Senegal 1st Sub-Saharan African Country To Pass Startup Act, Others To Follow

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Written by Peter Pedroncelli
Startup Act
Senegal has become the first sub-Saharan African country to pass a Startup Act aimed at encouraging local entrepreneurs and supporting tech startups. Photo by David Olubaji on Unsplash

Senegal has become the first sub-Saharan African country to pass a Startup Act, which hopes to create an enabling business environment for tech startups in the West African country.

Other countries in Africa are also formulating policies and legislation in favor of tech startups.

The Startup Act, which was approved in Senegal at the end of December, is designed to support and encourage local entrepreneurs and promote the growth of digital technologies, according to Afrikanheroes.

The Senegalese Startup Act plans to do this by creating a specific support and governance framework for startups, as well as a suitable legal framework for the registration and labeling of Senegalese startups. 

The Startup Act also creates a resource center dedicated to startups and a package of incentive measures.

Small- and medium-sized businesses typically form the economic backbone of industrialized countries across Europe and North America, according to the U.S. Department of Housing and Urban Development.

The same is true of one of Africa’s most developed economies. More than 90 percent of the formal South African economy is made up of small- and medium-sized businesses, which contribute 60 percent of all jobs, according to Sowetanlive.

In Africa, small businesses like tech startups often face regulatory and financial barriers. Startup Acts are implemented with the goal of overcoming those challenges, governments say.

Whether African Startup Acts will be successful remains to be seen, but they are expected to give a much-needed boost to entrepreneurship and competitiveness.

Senegal’s startup policies have been shaped by local entrepreneurial ecosystems and i4Policy, an African policy creation firm.

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In 2018, Tunisia became the first African country to pass such a law.

The Tunisian government passed into law the Tunisian Startup Act which includes an exemption for startups from corporate taxes for up to eight years, special custom procedures, and exemption from capital gains tax on investments made in startups.

Other African countries are following suit. In April 2019, the government of Mali put together a document to allow stakeholders to analyze the policies that will make up the country’s first Startup Act, Weetracker reports.

Ghana and Rwanda are also in the process of developing their own Startup Acts. 

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