Story of the Week: Africa’s Startups Need Better Policy to Spark Real Innovation

Hey, Kaluka here,

Last week, as I followed funding rounds and startup updates across the continent, one thing kept nagging at me.

Many African founders find it challenging just to do business. They’re dealing with slow company registration, unclear tax rules, strict licensing, and fragmented regulations between countries. It can be exhausting and this is holding back the innovation Africa so badly needs.

If we want startups to thrive and grow, we need better policies that help them along the way. That means making it faster and easier to register new businesses, creating tax breaks for early-stage founders, simplifying licensing, and breaking down the regulatory walls that stop companies from expanding across borders. Countries like Rwanda and Kenya are already starting to show what is possible with innovation hubs and testing sandboxes that encourage new ideas. Even with that, there is still a long way to go.

Government support is one of the main ways to attract more investment and give founders a chance to grow their solutions that can impact millions of people.

💬What are your thoughts? Reply and let me know!

If you’re a founder building something bold, now’s a good time to raise. If you have a startup you want featured on TechArena, let us know through this contact form here.

Last week, we tracked 8 funding rounds across Africa that raised about $79.2 million.

Here are the 9 investors who backed this week’s funding rounds:

Nigeria’s startup scene keeps rising. Despite macroeconomic headwinds and a fluctuating currency, Nigeria’s startup scene continues to grow stronger. Fintech companies like Flutterwave, Moniepoint, and Paga have set the stage for a wave of new founders tackling everything from logistics to healthtech. Lagos, already a hotbed of innovation and is seeing more local venture capitalists launching micro-funds and accelerators to support early-stage founders. It’s a clear sign that even in uncertain times, the entrepreneurial spirit is alive and well.

Around 60–80% of African startups incorporate outside their home countries.  This is most often in the U.S. and it allows them to access more mature legal systems, stronger investor protections, and faster registration processes. That trend isn’t just about raising funds, it’s a symptom of deep-seated policy gaps that African governments need to address.

You can keep in touch with me on social media. I would love to hear more from you (I am open to suggestions too)

Thanks for reading and for being part of this amazing startup ecosystem, see you next week!

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