African countries like Mali and Ghana are working to create a startup act aimed at creating a favourable environment for young entrepreneurs.
According to Wee Tracker, the African countries follow in the footsteps of Tunisia and Senegal, who pioneered the Startup Act in Africa. The Startup Act is a policy which removes barriers to entrepreneurship, such as providing subsidies like tax breaks.
Italy introduced the concept of the Startup Act to the world in 2012, looking to foster growth and creativity. Tunisia followed in 2018, becoming the first African country to set up the Startup Act.
In Tunisia, the government exempts corporate taxes for startups for the first eight years. Moreover, Tunisia does not charge capital gains tax on investments made into startups.
Finally, the North African state offers startup founders with one year off work for both public and private sector employees. Up to three founders qualify for a salary during the first year of operations.
Senegal’s Startup Act is still in the making, looking to pass into law by December.
Mali Startup Act
Mali is in line for similar regulations, having created a blueprint in April 2019 that will guarantee to fund its early-stage ventures. Mali’s Minister of Digital Economy proposed that the law provide seed funding for startups established by Malian nationals.
Besides, the government will also create a startup guarantee fund which will help raise 80% funds for scaling. The initiative will also support innovative projects from research and development laboratories in schools.
However, the program will only benefit ventures below four years old with at least a third of its equity from locals.
African nations like South Africa, Kenya, and Nigeria seem reluctant to adopt similar measures.