The Ghanian Startup and Innovation Bill project is a joint initiative by Ghana’s private sector represented by; Ghana Hubs Network (GHN), Private Enterprise Federations (PEF), Ghana Chamber of Young Entrepreneurs (GCYE), Ghana Start-up Network, and Government represented by the National Entrepreneurship and Innovation Programme (NEIP) and Civil Society by i4policy. The idea of such a partnership is to enhance the startup ecosystem through the co-creation of support regulations.
In 2019, the Ghana Hubs Network embarked on a nationwide policy hackathon with funding support from GIZ Make IT and Konrad Adenauer Stifftung (KAS), two German government organizations promoting entrepreneurship and innovation. As an ecosystem support organization, Ghana Hubs Network(GHN) serves as an umbrella organization for over sixty (60) innovation hubs with presence in all sixteen (16) regions of Ghana. During the policy engagements, GHN and partners gathered insights into the challenges that entrepreneurs and innovators encounter across the country ranging from policy incoherence, limited funding, high taxes and limited opportunities for skills development. The compiled report from the policy engagements dubbed hackathons served as a key engagement tool for partners in formulating a draft Bill in support of startups and innovation in Ghana.
The Bill when passed into an ACT by the Parliament and President of Ghana will establish various principles and support legislation required to promote startup development and innovation in Ghana. Subsequently, the success of the policy will create an enabling environment for startups’ growth, and investment protection. Entrepreneurs and innovators will then be able to commit time and resources to develop sound ideas, solutions and products needed to propel local level growth.
It is important to note that the need for the policy is as a result of Ghana emerging as one of the most robust and developed startup ecosystems on the continent, following Egypt, Kenya, Nigeria and South Africa as the major hubs on the continent. In the 2022 Spark Ecosystem Innovation in Ghana, the country attracted over $200m worth of investments for startups with a growing environment for support programming. Ghana’s continuous growth is evident of several strengths including; significant consumer and business markets, sophisticated entrepreneurial talent, and a strong corporate sector. In addition, Ghana’s access to local capital and ties to a growing number of international investors is growing although challenges remain as few startups continue dominate access limiting potential of others and hence the need for the startup and innovation Bill to spread benefits and enhance growth.
According to Venture Capital Africa (VC4A), 71% of the Ghanaian ventures are creating jobs with an average of 8.04 FTE per venture. This rise in ventures is helping create employment for young people 35 years and below. This is a considerable contribution to the country given its growing population and thus justifies further investment in the growth and development of the startup ecosystem and the entrepreneurs it supports through policy support.
By way of success stories on the continent in startup policy development, the passage of Startup ACTs in Tunisia, Senegal and Nigeria between 2018 and 2022, has paved the way for multiple startup policy development on the continent. For instance, Rwanda Kenya, Ethiopia, and Uganda are making strides in the startup policy development process and have taken inspiration from the successes of the countries that have passed and those like Ghana that are in advanced stages of getting a policy passed into an ACT to improve the enabling environment for startups and investors.
Ghana’s startup Bill drafting process kickstarted on October 29, 2020 through the establishment of a Technical Working Committee (TWC) comprising the various private sector, government and CSO representatives to lead the drafting process. In order to ensure that a cross section of stakeholders are involved and provide the needed feedback, wide consultations have been done and are underway including; regional consultative workshops, stakeholder dialogues, conferences and validation with 2019 policy engagement stakeholders. The consultative processes also involves teams of researchers, policy analysts, economists, entrepreneurs, legal experts and members of Parliament to deepen engagement and ensure that the Bill when passed into an ACT serves the objectives set forth.
As the lead in research and policy, I am tasked with the engagement of experts and professionals to review the Bill, and provide the necessary insights needed in the lead up to submitting to Parliament for further assessment and subsequently giving the Bill the legal backing for implementation.
It is envisaged that the Bill, when passed will set up an incentive framework for the creation and development of Start-ups in Ghana. Further, the Government of Ghana will have the needed legal regime within which to allocate incentives and support efforts at strengthening the process of startup development in the country. This is expected to lead in the promotion of creativity, innovation and the use of new technologies in achieving a strong added value and competitiveness at the national, regional and district levels.
Ultimately, partners to the Ghana Startup and Innovation Bill are eager to follow in the footsteps of the countries that have made strides in establishing a Startup ACT which is a prerequisite to the creation of jobs and building resilience for startups in Ghana and the continent of Africa.
By: Yaw Adu-Gyamfi
Research and Policy Lead
Ghana Startup and Innovation Bill
Director of Research and Policy, Ghana Hubs Network