The signing of the Nigeria Startup Act, 2022 by President Muhammadu Buhari has been seen as a proactive effort to develop Nigeria’s startup ecosystem by putting in place a unique regulatory and legal framework to bring it up to speed with the best global practices.The Act is part of the concerted efforts by the Federal Government to encourage, promote, harness and provide stability to the startup ecosystem in Nigeria. No doubt, the Nigerian technology and innovation space in general, and its startup ecosystem in particular, have been gaining global media rave review, momentum and recording impressive growth in recent times. According to StartupBlink’s Global Startup Ecosystem Index 2021, Nigeria’s startup ecosystem was ranked as the top three most advanced ecosystems in Africa.
AVAILABLE data has it that in 2021, Nigerian startups retained USD1.37 billion of Africa’s USD 4 billion funding and that Nigeria has the highest volume of startups in Africa. Despite this huge amount, it is quite unfortunately that Nigerian have a high failure rate of about 61% startup failure rate recorded from 2010-2018, the failures were attributed to various factors including unfavorable government policies, regulatory bottlenecks, over-saturation of startups in selected locations, bureaucratic establishment process, talent dearth, high cost of running business, funding challenges amongst several other factors.
THE need to maintain existing record as the leader of African startup, spur the development of the ecosystem and reduce the failure rate of tech-enabled businesses in Nigeria is the initiative behind the introduction of the Startup bill in 2021 which was signed into law on October 19, 2022, hence becoming Nigeria Startup Act, 2022 as it is believed that this will go a long way in addressing the challenges plaguing startup, promote existing participants in the ecosystem and encourage prospective participants to fully engage in the ecosystem considering its success in other countries using the startup Act.
IN Italy for instance, over €34,000,000 in investments went into Italian startups between 2012-2015 after the introduction of a Startup Act. In similar manner, according to Startup Tunisia, “Résultats des sessions de labellisation” following the introduction of a Startup Act in 2018, Tunisia recorded $22,400,000 (twenty-two million four hundred thousand United States Dollars) from investors in 2019 alone. Reports has it that as against only 16 startups that applied to be labelled as startups in March 2019, 40 applications were recorded in July 2022 alone following the adoption of Tunisian’s startup act. This implies that the Tunisian Startup Act has helped in the rapid development of the startup ecosystem in Tunisia.
WHILE we commend the Federal Government and national assembly on this brave move, we also want to sincerely appeal to the government to put in place proper implementation policies that will help in achieving the main objective behind the introduction of the Startup Act. We believe that government is in possession of all the needed machineries required for its success. If properly implemented, no doubt, it will help fast-track the growth and development of upcoming tech gurus who are already discouraged due to the fact that the tech industry gives them no breathing space. We urge the government to take a look at the Silicon valley project and domesticate on this.
GOVERNMENT should as well take a look at the operations of the Bank of Industry BOI. The agency is thriving because of the effective and efficient strategy implementation policies in terms of equity and high accessibility to the people. BOI is available everywhere, and anyone with a brilliant business proposal can work up to the Bank of Industries for fund and such request will be granted following the due procedure. Effective strategy implementation is the major factor for the high success rate of the Bank of Industries today.
WE also implore government to make available needed resources and also partner with private donors in doing this. We strongly believe that with proper implementation, the objectives set out in the Startup Act would be met and even exceeded. In conclusion, it is believed that the Startup act, aimed at creating job opportunities and a level playing ground for upcoming tech businesses, hence, successful implementation policy will ensure that the entire nation benefits from the growth/development recorded in the startup ecosystem, promotes competition, and increase the nation’s Internally Generated Revenue.