The Startup Bill will offer some incentives such as tax breaks and access to credit for startups.
William Ruto, Kenya’s President, has confirmed that the Startup Bill 2022, which seeks to provide employment opportunities for Kenyan youth and tax breaks for startups, will be signed into law by April 2024. The announcement was made during the Kenya Innovation Week (KIW), attended by the president and other government officials. “By March, or April next year, we will have a firm startup law in Kenya, which will assist many of our innovators de-risk their innovations and turn them into businesses,” Ruto said in his address.
The startup bill has been in the Senate since 2021; it was introduced to the legislative by the current Nairobi governor, Johnson Sakaja. It received its first reading in February 2023 and is currently undergoing further discussions in the Senate.
The bill will offer incentives to registered startups, including tax breaks. It further proposes a platform for startups to access information on resources and support. There will be a plan for a credit guarantee scheme to provide financial support and training for startup growth.
If passed, the startup bill will also establish a legal framework to boost tech growth, foster innovation, and attract talent and capital. This will involve key roles for national and county governments, such as promoting innovation, facilitating tech transfer, creating jobs and wealth, and connecting research institutions with businesses.
Kenya is struggling to offer employment to its large youth population, most of whom are currently jobless. “The youth are the overwhelming majority of millions of unemployed Kenyans,” the president said. Despite the efforts of the SME sector, which has been employing over 80% of the youth annually, one key problem exists—small businesses and enterprises, while crucial in providing job opportunities, struggle to be sustainable as nearly 75% of them close shop after a short period.
Amidst scarce job opportunities, Ruto acknowledged that young Kenyans have played an instrumental role in creating startups and successfully closing funding rounds with global firms. “The youth continue to sustain innovation in our economy, with youth-driven startups securing $700 million last year,” the president added.