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Improving the Startup Environment with Nigerian Startup Act

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By Lere Ojedokun

On October 19, 2022, the Nigerian technology and innovation space, and in particular the tech-enabled startup ecosystem received a major boost when President Muhammadu Buhari signed the Nigeria Startup Bill (NSB) into law.

With the presidential assent, the Nigeria Startup Act (NSA 2022) came into effect, principal objective of which is to further grow the country’s ICT sector which, according to the Minister of Communications and Digital Economy, Prof. Isa Pantami, contributes 40 per cent to the Gross Domestic Product (GDP) annually, with 18.42 per cent already recorded in 2022 alone.

He added that the new act – a joint initiative by Nigeria’s tech startup ecosystem and the Presidency, was aimed at harnessing the potential of Nigeria’s digital economy through co-created regulations, and to emplace well-laid laws and regulations that work for all stakeholders in the tech ecosystem.

Pantami also said the act provides the legal and strategic framework for innovators to make their contributions to the country, stating that out of the seven unicorns in Africa, five are from Nigeria, and that the market value of each unicorn is worth US$1billion.

In a nutshell, the intention of the Nigerian Startup Act 2022 includes recognition of legally incorporated tech startups 10 years downward, whose activities support the creation and incubation of innovations and tech solutions.

It further seeks to provide an enabling environment for the establishment, development, and operation of startups; provide for the development and growth of technology-related talent; and position Nigeria’s startup ecosystem as the leading digital technology centre in Africa.

To achieve the intended objectives, the act makes provisions for the establishment of a startup seed fund; tax incentives for startup businesses, new employees and angel investors, accelerators, and venture capitalists; training and capacity building support; as well as facilitating smooth working relationships between startups and relevant government agencies.

Startups under the Nigerian Startup Act 2022 are defined as any company in existence for not more than 10 years, with its objectives being the creation, innovation, production, development, or adoption of a unique digital technology innovative product, service, or process.

This definition connotes that the Act will apply to tech-enabled startups, that is, companies like Alerzo, Kuda, Bamboo, etc that leverage innovations and technological advancements to solve operational issues or improve customer experience.

The new act, indeed, is a huge step towards addressing the yearnings of players and stakeholders for a more enabling operating environment. This is more so, because, despite the huge socio-economic potential and benefits that digital innovations, products and services can offer Nigeria’s economic recovery and growth, the space is fraught with certain challenges.

For instance, McKinsey & Company in a report, Harnessing Nigeria’s Fintech Potential (September 2020), stated that Nigeria is home to over 200 fintech standalone companies offering fintech solutions, plus fintech solutions offered by banks and mobile network operators. The report added that the Nigerian fintechs raised more than US$600 million in funding between 2014 and 2019.

Quartz Africa, however, lamented the high failure rate of Nigerian startups. It said 61 per cent startup failure rate was recorded from 2010-2018 due to various factors including poor infrastructure such as roads, inefficient electric power, inconsistent government policies, regulatory bottlenecks, over-saturation of startups in select locations, dearth of talent, high operating cost, funding challenges, etcetera.

It is gratifying also that tech-backed B2C and B2B e-commerce startups like Alerzo (AlerzoShop), TradeDepot, Omnibiz, Njalo etcetera are also among the principal beneficiaries of the new act. As an important driver of the digital economy, they also face similar challenges of policy inconsistency, lack of access to funding, exclusion from official foreign exchange window, high lending rate by commercial banks, high operating cost, poor supporting infrastructure, overlap in regulation by government agencies, multiple taxations and insecurity, amongst others.

The new act offers the much-sought political will towards addressing the challenges of tech startups. It is also an acknowledgement of the significance of tech-enabled startup businesses as enablers of national socio-economic growth which e-commerce platforms are a part of.

Despite the challenges in the emerging B2B e-commerce ecosystem, the resilience of the segment as a significant contributor to the manufacturing and distribution value chain is never in doubt. Over the past years, operators have consistently invested in ICT infrastructure and human capital to impact the entire value chain – manufacturers, distributors and retailers – by enabling Factory-to-Retail distribution for consumer goods companies.

Nigeria’s informal retail market is estimated to worth US$100 billion, yet faces peculiar challenges including limited inventory, lack of access to finance for expansion, unregulated and clustered market, distance to market or supply source and high transportation cost, all of which increase cost of operation.

Alerzo is prominent among the tech-enabled e-commerce platforms that are empowering informal retailers in the sub-urban and rural areas with faster distribution of consumer goods using first-party relationship platforms, enabling manufacturers and top-tier primary suppliers to clear their inventory faster, while it absorbs the burden of last-mile supply and delivery to the retailers. The new Act could enable it to do more when the cost of doing business is low.

During COVID-19 and post-pandemic, Alerzo helped to bridge the demand-supply shortfalls by leveraging its ecosystem of digital solutions and logistics platforms to empower informal retailers to access a wide assortment of consumer products with ease and faster from FMCG companies such as Flour Mills, Unilever, Nestlé, Procter & Gamble, PZ Cussons and Dangote at zero delivery cost to the retailers.

More angel investors, accelerators and venture capitalists partnering with B2B e-commerce platforms like Alerzo and others in critical areas such as logistics and warehousing services would mean more goods will pass through the supply chains faster to the consumers.

Businesses will reduce their operating cost and increase profitability; more jobs will be created, economic wealth will be distributed to more people; quality of life will improve, while the economy will be significantly impacted.

The act, by offering incentives, provides a buffer for startup businesses like Alerzo to achieve stability or withstand macroeconomic headwinds. Incentives like pioneer status for tech businesses aged zero to 10 years in critical industries like technology and agriculture and possible tax holiday, up to between three and five years, are highly commendable.

Also allowing startups to employ entry level talent with no more than three-years of post-graduation experience and offering income tax relief up to five per cent of profit generated, and Personal Income Tax relief of 35 per cent for two years for such employees can help them attract the right talents.

By enabling angel investors, accelerators, and venture capitalists to enjoy tax credits, up to 30 per cent of their investment in a startup, can attract more investors into the segment.

The future of tech startups in Nigeria is bright, no doubt. McKinsey & Company, in the report cited earlier, revealed that Nigeria’s fintech ecosystem attracted US$122 million, representing 25 percent of US$491.6 million total funds raised by African tech startups in 2019 alone, coming second to Kenya which attracted US$149 million.

It noted further that Nigerian startups retained US$1.37 billion of Africa’s US$4 billion funding in 2021, showing that Nigeria has the highest volume of startups in Africa. Quartz Africa further affirmed Nigeria as hosting the most startups in

Thus, Nigeria Startup Act 2022 can be a stimulus to accelerate the growth of Nigeria’s tech startups to an enviable height in the not-too-far foreseeable future.

 

Ojedokun, a policy analyst and development advocate, contributes this piece from Lagos.

 


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E-Business

NITDA, API Partner Against Harmful Online Content

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National Information Technology Development Agency (NITDA), in partnership with the Advocacy for Policy and Innovation (API), has convened a one-day workshop in Abuja to advance dialogue on the draft Online Harm Protection (OHP) Bill to confront harmful online content.

NITDA, API Partner Against Harmful Online Content

The bill, a rights-based, locally rooted, and multi-stakeholder initiative, is aimed at addressing the challenges of the digital age.

The event, which held yesterday, brought together government officials, civil society, academics, digital platforms, and legal experts to shape a policy framework designed to combat online ills such as cyberbullying, disinformation, hate speech, digital exploitation, and gender-based violence, while safeguarding democratic freedoms and digital inclusion.

In his keynote remarks, Kashifu Inuwa, director general, NITDA urged a paradigm shift in the way society engages with digital technologies.

“For almost two decades, we have viewed digital technology through a consumer lens. But these technologies are not just products and services. They are transforming how we live, work, and interact. They shape our politics, our society, and our democracy,” he said.

Warning against unaccountable digital power in the hands of private corporations, the DG likened the digital journey to the tale of Alice in Wonderland, where initial fascination with innovation has given way to deeper concerns about privacy, autonomy, and manipulation by big tech platforms.

“We thought we were using Google, but now we realise Google is using us. Social media, once a tool of expression, has become a tool of surveillance and influence,” Inuwa noted.

He, therefore, emphasised the urgency of developing a democratic and accountable framework.  He explained that following the 2021 Twitter ban, NITDA facilitated dialogue between the government and platform operators, leading to a Code of Practice that stressed Nigeria’s sovereignty and legal standards.

According to him, the same process birthed the multi-stakeholder steering committee and the OHP White Paper in December 2024, laying the foundation for the current legislative push.

Earlier in her opening remarks,  Victoria Manya, co-founder, API, observed the moral and civic necessity of the bill.

Her words: “The internet did not break society, it merely revealed its unfiltered version. Every day, Nigerians are exposed to harassment, disinformation, exploitation, and even algorithmic violence. The OHP Bill is not a war on the Internet. It is a peace offering to its users, a social contract for a digital future that is safe, inclusive, and democratic.

“We cannot answer the question of algorithmic power with unchecked state control. We must answer it with shared, rights-based governance. This bill must not be written for the people, but with them.”


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How AI Alert by Airtel is Transforming Mobile Security in Africa

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These days, people rely heavily on their mobile phones for talking, texting, banking, social media, and storing important personal information. Because of this, scammers and spammers often target phone users.

Mobile fraud, like fake SMS messages and scams, is becoming more common and putting millions at risk of losing money or having their private details stolen.

Airtel’s new AI-powered Spam Alert Service offers a smart and timely way to fight back, marking a major step forward in protecting mobile users in Africa.

A brief look at mobile fraud and spam

Mobile fraud and spam are problems around the world, but they hit harder in places where mobile phone use is growing fast, and safety measures haven’t caught up.

A 2024 report from GSMA Mobile Economy shows that more than 20% of mobile users globally have experienced some kind of mobile fraud, with spam texts being one of the most common.

In Nigeria, the Nigerian Communications Commission (NCC) has noted a sharp rise in scam messages and fake calls, leading to yearly losses in the hundreds of millions of dollars.

These spam texts often include fake links, harmful ads, or tricks to steal personal details. Many people get caught without knowing, which can lead to stolen bank money, identity theft, or damaged devices.

Older spam blockers only work on certain phones or apps, leaving many people, especially those using basic phones, without protection.

Why Airtel’s AI Spam Alert Service stands out

Airtel, a top telecom company in Africa, has launched a new and free service called the AI Spam Alert Service. It’s the first of its kind in Africa and aims to protect mobile users from spam text messages as they come in.

What makes this service different is that it doesn’t read or check the actual message content. Instead, it uses advanced artificial intelligence to quickly study the sender’s behaviour using over 250 signs or patterns, all within a fraction of a second.

Some of those parameters, according to Airtel, includes:

  • How frequently the sender changes SIM cards.
  • The volume and frequency of messages sent by the message initiator to different recipients.
  • The geographical spread of the recipient numbers, whether messages are targeted locally or dispersed nationwide.
  • Whether the sender receives replies or only sends messages.
  • A cross-reference of numbers previously reported for spam activity.

The AI completes this analysis in just 2 milliseconds, faster than the blink of an eye, allowing real-time alerts to subscribers as suspected spam messages arrive.

How Airtel’s Spam Alert Service improves mobile safety and trust

Airtel’s new AI-powered spam alert system is set to make a big difference in mobile security across Nigeria and the rest of Africa. Instead of depending on users to block spam themselves, the service works directly through the network to stop suspicious messages before they reach people’s phones.

This kind of technology helps users feel safer and more confident using mobile networks—especially as more people rely on their phones for banking and other money-related services.

A 2025 report by McKinsey Digital shows that many Africans worry about mobile security when using digital financial tools. By reducing the risk of spam and fraud, Airtel is not only protecting its users but also helping to build a safer digital space where more people can take part in the growing mobile economy.

According to Airtel, within two months of its launch, the spam alert service system has identified 9,667,008 messages as potential spam.

Why this is a game changer

By building a service that is first-of-its-kind in Africa, Airtel is leading the way in offering spam alerts, powered by AI directly on its network, for over 150 million subscribers across the continent.

In addition, the service is quick, spotting suspicious sender activity in just milliseconds without reading users’ messages.

Finally, the service is free and requires no app downloads or extra setup. Airtel says the turns on automatically, making it easy for everyone to stay protected, even those using basic phones.

By sending signals to users before problems happen, Airtel boosts trust and encourages more people to safely use mobile money and other digital services.

Scammers are always finding new ways to trick consumers through the ubiquitous mobile phones, so increased demand for security improvements is, understandably, shifting to telecom companies.

Airtel’s AI Spam Alert Service is a strong and timely move toward better, smarter protection for users. As more people start using the service, it should help cut down fraud, keep personal information safe, and make mobile use more enjoyable.

As African economies continue to grow more digital, users of telecom services will need more secure and reliable ways to communicate, and Airtel is leading the way towards that safe future.

 


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Microsoft Server Hack Likely Solo Actor, Thousands at Risk

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A widespread cyberattack targeting Microsoft’s (MSFT.O) server software used by thousands of government agencies and businesses for internal document sharing was likely orchestrated by a single actor, a cybersecurity researcher said on Monday.

Microsoft Server Hack Likely Solo Actor, Thousands at Risk

Microsoft issued an alert on Saturday warning of “active attacks” on on-premise SharePoint servers.

The company clarified that SharePoint Online, part of the Microsoft 365 cloud suite, was not affected by the exploit, which is considered a “zero-day” vulnerability due to its previously undiscovered nature.

“Based on the consistency of the tradecraft seen across observed attacks, the campaign launched on Friday appears to be a single actor. However, it’s possible that this will quickly change,” Rafe Pilling, director of Threat Intelligence at Sophos, a British cybersecurity firm.

That tradecraft included the sending of the same digital payload to multiple targets, Pilling added.

Microsoft said it had “provided security updates and encourages customers to install them,” a company spokesperson said in an emailed statement.

It was not clear who was behind the ongoing hack. The FBI said on Sunday it was aware of the attacks and was working closely with its federal and private-sector partners, but offered no other details.

Britain’s National Cyber Security Centre did not immediately respond to a request for comment.

The Washington Post said unidentified actors in the past few days had exploited a flaw to launch an attack that targeted U.S. and international agencies and businesses.

According to data from Shodan, a search engine that helps to identify internet-linked equipment, over 8,000 servers online could theoretically have already been compromised by hackers.

Those servers include major industrial firms, banks, auditors, healthcare companies, and several U.S. state-level and international government entities.

“The SharePoint incident appears to have created a broad level of compromise across a range of servers globally,” said Daniel Card of British cybersecurity consultancy, PwnDefend.

“Taking an assumed breach approach is wise, and it’s also important to understand that just applying the patch isn’t all that is required here.”


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