FG has approves tax relief and other incentives for startup

Nigerian Startup Paystack Co founders
Nigerian Startup Paystack Co founders

Startup: The Nigerian government has authorized a plan to encourage and expand the country’s digital innovation and entrepreneurship ecosystem.

This was announced in a statement signed by Dr. Femi Adeluyi, Technical Assistant (Research & Development) to Professor Isa Ali Ibrahim Pantami, Minister of Communications and Digital Economy.

The clearance came after the Minister presented a note, according to Adeluyi, and will allow the implementation of policies to stimulate and support the establishment and expansion of more Innovation-Driven Enterprises (IDEs), among other things.

He said that Professor Isa Ali Ibrahim Pantami, the Honourable Minister of Communications and Digital Economy had earlier presented a memo during its meeting on May 18, 2022, where the Federal Executive Council approved a plan to incentivize and further harness Nigeria’s digital innovation and entrepreneurship ecosystem.

The permission is said to enable the implementation of policies to stimulate and support the establishment and expansion of more Innovation-Driven Enterprises (IDEs), which have the potential to create millions of new jobs in the country according to the statement.

In keeping with the National Digital Economy Policy and Strategy (NDEPS) for a Digital Nigeria, this would also aid in the development of innovative solutions to societal challenges, as well as the rapid growth and diversification of the Nigerian economy.

According to the statement, a number of the recommended solutions are the outcome of recommendations made at an interactive forum on February 22, 2022, during which the Honourable Minister led a Federal Government Delegation on a working tour to the Lagos digital innovation ecosystem which include delegation like NITDA’s Director-General, the Nigerian Communications Commission’s Executive Vice Chairman, the Post Master General, and the Managing Director of Galaxy Backbone Plc.”

Adeluyi went on to say that the visit provided a useful venue for open and engaging talks about the ecosystem’s key obstacles and government actions needed to help it reach its full potential.

About 143 ICT and startup companies attended the forum.

He also noted that the group also conducted visits to three selected digital businesses, including Flutterwave ($3 billion in valuation), Treepz ($3.1 million in investment), and Reliance Health ($48.3 million in funding).”

“It is worthy to that under the able administration of His Excellency, President Muhammadu Buhari, GCFR, Nigeria became home to 5 of about 8 Unicorns (startup companies valued at over US$1Billion) on the African Continent.

“Furthermore, Nigeria’s startup ecosystem attracted about 35% (estimated at US$1.4Billion) of the over US$4Billion raised by African startups, which is the highest raised by any startup ecosystem on the continent. Most importantly, it has created a significant number of jobs.

“For instance, Jumia, an indigenous e-Commerce company, provides over 3,000 direct jobs according to Jobberman’s 2020 Digital Sector Report. The report also asserts that Nigeria’s Digital Economy has the potential to create an average of 1.3million tech-enabled jobs across industries in 5 years (i.e. by 2025),” he stated.

Startup company, Paystack's team celebrating birthday of their Co-Founder and CTO, Ezra, and Product Marketer & resident babyboy, Abdulrahman!
Startup company, Paystack’s team celebrating birthday of their Co-Founder and CTO, Ezra, and Product Marketer & resident babyboy, Abdulrahman!

Adeluyi also announced that, in accordance with Executive Order 003 and Presidential Order 005, the Federal Executive Council adopted the following proposals to further improve the ecosystem:

“i. that the Federal Ministry of Finance, Budget and National Planning and the Nigerian Investment Promotion Commission (NIPC) should prioritize the granting of Tax Reliefs and other Incentives such as the Pioneer Status Incentive (PSI) Scheme to the technology and innovation ecosystem;

“ii. that the Nigerian Copyright Commission, the Trademarks Registry, and the Patents and Designs Registry should work with the National Information Technology Development Agency (NITDA) in developing an Intellectual Property (IP) framework for the technology and innovation ecosystem within two (2) months; and

“iii. that the Bureau of Public Procurement (BPP) should work with NITDA to develop a framework that will ensure the involvement of technology innovation startups in government procurement processes to encourage ideation, innovation and design of solutions to solve development challenges within two (2) months.”

He also revealed that the Nigeria Startup Bill (NSB) had already been passed by the Federal Executive Council and forwarded to the National Assembly, with the process nearing completion.

According to him, the Council’s adoption of the incentives will cement the advances made thus far in the NSB process.

The National Digital Economy Policy and Strategy (NDEPS) highlights the importance of the innovation and startup ecosystem in the development of an indigenous digital economy, he said.

He promised that the Ministry will continue to position Nigeria to create this ecosystem in order to transform the country into a digital economy that is both sustainable and prosperous.

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