NITDA seeks 15 MDAs coordination to implement Nigeria Startup Act

The National Information Technology Development Agency (NITDA) has called for coordination among 15 ministries, departments and agencies (MDAs) to fully implement the incentives provided under the Nigeria Startup Act (NSA).

The agency made the call at the NSA Incentives Activation Co Creation Session in Abuja, organised by its subsidiary, the Office for Nigerian Digital Innovation (ONDI).

NITDA said effective implementation of the legislation would require government institutions across different sectors to work together to ensure that startups and investors can access the incentives and other benefits provided under the law, which was signed four years ago.

While the concerned MDAs were not mentioned, the agency referenced the tax incentives provision of the Act, which falls within the purview of the Nigeria Revenue Service (NRS).

What they are saying

Speaking on behalf of NITDA Director General, Kashifu Inuwa, ONDI National Coordinator Victoria Fabunmi said the government must now move from policy design to operational delivery, with the impact of the Act measured by its ability to provide tangible benefits to businesses in the innovation ecosystem.

• Inuwa said the establishment of the Startup Consultative Forum and its governance structures, as well as the launch of the digital startup portal, had created important channels for engagement between government and ecosystem stakeholders.
• However, he said the real test of the legislation was whether founders could easily access the relief, funding and other resources provided under the Act.
• “We want to go to the next level. We want to be able to say that the actors in our ecosystem have been able to benefit significantly from the legislation that has been passed, and it wouldn’t happen without everyone sitting in this room,” he said.

Over 31 incentives hanging

In a context setting presentation titled “Operationalising the Incentive Provisions of the Nigerian Startup Act,” Elma Andah, Acting Lead, Strategy, Research and Analytics at ONDI, said the Act provides more than 31 incentives across six major categories.

She identified the categories as tax and fiscal incentives, regulatory support, funding access, exports and trade, ecosystem enablers, and training and capacity building.

According to Andah, implementing the incentives requires the participation of more than 15 government institutions, making coordination among the MDAs critical to the success of the legislation.

• “No single institution can deliver all these incentives alone. Implementation requires coordination across more than 15 MDAs,” she said.

She said the institutions involved in implementation operate across sectors including trade, finance, communications, innovation, digital economy, science and technology, with each possessing different mandates, resources and policy instruments.

• NITDA said bringing the institutions together would help identify implementation gaps, clarify responsibilities and develop workable mechanisms for delivering the incentives to their intended beneficiaries.
• Inuwa urged government agencies, private sector participants and other ecosystem stakeholders to work collectively to remove institutional bottlenecks that could prevent startups from benefiting from the Act.

He said the focus should shift from the existence of the legislation to the practical activation of incentives designed to promote investment, innovation and enterprise growth.

Get up to speed

Former President Buhari signed the Nigeria Startup Bill 2022 into law on October 19 2022 to put an end to the legal uncertainties that had trailed the startup industry in the past.

• However, four years after, the Act remains at the pre-implementation stage, with several incentives provided under the law still elusive to Nigerian startups.
• In June 2024, NITDA inaugurated a Startup Labelling Committee as part of moves to implement NSA.
• According to the agency, the committee was to, among others, review and evaluate startups’ applications for label based on criteria defined in the Act and any additional criteria that may ensure quality for the label; Periodically review and update additional labelling criteria to ensure alignment with industry trends; Conduct an impartial evaluation of submitted applications for Startup Label.

Before that, NITDA had announced that a total of 12,948 startups had registered on the portal opened for labelling.

What you should know

Under the Act, before a company can be labelled a startup, it must obtain a certificate known as the startup label. This means that only companies with the startup label will be recognised as startups.

The law mandates that a Startup Support and Engagement Portal should be established to facilitate the issuance of the startup label and also bridge the gap between regulators and startups.

According to the Act, for a company to be named a startup, it must be a registered limited liability company that has been in existence for not more than ten years from the date of incorporation, amongst other requirements.