President Muhammadu Buhari has signed the Nigeria Startup Bill into law, the Minister of Communications and Digital Economy, Isa Pantami disclosed this after a meeting with the President at Aso Villa today.
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He disclosed that the startup bill passed the national assembly on July 20, 2022, was initiated by the executive arm and seeks to create an enabling environment for tech-based startups in Nigeria.
Pantami further revealed that the law which holds huge benefits for the Nigerian economy, adopted an approach to allow startups to identify business challenges and voice them out.
Based on the provisions of the law, the Federal Government plans to set up a 10 billion naira fund for startups in the country.
The Information and Communications Technology sector has so far contributed 18.42 percent in 2022.
This news comes a year after the draft bill was first submitted to the Presidency and the Federal Executive Council (FEC). It also comes almost three months after the Nigerian senate passed the bill.
With the new Act, Nigeria’s tech ecosystem should see an improved enabling environment in the near future. Tech startups in Nigeria face a number of regulatory hurdles, and suffer from a lack of basic amenities like constant power supply and limited funding.
Crypto startups, for example, have had to innovate since the Central Bank of Nigeria reinforced a ban on crypto trading in 2021. In 2020, state regulations also banned bike-hailing startups in Lagos, Nigeria’s most populous city, and sent mobility startups like ORide, Max.ng, and Gokada running from the city.
One of the 3 objectives of the Nigeria Startup Act is to bridge the engagement gap between startups and regulators and ensure that harmful regulations like these are shut down. Among other things, the bill also seeks to encourage the establishment, development and operation of startups in the country via incentives like tax breaks, government loans, and credit guarantee schemes.
The NSB—now NSA—has provisions for tax breaks for new startups, and also provides tax incentives for foreign service providers. It also delineates requirements for registration and licensing or labelling of startups.