On World Refugee Day, join us in celebrating resilience, as we explore the transformative power of investing in refugees and their host communities, driving integration, and building a more inclusive and prosperous future together.<h1>Refugee Lens Investing: Empowering Refugees in Ethiopia&nbsp;</h1>Celebrating World Refugee Day<img src="https://lh4.googleusercontent.com/sHWxhw4wWeiaC9R3o8UcqXfxSM_NwGomieviSeGASh9qRd_dcny9jeX35nbSSDh2vgeKpVeIrUosf_l2NotwHLYTgMQyf5TknQHihHCl24mqJ3irmpqq1wsGpkyEHrO7dGY1ztx33x53GdSgqtC_mCw">Garment worker at a factory near Debre Birhan, Ethiopia. The factory serves international clients supports vulnerable women, including IDPs, refugees and disabled people through training, employment, housing and other benefits. Photo courtesy of Mariah Grubb.Today is World Refugee Day, a day to celebrate the resilience and strength of refugees around the world. It is also a day to raise awareness of the challenges that refugees face and encourage commitment to supporting their long-term integration. Ethiopia is a country that has been welcoming refugees for centuries. While the exact numbers are challenging to ascertain, as of February 2023, Ethiopia was estimated to have&nbsp;<a href="https://reliefweb.int/report/ethiopia/ethiopia-humanitarian-response-plan-2023-february-2023">4.6 million</a> internally displaced people (IDPs). Furthermore, according to UNHCR, there are 916,436 registered&nbsp;<a href="https://data.unhcr.org/en/country/eth">refugees</a> in the country.Refugees in Ethiopia face many challenges, including poverty, lack of access to education and healthcare, and discrimination. However, there are also many opportunities for refugees to rebuild their lives and contribute to their host communities. One way to support refugees is through refugee lens investing (RLI). RLI is a type of impact investing that focuses on investing in businesses that support both refugees and their host communities to enhance integration and improve the overall economic well-being of the community.&nbsp;Additional information about the RLI framework and criteria can be found on the&nbsp;<a href="https://refugeeinvestments.org/resources/refugee-lens/">Refugee Investment Network</a>’s (RIN) website.With Renew Capital’s signature ‘Invest+Impact’ model, we are constantly exploring new and innovative impact investment frameworks and models. This resulted in a recent collaboration with RIN to conduct a landscape analysis and develop a&nbsp;<a href="https://refugeeinvestments.org/resources/creating-a-roadmap-for-refugee-lens-investing-in-ethiopia/">road map for RLI in Ethiopia</a>.&nbsp;Despite concerns that refugees are seen as burdens, Renew Capital's research supports the evidence that they bring significant benefits to host communities. Refugees are hardworking, committed individuals who bring new knowledge, skills, and dedication to the workforce. Integration of refugees fosters inclusive economic growth, cohesion, and stabilization. Cultural exchange and knowledge sharing enrich societies, promoting innovation, understanding, and tolerance.&nbsp;On World Refugee Day, join us in learning more about refugee lens investing and how we can collectively create a more inclusive and prosperous world for all, where refugees are empowered to rebuild their lives and contribute to the growth and well-being of their host communities.

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Refugee Lens Investing: Empowering Refugees in Ethiopia

<h1>Rwanda, a Rising Star in Africa's Economic Landscape</h1>Exploring Rwanda's startup ecosystem&nbsp; <img src="/uploads/IMG_6194_4c08eb0359.jpeg"> Rwanda, the land of a thousand hills, is a vibrant nation with a population exceeding&nbsp;<a href="https://www.worldbank.org/en/country/rwanda/overview">13 million</a> people and an estimated&nbsp;<a href="https://www.worldeconomics.com/Country-Size/Rwanda.aspx#:~:text=The%20official%20estimate%20for%20Rwanda's,in%20puchasing%20power%20partity%20terms">GDP of $32 billion</a> (in purchasing power parity terms) as of the end of 2022. Rwanda has been recognized for its efforts in promoting&nbsp;<a href="https://www.elibrary.imf.org/view/journals/002/2017/214/article-A002-en.xml?rskey=S8MnHZ&amp;result=70">gender equality</a> and has made considerable strides in creating a favorable business environment.&nbsp; In 2023, Renew Capital officially launched operations in Rwanda, a step that strengthens our commitment to&nbsp;<a href="https://www.renewcapital.com/companies">investing in growth-oriented businesses</a> across Africa. In this blog we explore the country’s entrepreneurial landscape, thriving sectors and development strategies.Ease of Doing BusinessThe World Bank's "Ease of Doing Business” report ranked Rwanda 29th in 2019 and 38th in 2020 out of 190 economies worldwide. According to the&nbsp;<a href="https://rdb.rw/rwanda-maintains-2nd-position-in-africa-in-2020-world-bank-doing-business-report/">Rwanda Development Board</a>, the reforms captured and reflected in these four indicators strongly impacted its regulatory business environment.<ul><li>Starting a business: Rwanda has made it easy for people to start a business by offering newly formed SMEs a two-year trading license tax exemption.&nbsp;</li><li>Building permits: Rwanda's ranking in the domain of construction permits experienced a notable jump of 25 points, advancing from 106th position in 2019 to 81st globally in 2020 thanks to the accelerated process for acquiring water and sewage connections and the enhancement of building quality control through a mandatory liability insurance requirement for all construction professionals.</li><li>Electricity supply: The upgrading of Rwanda’s power grid infrastructure has increased the dependability of the country’s electricity supply. This has resulted in an improvement in Rwanda's ranking from 68th to 59th worldwide.</li><li>Contract enforcement: The most remarkable progress was observed in the enforcement of contracts, with Rwanda leaping from the 78th to 32nd place globally. This jump was largely attributed to the introduction of a new small claims procedure and a reduction in court fees.</li></ul>Other additional investment benefits offered by the government include:&nbsp;<ul><li>Free business registration</li><li>Highly digitalized and efficient administration (only six hours to register a business)</li><li>One-stop center for investors with dedicated investment acceleration and aftercare team</li><li>No restrictions on foreign ownership</li><li>No restrictions on capital flows</li><li>Capital gains exemption on sale or transfer of shares</li></ul>Economic Landscape Rwanda's&nbsp;<a href="https://rdb.rw/about-rdb/#overview">investment climate</a> is one of the most attractive in Africa. The Rwanda Development Board (RDB) is playing a significant role in attracting and facilitating investment. RDB's key services include one-stop center services (business and investment registration, visa facilitation, tax incentives management, etc.), investment promotion, investment deals negotiation, tourism and conservation and private sector skills development.&nbsp;Rwanda's&nbsp;<a href="https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/National_Development_Planning_and_Research/Vision_2050/English-Vision_2050_Abridged_version_WEB_Final.pdf">Vision 2050</a> is the country’s long-term development strategy which seeks to transform the country into a knowledge-based, high-income country by 2050. This strategy offers various investment opportunities in sectors such as education, technology, infrastructure and health. Rwanda has made significant&nbsp;<a href="https://www.afdb.org/en/news-and-events/press-releases/africas-economic-growth-outpace-global-forecast-2023-2024-african-development-bank-biannual-report-58293#:~:text=Africa's%20pre%2DCovid%2D19%20top,%2C%20and%20Tanzania%20(5.6%25)">progress</a> toward achieving its Vision 2050 goals, and the country is now considered to be one of the fastest-growing economies in Africa. Major Sectors in RwandaThe&nbsp;<a href="https://rdb.rw/invest/">manufacturing sector</a> in Rwanda is still small but steadily growing at an annual rate of 7%.&nbsp; Rwanda's strategic position aids cross-border trade, particularly within East and Central Africa's estimated 268 million population. This has led to increased trade volumes.&nbsp;<a href="https://rdb.rw/invest/">Key exports&nbsp;</a>include beverages, dairy products, processed food and construction materials.Agriculture is the primary occupation for 70% of Rwanda's inhabitants. The agricultural sector accounts for 29% of Rwanda's GDP. Limited availability of farmland has prompted the nation to prioritize the enhancement of crop productivity, focusing on high-yield produce like maize, potatoes, wheat, beans, peas, cassava and soya.Rwanda has implemented the ICT for Rwanda Agriculture policy (ICT4RAg), with the aim to stimulate cooperation between ICT and agricultural sectors. This collaboration seeks to develop solutions in areas such as weather forecasting, pest and disease management, storage infrastructure, market accessibility, soil health and nutrient analysis, teaching innovative farming techniques, facilitating funding and credit services, and controlling pollution.Gender EqualityRwanda stands out globally for its efforts in advancing gender equality and women’s empowerment, particularly in political participation. The&nbsp;<a href="https://www.worldbank.org/en/country/rwanda/overview">parliamentary elections</a> in September 2018 saw women fill 61% of seats. The&nbsp;<a href="https://www.ipu.org/news/voices/2022-10/how-did-rwanda-become-no1-gender-equality">proportion of women members&nbsp;</a>of parliament is at 61.25% today, way above the current global average of 26.4%.Internet Penetration&nbsp;Rwanda’s&nbsp;<a href="https://datareportal.com/reports/digital-2023-rwanda">internet penetration</a> rate stood at 30.5% of the total population at the start of 2023.Mining SectorRwanda's primary mineral&nbsp;<a href="https://rdb.rw/invest/">exports</a> include tin, tantalum, tungsten ores, as well as some gold and gemstones. The sector offers opportunities in ore processing and diversification. In 2015, mining generated $149 million in foreign exchange.&nbsp;Electricity AccessRwanda has achieved one of the world's fastest rates of population&nbsp;<a href="https://documents1.worldbank.org/curated/en/819241600653622828/pdf/Rwanda-Energy-Access-and-Quality-Improvement-Project.pdf">electrification</a>, increasing from 6% in 2009 to about 54% in March 2020. Globally, Rwanda's electrification progress from 2010-2016 ranked 11th, and third in Africa.<figure class="image"><img src="/uploads/Whats_App_Image_2023_02_20_at_17_00_20_33f6a86db5.jpeg"></figure>Entrepreneurial GrowthRwanda has made great strides in entrepreneurship, with a significant number of startups being launched in the country. The country has put in place strong institutions, a strong judicial system and enacted economic transformation strategies. The ecosystem of enterprise support providers is growing fast, marked by new openings of coworking spaces, incubators, accelerators, universities and youth entrepreneurship programs. The central stakeholders in the innovation ecosystem are primarily putting their efforts toward entrepreneurship education, SME finance and networking opportunities.Rwanda's robust economic growth, ease of doing business, commitment to development strategies and gender equality are among the reasons Renew Capital has opened its doors in Rwanda. As the country continues to make strides toward its Vision 2050, opportunities will continue to expand.&nbsp; At Renew Capital, we're passionate about nurturing growth-oriented businesses. Visit our&nbsp;<a href="https://www.renewcapital.com/companies">companies page</a> to learn more.&nbsp;

Rwanda

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Rwanda, a Rising Star in Africa's Economic Landscape

<h1>Blended Finance: A Key Mechanism for Mobilizing Private Capital for Public Good</h1>Addressing today’s development challenges requires a fusion of creativity and collaboration. That's where blended finance comes in. According to Convergence, blended finance is the use of catalytic capital from public or philanthropic sources to increase private sector investment in sustainable development.&nbsp;<a href="https://www.renewcapital.com/">Renew Capital</a>, an Africa-based impact investment firm, partners with development agencies such as Global Affairs Canada and USAID to achieve leverage through a blended finance model.<figure class="image"><img src="/uploads/IMG_6247_aa8948edf2.JPG"></figure>“Blended finance is critical to achieving sustainable impact in Africa. We're committed to strengthening the investment ecosystem by developing pipeline for investors, organizing local capital and improving the investment environment. We also promote women's economic empowerment and address climate change by helping companies become more climate and gender smart,” says Renew Capital Managing Partner Laura Davis.Renew Capital has implemented its blended finance model in Ethiopia for more than a decade. Here, they share their eight biggest lessons learned in blended finance. These lessons are paving the way for Renew Capital’s rapid expansion across East Africa, and are key for any organization looking to implement blended finance.<h2>A Decade of Lessons in Blended Finance</h2>LESSON 1: FIND A BALANCE BETWEEN MONITORING AND EVALUATION AND REPORTINGImplementers of many blended finance projects face the ongoing challenge of serving two masters which both require robust and specific reporting. Additionally, obtaining timely and accurate financial statements from portfolio companies and other non-investee SMEs required for reporting can become a challenge.&nbsp;&nbsp;Tip:&nbsp;During the planning stage of a blended finance project, be intentional in what you agree to in terms of reporting. Creating alignment and overlap of reporting requirements for your different stakeholders will lessen the burden of monitoring and evaluation during implementation.LESSON 2: PERSIST ON THE OUTCOMES, BE FLEXIBLE ON THE ACTIVITIES AND OUTPUTInvesting in blended finance projects in Africa is a relatively new initiative for government and donor partners. Some approaches that work well in one country may be unsuccessful in another. It’s important to stay focused on the outcomes, remain nimble in the activities and apply lessons learned as you go.Tip:&nbsp;Make sure your donor partner and your investors are flexible and allow you to adjust activities and pivot plans as you begin implementation and apply lessons learned. Be diligent in documenting your failures and reviewing them to extract lessons learned.LESSON 3: DON’T BE AFRAID TO TRY SOMETHING RADICALLY NEWBe willing to try something totally radical. One component of our blended finance project in Ethiopia was to expand our reach to “investment hubs” in larger cities outside of Addis Ababa and to educate SMEs on investing, sourcing deals and creating valuable business networks. Due to unrest, logistics and a lack of local partners in these cities, our efforts had little traction. Instead of continuing down a failed path, we pivoted to a new, radical idea to reach the masses— an edutainment show customized for the Ethiopian culture and aired during prime time on Friday evenings. We soon went from minimal touchpoints in four cities outside of Addis with only a few stakeholders, to millions of viewers. By trying something new we were able to raise excitement for entrepreneurship and the formation of local angel networks.&nbsp;Tip: Be open to trying something radical if the status quo is not working. You may end up unlocking impact at a larger scale than you ever thought possible.LESSON 4: MONEY TALKS WITH POLICY REFORMIn 2022, Renew Capital celebrated 10 years of investing in Ethiopia. “Despite the challenges of investing in Ethiopia, Renew Capital has so far invested in 12 companies here,” says Laura. “This gained us credibility and a seat at the table when the government was updating the investment code and creating the Startup Proclamation. Our track record of bringing Foreign Direct Investment (FDI) into the country allowed us to help influence several changes that will have a significant impact on the future of the investment and entrepreneurial ecosystem.”Tip: Establishing a solid track record in a challenging investment environment can lead to valuable opportunities for influence and collaboration. We believe many African businesses can be attractive investments. If investors have a clear path to invest in them, they will. By blazing this trail, we hope to inspire others to invest in Ethiopia and other emerging markets with confidence and purpose.&nbsp;LESSON 5: STAY THE COURSE, DON’T GET PULLED AWAY FROM YOUR SWEET SPOTAs an investor there is a temptation to pursue grant opportunities or venture into areas beyond one's expertise or investment goals. Social enterprises with an alluring narrative, but no real investment case, can be particularly captivating. Nevertheless, it is crucial to stay focused on investment strengths and avoid sacrificing long-term sustainability for short-term funding and recognition.Tip:&nbsp;It's easy to be distracted by soft funding and grant dollars, but it's essential to remain disciplined with your investment model and focus on longer-term sustainability. Stay the course.LESSON 6: EXTEND THE TIMELINEInvesting in SMEs requires a long-term approach, as realizing impact and growth can take several years. External factors such as market and economic conditions can also impact success. Committing to long-term goals can help overcome these challenges and create greater value over time.Tip:&nbsp;Work with your donor to find ways to either extend the project or the reporting period to get a truer sense of the long-term positive impact of a blended finance model.LESSON 7: 80/20 RULE: FOCUS ON A FEW GROWTH COMPANIES, VERSUS TRYING TO HELP EVERYONENot everyone is meant to be an entrepreneur, and blended finance interventions need to realize this. You’ll figure out quickly which entrepreneurs have the capacity to take on financing and scale.&nbsp;&nbsp;TIP:&nbsp;Be aware that 80% of the impact and results will come from 20% of the SMEs you support under a blended finance model. Focus on the 20% and those who are equipped to grow and create impact at scale.LESSON 8: BE PREPARED TO EDUCATE ALL STAKEHOLDERS, MULTIPLE TIMESBlended finance is still relatively new to some stakeholders and you may need to educate them as they may not fully understand the ins and outs of blended finance.&nbsp;Some of the reporting, forms and requests will make little sense in the greater context in which the project operated. Some in the donor community will say blended finance projects are only making rich people richer. Some SMEs will think of and approach investors as grantmakers. And many investors will be ignorant of Africa’s private sector potential.Tip:&nbsp;Be prepared to educate stakeholders to dispel misconceptions and recognize the potential of the private sector in developing economies.Download Renew Capital’s<a href="https://latest-api.renewcapital.com/uploads/ABG_Program_Overview_and_Lessons_Learned_3ebb258c22.pdf">&nbsp;Accelerating Business Growth Project Report</a> for additional lessons learned from other key stakeholders in our blended finance model.

A Key Mechanism for Mobilizing Private Capital for Public Good

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Blended Finance: A Key Mechanism for Mobilizing Private Capital for Public Good

Desire Nduwarugira, project manager at Renew Capital, reflects on the recently celebrated Africa Day and shares more about what it means for Africa to be united, as well as how initiatives like the Accelerating Regional Business Growth (ARBG) can support African SMEs in trade and help Africa's businesses thrive.<h1>Our Africa, Our Future!</h1>Commemorating Africa Day while working at an Africa-focused Investment firm!On May 25 each year, Africans at home and abroad commemorate <a href="https://www.renewcapital.com/newsroom/africas-entrepreneurial-spirit-innovation-creativity-and-resilience" target="_blank" rel="noopener noreferrer">Africa Day</a>, symbolizing our shared history and aspirations. At Renew Capital, this day provides an opportunity to reflect on&nbsp;<a href="https://www.renewcapital.com/about">our vision</a>.I believe that Pan-Africanism offers Africa a path toward unity, progress, and economic development. By striving for sustainable socio-economic and political integration, we can achieve full independence and control of our resources as a collective and diverse entity.<figure class="image"><img src="/uploads/1_Y9_A3503_9530be4e58.jpg"></figure>Desire Nduwarugira pictured far right&nbsp;Pan-Africanism driving business growth: The AfCFTAAt Renew Capital, I am part of a multi-year private-sector development program funded by Global Affairs Canada (GAC) –&nbsp; the Accelerating Regional Business Growth (ARBG) Program – which aims to improve the small and medium enterprise (SME) investment ecosystem across East Africa.East Africa is well-positioned to experience significant private sector growth in the coming decade fueled by African Continental Free Trade Area (AfCFTA) which promises increased regional integration, policy reform, trade and investment.&nbsp;With 55 member countries, the AfCFTA is the largest free trade area in the world. Its goal is to create a single continental market, connecting 1.3 billion people with a combined GDP of $3.4T USD. It has the potential to lift 30 million people out of extreme poverty. However, realizing its full potential depends on implementing substantial policy reforms and trade facilitation measures.Under ARBG, the Trade Facilitation Program is designed for ambitious companies in East Africa interested in starting or expanding their cross-border trade activities through the AfCFTA. The program includes a two-part virtual training session on June 5 and 6, covering:1) Trade liberalization in Africa, explaining the current status of the AfCFTA and its benefits for SMEs.2) Operationalizing trade-related goals by creating a market entry strategy, export marketing plan, and import diversification strategy.Registration for the program is currently <a href="https://docs.google.com/forms/d/e/1FAIpQLSemdya80DGBvSN3xr42keTbyOtNHhILoS_BeK5Ac9XWH-48ZA/viewform" target="_blank" rel="noopener noreferrer">open</a>.Before joining Renew Capital, I successfully managed several projects at One Acre Fund, an international organization serving smallholder farmers in Africa. I graduated from Lake Tanganyika University's School of Law in Bujumbura, Burundi, and have been working in Rwanda since 2015. From serving smallholder farmers to fighting against hunger to working with entrepreneurs to accelerate business growth, my mission is to improve the lives of my fellow Africans.

Commemorating Africa Day while working at an Africa-focused Investment firm!

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Our Africa, Our Future!

<h1>Catalyzing Trade in Africa Through ARBG</h1>Insights and recommendations to overcome intra-African trade challengesIn its initial year, Renew Capital’s Regional Trade Facilitation program, a part of the Accelerating Regional Business Growth (ARBG) program partnership with Global Affairs Canada, has drawn important insights that could help shape the future of intra-African trade.&nbsp;During the design and development of the Regional Trade Facilitation program, Renew Capital’s ARBG team spoke to hundreds of organizations, experts and companies on the continent, resulting in a report that highlights some of the opportunities and challenges for African businesses looking to trade within the region. From addressing financing gaps to improving data reliability, here are the highlights of what we have learned so far, alongside early policy recommendations based on the findings:<figure class="image"><img src="/uploads/F058337_B_9451_4_F92_BDA_3_8_CAB_487_F5_C44_ad89c798c4.jpeg"></figure><a href="https://docs.google.com/forms/d/e/1FAIpQLSemdya80DGBvSN3xr42keTbyOtNHhILoS_BeK5Ac9XWH-48ZA/viewform">Sign up now</a> for the Regional Trade Facilitation program that’s designed for entrepreneurs to learn more about recent liberalization trends, the benefits of regional trade and strategies for executing effective new market entry.Capitalizing on the AfCFTA: Potential for ProgressThe Regional Trade Facilitation Program is central to the&nbsp;<a href="https://www.renewcapital.com/newsroom/five-facts-about-accelerating-regional-business-growth">ARBG strategy</a> and designed to:&nbsp;<ul><li>Capitalize on the African Continental Free Trade Area (AfCFTA): The&nbsp;<a href="https://au-afcfta.org/about/">AfCFTA</a> is more than a free trade agreement; it's a blueprint for Africa's future. ARBG seeks to leverage this potential to its fullest, supporting businesses with the knowledge and tools to navigate the treaty's provisions.</li><li>Equip businesses for success: ARBG is providing businesses with the tools they need to navigate the complex landscape of intra-African trade, including country-by-country trade assessments and training in the private investment process and business management.</li><li>Tackle trade barriers: ARBG seeks to identify the obstacles faced by entrepreneurs seeking to trade across borders and support companies by identifying solutions, creating linkages and advocating for policy changes as applicable.&nbsp;</li></ul>The Roadblocks to Progress&nbsp;In the region, businesses face significant hurdles they will need to overcome in order to progress:<ul><li>Lack of capital: Many firms looking to break into the export market struggle to access trade financing, hindering their ability to expand their operations.</li><li>Complexities of transportation, logistics and borders: SMEs looking to expand their horizons face concerns over time-consuming logistics and paperwork with the potential for goods to get lost in transit.</li><li>Scarcity of quality research and granular data:&nbsp;Lack of reliable data is an impediment to informed decision-making across the continent.</li></ul>Shifting the Trade FocusARBG's Regional Trade Facilitation program aims to shift the focus from external to intra-African trade. This involves:<ul><li>Equipping businesses with the skills and data: To help businesses thrive in a new era of regional trade, ARBG offers targeted training for SMEs interested in trade in East Africa. The project also develops country-by-country trade assessments that outline the barriers to trade faced by entrepreneurs and conducts research on finance opportunities and market intelligence.</li><li>Influencing policy:&nbsp;ARBG aims to shape the future of trade policy by offering recommendations based on findings.&nbsp;&nbsp;</li><li>Investing directly in businesses:&nbsp;Keen on regional trade, ARBG is walking the talk by investing in SMEs, supporting them in their business growth through finance, market research and support building the foundations of their businesses. &nbsp;</li></ul>Early Policy RecommendationsARBG's initial findings suggest several key areas of focus:<ul><li>Financing:&nbsp;Though repeatedly acknowledged as a challenge, the trade financing gap remains a key challenge for companies, partly due to the conservative nature of the banking sector. The solution likely lies within the private sector, where tech-based startups are now looking to fill the gap. Looking at how this burgeoning industry can be fostered (through private investment, regulatory reform, etc.) is recommended.</li><li>Reliable Data: There's a pressing need for quality research and granular data to guide decision-making. Solutions could build on existing data repositories (e.g., East Africa Community (EAC)&nbsp;<a href="https://eac.opendataforafrica.org/EACTD2011/trade-data-of-east-african-community">Open Data For Africa</a>, Observatory of Economic Complexity (OEC)&nbsp;<a href="https://oec.world/en/">data portal</a>), but should also include specific product details and sub-country-level data.</li><li>Import Substitution: Almost all companies we spoke to spent a significant amount of capital and time importing key ingredients. Swapping expensive foreign imports with regionally produced options offers significant opportunities for companies. Significant outreach and marketing is still needed to ensure the AfCFTA’s recently launched platforms like the Pan-African Payment and Settlement System (PAPSS) and the Africa Trade Exchange become trusted tools for traders to find and connect with new high-quality, cost-effective and accessible suppliers from the region.</li><li>SME Coordination:&nbsp;Among the Regional Economic Communities (RECs), a desire remains for the private sector to take greater ownership of coordinating amongst themselves to yield commercial linkages and pressure states to prioritize trade policy upgrades. While ultimately these processes need to be owned by SMEs, the RECs and their corresponding business councils can play an important role in jumpstarting these initiatives.&nbsp;</li></ul>"Increasing regional trade can significantly benefit the companies we partner with," says Renew Capital Director of Regional Private Sector Projects Lucas Robinson. "Companies will be able to employ more people, source more materials locally, grow their revenue and even manage currency fluctuation risks. These changes can have a significant positive impact on the businesses."<a href="https://docs.google.com/forms/d/e/1FAIpQLSemdya80DGBvSN3xr42keTbyOtNHhILoS_BeK5Ac9XWH-48ZA/viewform">Sign up now</a> for the Regional Trade Facilitation program in East Africa. The program is designed to help entrepreneurs in East Africa gain a better understanding of:<ul><li>Recent developments related to trade liberalization in Africa</li><li>Benefits of regional trade</li><li>Deployable strategies to increase trade</li><li>How to develop regional market entry strategies and execute trade plans</li><li>Tools to facilitate (new) regional market entry.&nbsp;</li></ul>&nbsp;*Ecosystem activation, pipeline development and capacity-building support provided to Renew Capital portfolio companies is generously supported by Global Affairs Canada.

Insights and recommendations to overcome intra-African trade challenges

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Catalyzing Trade in Africa Through ARBG

In celebration of Africa Day, we highlight the innovative and creative spirit of African entrepreneurs and explore the role of these entrepreneurs in Africa’s economic development.&nbsp;<h1>Africa's Entrepreneurial Spirit: Innovation, Creativity and Resilience&nbsp;</h1>The role of entrepreneurship in Africa’s economic transformationAfrica's private sector is experiencing rapid transformation. Today, innovative entrepreneurs are turning challenges into opportunities and leveraging technology to transform the finance, healthcare, climate, agriculture and transportation industries on the continent. This Africa Day, we're celebrating entrepreneurship by exploring how Renew Capital portfolio companies are innovating across these important sectors. <img src="/uploads/Africa_Day_71e32d4591.png">Innovation in AgricultureThe agricultural economy employs more than 50% of Africa’s labor force and typically accounts for 30–40% of GDP. Technology offers many opportunities to improve Africa’s agricultural sector.&nbsp;David Lukwago founded&nbsp;<a href="https://www.renewcapital.com/newsroom/inputi-using-technology-to-boost-agricultural-productivity">Inputi</a> to leverage the power of technology to make it easier for farmers to get access to farming inputs. The venture was born during the height of COVID-19 when the supply chain was severely disrupted due to national lockdowns in Uganda.&nbsp;“Inputi’s goal is to aggregate demand based on location. We are working to make the pickup of farm inputs as convenient as possible for farmers by delivering inputs to the nearest agro shop,”says Lukwago.&nbsp;&nbsp;Innovation in Fintech&nbsp;Many Africans still do not have access to financial services due to low levels of financial literacy and the high cost of transactions. Fintech integrates technology into financial services, enabling faster, more efficient, and cost-effective transactions while&nbsp;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4367898">enhancing financial literacy.</a>&nbsp;One company that is improving access to financial services is Akellobanker.&nbsp;<a href="https://www.renewcapital.com/newsroom/financial-inclusion-and-market-linkages-transform-lives">Akellobanker</a>, founded by Jean Antony Onyait, is a platform that gives Ugandan smallholder farmers and traders access to loans from financial institutions, primarily SACCOS (Savings and Credit Cooperatives) and microfinance institutions.&nbsp;“Five years ago, financial technology companies came over and showed banks that they could break through to places they weren’t reaching—breaking monopolies and creating healthy competition. This competition goes a long way in reducing prices and making services more affordable for local communities,” says Onyait.Also in Uganda,&nbsp;<a href="https://www.renewcapital.com/newsroom/renew-capital-angels-invest-in-ugandan-digital-payment-platform-xente">Xente</a> is tackling the sphere of digital payments with its neo-bank which allows businesses to make payments using cards, mobile money and domestic and international bank transfers, as well as to pay bills and send airtime and data. Only 5%–7% of all payment transactions in Africa were made via electronic or digital channels in 2022 (Mckinsey). The platform also allows businesses to manage their petty cash expenses to ease the complexity of accounting and finance.&nbsp;&nbsp;Innovation in Transportation According to the OECD, Africa has the fastest urban growth rate in the world and by 2050, Africa's cities will be home to an additional 950 million people. This has highlighted a growing need for more efficient and cleaner transport systems.&nbsp;A major challenge with Africa’s transportation sector includes high reliance on informal transport. In major cities in Africa, informal transport accounts for&nbsp;<a href="https://slocat.net/public-transport-challenges-in-africa-mapping-and-transit-data-as-a-remedy/">95% of all public transport trips</a> and most of the time, this form of transportation is inefficient and commuters are often forced to wait in long queues. Ugandan company&nbsp;<a href="https://www.renewcapital.com/newsroom/easy-matatu-the-startup-innovating-in-africas-urban-transportation-sector">Easy Matatu</a> is helping to solve this challenge with an app that connects commuters to book and pay for a seat in advance, reducing wait time and minimizing delays.&nbsp;“Our mission is to fix public transport in Africa’s cities using technology. This looks different in different African cities,” says Easy Matatu founder Carl Lema Andrew.BuuPass, a Kenyan company, founded by Wyclife Omondi of Kenya and Sonia Kabra of India, is also helping to&nbsp;<a href="https://www.renewcapital.com/newsroom/buupass-enhancing-mobility-across-east-africa">streamline</a> ticketing processes in East Africa. BuuPass enables bus operators to set up their routes, booking stations and real-time ticket booking, as well as access daily reports on their business transactions online.“Many of these (transport) companies were still using pen and paper for their ticketing processes and they lacked a centralized data source to inform their business decisions. To address this gap, we developed a bus management system that allows our clients to digitize their processes,” says BuuPass co-founder Kabra.&nbsp;At Renew Capital, we believe that Africa can harness its entrepreneurial spirit to unlock its full economic potential, drive inclusive growth and shape a prosperous future for the continent.&nbsp;Are you interested in learning more about entrepreneurs in Africa and their stories? Subscribe to our newsletters below.&nbsp;

The role of entrepreneurship in Africa’s economic transformation


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Africa's Entrepreneurial Spirit: Innovation, Creativity and Resilience 

Only about 2.83% of capital invested in climate-related startups in Africa from 2019 through Q1 2023 went into logistics companies, including electric vehicle startups. This logistics brief focuses on EVs as part of Renew Capital's series on climate tech in Africa.&nbsp;<h1>Insights on the EV Sector Across Africa</h1>Making electric vehicles a viable solution for the African market<figure class="image"><img src="/uploads/shutterstock_1445301932_91b00cf41f.jpg"></figure>Approximately $2.15B was invested in climate deals in Africa from 2019 to Q1 2023. Only 2.83% of that capital went into logistics and transport, which includes electric vehicles.<img src="/uploads/A1_A19392_6_D70_4_BDA_8_EC_6_871416_DC_5_D64_1_201_a_30404271a5.jpeg">(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)&nbsp;Investors closed 22 startup EV deals from 2019 to Q1 2023. Kenyan companies accounted for 36% of these funding rounds.<img src="/uploads/image_3f0cd094f7_338ceb127b.png">(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)&nbsp;While EV investments peaked in Africa in 2022, we are not aware of any EV deals that have been reported in Africa to date in 2023.&nbsp;<img src="/uploads/image_59ceb483ba_f9ac76d932.png"> &nbsp;(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)EV Initiatives by the Government of&nbsp;RwandaAn earlier&nbsp;<a href="https://www.renewcapital.com/newsroom/africa-e-commerce-struggles-to-scale-while-tech-logistics-companies-attract-capital#:~:text=Rwanda%27s%20EV%20and%20E%2DMobility%20Solutions%20Struggle%20Despite%20Government%20Push%C2%A0">logistics brief</a> highlighted challenges associated with scaling EVs in Africa using Rwanda as a case study. The Rwandan government has invested heavily in sustainable infrastructure and e-mobility. While private investments have been made to grow e-mobility solutions throughout Rwanda, the government has created a slate of incentives to promote investment in e-mobility solutions:<ul><li>Low charging costs, especially between the off-peak hours of&nbsp; 11 pm to 8 am. Tax breaks on imports of any e-vehicles, equipment, or materials required to develop charging infrastructure</li><li>Public land allocated to companies setting up charging stations for no cost/rent-free</li></ul>Despite these government initiatives and private sector investments, the current challenges EVs face in Rwanda underscore challenges that will likely prevent the proliferation of EVs throughout sub-Saharan Africa in the near term. High entry cost to purchase, inadequate charging infrastructure and poor road infrastructure are key pieces missing that will potentially limit the possibility of EVs taking over the African market.&nbsp;While larger EVs including Volkswagen’s ID.4 will likely be imported to Rwanda and are already being sold in Ethiopia to deal with the problem of poor infrastructure, the majority of Rwandans and sub-Saharan Africans cannot afford to own these expensive vehicles.&nbsp;Interestingly though, given rising fuel costs in Ethiopia and the relatively low cost of electricity in East Africa’s largest economy, EVs may be able to make a splash.&nbsp;An Ethiopian EV Cost Comparison ExperimentAn in-house experiment conducted by some of Renew Capital's Ethiopian team members determined that the current gas cost of operating a fuel Peugeot 6 Seater SUV (at 62 ETB/KM) was four times more expensive than the comparable EV Volkswagen ID6 in the Ethiopia market.&nbsp;The purchase price of both vehicles is comparable at 5.5M ETB (approximately $105K). This is despite recent incentives placed on EV purchases by the Ethiopian government which only require a 15% import tax for fully assembled imported vehicles. This example underscores that while upper-class individuals in Ethiopia can afford the $105K price tag, many Ethiopians will not be able to access them over the long term.Therefore, the future of EVs in Ethiopia depends on the ability of car manufacturers to create a smaller-sized EV more comparable to the Toyota Vitz or Platz, commonly driven vehicles by middle to upper-class individuals in Ethiopia. Still, with a Toyota Platz and Vitz priced at 1.6M ETB ($30K) and 1.2M ETB ($23K) respectively, even these vehicles in the current Ethiopian economy are considered a luxury. At the same time, electric motorcycles are making headway in Ethiopia’s neighboring countries including Kenya, Rwanda and Uganda.For example, electric motorbikes could cost around $1,500, which is far cheaper than the cost to buy a smaller-engine-sized car like the Toyota Vitz or&nbsp; Platz.At the same time, the transition to EVs in Ethiopia will not be without its challenges. One of the key barriers to adoption is the lack of charging infrastructure. Currently, there are only a handful of charging stations in Ethiopia, which limits the practicality of EVs for many people. In addition, high upfront costs and limited availability of EV models in Ethiopia are other obstacles to widespread adoption.Despite these challenges, there is a reason for optimism. At least two Ethiopian organizations, including private companies, are working on installing the infrastructure required for charging widespread adoption of EVs. For example, in 2021, Ethiopian automotive company&nbsp;<a href="https://ethiopianmonitor.com/2021/12/28/first-electric-vehicle-charging-station-opens-in-addis-ababa/">Marathon Motors</a> partnered with Nissan to launch an electric vehicle pilot program in Ethiopia. As part of the program, Marathon has installed charging stations at its dealerships and service centers. Likewise, at the beginning of 2023, Cardinal Industrial PLC&nbsp;<a href="https://www.eep.com.et/en/it-is-planned-to-build-500-electric-vehicle-charging-stations-in-one-year/">announced its plans</a> to build 500 EV charging stations across Ethiopia over the next year.&nbsp;&nbsp;Moreover, as part of its 10-year economic development plan, the Ethiopian government intends to import 4,800 electric buses and 148,000&nbsp;<a href="https://www.globaltimes.cn/page/202207/1271799.shtml">electric cars&nbsp;</a>by 2030.&nbsp;Bottom LineEVs have not historically received adequate investment in the African market. At the same time, the EV market needs meaningful innovation in order to make electric vehicles a viable solution for Africa. Aside from motorcycles, very few sub-Saharan Africans have the ability to purchase and use EVs due to their high entry cost and limited charging infrastructure. Importantly, EVs in public transportation could be a more durable solution for EVs in Africa than personal vehicles.

Making electric vehicles a viable solution for the African market

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Insights on the EV Sector Across Africa

Although Zimbabwe faces economic challenges, a recent visit by Renew Capital to the country highlighted a number of positive factors attributable to the country, including a highly educated population, a thriving services sector and a growing startup environment.<h1>Zimbabwe Private Sector Snapshot&nbsp;&nbsp;</h1>A quick guide to challenges and opportunities for the private sector in Harare and across the nation&nbsp;<img src="/uploads/1f73bae3_40fe_4b04_b855_a7da8d97039a_1_06461ce4e1.jpg">Pictured: Harare’s Central Business DistrictZimbabwe has made headlines for years due to its inflation, currency issues and fractured banking system. But what is the reality between what the world perceives about the country, and what is happening on the ground?&nbsp;&nbsp;The Renew Capital team recently visited Zimbabwe on a fact-finding mission to meet with entrepreneurs, prepare for the Renew Capital expansion into Zimbabwe and learn firsthand about the challenges and opportunities in the country's private sector.&nbsp; <img src="/uploads/2d0b9d55_e9a3_4fab_8854_9068894cf919_2_91f4ad7240.jpg">Here are some takeaways on Zimbabwe’s private sector ecosystem:Opportunities:<ul><li>Zimbabweans rank among Africa’s most educated. According to the World Bank (2023), the country has "<a href="https://www.worldbank.org/en/country/zimbabwe/overview#:~:text=Zimbabwe%20has%20strong%20foundations%20for,are%20emerging%20in%20some%20sectors.">excellent human capital</a>, comparable to that of upper-middle-income economies in sub-Saharan Africa, although some skill shortages are emerging in some sectors."&nbsp;</li><li>Although Zimbabwe’s startup scene is still small, there is great potential. Innovation hubs like&nbsp;<a href="https://eight2five.co.zw/">Eight2five in Harare</a> are growing and offering support to local entrepreneurs. The country also has a legacy of entrepreneurship in the technology sector, with the Zimbabwean-founded&nbsp;<a href="https://www.econetafrica.com/">Econet Group</a> being among the&nbsp;<a href="https://www.gatesfoundation.org/about/leadership/strive-masiyiwa#:~:text=Masiyiwa%20is%20the%20Founder%20and,industry%20on%20the%20African%20continent.">pioneers of mobile telecommunications</a> on the continent.</li><li>The services sector is highly impressive, likely stemming from a strong history in&nbsp;<a href="https://www.trade.gov/country-commercial-guides/zimbabwe-travel-and-tourism#:~:text=Tourism%20is%20Zimbabwe%E2%80%99s%20third%20largest%20sector%20after%20mining%20and%20agriculture%20and%20has%20the%20potential%20to%20play%20a%20significant%20role%20in%20Zimbabwe%E2%80%99s%20economic%20recovery.">tourism</a>, which is the third-largest sector in the economy behind mining and agriculture (U.S. Department of Commerce, 2022).</li><li>Zimbabwe has beautiful weather and a strong agricultural foundation. According to Africa News, Zimbabwe registered its largest wheat harvest in 50 years in 2022 (375,000 tons) setting the country up to become a “self-sufficient&nbsp;<a href="https://www.africanews.com/2023/01/08/zimbabwe-new-african-agricultural-power-house//#:~:text=Zimbabwe%20has%20registered%20its%20largest,A%20unique%20performance%20in%20Africa.">agricultural powerhouse</a>.” The article also states that "the country no longer needs to import wheat to meet its needs, saving up to $300M in import costs."</li></ul>Challenges:<ul><li>The Zimbabwean currency currently lacks international exchange value, leading to a high demand for foreign exchange for essential imports.&nbsp;</li><li>Based on Renew Capital’s discussion with local private-sector players, there seems to be a concern about the government’s influence on the banking system.</li><li>Upcoming elections, slated for August this year, have heightened uncertainty about whether the elected government will be able to deliver a stable currency and create the stable political environment needed to build investor confidence.</li><li>Like many countries in sub-Saharan Africa, Zimbabwe has great wealth and many wealthy Zimbabweans, but there are few angel investors, angel networks and early-stage VC investors active in the market to fuel the formation and growth of the entrepreneurial ecosystem.&nbsp;</li></ul>Read more about Zimbabwe’s currency challenges&nbsp;<a href="https://www.aljazeera.com/economy/2022/5/5/dollar-oclock-should-zimbabwe-axe-its-faltering-currency-again">here</a>.Overall takeaway:&nbsp;Despite the challenges, Zimbabwe presents an opportunity for savvy and resourceful entrepreneurs to make a difference in the country.In the coming months, we will be diving deeper into Zimbabwe and other African markets to provide insights into the private sectors of each economy.&nbsp;

A quick guide to challenges and opportunities for the private sector in Harare and across the nation

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Zimbabwe Private Sector Snapshot 

Chukwudi Ofili, Renew Capital's Legal Director and West Africa Investment Manager shares how he returned to Nigeria after a successful career in the U.S. and U.K. to use his knowledge of international corporate and investment law and make an impact in his home country.&nbsp;<h1>Homecoming: My Journey to Renew Capital</h1>As an undergraduate law student in Nigeria, I had a keen interest in corporate law, commercial law and the law of contracts. I recognized very early on the important role of corporations and the private sector in growing and sustaining a nation’s economy. Within law, my particular interest was in the advancement of emerging economies. I knew first-hand the challenges of daily survival and I beat the odds to graduate with honors from Babcock University and later on received my first bar qualification to practice law in Nigeria.&nbsp;<img src="/uploads/image_4723b7654e_2d008e21bd.png">Leaving the continent&nbsp;After five years practicing law in Nigeria, where I did mostly local and cross-border finance and investment transactions with counterpart law firms in London, New York and Dubai, I moved to the U.S. on a full graduate assistant scholarship for a Masters of Law program at the University of Georgia School of Law, and subsequently qualified as an attorney in the state of New York. While in the U.S., I was selected by The Coca-Cola Company as an extern in its legal department at its headquarters in Atlanta, Georgia. At The Coca-Cola Company, I worked with the international trade team on export, import and sanctions as they related to the company’s global operations in over 250 countries. This was my first foray into working as an in-house legal counsel with a global corporation.To further broaden the scope of my legal experience in another jurisdiction, in 2018 I took part in the highly selective&nbsp;<a href="https://www.ilfaafrica.com/ifsp">International Lawyers for Africa (ILFA) International Secondment Programme</a> in the U.K. IFSP is an annual international secondment program where lawyers practicing in various African jurisdictions are sponsored on secondment at highly reputed international law firms and corporations in London, Dubai and Paris. During this period, I worked with the finance (corporate and project finance) and private equity team of Trinity International LLP in London doing deals across Africa. It was an enriching experience that included working on international transactions as well as participating in training programs on business development and technical legal skills. The networking events provided an opportunity to meet some of the brightest minds in the international legal market in diverse practice areas.&nbsp;Investing back into NigeriaI moved back to Nigeria with the goal of leveraging my international experience and the network I’d built in the U.S. and U.K. to grow a legal practice in Nigeria. Consistent with this goal, I made partner within a year of my return (a record seven years after being called to the Nigerian bar). I continued to work with financial institutions, investors and tech-enabled businesses (which were on the rise and continue to dominate the ecosystem) in relation to fundraising – debt and equity – transactions.Notwithstanding the remarkable personal milestone and the many awards and recognitions, I was still keen on contributing my quota by providing solutions to the issues challenging the advancement of emerging economies in Africa.&nbsp;I noticed that a shift was on the horizon and I needed to satisfy my desire to be part of an initiative or organization whose activities are geared towards accelerating the growth of small and growing businesses to drive sustainable development in Africa. During my research on the emerging impact investment firms that have the potential to curate bespoke and effective products suitable for Africa, Renew Capital shone through with its unique approach of blending impact investing, management training and ecosystem building to accelerate the growth of small and growing businesses and advance the emerging economies in Africa.My role as Renew Capital’s Legal Director and West Africa Investment Manager provides an exceptional platform to contribute to Renew Capital’s vision of changing the way the world engages Africa – from a place of giving to one of investing.&nbsp;Five key lessons that I have learned in my journey with Renew Capital to date that will continue to drive my efforts and contributions as we scale our investment work across the continent are: (i) hard work is indispensable, but you must always work smart and be flexible; (ii) always strive for excellence; (iii) people skills, cultural skills and emotional intelligence are vital for success in any endeavor; (iv) developing a good network over time is invaluable; and (v) always look to add value and be solution-driven in every endeavor.There is no doubt that these are exciting times for investments in Africa and the team at Renew Capital is well-placed to contribute significantly to developing the ecosystems and infrastructure needed to make the investments possible. I am here for all of it.

Chukwudi Ofili, Renew Capital's Legal Director and West Africa Investment Manager shares how he returned to Nigeria after a successful career in the U.S. and U.K. to use his knowledge of international corporate and investment law and make an impact in his home country.



Investing in Africa