Fast Forward

On Wednesday, December 15, 2021, Nigeria's Federal Executive Council (FEC) approved the country's ambitious Startup Bill, which aims to provide the necessary regulatory support to encourage continuous growth in Africa's most vibrant startup ecosystem.

Although Nigeria currently houses the highest number of startups in West Africa, the country ranks below the likes of South Africa, Kenya and Tunisia when it comes to business friendliness. The ban on Twitter and clampdown on Cryptocurrency trading emphasise this, which has long impeded the startup ecosystem growth in Nigeria.

Regardless, the Nigerian Startup Ecosystem has recorded significant growth in recent years. It is, therefore, expected that the Startup Bill will help instigate a more business-friendly environment that will enable startups to thrive.

A New Dawn

There is a seeming awakening of the Nigerian Government to the predominant boom in the Tech industry. Government agencies like the Nigeria Sovereign Investment Authority (NSIA) are increasing their startup-related activity; for example, the NSIA is an investor in Ventures Platform—a fund that invests early in founders announced a $40m fund for African tech startups.

Nigeria’s minister of communications and digital economy, Isa Pantami, said the NSB would replace the National Digital Innovation Entrepreneurship and Startup Policy, a proposal that would have been Nigeria’s approach to digital innovation.

The Minister revealed two aspects of the NSB; a national council for digital innovation and entrepreneurship, chaired by the Nigerian president and vice president, and a startup investment seed fund run by the government. However, there is cautious optimism that the government shelved this plan favouring the NSB because the private sector-led the latter.

In a statement, Kola Aino - Founder and General Partner of Ventures Platform Fund hinted that "The bill will provide an enabling environment for the growth of startups and guard against different challenges faced by startups such as seemingly disruptive regulations, lack of regulatory certainty and weak infrastructures like broadband, open data, and digital platforms that limit the optimisation of the many benefits of the digital economy,”

Adaeze Sokan, Country Director at UK-Nigeria Tech Hub, while speaking on NSB progress, said, “the inclusive and collaborative process is laudable and can serve as a framework for policy formulation in the country.”

According to her, NSB aims to provide a platform where start-ups can continuously engage regulators, and the key objectives include regulatory certainty, local content and enabling a business environment. She explained that there would be more support for local Angel investors, funds and incubators and national co-investment schemes, and investing in early-stage start-ups.

Drawing from the above, the process that engenders the NSB could be a template for ecosystem initiatives going forward. Nigeria’s legislators’ endorsement is all that’s left to augment the process.

The Nigerian Startup’s presidential approval would help unlock the full potentials inherent in the Nigerian startup ecosystem.