DRC Launches its Startup Act, Joining the Likes of Nigeria and Tunisia

By John Ivan Busulwa

DRC is one of the countries on the continent with a developing digital economy, but it is lagging way behind its Sub-Saharan African counterparts like Nigeria, Kenya, and South Africa. For example; the 2019 UNCTAD B2C e-Commerce Index ranked DRC 148th of 152 countries. The World Bank ranked DRC 183rd out of 190 in the World Bank Doing Business 2020, scoring 36.2 out of 100, behind the Sub-Saharan Africa average of 51.8

In a bid to improve the ease of doing business and to attract startup founders, the government led by Tshisekedi Etienne launched its Startup Act in November, having signed it into law in September. The Act's purpose is to provide the necessary policy and regulatory framework to enable startups to thrive by offering incentives to startups to cover areas of governance, business support, access to markets, fiscal policy, labor market, digital infrastructure, and finance among others.

Before the enactment of the Startup Acts on the African continent, most of the innovation and startups relied so much on the "Small Business Acts" as they were famously called in the majority of the countries. 

The Startup Act is a reflection and probably one of the outcomes of the recently adopted (in 2019)  "Plan National du Numérique (PNN) – Horizon 2025," a plan in which the DRC seeks to operationalize its vision for the digital economy. With the PNN, the government envisioned making the digital economy a lever for integration, good governance, economic growth, and social progress.

The newly enacted Startup Act will not only provide a comprehensive policy framework for startups and investors but also serve as a response to the DRC's financial partners like the World Bank who have consistently urged the Central African nation to improve its "Ease of Doing Business"  

The Startup Act could be the silver bullet in a series of strategic moves to build and restore investor confidence in DRC's Startup ecosystem which the nation's startups struggling to raise any significant funding. For context, OPay, a Nigerian fintech, raised $400M last year, which is 400x the amount of VC funding raised by startups in DRC in the same year, which stood at less than $1M in the same year as reported by Partech in its 2021 funding report.

DRC is not the only African country that has enacted a Startup Act. In October 2022, Nigeria enacted a startup Act joining Tunisia which enacted its act in 2019. Following the enactment of its Startup Act, in 2019 alone Tunisia saw over $22m invested in Tunisian startups in 2021 as per our data. In January, Tunisia raised its first mega round when AI startup, Instadeep raised $100m. 

The enactment of the Startup Act is a step in the right direction and comes at the right time, just when Africa is positioned to be the next big market every VC is looking for.  Investors put their money where they feel it's safe, and the Startup Act could give investors the much-needed safety for them to invest in startups building in DRC. 

Cover Photo/Orange Corners

About the author.

Ivan is a Lawyer & UX Designer, with a keen interest in Intellectual Property, Startups, and currently, he's a Contributing writer at Digest Africa

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