The Senate last Thursday passed the Nigeria Start-up Bill, NSB after four months of going through the contents.
The Bill drafted between June and September 2021 by over 30 tech leaders aims at providing enablement to some of the teething problems in the start-up ecosystem.
There is probably no other aspect of the sector that has been as hard hit by these inadequacies than the start-up sub sector. Start-ups are companies in the first stage of their operations, often being financed by the entrepreneurial founders during the initial starting period. Most of them graduate mainly from the informal sector, which has remained the mainstay of the Nigerian economy and deserved all the support they can get.
After over two decades of suffering in silence, about 30 start-ups including Ventures Platform founder Kola Aina and Future Africa founder Iyin Aboyeji, and some government officials like National Information Technology Development Agency, NITDA officials, and the Minister of Digital Economy, Dr. Isa Pantami, decided to put heads together to salvage the situation.
After reading through the bill, President Muhammadu Buhari, passed it to the National Assembly in February 2022 and the National Assembly began the processes of reading in March 2022.
Interestingly, last Thursday, Senate approved the bill and is looking up to the House of Representatives for harmonisation.
It will also ensure that start-ups that require licensing from regulators such as the CBN and Securities and Exchange Commission, SEC will enjoy accelerated processes.
This is in addition to the protection of intellectual property for start-ups and for those that want to exit and raise money through the stock exchange to be free to do so.
Reacting to the passing of the bill by the Senate, a co-founder of a start-up, BipEDGE platform, Mr Ubong Ibanga, said: “The passing of the bill by the house of assembly is certainly a step in the right direction. It’s a bill that is very long overdue, and if fully and correctly implemented after it gets the nod of the Federal Government, will greatly improve starting and growing a business in Nigeria. So, as a matter of urgency, the President should just sign it into law immediately”
Also, the Partner and Head of technology, innovation and intellectual property at the law firm of AELEX, Mr. Davidson Oturu, said he considered the passage as a huge milestone.
He said: “Hopefully, the House would pass it within the next few weeks and then it proceeds to the President for his assent.
“There are many gaps we consider the Bill will fill. Firstly, there is the issue around regulatory certainty. A lot of start-ups consider that government policies and regulations spring up suddenly which can affect their business models. Some examples readily come to mind include the cryptocurrency restrictions and banning of motorcycles that affected Gokada’s business model.
“What the Bill seeks to do is to harmonise laws and regulations so that start-ups will be aware of the different matters that will affect them.
“Furthermore, there is a National Council for Digital Innovation and Entrepreneurship that is being set up under the law. This Council will comprise relevant government officials as well as start-ups. The implication of this is that start-ups will have the opportunity to determine the laws and policies that will affect them.
“Due to the challenges faced by taxation of start-ups before they have even begun to scale, the Bill provides tax incentives for start-ups and they also have the opportunity to enjoy some of the incentives under the pioneer status scheme.
“With respect to funding, which is also another problem for start-ups; a seed investment fund will also be set up. The seed investment fund will provide funding for qualified early stage start-ups.
“There are also incentives for other participants that contribute to the growth of the ecosystem such as angel investors; private equity funds/venture capitalists, accelerators and incubators.
“For start-ups that require space and opportunities to build their innovative products and services, technology parks will be set up to meet their needs and provide a conducive environment for them to grow their business ideas. All these are why the bill should receive Mr President’s immediate assent” he added.