Governments seeking to empower entrepreneurs often find themselves developing and implementing a complex range of reforms, policies and programs that cut across ministerial and departmental portfolios. Without central coordination, it is easy for reforms to stall due to limited legislative capacity or disagreements between responsible departments, or end up with duplicate or competing initiatives between departments.
Nigeria has taken an innovative approach with its new Startup Act that seeks to minimize these pitfalls. The Nigeria Startup Act project is a joint initiative by Nigeria’s tech startup ecosystem and the Presidency to harness the potential of the digital economy through co-created regulations.
And the Act itself is the product of co-creation. First drafted in June 2021, it was reviewed and validated by the ecosystem that summer, submitted to Parliament in October 2021, passed in July 2022, and received Presidential assent in October 2022.
The wide-ranging legislation includes the creation of a one-stop online portal for entrepreneurs to interact with government ministries and agencies; a legal definition of a Startup to allow for tax and fiscal incentives; a startup investment seed fund; and the appointment of a Secretariat to implement extensive ecosystem development initiatives and programs.
But at the heart of this Act is a groundbreaking new approach to entrepreneurship policymaking that provides the framework for co-creation of regulations between government and the wider ecosystem.
The Act established the Council for Digital Innovation and Entrepreneurship. This corporate body comprises the President of Nigeria, the Vice President, four ministers (covering communications and digital economy; finance; industry, trade and investment; and science, technology and innovation), the Governor of the Central Bank of Nigeria; two computer trade body representatives; the DG of the National IT Development Agency, and four representatives of a consultative forum.
The Council’s primary role is to formulate policies that are friendly, clear and well planned. It also has scope to give direction for the harmonization of laws and regulations affecting startups. More broadly, it overseas the wider implementation responsibilities of the Secretariat (see below).
The Council is supported by a Startup Consultative Forum, comprising entrepreneurs, angel investors, venture capitalists, incubators, accelerators, and the Nigeria Computer Society. The National Information Technology Development Agency acts as Secretariat of the Council and the implementing body for the wider provisions of the Act. Finally, an independent body works to evaluate the work of the Council and Secretariat.
All of the above provides the structure required to identify problems facing entrepreneurs, design and implement solutions, then evaluate and improve solutions as needed. At a recent event, Oswald Guobadia, SSA to the President and the lead champion of the Startup Act, gave an impromptu walkthrough of the Act and how it can be used to ensure an all-government approach to policymaking. He used the example of immigration policy for entrepreneurs. Traditionally, this can be a divisive issue, with Ministers responsible for entrepreneurship and investment pushing for simple, fast and effective entrepreneur and investor visas facing highly risk-averse Ministers responsible for borders, immigration and security that seek to limit routes into the country and opportunities for fraud. In many cases, the ministry responsible for immigration has the final say and immigration routes for entrepreneurs remain slow and inefficient, if present at all.
Under the Nigerian Startup Act, the issue of immigration routes for entrepreneurs may be raised through the Startup Consultative Forum after inputs from the community. The Forum will discuss the issue, before raising it with the Council. The Council will then take an all-government approach to the issue, with the President, Vice President, four Ministers and the other members working together to design, implement and evaluate a solution that is best for entrepreneurs.
Having only received assent in October 2022, the Nigerian Startup Act is in its early stages of implementation, but it offers a promising future for Nigeria’s entrepreneurship ecosystem and is already inspiring similar startup acts around the world.