How African governments can help tech startups grow

by MMC
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Go to any African tech conference and the usual refrain when entrepreneurs are asked what governments can do to help them succeed is “Stand aside!” “.

But is this way of thinking becoming a little outdated, especially as a number of African governments show signs of willingness and ability to engage with local tech ecosystems?

Certainly, startups don’t need their leaders to be “an obstacle”, but are there things governments can do to ensure they offer more to entrepreneurs than just guarantees not to bother them?

We think so! Here are some suggestions and examples of ways African governments are already working to boost local tech ecosystems.

Get out of the way!

Let’s tackle this one right away: the African techpreneur’s conference call. Yes, African governments have a history of hindering rather than helping the entrepreneurial community, and while that reputation has changed somewhat, excessive regulation, such as taxes on mobile money and social media in some countries, keeps this topic relevant. If governments tend to overtax and block innovation, they should indeed step aside.

Positive regulation

If governments are to regulate, they must do so in a positive way. There is a trend towards governments introducing startup-friendly legislation, initiated by Tunisia and currently replicated in no less than 10 other African countries. Startup Acts, established through collaborations with local startup ecosystems themselves, could go a long way toward removing bottlenecks that have hindered growth.

Facilitation

In addition to regulating favorably, governments can also take a more active role in supporting startups. This is slowly but surely being seen across the continent, with, for example, Egypt launches startup incubator, Nigeria deploys several hubsAnd Rwanda provides infrastructure for startup growth. Some initiatives have not been as successful, such as Enterprise Kenya project much announced but totally without impactbut there is growing evidence that African governments are providing the rails for local startups.

Funding

The next step from facilitation is to offer direct funding to African startups, and although this is less common, more and more governments are investing in the technology sector. The Senegalese government injected US$2 million into 40 local tech startups last yearNigeria organized a fundraising initiativeAnd Egypt launches fintech fund. South Africa is leading the way, with initiatives like SME Fund SA and the Project Development Partnership (PDP) Fund. We will likely see more direct investment in startups from governments – or at least government-funded initiatives – in the years to come.

Become customers

The road less traveled is that of governments become customers technology startups. Speaking at the NetProphet event in Cape Town in 2016, project founder Isizwe Alan Knott-Craig Jr hailed gov-tech – startups providing solutions to African governments – as a lucrative marketbut although his organization certainly worked well in the city of Tshwane, his example was not often followed. Nigeria’s SpacePointe And AhadooTec from Ethiopia are two African startups that have successfully secured government contracts, but in general, startups struggle to provide these services due to procurement and interoperability issues. Still, governments would benefit from partnering with startups in the same way as businesses across Africa, and it would be good to see tender processes become easier and borders lowered so that more startups can win government contracts.

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