Adedana Ashebir, the regional manager for Village Capital, a firm that provides support for start-ups across Africa, has called for countries on the continent to set up structural frameworks that will make it easier for innovative businesses to sprout. She specifically mentioned the enactment of national startup acts as some of the approaches the region can deploy to catalyze growth.
Tunisia was the first country in Africa to enact a startup act. Drawing insights from a broad range of entrepreneurs and economists in 2018, the country was able to come up with a framework that protects the essential ecosystem of bright ideas turning into viable businesses across its cities. While Senegal has since followed suit, Ghana and Mali were already in the process of enacting similar act before the global economic lockdown forced states’ authorities to put a temporary halt to the idea.
Nigeria which is the largest market on the continent is expected to embrace this protective act.
In a recent column for TechCrunch, Adedana wrote, “National legislation that creates clear frameworks and operational support for startups are one of the best ways to help Africa’s digital companies survive and thrive through the coronavirus crisis — and improve their environment over the long term”.
The startup investment expert highlighted key areas such as guiding rules specifying the roles of angel investors, venture capital and seed funds, in supporting start ups, as some of the advantages of the act.
She named other benefits the sector will derive: “alleviating their tax and social security contribution burdens, providing access to forex bank accounts and offering subsidized salaries for founders”.
As the ongoing pandemic put businesses off balance, start ups will feel the shocks more. While Adedana said most Tunisian startup owners confided that the act helped keep them afloat, providing the same framework to back up the burgeoning Nigerian start up ecosystem, for instance sectors such as fintech, agritech, edutech, and e-commerce, will go a long way to stimulate growth of innovation as well as aid the push towards diversifying the economy.