Kenyan President William Ruto, at a regional business summit in Nairobi targeting US investors, announced that some controversial provisions in the National Information, Communications and Technology (ICT) Policy, which requires tech companies in Kenya to have at least 30% Kenyan ownership to operate in the country, had been reversed. However, this announcement was not supported by official evidence or documents. The policy, gazetted on August 7, 2020, aimed to position Kenya to harness global opportunities and gain global recognition for innovation, efficiency, and quality in public service delivery. Although Ruto’s statement gave hope to foreign investors, the country has published three separate gazettes since the statement with no trace of the policy amendment, signaling that the statement on the review of the policy was merely a promissory remark.
The ICT policy sought to change the narrative for startups in Kenya in several ways, including:
New 30% Equity Participation Rule in Favour of Kenyans
The new ICT policy aimed to reserve 30% of ownership stake in every company registered to do ICT-related businesses in Kenya. Only companies with at least 30% substantive Kenyan ownership, whether corporate or individual, would be licensed to provide ICT services. Foreign companies doing any ICT-related businesses in Kenya would have to give at least 30% of their ownership stakes to Kenyans. This applies immediately to foreign new comers to the Kenyan tech startup landscape. However, existing wholly-owned foreign ICT companies in the country will have until 2023 to meet the local equity ownership threshold. Once the three years expire, they may have to apply to Kenya’s Cabinet Secretary for Information, Communications & Technology for a one-year extension with appropriate acceptable justifications.
For ICT companies listed or to be listed on the Nairobi Stock Exchange, their equity participation or distribution would be governed by the extant rules of the Capital Markets Authority of Kenya.
Pension Funds in Kenya to Set Aside 5% of their Funds for Investment in Local Startup Ecosystem
Pension funds in Kenya were encouraged to set aside 5% of their investments for the local ICT startup ecosystem. This would unlock funding for startups in Kenya. Since 2015, Kenya has allowed private equity and venture capital firms to raise funds from pension schemes. This has allowed pension schemes to invest up to 10% of their assets in private equity and venture capital firms that invest in startups and SMEs. However, the new 5% rule under the new policy would encourage pension funds to invest directly in startups or venture capital firms investing in early-stage startups, out of the permitted 10%.
Implications for Kenyan ICT Firms
The 30% local ownership requirement in Kenyan tech companies remains valid, despite President Ruto’s statement at the regional business summit.
Existing wholly-owned foreign ICT companies in Kenya have until 2023 to meet the local equity ownership threshold.
Foreign-owned ICT firms must meet the 30% equity participation requirement going forward.
Pension funds in Kenya were encouraged to set aside 5% of their investments for the local ICT startup ecosystem, unlocking funding for startups in the East African country.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The United Arab Emirates (UAE) Ministry of Finance (MoF) has recently issued a new Ministerial Decision, №73 of 2023, on Small Business Relief. This decision is aimed at supporting startups and other small or micro businesses by reducing their Corporate Tax burden and compliance costs, in accordance with Article 21 of the Corporate Tax Law. The decision specifies the revenue threshold and conditions for a taxable person to elect for Small Business Relief and clarifies the provisions of the carried forward Tax Losses and disallowed Net Interest Expenditure under the Small Business Relief scheme.
Under the new Ministerial Decision on Small Business Relief, taxable persons who are resident persons can claim Small Business Relief where their revenue in the relevant and previous tax periods is below AED3 million for each tax period. Once a taxable person exceeds the AED3 million revenue threshold in any tax period, the Small Business Relief will no longer be available. This revenue threshold will apply to tax periods starting on or after 1st June 2023 and will only continue to apply to subsequent tax periods that end before or on 31st December 2026.
Revenue can be determined based on the applicable accounting standards accepted in the UAE. However, Small Business Relief will not be available to Qualifying Free Zone Persons or members of Multinational Enterprises Groups (MNE Groups) as defined in Cabinet Decision №44 of 2020 on Organising Reports Submitted by Multinational Companies. MNE Groups are groups of companies with operations in more than one country that have consolidated group revenues of more than AED3.15 billion.
In tax periods defined in the decision where businesses do not elect to apply for Small Business Relief, they will be able to carry forward any incurred Tax Losses and any disallowed Net Interest Expenditure from such tax periods, for use in future tax periods in which the Small Business Relief is not elected.
The Ministerial Decision also addresses the issue of the artificial separation of business. It specifies that where the Federal Tax Authority (FTA) establishes that taxable persons have artificially separated their business or business activity and the total revenue of the entire business or business activity exceeds AED3 million in any tax period and such persons have elected to apply for Small Business Relief, this would be considered an arrangement to obtain a Corporate Tax advantage under Clause (1) of Article 50 regarding the general anti-abuse rules of the Corporate Tax Law.
This decision is expected to benefit startups and other small or micro businesses looking to establish a headquarters abroad, especially those from Africa. By reducing their Corporate Tax burden and compliance costs, the UAE is positioning itself as an attractive destination for foreign investment and entrepreneurship. However, it is important to note that this relief is not available to all businesses and only applies for a limited period, so interested parties should carefully consider their eligibility before making any decisions.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The National Bank of Ethiopia (NBE) has taken a significant step towards enhancing the stability of the country’s financial system by setting up a deposit insurance fund. The Ethiopian Deposit Insurance Fund has been established in line with Council of Ministers Regulation №482/2021, and it will serve as a financial safety net for depositors of commercial banks and microfinance institutions.
Deposit insurance is a form of banking regulation that protects depositors and ensures the stability of the banking system. It is a crucial component of the financial safety net because it provides explicit depositor protection and prevents a “bank run.” The NBE recognizes the importance of deposit insurance, and as such, it has established the Ethiopian Deposit Insurance Fund.
Prime Minister Abiy Ahmed
According to the NBE, all groundwork for the establishment of the Fund has been completed, and the Prime Minister Abiy Ahmed has appointed a new CEO for the deposit insurer. The incoming Chief Executive Officer of the Fund is Merga Wakweya, who currently serves as the Director of Microfinance Institutions Supervision at the National Bank of Ethiopia.
The NBE expects the Fund to play a crucial role in maintaining depositor confidence, preserving financial stability, promoting economic growth, and developing the country. The Ethiopian Deposit Insurance Fund will compensate insured depositors of both commercial banks and microfinance institutions. The Fund will undertake various activities to achieve its objectives, including issuing directives, collecting premiums from financial institutions, and investing and managing resources.
The primary duty of the Fund is to make payments to insured depositors in the event of a bank or microfinance institution failing. This will help to maintain the confidence of depositors and ensure that they do not lose their savings in the event of a bank failure.
In conclusion, the establishment of the Ethiopian Deposit Insurance Fund is a significant step towards enhancing the stability of Ethiopia’s financial system. It provides a safety net for depositors, promotes financial stability, and supports economic growth in the country. With Merga Wakweya at the helm, the Fund is expected to play a crucial role in achieving these objectives.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The government pf Ghana has introduced two new taxes: a 10% tax on all betting, games and lottery wins and a levy on every ride-hailing trip.
Betting Tax
The new 10% tax on betting and lottery winnings has been met with criticism by young Ghanaians on social media who are involved in betting. The betting industry in Ghana has seen significant growth in the past decade, leading to many betting companies operating in the country. Sports betting has been a topic of controversy among Ghanaians, with some believing it has negative effects on the youth while others see it as a legal activity.
The new tax means that 10% of all winnings by punters will go to the government of Ghana.
Ride-Hailing Tax And Regulations
The “Digital Transport Guidelines” announced by Ghana’s Driver and Vehicle Licensing Authority (DVLA) will impose a new levy on every ride-hailing trip. The vehicle licensing agency plans to force ride-hailing companies to share real-time trip and customer data with it.
The new rule means that Uber, Bolt, Yango, inDrive, and Black Ride — the five ride-hailing firms which operate in Ghana — will impose an additional charge on passengers who use their platforms. The new charge may amount to double taxation, especially for passengers who use mobile money payments. This tax is in addition to the unpopular e-Levy, a 1.5% tax on all electronic and mobile payments above 100 cedis, which was introduced in May 2022 and reduced to 1% in January 2023.
The DVLA has set the fee at GH¢1 per trip, subject to periodic review. It is unclear if Ghanaian law permits administrative bodies to impose charges on consumers like the DVLA has. The new per-trip levy will cover annual license fees paid by drivers, digital transport licenses, fees for an information search system, and the costs of maintaining the entire DVLA database.
The new guidelines mandate the registration of all private vehicles intended for commercial purposes with the Driver and Vehicle Licensing Authority. Registered vehicles would then receive a DVLA sticker which they are required to fix onto the front windscreen of their vehicles. The DVLA also mandates ride-hailing companies to verify their passengers’ identities using Ghana’s biometric digital ID, the Ghana card.
Having a data protection certificate is a requirement for ride-hailing companies operating in Ghana, and the new guidelines acknowledge this. However, the new rules from the agency will force ride-hailing companies to share business and personal customer information with the agency for every trip completed. Data the agency wants to collect includes passenger information, driver name, departure and arrival time stamps, departure and arrival GPS coordinates, trip distance, date of transaction, license number of driver, vehicle registration number, and driver, vehicle and passenger ratings.
The data will enable the DVLA to collect the revenue from its new tax net, which is supposed to be remitted monthly by ride-hailing companies. The new rules may open fronts for data abuse and privacy violations.
Ghana is battling inflationary headwinds that have eroded the buying power of the cedi by more than 50% in the last year alone. In January, inflation rose to 54.1%, a 22-year high. The new taxes on betting and ride-hailing may further exacerbate the cost of moving people and goods across Ghana, contributing to rising prices. Taxes on services like ride-hailing are not uncommon, and these costs often get passed on to passengers. Paying GH¢1 extra for every Uber/Bolt trip may not be much, but for Ghanaians feeling the pinch of a flagging economy.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
On Thursday, March 30, 2023, Kenya’s President William Ruto announced that startup companies based in Kenya would be exempted from paying taxes on unrealised gains, effective July 1, 2023. The president made the announcement at the Ole Sereni Hotel in Nairobi during the American Chamber of Commerce Regional Business Summit. He noted that his administration wanted to make Kenya an apex innovation centre by attracting investments from startups, but a few hindrances remain that are preventing such businesses from realising their full potential.
Kenya digital tax
President Ruto stated that the Kenyan government would exempt startup companies from paying taxes on unrealised gains on employee-allocated shares starting 1st July this year. He added that his administration is committed to promoting the best operating environment for business enterprises by introducing policies designed to make Kenya the most competitive investment destination across the continent.
Additionally, the president noted that Kenya has one of the most developed financial services sectors on the continent and is ripe for the establishment of an International Financial Centre in Nairobi to attract global financial players. He also announced that Kenya, the United States government and the American Chamber of Commerce had launched a trilateral business dialogue to address and resolve the challenges of U.S. investors and businesses in Kenya, in a bid to boost trade among the two nations.
The exemption of startup companies from taxes on unrealised gains on employee-allocated shares is a positive development for the startup ecosystem in Kenya. This move will provide a much-needed financial boost for new businesses that are struggling to attract investment. By removing this tax burden, more startups are likely to attract investment, which will help them grow and scale up.
However, it is important to note that this exemption is only on unrealised gains, and startups will still be required to pay taxes on any realised gains.
An unrealized gain or loss is a change in the value of an asset that has not yet been sold. This means that it is only a paper gain or loss and has not resulted in any cash or taxable event. For example, if you buy a stock for $10 and its value increases to $15, you have an unrealized gain of $5. However, if you sell the stock for $15, then you will have a realized gain of $5 that will be taxable.
Unrealized gains or losses are not taxed until they are realized, which means until the asset is sold. So, if you hold on to the asset and it continues to increase in value, you won’t owe any taxes until you sell it.
To calculate unrealized gains or losses, you need to determine the current market value of the asset and compare it to its original purchase price. The difference between the two values will give you the unrealized gain or loss.
Unrealized gains or losses can be relevant at any stage of a business. For example, if a business owns stocks or other investments that have increased in value, the unrealized gains will increase the net worth of the business. On the other hand, if a business has assets that have decreased in value, it will have an unrealized loss. These unrealized gains or losses may affect the financial statements of the business, but they will not result in any tax liability until the assets are sold.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The Bank of Central Africa can now open current accounts for payment and microfinance institutions in the same way that it does for banks and other financial institutions. The Bank of Central African States (BEAC) Board of Directors granted this approval when it convened in ordinary session on March 14, 2023 in Yaoundé, Cameroon.
The Board of Directors of the said bank allowed the BEAC Government to establish current and settlement accounts for payment institutions and microfinance institutions authorised to offer payment services on a case-by-case basis, according to the BEAC’s criteria.
It should be noted that under the rules of Article 5 of the CEMAC Payment Services Regulation of December 21, 2018, firms are entitled to operate as payment service providers, credit institutions, microfinance institutions, or approved payment providers.
Gabon, Cameroon, the Central African Republic (CAR), Chad, the Republic of the Congo, and Equatorial Guinea comprise the Central African Economic and Monetary Community (CEMAC). It has a population of roughly 37 million people and a total surface area of about 3 million km2.
Bank Central Africa fintech Bank Central Africa fintech
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The recent collapse of Silvergate Bank and Silicon Valley Bank has sent shockwaves through the global startup community, highlighting the importance of reviewing existing business continuity policies, particularly on how much saved money a startup can recover from failed banks. These incidents have emphasized the need for startups to be prepared for the worst-case scenario and have sparked discussions on the role of regulators in ensuring the safety and stability of the financial sector across ecosystems. This article will examine the impact of potential bank failures on startups in Africa, particularly exploring the government insurance policies that are in place to protect them.
Ghana:
In Ghana, the maximum compensation given to a bank depositor in the event of bank failure is GHC6,250.00 (USD$508).
If a depositor has more than the insured amount, the excess will be refunded by the collapsed bank’s receiver.
If, on the other hand, a person had a bank deposit account in his own name with a primary amount of GHc8,000, and his bank collapsed, he would be reimbursed GHc6,250, and the Reciever would refund the remaining GHc 1,750.
Amounts up to Rwf 500,000 (USD$460) per depositor per member bank and microfinance institution are now protected by the Rwandan Deposit Guarantee Fund, in the event of bank failure.
Deposits that exceed the predetermined limit are not given any further protection by the Deposit Guarantee Fund.
The maximum protected amount is Rwf 500,000 and it is calculated by adding the total balance of all bank accounts held by one depositor, including any accrued interest.
Only deposits made to a member institution’s bank accounts up to Ksh. 500,000 (USD$3,895) per depositor are insured. If a depositor has many accounts with a certain institution, all of those accounts are combined and reimbursed up to a maximum guaranteed amount of Ksh. 500,000.
Upon the liquidator’s successful recovery of sufficient monies from the sale of the institution’s assets and the collection of debts, a deposit in excess of Ksh. 500,000 is paid as a liquidation dividend.
The Corporation for Deposit Insurance (CODI) has the responsibility of safeguarding deposits held by natural or non-financial persons in South Africa. The protection offered by CODI is R100 000 (USD $5,458) per eligible depositor and per bank.
Separate insurance will be provided for sole proprietorship accounts and individual bank accounts. If the bank is able to pinpoint the accounts the person uses for their sole proprietor business, the coverage maximum will be R100 000.
Up to the amount of R100 000, deposits made in foreign currencies are likewise insured. Prior to paying a depositor when a bank collapses, foreign currency balances will be converted to South African rand.
When they have bank amounts of more above R100 000, eligible depositors are not permitted to purchase additional deposit insurance coverage. Depositors may make claims against the collapsed bank’s estate, which the liquidator will manage, for amounts over R100,000.
Insures deposits in all six countries that the Economic and Monetary Community of Central Africa comprises of (Cameroon, Central African Republic, Chad, Equatorial Guinea, Gabon and Republic of the Congo).
The Fund will reimburse savers’ deposits and other assets placed with banks in the CEMAC (Economic and Monetary Community of Central Africa), up to 5 million FCFA maximum.
Deposit Guarantee Fund in Central Africa (FOGADAC), created seven years ago by the Banking Commission of Central Africa (COBAC)
West African Monetary Union Deposit insurance Fund
This agency is tasked for protecting deposits throughout all eight West African Monetary Union member nations (Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo).
Only deposits owned by natural or artificial persons and denominated in CFA francs are insured, up to the ceiling set by the Council of Ministers.
One million four hundred thousand CFA francs (CFAF 1,400,000 or USD$2,271), per holder, for all deposits held in the books of a member credit institution
Three hundred thousand CFA francs (CFAF 300,000 or USD486), per holder, for all the deposits held in the books of a member Decentralized Financial System.
The Fund compensates depositors within three months, except in cases of force majeure.
In the event of the failure of a participating financial institution, the Nigerian Deposit Insurance Corporation is mandated to guarantee payment of deposits up to the maximum insured sum of N500,000 (USD$1,091) to a depositor in Money Deposit banks and primary mortgage banks and N200,000 (USD$436) to a depositor in microfinance banks.
A building belonging to one of Nigeria’s recently failed banks. Source: Daily Bells
Morocco
The current amount of compensation per natural or legal person is 80,000 DH (USD$7,744). (There are proposals to raise the threshold to at least 120,000 DH.)
In Algeria, the compensation ceiling per depositor is set at two million Algerian dinars (2,000,000 DA or USD$14,639)
Compensation is made in national currency (DA).
Deposits in foreign currencies are converted into national currency at the rate in force on the date on which the banking commission declared the unavailability of the deposits.
Regulatory Body: Bank Deposit Guarantee Fund Algeria(FGDB)
Tunisia
In Nigeria, the maximum amount of compensation received by each depositor from the bank deposit guarantee fund is set at 60,000 dinars (USD$19,218) or its equivalent in convertible currencies based on the exchange rate in effect on the date of publication of the decision of compensation for the balance of all of his accounts per bank.
The FGDB guarantee is automatic and does not need depositors to seek it in order to profit from it. Depositors can also use it for free.
Regulatory Body: Bank Deposit Guarantee Fund, Tunisia (FGDB)
Uganda
For the balance of all of his accounts with each bank, the maximum compensation that can be received by each depositor from the bank deposit guarantee fund is set at 10,000,000 Ugandan shillings (USD$2,703.99) or its equivalent in convertible currencies, based on the exchange rate in effect on the date that the decision of “compensation” was published.
Deposits in excess of the insured amount will be repaid by the liquidator following the sale of the defunct bank’s assets. The amount paid out will depend on the recovery made.
USD deposits: With effect from 1 January 2022, the maximum deposit protection cover level is set at US$1,000.00 (one thousand dollars) per deposit class per banking institution and US$500.00 (five hundred dollars) per deposit class each deposit-taking microfinance institution;
ZWL deposits: From 17 February 2022, the maximum deposit protection cover level is set at ZWL120,000.00 (One Hundred and Twenty Thousand Zimbabwean Dollars or USD$ 331) per depositor per bank and ZWL5,000 (Five Thousand Zimbabwean Dollars or USD$13) for customers of deposit-taking microfinance institutions..
Clients who have accounts with balances equal to or below the established cover limit are assured to receive full reimbursement in the event that a member institution fails.
Deposit amounts in excess of the authorised cover limit will be paid out pro rata during the liquidation procedure.
The cover limit is reviewed from time to time in line with the growth of the Fund and market conditions.
According to the Central Bank and Banking System Law №194 of 2020, the Deposit Insurance Fund should be directly linked to the Central Bank, have a legal personality and an independent budget, include all banks as members, have a board of directors that is chaired by the governor, and be based in the governorate of Cairo.
No information on insurable limit.
Bank failure Africa startup Bank failure Africa startup Bank failure Africa startup Bank failure Africa startup
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The Nigerian government has set up 10 billion naira ($21.7 million) every year under the Tech Startup Act to assist digital entrepreneurs in the country.
Professor Isa Pantami, the country’s Minister of Communications and Digital Economy, made the announcement during the formal launch of the Nigeria Startup Act Implementation Committee (NSAIC) in Abuja, the nation’s capital.
Professor Sahalu Junaidu, Chairperson, will preside over the 27-member Committee, which will be co-chaired by Chinenye Mba-Uzoukwu.
He stated that the world’s leading nations have achieved success by prioritising knowledge-based economies, technology and entrepreneurship developments, and start-ups as key sources of income.
Professor Pantami stressed the importance of the Act in fostering digital startups, which would enhance the information and communications technology (ICT) industry.
The Minister praised Nigerian companies for putting the country on the world map with their outstanding achievement.
“In a country like Nigeria, we are blessed with talents. We have innovators, young people that are making us proud. I have been with Nigerian start ups to many global competitions and we always leave with our shoulders high because of the performance of our young innovators.“
He stated that the Nigeria Startup Act is required to combine and offer legal, technical, and financial backing to all of these accomplishments.
“It’s implementation also becomes necessary, because we discovered some challenges confronting our innovators in the country. Sometimes it’s in regards to finance. Today in the Act, there is provisions to support them financially. Government will set aside a minimum of 10billion Naira annually in addition to other sources of funding that has been captured in the law.“
According to Professor Pantami;“There is also a leadership where we are going to have the National Council for Digital Innovation and Entrepreneurship to be chaired by the President of Nigeria. This is to provide the leadership that is required to address the challenges being confronted by the the e-forces.
“We also have an implementation committee where we brought together relevant stakeholders, some from government, some from the private sector, some from ecosystem, some from academia, some from legal institutions and many more to come together and provide the leadership that is required for the technical implementation of this very important law.“
The Minister, on the other hand, decried the unjustified harassments faced by young innovators in the country, who are frequently mistaken for criminals by law enforcement agents, noting that the Act would provide them with legal, technical, and financial assistance to help them overcome some of their difficulties.
“In addition to so many initiatives, in a country like Nigeria it is unfortunate that few years ago, before our modest efforts to complain to Mr President, some of our young innovators where unnecessarily being harassed sometimes by other institutions. Whenever they see you caring laptop you will just become a suspect. instead of encouraging you, you are being intimidated
“It becomes necessary to deal with the criminals whoever, citizens are always innocent until proven guilty by a court of the law. So all these issues are going to be addressed and they are being addressed by the Nigerian Start up Act 2023”.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The Central Bank of Nigeria has approved the operating parameters for open banking in Nigeria, kicking off the country’s open banking system. Musa Jimoh, Director of the CBN’s Payments System Management Department, issued a circular outlining the guidelines on March 7, 2023.
The policy will usher in a new era of financial innovation and financial inclusion in Nigeria and throughout Africa.
Godwin Emefiele, CBN governor
On February 7, 2021, the CBN announced the regulatory framework for open banking in Nigeria, laying the basis for an industry group to prepare a draught of operating guidelines in May 2022. This draught has now become the legislation for CBN-supervised banking and fintechs.
Many innovative fintech companies, like Mono, Okra, and Stitch (all members of the Open Banking Nigeria consortium), have gone ahead and developed creative hacks while waiting for open banking. But now that they can provide the market more richer data than is currently accessible, their days of suffering are gone.
A new era of financial inclusion and innovation would start with open banking. strengthening Nigeria’s position as a worldwide leader in financial services and payments.
Key Provisions Of The New Regulations
The rules require the CBN to develop and operate an Open Banking Registry, which will act as a regulatory monitoring tool for open banking ecosystem players. This register is also intended to improve transparency and give a mechanism of regulating system operators.
In addition, the rules establish a Consent Management framework, which requires consumers to express explicit consent before their data may be accessed for open banking products and services, among other purposes.
“The adoption of open banking in Nigeria will foster the sharing of customer-permissioned data between banks and third-party firms to enable the building of customer-focused products and services.
“It is also aimed at enhancing efficiency, competition, and access to financial services,’’ the memo shows.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
The first “regulatory sandbox,” a device that enables fintechs to provide test financial services, has been introduced by the Central Bank of Tunisia.
The BCT made the decision to repeat this experience a little over three years later, but this time with more “traditional” financial institutions.
The BCT Governor, Marouen Abassi, made the announcement yesterday while taking part in the Annual Days of the Club of African Bank and Credit Institution Managers in Tunis. The “express sandbox” would be aimed towards local banks.
Banks will be able to test and launch their digital solutions through this programme in order to assure compliance with various requirements. This framework gives the BCT the chance to check the dependability of these solutions before making them available to customers.
The central banker reaffirmed that this programme is in line with the BCT’s orientation to support “the means and systems of payment as a lever for inclusion and financial stability.”
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
