medium-sized enterprises (SMEs) to help build up Nigeria’s digital economy.
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Africa’s startup ecosystem is growing not receding despite global economic meltdown and Nigeria, Africa’s top destination for global startup financing, can further take advantage of this through a Startup Law. Bloomberg rightly reported that global funding for startups in Africa is surging. “Funding “more than doubled to $3.14 billion in the first six months of [2022], according to research firm Africa: The Big Deal. That compares with a decline ranging from 3.7% in Europe to 43% in Latin American and the Caribbean.”
The Nigeria Startup Act as envisaged will foster an environment for tech-enabled startups to thrive. It is a joint a joint initiative by Nigeria’s tech startup ecosystem and the Presidency to harness the potential of the country’s digital economy through co-created regulations. Its birth will “ensure that Nigeria’s laws and regulations are clear, planned and work for the tech ecosystem” in a way that will “contribute to the creation of an enabling environment for growth, attraction and protection of investment in tech startups.”
With an Act of Parliament, Nigeria’s startup ecosystem will be better positioned to address the twin challenges of low funding and absence of regulatory support that is currently faced by all SMEs. The law will allow for the creation of a Startup Investment Seed Fund to be managed by the Nigeria Sovereign Investment Authority. The Startup Investment Seed Fund will help to provide early-stage finance for startups at a single digit interest. The funds will also support technology laboratories, accelerators, incubators, and hubs.
Why does the Nigeria Startup Act matter now? As the International Telecommunications Union (ITU) has rightly affirmed: “digital technologies are [now] indispensable for the functioning of economies, societies and individual lives around the world. As our personal and professional activities have moved online in response to the COVID-19 crisis, we have adapted to the challenges of living, working and learning remotely – and experienced first-hand just how dependent we are on digital infrastructure, services and applications.
“The road to economic and social recovery is a digital one. And in a recent UN series of high-profile online roundtables, governments from Italy to Vietnam, Mauritius, Spain and Trinidad and Tobago highlighted the importance of fostering the growth of SMEs in building back economies post-pandemic.”
For the ITU, SMEs are driving digital transformation all over the world; and notably, SMEs make up 90 per cent of all businesses worldwide. This only means that SMEs play a significant role in national economic growth and job creation, as well as offering a path out of poverty for many developing countries including Nigeria.
This is particularly true of tech SMEs – the source of innovative ICT-enabled solutions with the power to change the world, and the engine driving digital transformation.
The Nigerian experience has shown (as is the case elsewhere) tech SMEs are the engine of economic recovery in the present global crisis. So now more than ever, we need to encourage creative SMEs with innovative tech solutions.
More than ever before, tech SMEs, startups and entrepreneurs need support and encouragement from the industry and from the government – it matters now to get the Nigeria Startup Bill assented to by Mr President to begin its catalytic journey of making tech SMEs ecosystem to transform and strengthen Nigeria’s economy.
It is time to create and expand opportunities, expose the market to international best practice, provide institutional frameworks to aid better management approaches within tech SMEs, hone new critical skills, bolster productivity, build resilience and encourage more investment in the ecosystem.
The Nigeria Startup Bill as a Law will make all these possible and usher in the desired dawn for millions of aspirations of young Nigerians seeking to rework the world with their solutions.
