ICTworks

Start up companies face a litany of challenges to grow from an idea to successful companies, and even more difficulties to scale nationally. From my research, most technology companies in Africa talk about these issues:

• Realistic financing options for each stage of company growth
• Conducive government policy that encourages a startup ecosystem
• Deep human capacity to work at technology firms
• Clear marketing of the ecosystem to potential clients

Access to finance is the highest priority issue in every conversation with entrepreneurs. They all want to know how to find more funding for their nascent companies.

Tunisia Startup Bill

Tunisia was the first African country to implement a Startup Bill, and it was landmark legislation. It sought to counter the four main challenges for small firms with unique answers:

• Government policy that specifically recognized startup firms as a separate business category that needed additional protection and support.
• Startups are exempt from capital gains taxes and the government guarantees 30% of venture capital investments in startups
• Human capacity was increased by allowing startup founders to return to their old jobs a year, a government stipend to support their efforts, and employment programmes to support staff acquisition.
• Certified startup firms benefit from a clear government designation that informs potential clients and investors of the company’s legitimacy.

The Tunisia Startup Bill is based on 20 measures developed with the startup community. Its overall goal is to change the internal perception of starting a company as too risky, and the external perception of Tunisian firms as hindered vs. helped by their government.

Nigeria Startup Bill

The Nigeria Startup Bill is a joint initiative by Nigeria’s tech startup ecosystem and the Presidency to harness the potential of Nigeria’s digital economy. It provides incentives, structures and programmes for Nigerian startups, venture capital companies, hubs and innovation centres to catalyse growth, create value and build a foundation to export tech-enabled services.

Highlights of the Nigeria Startup Act

• Establishes the National Council for Digital Innovation and Entrepreneurship (The Council)
• Sets up a consultative forum for Nigerian ecosystem stakeholders to engage and present proposals to the Council
• Provides for the Startup Investment Seed Fund which will be managed by the Nigerian Sovereign Investment Authority (NSIA)
• Simplifies registrations and access to government services through the Startup Support and Engagement Portal

Kenya Startup Bill

Kenya’s President confirmed that the Kenyan Startup Bill 2022, which seeks to provide employment opportunities for Kenyan youth and tax breaks for startups, will be signed into law by April 2024. President Ruto said that by April, 2024, there will be a firm startup law in Kenya, which will assist Kenyan innovators and de-risk their innovations.

If passed, the Kenyan startup bill will:

• Establish a legal framework to boost tech growth, foster innovation, and attract talent and capital.
• Offer incentives like tax breaks and credit guarantee schemes to registered startups that provides financial support
• Have key roles for national and county governments, such as promoting innovation, facilitating tech transfer, creating jobs and wealth, and connecting research institutions with businesses.

Zambian Startup Bill

There is a movement within Zambia to create a startup bill that will support local technology companies to start and grow. There was a Startup Bill Hackathon to generate the ideas and opportunities relevant to Zambians.

One interesting theme is creative financing. In a recent SLUSH’D conference, the government spoke about a startup bill that will include a venture capital fund, which is funded by government but administered by the startup community itself to support nascent technology firms.

The government spoke of creating a draft Startup Bill that will be open to comment and editing. In addition, bill drafters spoke of submitting it to Parliament in early 2024. Soon enough, we may have answers to open questions like:

• What challenges will the Zambian Startup Bill try to alleviate?
• Can the changes to government policy really help tech firms?
• When will these changes be implemented and felt by companies?
• How should other countries alter their policies in response to this?