How Tunisia’s Startup Act is a blueprint for other African policy makers

Tunisia’s new startup act, which was passed last month, is a blueprint for how other African countries could create an enabling environment for innovators and tech startups from the “bottom-up”, says a former banker and entrepreneur who helped draft the act.

“This legal framework is the result of bottom-up work that was initiated by some of the entrepreneurial ecosystem players,” says Walid Hached, COO at Tunis-based co-working space at Cogite.

The Tunisia Startup Act includes about a number of measures that aim to encourage entrepreneurship, make it easier to start and end a business, as well as easier to access funding and international markets.

The act mandates the Tunisian government to provide startup founders a stipend for one-year and offer financial support for securing patents and tax exemptions.

In addition, the act also has provisions for public procurement, funding for startups, and temporary relief with regards to foreign exchange and customs procedures.

Tunisia’s Startup Act has provisions that include a stipend for founders, tax exemptions, public procurement, and guaranteed funding for startups

Earlier this month Hached (pictured above), together with Smart Tunisia talent and capacity building manager Rym Jarou gave a presentation on the act in at the first African Innovation Hub Convention, held in Kigali, Rwanda (Watch the presentation here).

Read more: 90 innovation hubs endorse the African Innovation Policy Manifesto

Responding to Ventureburn in email this week, Hachel said the initial conceptualisation of the act was carried out by a group of people from different fields, including investment funds, non-governmental organisations, and entrepreneurs.

“The bottom-up approach is the way to go. It leverages existing talent, it results in adapted legal frameworks. Entrepreneurship is the future of this young continent,” said Hached, adding that the act was adopted “quickly” by lawmakers and the Tunisian government.

Measures still need to come into effect

He said the law — which aims to position the North African country as a “startup nation”– seeks to address the four main challenges that have long plagued Tunisia’s startup ecosystem.

These he lists as: entrepreneurship not being perceived as a serious career; access to finance, resources and markets was difficult because of strict regulations on foreign currencies and financial instruments like convertible bonds; high taxes; and administrative procedures that are “too heavy and complex”.

The act, he explained, is based on 20 measures which are structured around five main themes; defining and labelling startups; encouraging entrepreneurship; creation of an environment that allows for the easy creation, development, and liquidation of companies; access to funding; and access to international markets.

He said while the act has been passed, the law still needs to be applied to the various measures included in the act.

Act will help stem talent drain

When asked what the long-term effects of the act will be, he said “the most important will be psychological”. “A lot of young Tunisians only think of leaving the country to find a better future in foreign countries. They think it is too hard to succeed in their country.

“Thanks to this act, there will be more people who will try to start their own company and eventually some success stories will show that succeeding in Tunisia is also possible,” he explained.

“The talent we are losing in Tunisia because of emigration is a big problem. This act will certainly contribute to mitigate it,” added Hached.