The State of Startup Acts in Africa (2025)

According to the 2024 Startup Graveyard Report, some African countries have implemented policies that enable new businesses to exist and develop in favourable conditions. One such policy is the Startup Act. These Startup Acts are at different stages of development in their respective countries.

How many Startup Acts are there in Africa?

Eight African countries have fully implemented Startup Acts. They include Tunisia, Senegal, Nigeria, the Democratic Republic of Congo (DRC), Côte d'Ivoire, Ethiopia, Ghana, and Rwanda. Tunisia’s Startup Nation Law came into play in April 2018, making them the first African country to do so. The latest Startup Act adopted in an African country was done by Côte d'Ivoire in November 2023. Other countries in the process of enacting Startup Acts include Algeria, Egypt, Kenya, Morocco, Tanzania and Zambia.

What are the goals of the Startup Act?

While these laws are created in accordance with the specific needs of their respective countries, they have one theme in common: ensuring the continued establishment and growth of startups.

Nigeria
Nigeria’s Startup Act was signed into law by former President Muhammadu Buhari in October 2022. Enacted by the country’s National Assembly, its core objectives are;

• To streamline legal processes for the development of startups in the country.
• To provide support for the establishment and growth of startups and technology-related talents.
• To position Nigeria’s startup ecosystem as a leading force in Africa’s technology sector.

Some of Nigeria’s Startup Act’s features include;

• The Startup Nigeria Portal: a centralised platform managed by the National Information Technology Development Agency (NITDA), where eligible companies can apply for startup labels.
• Startup Labels: Certifications given to qualified companies that give them access to incentives.
• Startup Investment Seed Fund: a funding opportunity provided by the Nigerian Sovereign Investment Authority (NSIA) for labelled startups.

Other features of the Act are tax exemptions, a credit guarantee scheme, crowdfunding opportunities, accelerator & incubator programs, compliance with data protection laws, and the National Council for Digital Innovation and Entrepreneurship.

Tunisia
Tunisia’s Startup Nation Law was enacted under Habib Essid’s rule in 2018 as part of the “Digital Tunisia 2020” strategy. Its core objectives are;

• To streamline legal and administrative processes for the development of startups in Tunisia.
• To provide support for the creation and growth of innovative, technology-driven startups through incentives, tax benefits, and a dedicated startup label
• To position Tunisia’s startup ecosystem as a leading entrepreneurial and technological hub in Africa and the Middle East.

Some features of Tunisia’s Startup Act are;

• Startup Label: a certificate of merit assigned to qualified startups in the technology sector.
• Fund of Funds: €100 million provided for investment in eligible startups at different levels of development.
• Congé pour la Création d'une Startup grants founders annual leave to focus on their projects.
• Startup Grant: an allowance that covers living expenses for company founders in their early phase.

Have the goals of these Startup Acts been achieved?

Each country has recorded a significant impact since the implementation of its respective Startup Acts.

Six months after Nigeria’s Startup Act was enacted, twelve states in the country had reportedly expressed interest or domesticated the use of the law. By April 2024, Dr Bosun Tijani, the Minister for Communications, Innovation, and Digital Economy, announced the opening of the Nigeria Startup Portal for labelling. The Startup Portal had over 12,000 registered startups at the time of this announcement.

By 2023, over 900 Tunisian startups across different sectors had been labelled. This progress prompted the government to push for the adoption of “Startup 2.0” in 2023, aimed at strengthening the first Startup Act and positioning home-grown companies for the international market. Measures were also put in place for financial institutions to provide funding for these startups.

What challenges do these Startup Acts face?

Despite the initial traction Nigeria’s Startup Act gained, state-level adoption has not increased. Out of 36 states, just twelve have domesticated the law, or are in the process of doing so.
According to the Act, the Startup Investment Seed Fund is assigned a sum of 10 billion naira annually. However, only 12% of this amount reportedly reached startups in 2023 due to unclear rules about the fund’s dispersal. Many startups are also not aware of the Act’s provisions and incentives.

Based on TLP Advisory’s Report on Nigeria’s tech space, despite the financial provisions in the Startup Act, almost 50% of startups still depend on angel investors, venture capitalists and crowdfunding to scale operations.

While the policies surrounding Tunisia’s startup ecosystem remain favourable, other issues still exist in the country’s local tech ecosystem. Ezzedine Cherif, former founder of Split, a Tunis-based carpool startup, opined that despite the Startup Act, issues such as over-regulation, misaligned investment choices, and stifled foreign exchange make it almost impossible to scale Series-A level startups from within the country. Hamza Moussini, founder of Tabaani, pinpointed several issues affecting Tunisia’s tech space – severe brain drain, unstable regulatory policies and scarcity of funding.

Ahmed Hadri further elaborated Tunisia’s unique position as the “first African country to initiate a Startup Act law, but at the same time to have a foreign exchange law that dates from the 70s. To have multiple challenges on different levels, but at the same time, be the origin of the largest exit in Africa (Instadeep).”

Policies Supporting African Startups

There are other policy frameworks that support startups beyond the Startup Acts legislated by individual countries. Pan-African policies like the African Union startup policy framework and the African Continental Free Trade Area (AfCFTA) support cross-border businesses and reduce tariffs for its member states. The Digital for Economy for Africa Initiative (DE4A) aims for digital inclusion for individuals, businesses and governments by 2030.

Key Takeaways

Enacting Startup Acts is a positive method of providing enabling environments for new and small businesses. However, evidence shows that startups require more help beyond the creation of these laws. Information campaigns about the Act’s provisions and constantly revising these laws to solve problems faced by startup founders would be a welcome effort.