The Overdue Ethiopia’s Start-up Act: The Need to Change Subject











By Tsegamlak Solomon | Sep 09, 2023

Start-up Ethiopia

It was five years ago. I remember sitting in the meeting room of the former Jobs Creation Commission: a team of a little more than 10 people and we were gathered to discuss how to build a vibrant start-up ecosystem in Ethiopia with a focus on the Start-up and Innovative Business Proclamation. The room was full of energy; everyone in the room looked excited and the future looked bright. Everyone was trying to stretch the act in their favour, which cumulatively represented the overall interest of the private sector. The result of that is the first draft of the Start-up and Innovative Business Proclamation.

Fast forward 5 years, and the enactment of the Start-up Proclamation is still a hot issue whenever delegates from the private sector and the government meet, which is very sad. Different legislations have been presented to the parliament since then and were enacted, but the Start-up Proclamation, which has drawn much attention at the start, is yet to see the light of day. By way of comparison, Nigeria started discussions on the need to have a start-up act back in June 2021 and it was signed into law in October 2022. This was made possible because of the Nigerian Government’s unwavering support to building a favourable startup ecosystem. We are in our fifth year, and it is still counting.

Most importantly, we were made to believe that the Start-up Proclamation is the answer to every start-up’s question, whereas that is not the case. It was supposed to be the start—the start to everything that should follow. It was supposed to be the foundation for what comes next: a vibrant start-up ecosystem.

For the past five years, whenever the issue of start-ups has been raised, the enactment of the Start-up Proclamation has been presented as the hottest topic for discussion, whereas little or no effort has been made to push the act to the finish line. Rather than the betterment of the ecosystem, who should manage the Innovation Fund and who should own the overall project has been the central element of the discussions and the real reason for the delay in enactment.

We are hearing there are some positive developments in this regard, and we might see the act finally coming into effect in the near future. However, there are still a lot of things that need to change on the ground. First and foremost, the objective needs to be discussed with civil servants at the grassroots level, who handle the day-to-day activities and meet with entrepreneurs and startuppers in their day-to-day dealings. Without their buying into the idea, the ministerial-level, five-star hotel discussions about startups will not have a real-life impact on the startuppers on the ground.

The objective of the Startup Proclamation is still to create an innovative ecosystem in Ethiopia that is able to effectively and efficiently promote innovation and job creation, remove barriers to entrepreneurship by easing the start, operation, and closing of businesses, and build an ecosystem that encourages innovativeness. To attain these objectives, a lot of work is still required, both from private actors, including development partners, and the government at different levels.