His Excellency, President Muhammadu Buhari, GCFR, signed the Nigeria Startup Act, 2022 (“the Act”) into law on 19 October 2022, following its passage by the National Assembly. The Act provides the legal and institutional framework for the development and operation of startups in Nigeria, positioning Nigerian startup ecosystem as the leading digital hub in Africa and fostering the development of technology-related talent in the country.
The Act is divided into ten (10) parts, which address four (4) key areas that technology entrepreneurs contend with: capital, regulations, infrastructure and talent. Importantly, the Act avoids the issue of applicability and coverage by clearly delineating the requirements for registration and licensing or labelling of startups, eligible to enjoy the stipulated wide-reaching incentives.
In addition, the Act introduces specific provisions aimed at reforming identified onerous legal, regulatory, tax and administrative bottlenecks which have hindered the operations of startups in Nigeria. This should encourage the inflow of investment into the sector, improve the Nigerian business and economic landscape, and serve as a big boost to the Ease-of-Doing-Business campaign of the Federal Government.
We have highlighted below some of the key provisions of the Act along the thematic areas for ease of understanding:
1. Establishment of the National Council for Digital Innovation and Entrepreneurship.
Section 3 of The Act establishes the National Council for Digital Innovation and Entrepreneurship (“the Council”), consisting of the President as the chairman, the Vice-President as the vice-chairman, the Minister for Communications and Digital Economy, who will preside over the council in the absence of the President and the Vice-President. The other members of the Council include the Minister of Finance, Budget and National Planning, the Minister for Industry, Trade and Investment, the Minister for Science, Technology and Innovation, the Governor of the Central Bank of Nigeria, four (4) representatives of the Startup Consultative Forum, and one representative each from the Nigeria Computer Society and Computer Professionals (Registration Council of Nigeria). The Director of the National Information Technology Development Agency will serve as the Secretary of the Council. The tenure of members that are not ex officio is 2 years and this is renewable for another term of 2 years only.
The Council, which shall be a body corporate, will be responsible for formulating and providing policy guidelines for the realization of the objectives of the Act. It will also approve programs, monitor the implementation of its policies and programs, and provide support to individuals, universities, and research institutions carrying out postgraduate research in the areas of science, technology and innovation. It is empowered to appoint an Agent that will carry out its general or specific directions and provide it with quarterly monitoring and annual reports with respect to the program being implemented pursuant to the Act.