<h1 style="text-align:center;">RENEW’s Legal Corner: August 2022</h1>Our take on developments in the investment ecosystems of East Africa&nbsp;<figure class="image"><img src="/uploads/LWN_6417_94da49e087.jpg"></figure><hr>ETHIOPIAEthiopia is Changing its Two Decades Old VAT Proclamation&nbsp;It has been two decades since Ethiopia introduced Value Added Tax (VAT) per Proclamation No. 285/2002 (“VAT Proclamation''). The VAT Proclamation has gone through two amendments in 2008 and 2019, making a few tweaks to the age-old law; however, it has failed to take into consideration the current economic developments and technological advancements. The executive bodies (Ministry of Finance and Ministry of Revenue) have been the principal players in introducing several directives and circulars focused on VAT to cope with the dynamic changes in the business environment. However, this is expected to change. The government is working on a new VAT proclamation which will bring significant changes to the existing VAT Proclamation (Read our review of the draft VAT proclamation here).&nbsp;Ethiopia Licensed the First Private Company to Provide Digital Financial Services&nbsp;Under the <a href="https://www.mofed.gov.et/media/filer_public/38/78/3878265a-1565-4be4-8ac9-dee9ea1f4f1a/a_homegrown_economic_reform_agenda-_a_pathway_to_prosperity_-_public_version_-_march_2020-.pdf">Homegrown Economic Reform Agenda</a>, the Ethiopian government specified&nbsp; its intention to enhance financial inclusion in the financial sector. This reform promised the revision of the then restriction against mobile payment technology service providers. In April 2020, the government introduced <a href="https://www.nbe.gov.et/wp-content/uploads/pdf/proclamation/oversight-the-national-payement-system.pdf">Licensing and Authorization of Payment Instrument Issuers Directive No. ONPS/01/2020</a> which provides the legal framework for introducing fintech companies in Ethiopia. Following this, Ethio-telecom introduced Telebirr, which is the first mobile payment mechanism launched by a non-financial institution. Since its launch, Telebirr has recorded more than 21M users and ETB 25B in transactions through July 19, 2022.1 This month, the National Bank of Ethiopia (NBE) has licensed Kacha Digital Financial Services S.C. to provide digital financial services, which makes it the first licensed private mobile money service provider. This is in line with the government’s move to liberalize the financial sector and could be considered as a big step towards full liberalization of the sector.&nbsp;Leather and Textile Exporters Get an Exemption for Sample ExportThe Ministry of Finance has exempted exporters of leather and textile products from acquiring and getting permits and paying duties before sending or receiving samples.2 These exporters can now send and receive samples of up to 30kg of textile and 30sqm of hides without paying customs duty. This is done in order to increase the competitiveness of the Ethiopian producers in the international market and enhance their capability. This is expected to resolve one of the many issues that exporters face in Ethiopia.<hr>UGANDAWomen Entrepreneurs at Forefront of New NSSF ProgramThe National Social Security Fund has rolled out its flagship accelerator program that will among other things fund over 92,400 women entrepreneurs. As a prerequisite, the businesses should be in priority sectors that include manufacturing, technology, agriculture and commerce. The beneficiaries will obtain about USD 30,000 in funding. According to an article in the New Vision, an NSSF representative stated that the opportunity is now targeting women to motivate them to improve their economic growth and survival in the bad economy. The fund seeks to support small businesses with potential to scale and create jobs. Historically women-owned businesses have not been deemed investment ready due to a plethora of internal and external factors including size and ability to scale. Thus, they find themselves in a vicious cycle of operating as a small business. However,investors are now more aware of this conundrum when it comes to supporting women-led businesses and according to a recent survey from the Morgan Stanley Institute for Sustainable Investing, 67% of global asset owners identify gender diversity as an area of interest within their investment portfolios. This is positive considering that women face biases and discrimination when they pitch to investors and it’s essential that capital is channeled to directly fund unrepresented entrepreneurs.&nbsp;Uganda Government Mull New TVET Bill.The newly proposed Technical Vocational Education and Training (TVET) Bill, which will outline technical and vocational training, courses and programmes and the management of trainers and stakeholders, is said to be one of the solutions to the unemployment problem in Uganda. The Minister of ICT and National Guidance emphasized the need to promote technical and vocational training alongside formal academic training to reduce the unemployment rate. He stated in a briefing to journalists this week that the bill is going to be employer-led legislation, which must answer to the needs of employers and also the skills that we need in society. With an exceedingly young population, Uganda is taking steps to ensure that the unemployment issue is resolved by offering various options of formal education and training or technical/vocational training.<hr>RWANDADe-escalation of Tension Between DRC-Rwanda UnderwayThe DRC as the newest member of the East African Community has presented an immense potential for regional economic growth. Several neighboring and international countries are looking forward to the economic, political ties and benefits it will bring to the regional bloc. Businesses have already started to advance and make road maps for the economic flow that is expected to happen. However, with the ever rising political tension from the reemergence of M23 rebels in eastern Congo, there is a lot of political instability that has adversely affected the businesses within the community in an already trying financial time. According to an article in All Africa, the de-escalation process will be managed by the revived DRC-Rwanda committee that held their first meeting in Luanda on July 12. The paradox of including DRC in the East African Community and it being marginalized as an unsafe region to do business in is weighing heavy on the member states.Rwanda Judiciary Looks to Reduce Case Backlogs SignificantlyAs a measure to reduce the case backlog in Rwanda, the judiciary has contracted over 20 judges and 10 registrars to preside over cases in primary courts. According to an article in the New Times Rwanda, the average time a case spends before it is tried increased from 8 to 10 months which has subsequently created a huge backlog. The judiciary is also devising other methods to remedy this issue like court annexed mediation that expedites conflict resolution between parties. The New Times article also mentioned that the trials postponed in different courts increased by 28 percent from 22,784 to 29,259, and one of the reasons for this increase is the Covid-19 preventive measures which led to limited court activity. This is a very timely measure for the country to ensure law and order are upheld coupled with fair and reasonable justice.&nbsp;&nbsp;&nbsp;1) <a href="https://businessinfoeth.com/telebirr-mobile-money-service-transaction-value-reached-25-billion-birr/">https://businessinfoeth.com/telebirr-mobile-money-service-transaction-value-reached-25-billion-birr/</a>2)) https://addisfortune.news/leather-textile-exporters-salute-relaxed-sample-shipping-rules/

Our take on developments in the investment ecosystems of East Africa

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RENEW’s Legal Corner: August 2022

<h1 style="text-align:center;">RENEW’s Legal Corner: August 2022</h1>Our take on developments in the investment ecosystems of East Africa&nbsp;<figure class="image"><img src="/uploads/LWN_6417_94da49e087.jpg"></figure><hr>ETHIOPIAEthiopia is Changing its Two Decades Old VAT Proclamation&nbsp;It has been two decades since Ethiopia introduced Value Added Tax (VAT) per Proclamation No. 285/2002 (“VAT Proclamation''). The VAT Proclamation has gone through two amendments in 2008 and 2019, making a few tweaks to the age-old law; however, it has failed to take into consideration the current economic developments and technological advancements. The executive bodies (Ministry of Finance and Ministry of Revenue) have been the principal players in introducing several directives and circulars focused on VAT to cope with the dynamic changes in the business environment. However, this is expected to change. The government is working on a new VAT proclamation which will bring significant changes to the existing VAT Proclamation (Read our review of the draft VAT proclamation here).&nbsp;Ethiopia Licensed the First Private Company to Provide Digital Financial Services&nbsp;Under the <a href="https://www.mofed.gov.et/media/filer_public/38/78/3878265a-1565-4be4-8ac9-dee9ea1f4f1a/a_homegrown_economic_reform_agenda-_a_pathway_to_prosperity_-_public_version_-_march_2020-.pdf">Homegrown Economic Reform Agenda</a>, the Ethiopian government specified&nbsp; its intention to enhance financial inclusion in the financial sector. This reform promised the revision of the then restriction against mobile payment technology service providers. In April 2020, the government introduced <a href="https://www.nbe.gov.et/wp-content/uploads/pdf/proclamation/oversight-the-national-payement-system.pdf">Licensing and Authorization of Payment Instrument Issuers Directive No. ONPS/01/2020</a> which provides the legal framework for introducing fintech companies in Ethiopia. Following this, Ethio-telecom introduced Telebirr, which is the first mobile payment mechanism launched by a non-financial institution. Since its launch, Telebirr has recorded more than 21M users and ETB 25B in transactions through July 19, 2022.1 This month, the National Bank of Ethiopia (NBE) has licensed Kacha Digital Financial Services S.C. to provide digital financial services, which makes it the first licensed private mobile money service provider. This is in line with the government’s move to liberalize the financial sector and could be considered as a big step towards full liberalization of the sector.&nbsp;Leather and Textile Exporters Get an Exemption for Sample ExportThe Ministry of Finance has exempted exporters of leather and textile products from acquiring and getting permits and paying duties before sending or receiving samples.2 These exporters can now send and receive samples of up to 30kg of textile and 30sqm of hides without paying customs duty. This is done in order to increase the competitiveness of the Ethiopian producers in the international market and enhance their capability. This is expected to resolve one of the many issues that exporters face in Ethiopia.<hr>UGANDAWomen Entrepreneurs at Forefront of New NSSF ProgramThe National Social Security Fund has rolled out its flagship accelerator program that will among other things fund over 92,400 women entrepreneurs. As a prerequisite, the businesses should be in priority sectors that include manufacturing, technology, agriculture and commerce. The beneficiaries will obtain about USD 30,000 in funding. According to an article in the New Vision, an NSSF representative stated that the opportunity is now targeting women to motivate them to improve their economic growth and survival in the bad economy. The fund seeks to support small businesses with potential to scale and create jobs. Historically women-owned businesses have not been deemed investment ready due to a plethora of internal and external factors including size and ability to scale. Thus, they find themselves in a vicious cycle of operating as a small business. However,investors are now more aware of this conundrum when it comes to supporting women-led businesses and according to a recent survey from the Morgan Stanley Institute for Sustainable Investing, 67% of global asset owners identify gender diversity as an area of interest within their investment portfolios. This is positive considering that women face biases and discrimination when they pitch to investors and it’s essential that capital is channeled to directly fund unrepresented entrepreneurs.&nbsp;Uganda Government Mull New TVET Bill.The newly proposed Technical Vocational Education and Training (TVET) Bill, which will outline technical and vocational training, courses and programmes and the management of trainers and stakeholders, is said to be one of the solutions to the unemployment problem in Uganda. The Minister of ICT and National Guidance emphasized the need to promote technical and vocational training alongside formal academic training to reduce the unemployment rate. He stated in a briefing to journalists this week that the bill is going to be employer-led legislation, which must answer to the needs of employers and also the skills that we need in society. With an exceedingly young population, Uganda is taking steps to ensure that the unemployment issue is resolved by offering various options of formal education and training or technical/vocational training.<hr>RWANDADe-escalation of Tension Between DRC-Rwanda UnderwayThe DRC as the newest member of the East African Community has presented an immense potential for regional economic growth. Several neighboring and international countries are looking forward to the economic, political ties and benefits it will bring to the regional bloc. Businesses have already started to advance and make road maps for the economic flow that is expected to happen. However, with the ever rising political tension from the reemergence of M23 rebels in eastern Congo, there is a lot of political instability that has adversely affected the businesses within the community in an already trying financial time. According to an article in All Africa, the de-escalation process will be managed by the revived DRC-Rwanda committee that held their first meeting in Luanda on July 12. The paradox of including DRC in the East African Community and it being marginalized as an unsafe region to do business in is weighing heavy on the member states.Rwanda Judiciary Looks to Reduce Case Backlogs SignificantlyAs a measure to reduce the case backlog in Rwanda, the judiciary has contracted over 20 judges and 10 registrars to preside over cases in primary courts. According to an article in the New Times Rwanda, the average time a case spends before it is tried increased from 8 to 10 months which has subsequently created a huge backlog. The judiciary is also devising other methods to remedy this issue like court annexed mediation that expedites conflict resolution between parties. The New Times article also mentioned that the trials postponed in different courts increased by 28 percent from 22,784 to 29,259, and one of the reasons for this increase is the Covid-19 preventive measures which led to limited court activity. This is a very timely measure for the country to ensure law and order are upheld coupled with fair and reasonable justice.&nbsp;&nbsp;&nbsp;1) <a href="https://businessinfoeth.com/telebirr-mobile-money-service-transaction-value-reached-25-billion-birr/">https://businessinfoeth.com/telebirr-mobile-money-service-transaction-value-reached-25-billion-birr/</a>2)) https://addisfortune.news/leather-textile-exporters-salute-relaxed-sample-shipping-rules/

<h1 style="text-align:center;">RENEW’s Legal Corner: July 2022</h1>Our take on developments in the investment ecosystems of East Africa<figure class="image"><img src="/uploads/LWN_4361_73f63f253a.jpg"></figure><hr>ETHIOPIAA New Investment Incentive Regulation is Already Underway&nbsp;The Council of Ministers has come up with a new investment incentive regulation this month. After the introduction of investment laws in 2020, the business community had been looking for new investment incentive packages from the government. To the satisfaction of the investors and other stakeholders, the Council of Ministers has approved a new investment incentive regulation in its 8th ordinary summit. This regulation contains income tax and custom duty exemptions and introduced some big changes to the investment ecosystem compared to the previous law. (Read our review of the new incentive regulation <a href="https://www.renewcapital.com/resources/blogs/The%20New%20Investment%20Incentive%20Scheme%20is%20Expected%20to%20Change%20the%20Investment%20Ecosystem%20">here</a>.)The National Bank of Ethiopia Revised the Reserve Requirement for a Second Time This Year&nbsp;The National Bank of Ethiopia (NBE) took different measures to mitigate the soaring inflation in Ethiopia, one of which was increasing the reserve requirement of commercial banks. However, this month the NBE reversed that decision and reduced the reserve requirement of commercial banks from 10% to 7%. In September 2021 when the NBE introduced a 10% reserve requirement, the decision was seen as a means to reduce the supply of money in the market. However, this month’s measure of reduction in the reserve requirement is expected to increase the flow of money in the market and fuel the already skyrocketing inflation rate.&nbsp;&nbsp;Financial Regulator has Banned Virtual Currencies from the Ethiopian Market&nbsp;&nbsp;The NBE has banned digital currencies. According to the NBE, there is a huge transaction rate through digital currencies and this is creating a suitable condition for money laundering and illegal financial activities in the country. <a href="https://nbebank.com/wp-content/uploads/2019/04/amendement%20of-nbe-stab-proclamation.pdf">The National Bank of Ethiopia Establishment Proclamation No. 591/2008</a> clearly recognizes Ethiopian Birr as the country’s national currency for any financial transaction in Ethiopia unless the NBE permits otherwise. In addition, <a href="https://nbebank.com/wp-content/uploads/2019/04/nationalpaymentsystem.pdf">National Payment System Proclamation No. 718/2011</a> clearly renounces payment systems that are not allowed by the NBE. In its press release this month, the NBE gave these rationales for the prohibition of virtual currency from Ethiopia’s financial system.&nbsp;Recently, the Ethiopian government has introduced a <a href="https://id.gov.et/">National ID Program</a> and embraced blockchain technology only for the effective implementation of a biometric ID system. Though the government opens its hand to blockchain technology in general, this decision shows its rejection of blockchain technology from the country’s financial sphere.Council of Ministers Approves Budget for the Coming Fiscal Year&nbsp;The Council of Ministers has approved Ethiopia’s budget for the coming fiscal year. The country’s budget for the 2022-2023 fiscal year will be 786.61 ETB which is an&nbsp; increase from the previous year’s amount by 16.59%. (1) The House of People Representatives (HPR) is expected to ratify the decision of the council. The major source of the budget will be domestic sources&nbsp; according to the Ministry of Finance. The government is expected to broaden its tax base to raise more money from domestic sources.<hr>RWANDASenators Urge Efforts to Address Affordable Housing GapsIn a recent meeting on Economic Development and Finance, Rwandan senators have put the Ministry of Infrastructure to task in order to fast-track sustainable urbanization in line with the National Strategy for Transformation 2018-2024. This is important to RENEW’s investment practice because it reveals affordable housing as a fairly underfunded sector in Rwanda and puts policies in place to accelerate urbanization. The World Bank earlier this year extended a $150 million loan for the expansion of access to housing finance. According to the New Times Rwanda, the 25-year credit facility, which was approved by parliament and cabinet, attracts an interest rate of 1.35% per annum. It will be implemented by the Development Bank of Rwanda, working with other financial institutions to expand mortgage lending. This will also set a precedent for investment firms looking to venture into the real estate sector and offer more debt financing.EAC Says New Common External Tariff will Benefit CitizensThe East African Community (EAC) ministers recently adopted a higher tariff for fourth band goods produced outside of East Africa, such as dairy and meat products, cereals, textiles, edible oils, leather products, iron and steel, among others. The newly revised 35% regional Common External Tariff is likely to take effect in July as a second pillar to regional integration. It will promote efficiency in local production and manufacturing, which would ensure high quality East African products that can compete with other foreign imports. In addition, it will create jobs for the youth as expressed in a New Times interview with the Secretary General of the EAC, who said “We really encourage more people to come and invest in East Africa and produce from here, instead of bringing finished products, because bringing finished products means they are processed and manufactured elsewhere and you are creating jobs elsewhere.”&nbsp;This decision by the EAC ministers in charge of trade and finance is a notable move towards regional economic integration and subsequently boosting trade and investment in the African Continental Free Trade Area.<hr>UGANDACSOs want 70% of Budget for Development Expenditure&nbsp;The civil society budget advocacy group (CSBAG) has criticized the government for allocating most of the country’s budget for consumption expenditures. For the 2022-2023 fiscal year, 30% of the country’s budget will be used for development purposes while the rest will be allocated to cover consumption expenses. According to the CSBAG, the delivery of services to citizens requires the allocation of more money to development expenses and this will not be seen in the coming fiscal year. In addition, the CSO shared its worries about the increasing public debt of the country. The public debt is resulting in low resource service delivery and the country needs to mobilize its domestic resources in order to tackle this problem. In addition, for economic recovery the CSO suggested zero new tax rates and a pro-people rental tax. Moreover, targeting the lower-income part of society and supporting the subsistence economy have been suggested as major ways to drive economic recovery.&nbsp;&nbsp;38.8B UGX to be Reinvested in the Uganda Development Bank&nbsp;Shareholders of the Uganda Development Bank (UDB) permitted the bank to retain UGX 38.8 billion of profit which will be used to finance development projects. Compared to 2021, the bank’s profit showed a 76% increase; this increase is attributed to growth in capitalization of the bank coupled with an increase in investment in interest-earning assets, notably loan disbursement to development projects and reinvestment of the profits to the bank. According to the CEO of the bank, the reinvestment “will be used for the growth of the investment portfolios in Uganda.” &nbsp; &nbsp;&nbsp;&nbsp;1) <a href="https://www.fanabc.com/english/council-of-ministers-approves-786-6-billion-birr-draft-budget/">https://www.fanabc.com/english/council-of-ministers-approves-786-6-billion-birr-draft-budget/</a>

Our take on developments in the investment ecosystems of East Africa: July


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RENEW’s Legal Corner: July 2022

<h1 style="text-align:center;">RENEW’s Legal Corner: June 2022</h1>Our take on developments in the investment ecosystems of East Africa.<figure class="image"><img src="/uploads/Screen_Shot_2022_05_12_at_11_13_40_AM_1d149622f5.png"></figure><hr>ETHIOPIA​​The Ethiopian Securities Exchange (ESX) is Under FormationStarting from the entry into force of the Capital Market Proclamation in July 2021, the government of Ethiopia has been taking the necessary steps to make the capital market operational. One of the cardinal steps to operationalize this is the establishment of a securities exchange. Therefore, on May 19, 2022, the government took this crucial move by signing a cooperation agreement for the establishment of the Ethiopian Security Exchange (ESX). The Ministry of Finance (MoF), Ethiopian Investment Holding (EIH) and Financial Sector Deepening Africa (FSD Africa) have signed an agreement for establishing the ESX. According to the CEO of FSD Africa, the ESX will be operational within the next two years. When the ESX comes into effect, financial institutions and key economic players will be listed, which is expected to widen the investment opportunities for potential investors in Ethiopia. In addition, this is expected to have a positive impact on the country’s development by facilitating access to finance for businesses, whose source of finance has been limited to the banking sector for a long time.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade Registration and Licensing Activity Goes Fully Digital&nbsp;According to the <a href="https://www.pmo.gov.et/media/other/b2329861-f9d7-4c4b-9f05-d5bc2c8b33b6.pdf">digital Ethiopia 2025 strategy</a>, which was endorsed by the Council of Ministries on June 15, 2020, the government mentioned lack of E-governance as a reason for the country’s low rank on the Ease of Doing Business index. In order to avert this and other problems which are facing Ethiopia’s businesses, the government has listed initiatives that are undertaken in the digital Ethiopia 2025 strategy. These include digitizing government operations, government services and developing better service delivery channels.&nbsp;As part of digitizing government operations and services, the Ministry of Trade and Regional Integration (MoTRI) has introduced an Online Trade Registration and Licensing System (OTRLS) this month. Clients of MoTRI and Addis Ababa Trade Bureaus are now not required to go to government offices to get the services previously provided by appearing in person at the above mentioned respective trade bureaus. Effective May 2022, MoTRI has stopped all in-person licensing activities and has shifted everything online. However, the online system has its flaws. From our experience, we have noticed that the system is not user friendly. In addition, we have realized that the personnel at MoTRI who handle the system itself are not accustomed to how it operates, which still causes some delays and frustration in the business community.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign Mobile Money Operators Allowed to Operate in Ethiopia ahead of Revisions to the Banking Proclamation&nbsp;Following the government’s decision to open up the financial sector to foreign players, the National Bank of Ethiopia (NBE) indicated that it is working on building the legal framework that liberalizes the sector. Similarly, NBE announced the government’s decision to allow foreign mobile money operators or other digital financial services to operate in Ethiopia ahead of revisions to the banking proclamation. This decision is part of the series of measures being taken by the government to liberalize the market. This is also related to another recent government decision – opening the telecom sector for foreign investors. Allowing mobile money will be a great advantage for Safaricom (who will be opening operations in Ethiopia this year) in its competition with Ethio Telecom, which recently announced Ethio-birr and gained millions of subscribers within a short period of time.<hr> UgandaLitigation Continues in Bitature Case - A Deterrent for Foreign Investors?Vantage Mezzanine Fund II (Vantage), a South African investment fund, and Mr. Patrick Bitature (Bitature), a Ugandan local, continue a litigation battle in Uganda’s courts. Vantage was recently blocked by Ugandan courts from foreclosing on its investment in Bitature’s hotel/real estate business, Simba Group.&nbsp;Vantage provided a $10M secured loan to Simba Group in 2014. Simba Group defaulted on the loan in 2017; Vantage agreed to restructure the loan, with payments coming due in 2019. By 2019, the company had still failed to repay anything on the loan, and Bitature filed suit, claiming that the loan was invalid, and alternatively that it was signed under duress, and thus his company did not have to repay the loan. This lawsuit was eventually dismissed as baseless, but the legal battle continued. Vantage tried to enforce its security over the shares in Simba Group in an effort to recoup its loan. Under Ugandan law, the share transfer has to be registered with the Uganda Registration Services Bureau (URSB). When Vantage attempted to register it, URSB refused (there is speculation that Bitature may have interfered with the registration). Vantage filed suit to compel URSB to act, and the court dismissed the claim on the basis that Vantage Mezzanine Fund II was not registered as a partnership in Uganda and thus lacked standing to sue in Uganda.&nbsp;This ruling is significant for the international investment community – it calls into question the enforceability of foreign investments in the country and may harm Uganda’s reputation in the international investment world. Foreign investors want certainty and predictability from the laws and legal systems of the countries in which they invest. This case puts a question mark on whether government agencies and courts in Uganda will uphold and enforce foreign investments.&nbsp;In the latest development, Vantage received the green light from a commercial court in Uganda to sue Bitature and his wife directly, as they were guarantors on the loan. Bitature moved to dismiss this suit and asked the court to order a temporary injunction preventing Vantage from bringing private legal action against the Bitatures. The court dismissed Bitature’s requests and, remarkably, the judge directed the Bitatures’ lawyer to personally pay the court costs for&nbsp; representing his clients unprofessionally and filing a baseless lawsuit. This is the latest in the ongoing struggle by Vantage to recoup its investment; time will tell whether Vantage can win its money back through private prosecution.<hr>RwandaRwandan Central Bank Creates Regulatory Sandbox for Testing Fintech ProductsThe Rwandan Central Bank has introduced a platform for testing innovative fintech products and services in a live environment. This platform will serve a vital role in assessing and managing risks that financial products and services providers may face, such as interoperability and cybersecurity. Previously, financial products did not need to come to such an environment before applying for licensing. However, starting from this month, the central bank will now use this platform to assess the marketability of certain innovative financial products before issuing licenses. This will help the central bank to issue new laws and regulations, or amend existing regulations, by witnessing how these products function in a real market rather than based on assumptions. The sandbox regulation is part of the government policy to support innovation and development in Rwanda and is designed specifically for financial products that are deemed innovative.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;

Our take on developments in the investment ecosystems of East Africa: June 

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RENEW’s Legal Corner: June 2022

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<h1 style="text-align:center;">RENEW’s Legal Corner: May 2022</h1>Our take on May’s developments in the investment ecosystems of East Africa.<figure class="image image_resized" style="width:100%;"><img src="/uploads/097_A2836_15ec557b17.jpg"></figure><hr>ETHIOPIAThe New Directive by the Ministry of Revenues Eases the Deductibility of LoansThe Ministry of Revenues (MoR) issued a directive related to keeping tax books of accounts. The new directive No. 176/2014, which repealed Directive No 152/2011, aims at bringing clarity to the business community on keeping books of accounts and having supporting documents with an ultimate goal of creating consistency in terms of application. The new directive has made some noteworthy changes. However, perhaps the significant one is related to the registration and documentation of loans.&nbsp;Previously, taxpayers were required to show a loan agreement that was notarized at Documents Authentication and Registration Services (DARS) in order to recognize a certain entry to the company’s books as a debt. Otherwise, there is a high probability that the transfer will be considered an income and subject to tax. This has been a major dispute area between the taxpayers and the tax authority.The rigidity of the process at DARS to get a loan agreement notarized added to the fact that most businesses are family-owned and lack of awareness resulted in shareholders usually putting their personal money into their business at times of distress without DARS registration and facing excessive taxation.&nbsp;The new directive has provided some clarity to that. Even though the burden of proof still rests on the taxpayer, now a loan can be proven in different ways in addition to proof of notarization at DARS. Despite the upgrades to the law, be advised that not getting a loan agreement notarized at DARS will have consequences in terms of stamp duty penalty. The business community is still advised to get the loan agreement notarized at DARS, however, the consequence of not doing so is now less grave.&nbsp;NBE has Released a Complete Guidelines for Telecom OperatorsIn 2020, the National Bank of Ethiopia (NBE), came up with a <a href="https://nbebank.com/wp-content/uploads/pdf/directives/Payement%20system/ONPS-02-2020.pdf">Licensing and Authorization of Payment System Operators Directive - ONPS/02/2020</a>, which allowed telecom operators to engage in payment and related services in Ethiopia. As a follow-up to this, NBE has introduced a <a href="https://www.nbe.gov.et/wp-content/uploads/pdf/directives/Payement%20system/A-complete-Guide-on-licensing-process.pdf">Complete Guide on Payment System Operator License Process</a> that stipulates the details of the licensing process for the financial firms that want to engage in related businesses.&nbsp;The guideline has five phases detailing the application procedure to secure the license. These include to whom the application should be addressed, documents that should be submitted with the application, company formation and the authorization process.&nbsp;&nbsp;&nbsp;&nbsp;Basic Food Items Can Now Enter Ethiopia on Franco Valuta Basis&nbsp;In an effort to control the food inflation in Ethiopia, triggered by internal and international factors, the government is taking new measures. As part of this move, the Ministry of Finance has issued a circular allowing the Ethiopian diaspora and Ethiopians’ who live abroad to import basic food items into Ethiopia without a foreign currency permit.&nbsp;In a circular which is written to the Ethiopian Customs Commission, the Ministry of Finance has given permission to the diaspora and Ethiopians who live abroad to import oil, wheat, sugar, rice and instant milk under the franco valuta scheme. The new circular waives the restrictions that were imposed on the volume that is allowed. Under the new circular there is no minimum requirement and persons who are considered eligible can import any amount of the basic food items which are listed under the Directive.&nbsp;NBE Has Come up with a New Directive for the Implementation of Technology in Core Banking OperationsNBE has introduced a Directive that obligates commercial banks to automate their system, at least their core business processes. As per this law, commercial banks are required to automate their customer due diligence, loan processing, loan portfolio management, and interest banking services among others.&nbsp;NBE has set a time frame for banks to modernize their banking processes, which is within the next two years starting from the effective date of the Directive. Not complying with the Directive within the set time framework will result in an ETB 10,000 fine each month. If a bank fails to automate its core banking business within additional two years, it will face partial or full suspension of related core business in due consideration of the nature of the function.<hr>UGANDAThe End of Umeme’s Monopoly over the Supply and Distribution of ElectricityThe Ugandan Parliament has passed an Electricity Amendment Bill 2022 which, if ratified by President Museveni, will end Umeme Limited's (“Umeme'') monopoly as the sole bulk power supplier of the country. Umeme has been operating under a 20 years electricity distribution concession effective March 2005 from the Government. Umeme is Uganda’s main electricity distribution company, listed on the Uganda Securities Exchange and cross-listed on the Nairobi Securities Exchange of Uganda and is currently distributing about 97% of all electricity used in the country.&nbsp;The new bill permits suppliers to receive generation and transmission licensees to supply electric power in bulk directly to categories of customers specified by the Minister. The assent of President Museveni is the only remaining hurdle for the bill to be implemented.The implementation of the presidential directive will take away Umeme’s service territories where it is not licensed. It will also give a selling power to industries at a tariff that eliminates the current expensive distribution costs of Umeme.&nbsp;Uganda Import Rule Over Age-Old CarsIn a new directive by the Uganda Revenue Authority (URA), imports of vehicles older than nine will be cleared under the East African Community’s Single Customs Territory (SCT) which allows members of the bloc to jointly collect customs taxes. Complementary to this directive, any vehicle nine years old or more from the date of manufacture shall no longer be cleared under the current warehousing regime. As a result, based on CRSP The price of used cars will be inflated as it attracts an import duty of 25%, excise duty (ranging from 25% to 35%) and value-added tax of 16% payable cumulatively and in that order.The likely impact of this directive will be first, a decrease in vehicles sold on the automobile black market in Kenya and secondly, it will create a tough environment for Ugandan importers as they will be required to lodge import declaration forms in their respective home countries and pay relevant taxes upfront to facilitate the export process. Thus, the price of automobiles will likely imminently increase. However, for some, this is viewed as positive news from an environmental point of view because consumers will inevitably opt to purchase newer cars that have lower carbon emissions. Kampala, Uganda’s capital, is currently reported to have the second-worst air quality in Africa.<hr>RWANDARwanda to Benefit from $25m Initiative for Climate Resilient Crop VarietiesBurundi, Rwanda and the Democratic Republic of Congo (DRC) are part of the countries listed for consideration in the new initiative that strives to ensure environmental conservation and increase food security. According to an article in the New Times, the&nbsp; $25 million regional initiative dubbed “Transforming Agri-Food Systems in West and Central Africa” (TAFS-WCA) initiative has been launched by CGIAR, a global research partnership to improve nutrition and food security within the context of climate change in West and Central Africa through nutritious, climate-adapted and market-driven food systems. Rwanda depends greatly on agriculture for both domestic consumption and export. Earlier this year, a prolonged drought eroded more than 40% of Rwanda’s farmer’s produce, mainly beans and maize. This situation was exacerbated when the heavy rains that came, later on, damaged the crops that had survived the dry spells. This initiative will offer farmers some relief from the adverse and sometimes unavoidable effects of climate change subsequently ensuring food security and steady yields for consumption and export.Ukrainian Refugees Could be Sent&nbsp; to RwandaIn an interesting twist, senior officials in the UK have stated that Ukrainian refugees entering the country with illegal documentation may be relocated to Rwanda. The process will begin in the next few weeks following a $158M deal struck by the British government and Rwanda last month. Thousands of illegal migrants who haven’t yet been processed in the UK will be granted asylum or refugee status. According to an article in The Guardian UKTom Pursglove, the minister for justice tasked with tackling illegal migration stated in defense of the new immigration scheme that, “This is a new and untested policy at this point in time. I do think that in the fullness of time we will see this policy, as part of a wider package that we are introducing, really shift the dynamic.” The Migration and Economic Development Partnership will likely be beneficial in achieving Rwanda’s economic and social transformation by integrating the asylum seekers into the workforce.&nbsp;1. <a href="http://umeme.co.ug/">http://umeme.co.ug/</a>2. <a href="https://www.monitor.co.ug/uganda/news/national/mps-end-umeme-monopoly-as-electricity-distributor-3781812">https://www.monitor.co.ug/uganda/news/national/mps-end-umeme-monopoly-as-electricity-distributor-3781812</a>3. <a href="https://www.monitor.co.ug/uganda/news/national/uganda-import-rule-boosts-kenya-car-dealers-3779394">https://www.monitor.co.ug/uganda/news/national/uganda-import-rule-boosts-kenya-car-dealers-3779394</a>4. Current Retail Selling Price

Our take on May’s developments in the investment ecosystems of East Africa


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RENEW’s Legal Corner: May 2022

<h1 style="text-align:center;">RENEW’s Legal Corner: April 2022</h1>Our take on last month’s legal developments in the investment landscapes of Ethiopia, Rwanda and Uganda.<figure class="image image_resized" style="width:100%;"><img src="/uploads/097_A2846_254237521f.jpg"></figure><hr>ETHIOPIAA Startup Proclamation that Incentivizes Startups and Investors is in the MakingEthiopia is in the process of enacting a Startup Proclamation that aims to create an innovative ecosystem that is able to promote innovation and job creation. The proclamation that is currently in the draft stage is expected to bring solutions to some of the challenges that startups and innovative businesses face in Ethiopia including barriers to entry and exit, administrative challenges, and access to finance.&nbsp;One of the major measures taken by the Startup Proclamation is incentivizing angel investors to invest in startups and innovative businesses in Ethiopia. The incentives to such investors include tax breaks on capital gains tax and allowing debt investment, among others. [We will be publishing a white paper next week on angel investing in Ethiopia, and will include details on how the Startup Proclamation will likely impact angels.]Road Transport Proclamation in the PipelineThe Ethiopian Ministry of Transport and Logistics released a draft Road Transport Proclamation (Draft Proclamation), which, once enacted, will repeal the nearly decade and a half old Transport Proclamation No. 468/2005 (Transport Proclamation). The revision is needed in order to restructure the road transport sector in a manner that makes it competitive, safe and efficient and cognizant of the economic and social developments of the country. Below, we have summarized some of the major changes that are proposed by the draft proclamation as compared to the current one.Railway Transport Sector RemovedThe current proclamation regulates almost all forms of land transport including railway transport and their operators. However, in reality, this hasn’t been the case since 2017. With the enactment of the Railway Transport Administration Proclamation 1048/2017, the sector has been removed from the Transport Proclamation. Reinforcing that decision, the draft proclamation removed the regulation of railway transport from the scope of application.&nbsp;Maritime Transport Sector RemovedSimilar to the railway transport sector, the maritime sector administration has been part of the Transport Proclamation. However, this has been removed from the transport sector and a separate regulation has been set up per the Maritime Sector Administration Proclamation No. 549/2007. Similarly, the draft proclamation reinforced that decision and left the maritime sector out of the scope of the transport sector regulation.&nbsp;&nbsp;&nbsp;Establishment of the National Road Transport CommissionUnder the current Transport Proclamation, powers in relation to regulating the transport sector are given to the Transport Authority, which is empowered to promote an efficient, adequate, economical and equitable transport system. The new draft proclamation changes the name of the regulator to the National Road Transport Commission, which will have similar mandates to the Transport Authority. However, since there is a need to tie the works of the regulatory body with cross-border activities and neighboring countries, the decision is being taken to elevate the body to a commission.The Use of Technology&nbsp;The draft proclamation emphasizes the need for integrating technology into the transport sector, which is also one of the major reasons for the need to revise the current Transport Proclamation. The use of technology is mainly introduced in relation to data collection and dissemination. The draft proclamation provides for the establishment of a data center for such purposes.&nbsp;<hr>UGANDAChanges in the Coffee Sector Continue to Raise Concern&nbsp;A recent deal between the Ugandan government and Uganda Vinci Coffee Company Limited (UVCC) to set up a coffee processing plant in Uganda has raised concerns based on the exclusive rights given to the company to purchase all the Ugandan coffee to the exclusion of other players in the coffee sector. UVCC has been given free land in the Namanve Investment Park on a 49-year lease agreement and has been granted priority rights over the purchase of coffee to ensure its supply. There is also concern around the tax exemption extended to the investor. According to an article in the <a href="https://www.monitor.co.ug/uganda/news/national/inside-multibillion-coffee-deal-govt-signed-with-uvcc-3769446">Monitor</a>, the agreement, which lasts for a 10 year period, states that ‘the exemptions shall extend to taxes and impositions applicable to all the activities of the company and its foreign staff in respect to the export of green coffee beans.’It further states that ‘where no exemption from tax is allowed under the law of Uganda or exemption provided is inadequate to provide the company with comprehensive relief from taxes or other impositions, then the government undertakes that it will bear the cost of all taxes.’ In effect, this ensures the company will not have to pay any taxes and puts taxpayer money at risk for a deal they had not previously been made aware of or approved.&nbsp;This agreement comes after the recent decision of the Ugandan government to withdraw its membership from the International Organization of Coffee Exporters where it previously has been a pivotal member. The timing also aligns with the new National Coffee Bill passed in August 2020, which requires the registration of coffee farmers and, according to the Monitor, has not been well received.&nbsp;<hr>RWANDAImproved land rights for foreign investors may increase Rwanda’s attractiveness&nbsp;&nbsp;In an effort to position Rwanda as an entrepreneurial hub of Africa, significant changes continue to be made to the country’s laws in order to attract investments from all parts of the world. The new amendments to the land law n° 27/2021 of 10/06/2021 will likely play an instrumental role in achieving this. New land rights regarding state land leases and land concessions were revised alongside the existing rights that apply to nationals and foreigners in Rwanda.Under the new amendments, an <a href="https://www.collinsdictionary.com/dictionary/english/emphyteusis">emphyteutic</a> lease that initially stipulated a lease term of 49 years for investments and 20 years for a residential house extended the term to 99 years for both types of lease. This will likely encourage investors.&nbsp;Regarding freehold titles, historically a foreigner was only allowed full and exclusive rights to land by virtue of international bilateral agreements between Rwanda and other states, if they co-owned the land with a Rwandan citizen who had at least a 51% ownership stake, or were apportioned land in a special economic zone. The new revisions to the land law grants freehold rights to foreigners if approved by a presidential order in exceptional circumstances of strategic national interest. Though this is undefined in the new land law, and no such presidential order has been issued yet, the hope is that the order would cover all strategic investment undertakings under the new investment laws.&nbsp;The additional inclusions to the land law consist of land concession that entails use of private state land for a period not exceeding 49 years for strategic investment like forestry, agriculture and livestock, among others. An article in <a href="https://www.newtimes.co.rw/opinions/foreigners-rights-land-rwanda-new-land-law-and-its-impact-investment">The New Times Rwanda </a>stated that “All projects of national importance are deemed as strategic investments, such projects focus on special impact to the development of the country and its people.” The article further details the state lands lease which is “a State private domain land lease agreement between the State and an investor for strategic investment in construction of infrastructure for commercial purposes such as trade centers, hotels, real estate, restaurants, public parks, tourism sites, schools, hospitals passengers or goods transportation stations and industries.” The lease term is 99 years and can be renewed pending fulfillment of the investor’s tax obligations and diligent land conservation.&nbsp;

Our take on last month’s legal developments in the investment landscapes of Ethiopia, Rwanda and Uganda

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RENEW’s Legal Corner: April 2022

<h1 style="text-align:center;">Women’s History Month 2022</h1>To finish Women's History Month this year, we're highlighting notable female figures from Ethiopia, Rwanda and Uganda that have done or are doing historical things.<figure class="image image_resized" style="width:100%;"><img src="https://lh6.googleusercontent.com/53E5hUxm9MMwFV39X8eHHT_9tc8SsfdY8qfNIO8k0ssunKfIX_6BqAcu1hytG-l5dYBAHjNISLMjkvmW1HO0bm2xb00ubwRaT47W_1BeG9oU2HFDcgb29sgYekyhkjGnHJ8Vcvaa"></figure>ETHIOPIAMulumebet Emeru - Africa’s First Female PilotEthiopian Mulumebet Emeru became Africa's first female pilot in1934.&nbsp;“I was overwhelmed. It was a tremendous thrill though I did not realize at the time… that I was Africa’s first woman pilot. But with the war, I gave up flying. Indeed I got married…I would fly several times a week – always over Addis. It was an unusual experience and my friends all envied me.” (Quoted from Selamta, the in-flight magazine). (1)Although her piloting career was cut short by the Italian invasion of May 1936, she remains historic in the hearts of millions. She is also the grandmother of Aman Adinew, owner of METAD Coffee, one of RENEW’s first portfolio companies. After World War II, she was given farmland in Disamo and Harar where wild coffee was growing. She built the Harar farmland into a coffee estate, solidifying the family’s connection to the land and coffee cultivation.<figure class="image image-style-align-center image_resized" style="width:100%;"><img src="/uploads/Wro_Mulumebet_b4bd82fae6.png"></figure>RWANDAChristelle Kwizera - Founder of Water Access RwandaChristelle Kwizera founded Water Access Rwanda in 2014 to address water scarcity and youth unemployment in Rwanda one year before she graduated magna cum laude in mechanical engineering.Under her leadership, Water Access Rwanda is recognized as an innovator in the water sector. It was the first from Rwanda to win the Africa Entrepreneurship Award and the EDF Pulse Africa Award. She leads by example. Christelle was selected as a 2014 MILEAD fellow, recognizing her as an emerging African woman leader among more than 1,200 applicants. (2) Her story and journey continues to be a source of inspiration.&nbsp;<figure class="image image_resized image-style-align-center" style="width:75%;"><img src="/uploads/Christelle_Kwizera_8a77c52dfb.jpeg"></figure>&nbsp;UGANDAWinnie Byanyima - Executive Director of UNAIDS&nbsp;Winnie Byanyima is an aeronautical engineer, politician, human rights activist, feminist, and diplomat.She is a passionate and longstanding champion of social justice and gender equality and she currently leads the United Nations’ efforts to end the AIDS epidemic by 2030. Previously Winnie led the establishment of the African Union Commission’s Directorate of Gender and Development and also served as Director of Gender and Development at the United Nations Development Programme. She founded the Forum for Women in Democracy, an influential Ugandan nongovernmental organization, and has been deeply involved in building global and African coalitions on social justice issues. Winnie has seven given names, one of which is Kyegiragire, which means “I can make myself whatever I want to be”, a name which she says has shaped her attitude to life! She co-founded a 60-member Global Gender and Climate Alliance of civil society, bilateral and multilateral organizations and chaired an UN-wide task force on gender aspects of the Millennium Development Goals, and on climate change. (3)<figure class="image image-style-align-center image_resized" style="width:75%;"><img src="/uploads/winnie_new2_1440x350_bd814c7e90.png"></figure> &nbsp;&nbsp;&nbsp;<hr>(1) <a href="http://www.planetethiopia.com/gallery/image/CQ">http://www.planetethiopia.com/gallery/image/CQ</a>(2) <a href="https://svai.africa/our-people/christelle-kwizera/">https://svai.africa/our-people/christelle-kwizera/</a>(3) <a href="https://www.unaids.org/en/aboutunaids/unaidsleadership/bios/winnie-byanyima">https://www.unaids.org/en/aboutunaids/unaidsleadership/bios/winnie-byanyima</a>&nbsp;

Finishing  Women's History Month this year

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Women’s History Month 2022

<h1 style="text-align:center;">RENEW’s Legal Corner: March 2022</h1>Our take on the legal developments related to the investment landscape in Ethiopia, Rwanda and Uganda.<figure class="image image-style-align-center"><img src="/uploads/097_A2814_f27fb82728.jpg"></figure><hr>ETHIOPIAParliament Approves the Proclamation Lifting the State of Emergency &nbsp;Following the push several months ago from the Tigray People Liberation Front (“TPLF”) southwards to the capital, Addis Ababa, the federal government of Ethiopia declared a nationwide state of emergency, which later was enacted by the House of Peoples Representative (“Parliament”) as <a href="http://unidoseoul.org/en/?p=7249&amp;ckattempt=1">Proclamation No. 5/2021</a>. The main aim of the proclamation was to avert the threat posed by the TPLF, which is declared a ‘terrorist group’ by the federal government. Accordingly, a command post was established under the state of emergency proclamation, which was empowered to impose curfews, cause the termination of any means of communication and public transportation, and oversee activities of civil society organizations and activities of mass media and journalists, with the authority to revoke their license, among others. When enacted, the state of emergency had an expiry period of six months effective from the date of enactment, November 2, 2021.However, following the successful push back of the TPLF group to Tigray by the federal government, the Council of Ministers proposed for the state of emergency to be lifted as the threat from TPLF is no longer prevalent. As a result, the Parliament approved the recommendation and lifted the state of emergency on February 15, 2022, before the expiry date. According to the statement from the Prime Minister’s Office, the threat has reached a stage where law enforcement could be implemented by regular operation. The approval came after three weeks from the proposal by the Council of Ministers.The lifting of the state of emergency is seen as a positive development for the business community. Perhaps one of the most significant impacts of the lifting of the emergency is seen on the performance of the Ethiopian sovereign bonds. Following the expression of intention to lift the state of emergency by the government, the Ethiopian bonds witnessed a swing from near-worst to best performing. According to Bloomberg, “Ethiopia’s bonds are the best-performing sovereign debt in emerging markets this year.” The bonds have rallied 6 cents on the dollar following the announcement by the Prime Minister’s Office that the security threat had diminished. That brings returns this year to 13%, the best performance out of 80 developing nations tracked by Bloomberg. As a result of the war, the securities lost 28% last year alone, which was the worst performance after El Salvador.Executive Organs Proclamation Published&nbsp;One of the first tasks undertaken by the newly formed government when it took office on October 4, 2021 was restructuring the executive branch of the Federal Government. During its first session, the newly formed Parliament enacted a proclamation that defines the powers and responsibilities of the executive organs of the government. This has created a number of changes in the structure, from their nomenclature to restructuring their responsibilities and accountabilities. However, despite this being the first act of the Parliament, we had to wait for four months until the final proclamation defining their powers and accountabilities was published in the Federal Negarit Gazette. This month, the printouts of the Proclamation have been made available to the public, which is called the Definition of Powers and Duties of the Executive Organs Proclamation No. 1263/2021.&nbsp;One of the major reasons for the restructuring, per the preambles of the proclamation, is the need to establish an organizational structure that allows coordinated work that is efficient and cost-effective, helps reduce wastage and ensures accountability. Previous laws have not been able to establish an accountable organizational structure and designation of institutions and, as a result, it was impossible to ensure the continuity of institutions and uniformity of designation.&nbsp;Accordingly, the organizational structure has tried to classify government bodies into seven major categories, which are:Ministry - A ministry is led by a minister. It is mainly responsible for formulating sectoral policies, strategies and programs, and related matters and oversees and coordinates its implementation. Accordingly, 22 ministries are established per the proclamation. Major changes in this category are: the Ministry of Trade and Industry is divided into two different ministries, which are the Ministry of Trade and Regional Integration and the Ministry of Industry. In addition, the Ministry of Labour and Social Affairs changed its name to the Ministry of Labour and Skills, which under the new structure overtook the roles and responsibilities of the Jobs Creation Commission.&nbsp;&nbsp;Commission - A commission can be accountable to a Ministry, the Prime Minister’s Office or the Parliament. It coordinates the activities of different executive organs, formulates policies and strategies and oversees its implementation. The Ethiopian Investment Commission and the Customs Commission are the noteworthy organs in this category.&nbsp;Authority - An authority performs a regulatory function, issues standards and ensures their compliance with the same. It could be accountable to a Ministry, however, if there is a potential conflict with the activities of an institution to which it is accountable, it could be made accountable to the Prime Minister or other government organs. The Ethiopian Food and Drug Authority is a regulatory organ to note in this category.&nbsp;Administration or Development - An administration or development organ mainly conducts regular development and infrastructure development activities and oversees the same. One major introduction in this category is the introduction of Ethiopian Investment Holdings as a sovereign wealth fund that is independent of the Public Enterprise Holding and Administration and reporting to the Prime Minister. The Ethiopian Entrepreneurship Development is another organ established, which took over the roles and responsibilities of the Federal Small and Medium Manufacturing Industry Development Agency.&nbsp;&nbsp;Service - This is a new designation for government organs. It is used for institutions that are mainly established to provide centralized services necessary for government organs or provide services mainly to citizens. One of the major introductions under this category is the Documents Authentication and Registration Services, which used to be an agency in the past.&nbsp;Office - An office is an institution established for temporary or permanent purposes under special circumstances to conduct mainly activities that require special attention and institutional arrangement by uniformly coordinating different institutions.&nbsp;Institute - An institute is accountable to the relevant Ministry or another government organ that mainly focuses on training, study, research and consulting services. One of the major introductions in this category is the establishment of the Innovation and Technology Gifted and Talented Development Institute, whose powers are to be defined by regulation.&nbsp;&nbsp;Furthermore, one may notice that the number of executive organs that are accountable to the Prime Minister has increased. There are now seventeen executive organs that directly report to the Prime Minister.English Version of Commercial Code PublishedAs part of the economic reform program and to improve the country’s ranking in the World Bank's Ease of Doing Business ranking, the government started the process of updating the <a href="https://www.wipo.int/edocs/lexdocs/laws/en/et/et014en.pdf">six-decade old commercial code</a>. Accordingly, the Parliament adopted the new Commercial Code under Proclamation No. 1243/2021 (“<a href="https://chilot.me/2021/10/25/proclamation-no-1243-2021-commercial-code-english-version/">New Commercial Code</a>”), which came into effect in March 2021. However, the business community, especially foreign investors, has been waiting to get the printouts of the English version of the code. The wait has come to an end this month. The printouts of the English version of the New Commercial Code were made available to the business community.&nbsp;The New Commercial Code has made several changes to the old one, which principally is associated with its incompatibility with the current state of doing business. Many things have changed during the past six decades which made the repealed code outdated and inadequate to regulate current trade developments. Learn more about the changes <a href="https://www.renewcapital.com/resources/blogs/The%20Commercial%20Code%20of%20Ethiopia%20is%20Changing%20How%20the%20Country%20Does%20Business">here</a>.Parliament Approves the Enactment of the Private Employees Pension Proclamation&nbsp;The Parliament enacted a new <a href="https://chilot.me/2021/12/22/private-employees-pension-_draft_-proclamation/">Private Employees Pension Proclamation</a>. This will repeal the decade-old <a href="https://www.ilo.org/dyn/natlex/natlex4.detail?p_lang=en&amp;p_isn=89585&amp;p_country=ETH&amp;p_count=141">Private Employees Proclamation No. 715/2011</a> as amended by Proclamation<a href="https://chilot.files.wordpress.com/2017/04/proclamation-no-908-2015-private-organization-employees-pension-amendment.pdf"> No. 908/2015.</a> Adopting the new proclamation is required to strengthen and improve private organization employees' pension schemes and funds to ensure sustainability and reliability, benefit citizens better, and finally expand and consolidate to contribute to social justice, industrial peace, poverty reduction and development.&nbsp;As we understood from the final draft of the new proclamation, it has made some changes associated with the compliance requirements of employers and employees, manner of payment of retirement pension and gratuity. Now the new private employees pension proclamation is adopted, it will come into full effect once published in the Federal Negarit Gazette. We will be providing a detailed analysis of the changes introduced in the future.<hr>UGANDAUganda Declines to Renew Membership with the International Coffee Organization&nbsp;Uganda recently announced a two-year suspension of its membership from the International Coffee Organization (ICO), noting that the country needed to put pressure on the organization to address unreasonable terms in the International Coffee Agreement drawn up for member states, such as the unfair tariffs and restrictions imposed on imports of value-added coffee. According to an article in the East African, Uganda’s other concerns are the coffee price volatility, which it says is threatening the incomes of local farmers and sustainability of the coffee sector, unfair membership votes and contributions, and the increasing role of the private sector in the decision making of ICO, among other issues.The International Coffee Organization is the principal body in charge of fostering cooperation between international coffee exporters and importers. The surprising decision Uganda made to suspend its membership with the international body has left coffee farmers disgruntled especially considering Uganda is currently the second largest exporter of coffee in Africa with coffee comprising 22% of the country’s total exports and has a goal to be the world’s third-largest exporter of coffee by 2025 behind Brazil and Vietnam. The Uganda Coffee Development Authority has maintained that Uganda’s withdrawal from the International Coffee Agreement will not hamper coffee trade and export. Uganda can continue to export, but there are concerns that the withdrawal might limit market opportunities.&nbsp;<hr>RWANDAEALA Receives Key Bills Paving Way for Regional Monetary Union&nbsp;The completion of the discussion of three pertinent laws by the legislative arm of the East African Community (EAC) finally came to an end on March 1, 2022 with a plenary session to discuss the inception of the long awaited East African Monetary Institute (EAMI). The EAMI is charged with establishing the East African Monetary Union (EAMU) to create regional economic integration among the six member states of the EAC (Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda). According to a Rwanda Times article, the bills under discussion are:&nbsp;<ul><li style="text-align:justify;">The EAC Standardization, Accreditation and Conformity Assessment Bill, which will provide for standardization, accreditation and conformity assessment of products traded in the EAC to facilitate industrialization development and trade to make provision for ensuring protection of health and safety of society and environment in the community;</li><li style="text-align:justify;">The EAC Financial Services Commission Bill, which will promote integration of financial systems in the EAC and harmonize regulation and supervisory practices in the non-banking financial sector; and</li><li style="text-align:justify;">The EAC Surveillance Compliance and Enforcement Bill, which will have the function of assessing the attainment of macroeconomic convergence by EAC partner states and to regularly monitor and enforce adherence to the macroeconomic convergence criteria by the participating partner states.</li></ul>These bills are critical to finally establishing the EAMI. The EAMI aims to pick up from where the East African Central Bank left off by issuing a single currency by 2024 as a means of achieving the ultimate goal of regional economic integration. These efforts were stifled last month when members of the Council of Ministers failed to attend or send representatives to the sitting, consequently leading to the postponement of the discussion on major business. The delay in decision making has been a recurrent obstacle in finally realizing all the EAC pillars of regional integration.&nbsp;Photo by Imran Mazar

Our take on the legal developments related to the investment landscape in Ethiopia, Rwanda and Uganda