HOW THE NIGERIA STARTUP ACT IS REFRAMING THE STARTUP ECOSYSTEM

Author: Fanny Akhile

The Nigeria Startup Act (NSA), enacted into law in October 2022, is landmark legislative to grow the country’s startup economy. The Act builds an open legal and institutional environment to position Nigeria as Africa’s leading digital and innovation hub. Through the removal of systemic barriers such as regulatory obstacles, access to finance challenges, and infrastructural shortages, the Act aims to drive entrepreneurship, tech skill building, and inclusive economic growth.

Challenges Confronting Nigerian Startups

Empirical data have reported significant challenges that are impeding startup development in Nigeria:

Aladejebi and Bamkole (2023) enumerated restricted access to capital, accelerators, and bank finance as some of the key challenges. Such limitations restrict the capacity of startups to Launch, scale, and sustain operations. Njeba and Li (2024) also noted the negative impact of irregular and restrictive government policies on disruptive innovation. Their findings highlight the significance of an enabling regulatory framework, and Onuoha (2023) also commented on the lack of investor-ready startups and the weak infrastructure as the major handicaps for venture capitalist investment and maintaining long-term growth.

Strategic Interventions of the Nigeria Startup Act

A number of these targeted interventions amongst others to counter these issues are introduced through the Act and startups enjoy these benefits once they are signed up on the startup portal:

1. National Council for Digital Innovation and Entrepreneurship: It handles policymaking and oversight towards the goal of simplifying regulatory procedures and supporting innovation.

2. Startup Portal: An e-platform for central registration, co-working, and sharing of resources with the purpose to enhance visibility and connectivity in the startup ecosystem.

3. Startup Label Certificate: An official recognition mechanism that identifies eligible startups for access to government support, capacity development programs, and funding.

4. Startup Investment Seed Fund: A specific public fund supporting early-stage capital, directly combating capital access bottlenecks.

5. Crowdfunding and Listing Provisions: These offer substitute sources of finance and unlock investment channels through public and private mechanisms.

6. Tax and Fiscal Incentives: Tax incentives such as tax relief reduce the cost of doing business and enhance the competitiveness of startups.

8 Simple Step-by-step guide to Register on the Nigeria Startup Portal

Step 1: Access the Portal

Navigate to the official website at www.startup.gov.ng and select the “Register” option on the homepage.

Step 2: Select Your Category

Choose the registration category that best fits your role—options include Startup, Venture Capitalist, Angel Investor, Accelerator, Incubator, or Innovation Hub.

Step 3: Provide Personal and Organizational Details

Fill in the required information, including your name, email address, and other relevant data based on the selected registration category.

Step 4: Email Confirmation

Check your inbox for a verification email from the portal. Click the link provided to confirm and activate your account.

Step 5: Complete Your User Profile

Once verified, log in and complete your profile by adding more details about your startup, investment focus, or support services, depending on your category.

Step 6: Apply for the Startup Label (Startups Only)

If you’re registering as a startup, you can now apply for the official Startup Label, which qualifies you for government-backed benefits under the Nigeria Startup Act.

Step 7: Submit Verification Documents (Other Categories)

For VCs, Angel Investors, Accelerators, Incubators, and Hubs, additional documentation is required for verification. Submit the necessary credentials to complete this process.

Step 8: Engage in the Startup Consultative Forum

After successful registration, you are eligible to participate in the Startup Consultative Forum, a collaborative platform for stakeholders to engage in dialogue and influence startup policy development.

By completing the registration process, you’ll join a vibrant community of startups, venture capitalists, angel investors, and accelerators/incubators/hubs already registered on the Nigeria Startup Portal. As of April 2024, the National Information Technology Development Agency (NITDA) reported the following registrations:

Startups: 12,948​, Venture Capitalists: 912​, Angel Investors: 1,735​, Accelerators, Incubators, and Hubs: 925.

Upon registration and labeling, startups can access detailed information about available funding options and application procedures.

References

Federal Republic of Nigeria. (2022). Nigeria Startup Act. Retrieved from Nigeria Startup Act

Njeba, A. E., & Li, H. (2024). Challenges in Developing Disruptive Innovation in Start-ups in Nigeria. North American Academic Research, 7(8), 45–78. Retrieved from here.

Okamgba, J. G. (2023). Infrastructure Deficit in Nigeria: Overcoming Barriers to Development. TechEconomy. Retrieved from here.Nairametrics. (2024, April 16). Nigeria Startup Act: NITDA says 12,948 startups now registered. https://nairametrics.com/2024/04/16/nigeria-startup-act-nitda-says-12948-startups-now-registered