AFED Proposes A Startup Act Enactment As A Perennial Solution To Ghana’s Economic Challenges

With a quick response to the 2018 MID-YEAR BUDJECT REVIEW, we held a podcast interview with the founding president of Africa Economic Dialogue (AFED) , Justice Offei Jr and below were his full assertions:

“Ghana will still battle with revenue generation especially from income and corporate taxes simply because about 85.5% of the employment sector of Ghana (per 2010 PHC Figures), which happens to be furnished by the Private Informal businesses, are actually struggling with growth and are technically out of the Tax bracket . Nonetheless, we must admit that the size of government, corruption and borrowing has a direct impact on our debt deficit, marring our progressive economic development agenda.

Due to lack of regulation, an appropriate legal framework and an absence of flexibility in financial procedures, the ecosystem of entrepreneurship in Ghana is still struggling to flourish. AFED is poised to create a sort of landing point for start-ups to also generate a common voice to carry the Startup Act and become more visible as a community. If the ecosystem is gradually structuring, many expectations remain regarding the unblocking of the legal framework so that Ghanaian start-ups can truly blossom.

The largest economies in the world have all thrived on a supportive entrepreneurial framework. It is an undeniable fact that a more focused commitment and Political Will shall inform a need for legal framework to support Startup businesses in Ghana. Young entrepreneurs must begin to stand above the noise and build a corporate voice to influence policies that will support the growth of their businesses.

As part of the core agenda of Africa Economic Dialogue (AFED) prior to the main forum on the 8^th of September, 2018, Young entrepreneurs in Ghana would be summoned to deliberate on a proposed Startup Bill. I believe that if this bill is considered and passed by our legislature, government will have no option but a legal mandate given to entrepreneurs to demand what is due them. Trust me, there is no doubt that this STARTUP Act will be an indelible economic ink in Ghana’s developmental agenda of creating quality jobs and reducing the surging unemployment rate.

The AFED proposed StartUp Act will be structured around five main theme areas. These themes are: defining startups; encouraging entrepreneurship; creation of an environment that allows for the formation and liquidation of companies; access to funding; and access to international markets.

In this proposal, we will be advocating strongly the following under the themes stated herein;

• The ACT will give a definition for STARTUP.
• The Act will stipulates that Startups be exempt from corporate tax. In addition, the state will also take charge of employer, and employee social taxes for Startups.
• Up to three founders per Startup will be granted a stipend. The amount of the stipend is to be calculated “based on the average previous income for employees and a fixed allowance for those unemployed.
• Setting up of a Startup portal, which will be a “point of contact” for startups where administrative and regulatory processes around the creation, development, and the liquidation of startups will be settled.
• Tax relief for individuals and entities that directly invest in startups or that subscribe to venture capital funds investing in startups

• Employees who wish to found a Startup will be granted X-number of year “Startup Leave”. The leave, which is extendable will only be granted to employees with at least three years of experience within their initial company”.

• In a bid to reduce the cost of hiring employees, the act will also maintain employment programmes for graduates who launch a Startup, or join one as an employee. The initiative will incentivises employers to take on new employees by initially offering them hiring credit.

• The Act will cover patenting fees for Startups locally, and internationally.

It will interest you how Senators in United States of America advocated strongly to see a Startup Bill enacted by their legislature. If you think it is impossible for an African country like Ghana to have a Startup Act, ask Tunisia. Tunisia just passed a Startup Act, led by a Minister who supported the advocacy.

AFED is ready to take this advocacy to the tables of the legislature of Ghana and will need the support from the communities of young entrepreneurs and some MP’s to push this agenda. We have given it a 3year plan agenda. You can download AFED’s full publication on GHANA STARTUP ACT on website”

Free Registration for AFED 2018: www.apreneur.com/afed

The Editorial Team
TV Advocate