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Nigeria Startup Bill: More Support for Digital Entrepreneurship or Duplicity?

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President Muhammadu Buhari, in a letter dated 21st February 2022, transmitted the Nigeria Startup Bill, 2021 to the National Assembly for consideration and passage. The letter was read on the floor of the two chambers on 1st March 2022 and the bill was read for the first time in the House of Representatives on 3rd March 2022. The bill provides for a legal and institutional framework for the development of startups in Nigeria, an enabling environment for the establishment and operation of startups and the development of digital technology-related talents. Particularly, it proposes the establishment of a National Council for Digital Innovation and Entrepreneurship, with the National Information Technology Development Agency (NITDA)  as Secretariat.  The functions of the Council will include providing policy guidelines for the realisation of the objectives of the bill and monitoring implementation of the policies, giving direction for the harmonisation of laws and regulations that affect startups, among others. Another major proposal of the bill is the establishment of a Startup Investment Seed Fund to be managed by the Nigeria Sovereign Investment Authority, with the funds applied to providing early-stage finance to startups and providing relief to technology laboratories, accelerators, incubators and hubs. It also proposes training and capacity building for startups, facilitated by the Industrial Training Fund (ITF) and any other organisation that partners with the Secretariat (NITDA) for that purpose. On talent development, the bill proposes a collaboration between NITDA and the National Universities Commission and tertiary institutions in Nigeria to develop modules, programs and workshops to impact knowledge on establishing and running startups in Nigeria. In addition, it proposes the establishment of centres for the acquisition of  digital technology in the six geopolitical zones in Nigeria, as well as the establishment of startup innovation clusters, hubs and innovation parks in each State of the Federation.

Observers wonder if more legislation or new establishments are necessary to support budding digital technology companies in Nigeria. The bill proposes NITDA as the Secretariat of the National Council for Digital Innovation and Entrepreneurship which it seeks to establish, with most of the responsibilities for implementation resting on NITDA. NITDA already exists as the lead agency on digital technology in Nigeria and can be empowered and supported to function optimally and efficiently, as opposed to creating a new agency. This is to avoid conflict of functions and power tussle among agencies of government.

Beneficial initiatives proposed by the bill such as the Startup Portal to be domiciled at NITDA and serve as a platform through which startups register with relevant government ministries, departments and agencies, can  be introduced to the operations of NITDA or be  incorporated through an amendment to the NITDA Act 2007. Also, there are several government schemes set up to support micro, small and medium enterprises (MSMEs), which several businesses including those involved in digital technology, can benefit from.  The success of small and developing businesses in Nigeria lies in the willingness of the relevant government establishments to create an enabling business environment by ensuring that procedures for regulating the activities of business entities are simplified, convenient and efficient, to aid compliance. The Nigerian government also has to create incentives such as tax reliefs, grants, loan facilities, etc to encourage the growth and expansion of businesses, rather than burden them with unnecessary levies, multiple taxation and over-regulation of  their activities.

The world is speedily moving towards digital technology solutions in several sectors and Nigeria is not left out, with several tech startups making remarkable strides. Instead of the creation of additional government establishments, perhaps what is required is the government’s commitment to creating an enabling environment for all startups in digital technology and in other sectors, in order to maximise the business potential in Nigeria and stimulate economic growth. This will go a long way to support these businesses to develop and thrive in such a way that they can favourably compete in the global market.

See bill here: