Legal Issues Facing Startups in the African Market.
There is no doubt that tech in Africa has a promising future, with a current population of around 1.2 billion people projected to reach 1.7 billion by 2030. Africa has the world’s largest free trade area with the youngest population in the world. 70% of the sub-Saharan population are under the age of 30. Africa’s population is young and growing; the median age for the continent is 18, which is 14 years younger than any other in the world. Africa’s population is set to double to two billion by 2050.
The Tech ecosystem in Africa raised $5.2 billion in 2021 and is predicted to raise $7 billion in 2022. As of January 2022, Nigeria had more than 109 million internet users, the highest in Africa, with only 22% of access to internet connection achieved in Africa in 2022. It is obvious that the tech ecosystem in Africa has barely scratched the surface.
With so much potential, the African startup market is fraught with one legal challenge which usually spirals into different sub-issues. In this series, we look at how government policies affect startups in the African tech ecosystem.
From business structure to taxation, compliance, challenges with product launch, and business engagement with consumers, African startups find themselves in a web of legal issues which all boils down to sometimes, inconsistent policies from the government and industry regulators. Though countries like Nigeria with the recent startup Bill, Kenya, and other African countries have been attempting to create an enabling environment for the African startup ecosystem, the truth is that more work needs to be done. These issues will be considered in details.
References;
Dasha kroshkina, this is why global companies should enter the African market, https://www.entrepreneur.com/article/404166
Statista, Africa: number of internet users in selected countries 2022, https://www.statista.com/statistics/505883/number-of-internet-users-in-african-countries/
Partech report, 2021 africa tech venture capital, https://partechpartners.com/2021-africa-tech-venture-capital-report/
Techcabal, Africa is on track to hit $7b, or more, in startupfunding this year, https://techcabal.com/2022/02/25/african-startups-may-hit-7b-in-funding/
Do well to visit our website, www.scottslegal.com and follow our social media handles to get updated when we release the next part series on legal issues facing startups in the African market. We will also highlight how policymakers in Africa can do better to boost the African tech economy and put it in its rightful place.