<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 

In this blog, Bezawit Wondwosen shares her typical day as a Renew Capital intern. Interested in being part of the next internship program? Applications are now open!&nbsp;&nbsp;<h1>A Day in the Life of a Renew Capital Intern</h1>Everyday opportunities for gaining professional experience in private sector development and investment&nbsp;Have you ever wondered what an average day for an intern at Renew Capital looks like? I joined the Renew Capital internship program in Ethiopia after I graduated with my economics degree from Addis Ababa University. During my time at Renew Capital, I’ve learned a lot about the working world, met many kind and inspiring people, received mentorship from great leaders and have been involved with very interesting projects, events and tasks.<figure class="image"><img src="/uploads/Whats_App_Image_2023_05_19_at_12_13_18_eb998b70fa.jpeg"></figure>No day is exactly like the other in an internship. It can be exciting, bustling, unexpected and unplanned, but when you’re working to make the best of your experience, it’s extremely rewarding.&nbsp;Here’s what my typical day looks like:My alarm goes off at 7:00 am. It's time to get up and get ready for work. After a couple of snoozes, then anxiously thinking about what I have scheduled for the day, I’m up and excited to get busy. I need to get to work by 8:30 am, so I put on a nice pair of black pants, a blouse and sweater, and a pair of cute boots and I've got a stylish semi-casual outfit for the day. Then, I’m out the door and driving to work while listening to my current favorite podcast, "How I Built This by Guy Raz?" which was recommended by Matt Davis, our CEO, in one of the exec’s sessions.&nbsp;Our office is not far from where I live, so I get there within 30 minutes on a good day. The office is beautiful with windows all around. Around 8:30 am, I arrive at the office and head to my desk. My desk space essentials are usually coffee or tea, water, a notepad for notes and to-do lists, my AirPods and lipgloss. After unpacking, I open my laptop and check my email and calendar. I look over my calendar and see what the priorities are for the day and if I have free time, I try to assist anyone and support any project. A tip I try to remind myself is to ask whether my manager or another employee in any department needs help. Everyone always appreciates a helping hand and sometimes they can get too busy to delegate work.&nbsp;I have meetings with various departments throughout the day where I can learn more about them, find out what's coming up and find out if there are any prospective projects or events I can assist with. When meetings are completed, I return to my daily activities, which mostly involve training sessions and in-depth research on various topics. I enjoy researching different subjects since it takes me down unexpected rabbit holes and teaches me new information. When it’s finally lunchtime, I heat up the lunch I packed and sit with my colleagues. We are a group of people with different cultures and backgrounds so the conversations we have are always interesting which makes lunchtime so much fun.&nbsp;When lunch is over and I go back to work, I try to keep myself energized by drinking some coffee. My most productive hours are in the morning so I try to finish my harder tasks at that time.&nbsp; In the afternoon, I do the tasks that seem easier to me. When the day is finally over, I pack up my things and say, “Good night and see you tomorrow” to my colleagues for yet another work day. I usually finish my day by going to the gym, reading a book and spending time with my friends and family. And who knows what the next thing I will be assisting with tomorrow which makes it the best part of my internship experience. Renew Capital’s internships offer recent graduates based in Africa the opportunity to work on various investment and private sector development projects that will enhance their professional skills and gain work experience in an international firm operating across six African countries. Apply&nbsp;<a href="https://www.renewcapital.com/careers">here</a>!

Everyday opportunities for gaining professional experience in private sector development and investment 

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A Day in the Life of a Renew Capital Intern

<h1>Fueling the Growth of Ethiopia's LogiTech Startup Ecosystem</h1>USAID’s Bureau of Humanitarian Assistance seeks to strengthen the trucking, transportation and logistics sector through technology innovation<figure class="image"><img src="/uploads/W_Ith_credit_27033b5754.png"></figure>From late 2020 through February 2021, USAID’s Bureau of Humanitarian Assistance (BHA) conducted a&nbsp;<a href="https://pdf.usaid.gov/pdf_docs/PA00XFMD.pdf">Private Sector Landscape Assessment</a> (PSLA) for Ethiopia that identified and prioritized concrete opportunities to integrate high-impact private sector engagement (PSE) initiatives into USAID BHA’s emergency and non-emergency programming for Ethiopia. Ultimately, the PSLA recommended focusing on two thematic areas for new PSE opportunities:<ol><li>Expanding businesses to rural areas in support of the Mission’s Resilience Food Security Activities (RFSAs); and&nbsp;</li><li>Strengthening the trucking sector within Ethiopia through improving standardizations, planning requirements, utilization of new technologies, and improving driver requirements to both improve the delivery and reduce the costs of providing food assistance.</li></ol>In support of these recommendations, USAID BHA started the Strengthening Humanitarian Assistance and Resilience Private Sector Engagement In Ethiopia (SHARP-SEE) Project in partnership with Renew Capital in March 2022, during which the project teams have been working to strengthen urban to rural linkages and enhance the trucking, transportation, and logistics sector in Ethiopia. This collaboration has resulted in market and ecosystem research and culminated in a 12-week, intensive training program focused on 10 logistics and technology (or “LogiTech”) startups in Ethiopia. Key takeaways from project activities include:<ul><li>There are several persisting challenges that undermine the growth and modernization of Ethiopia's trucking, transportation and logistics sector.</li><li>Trucking and transportation companies are not tech-enabled, and most companies still operate with manual processes.</li><li>Macroeconomic conditions and regulatory barriers continue to undermine the Ethiopian startup ecosystem.</li><li>Only 0.07% of capital invested in logistics and transport startups in Africa was raised by Ethiopian companies from 2019 to January 2023.</li><li>The average deal size for Ethiopian logistics companies was $170K, significantly lower than other African countries from 2019 to January 2023.&nbsp;</li><li>Ethiopian startups only raised 5.82% of total capital raised by startups in Africa from 2019 to January 2023.</li></ul>&nbsp;Percentage of Capital Invested in Logistics by Country (USD, Millions, 2019 - January 2023)<figure class="image"><img src="/uploads/Screenshot_2023_05_18_at_11_18_47_AM_a31b08b385.png"></figure>(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)In other words, trucking and transportation companies are not tech-enabled, and most companies still operate with manual processes. According to interviews with SMEs throughout the SHARP-SEE project, trucking and logistics companies are interested in implementing technological solutions to address challenges associated with financial forecasting, accounting and operational efficiency. At the same time, while many companies have implemented solutions that allow them to track vehicle driving data, like location, speed, and fuel levels, the technologies in current use do not include logistics applications that support in the completion of tasks in the following key areas:<ul><li>Fleet Management Systems</li><li>Cargo Tracking and Matching Technologies</li><li>Last Mile Communications</li><li>Digital Work Orders &amp; Digital Truck Tasking</li><li>Efficient Unloading &amp; Loading&nbsp;</li><li>Digital Bidding and Tendering</li><li>Digital Warehouse Management Systems</li><li>Vehicle Space and Route Optimization</li><li>Public Transportation (Bus Fleet Management, E-Ticketing for Intercity Travel)</li><li>B2B Logistics between Urban and Rural Areas</li></ul>Furthermore, macroeconomic conditions and prohibitive government regulations undermine investment in the sector:<ul><li>Government directives on priority goods and quotas curtail the capacity of the private transportation, trucking and logistics sector.&nbsp;</li><li>49/51 percent company ownership in freight forwarding and shipping agency services discourages foreign investment and multinational innovations.&nbsp;</li><li>Investment Proclamation Number 1180/2020 requires that foreign direct investments must be no less than $200,000, undermining foreign investors’ ability to invest in startups and pre-seed companies.</li><li>Forex shortages, capital controls and the high cost of spare parts undermine investment and the growth of Ethiopia’s fleet.</li><li>Finally, the Ethiopian Shipping Line monopolizes approximately 85% of cargo that travels on the Djibouti corridor, leaving only 15% open for private contracts. The majority of this is humanitarian cargo, which receives an ESL waiver. At the same time, Investment Regulation 474 (2020), prohibits foreign ownership of inland trucking operations for loads under 25 tons, which constricts an estimated 15% of the total Ethiopian trucking market open to foreign investors and foreign companies, valued at approximately $350M, according to a trucking market size model developed by Renew Capital.</li></ul>As a result, private investment in logistics in Ethiopia lags behind regional counterparts and the country lacks an investable pipeline of tech-enabled logistics startups.&nbsp;The average deal size for Ethiopian logistics companies from 2019 to January 20230 was $170K, significantly lower than other African countries.&nbsp;Average Ticket Sizes for Logistics Deals in Africa (USD Millions, 2019 - January 2023) <img src="/uploads/image_4b78c20e06.png">(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)More broadly, Ethiopia’s startup technology ecosystem also remains underdeveloped with a limited pipeline of investable companies:&nbsp;Limited investment in Ethiopia is not just isolated to the logistics sector. For context, across sectors, Ethiopia only attracted 5.82% of capital invested in African startups from 2019 to Q1 2023. When adjusting for only tech startups, this number drops even more significantly, as Ethiopia’s largest startup deal in recent years was a $26M deal in a beverage startup, which dramatically skews these numbers.&nbsp;This is due to two primary reasons. First, as discussed, the limited pipeline undermines investor interest in the country. Second, high foreign investment investments ($200K) and the inability of foreign investment entities to provide debt financing undermines the ability of foreign investors to provide investment in smaller rounds, which is typically more appropriate for asset-light tech startups.&nbsp;Ethiopian startups only raised 5.82% of total capital raised by startups in Africa since 2019.Breakdown of investment funding by sector in Ethiopia as a percentage of total capital invested across the African continent by sector (2019 to Q1 2023).&nbsp;Capital Invested in Ethiopia By Sector as a Percentage of Total Invested Capital in Africa (2019 - Q1 2023)<figure class="image"><img src="/uploads/Screenshot_2023_05_18_at_11_18_56_AM_852882f800.png"></figure>(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)The LogiTech Investment Sprint Aims to Mitigate These Persisting Challenges: As such, the USAID BHA SHARP-SEE project team’s approach and solution to these persisting problems has been focused on helping build a pipeline of investment ready LogiTech startups with the ability to attract funding to Ethiopia’s Logistics sector. The 12-week training program focused on foundational business topics including strategic planning, organizational structures, managing business finances and investment preparation.&nbsp;The program also worked with startups to re-evaluate the effectiveness of their existing minimum viable products and seek true product market fit. Product development activities included in-depth customer interviews, the development of primary growth targets and KPIs, and continual target versus actual analysis and accountability.&nbsp;Participating startups’ products range in focus including, intercity logistics, intraregional public transportation, commuting, last mile delivery, business to business logistics and a digital solution for truck operators participating in import and export operations.Combined, these developing solutions fit well into Ethiopia’s modernizing digital economy and pave the way for a more tech-enabled future for Ethiopia’s logistics sector. At the same time, while in their infancy, some of these solutions are laying the foundation for improving the delivery of humanitarian aid by introducing digital tools to a traditionally undigitized sector. Furthermore, urban to rural linkages, between manufacturers and suppliers and retailers and between agricultural producers and export and local markets can be strengthened through the provision of tech-enabled logistics services. Finally, while still largely manual, busing and public transportation is moving towards digitization with two of the pitching companies focusing on improving the flow of people both within cities and between cities. In turn, these innovations can supercharge technology for logistics and continue to work towards more efficient delivery of humanitarian aid and the strengthening of urban to rural market linkages.Join us on May 31, 2023 as the final six companies from the LogiTech Innovation Sprint pitch their startups. Register&nbsp;<a href="https://us02web.zoom.us/meeting/register/tZYkce2rqj8jHdWZWTHs6i27mYpAyfU2Jbf4#/registration">here</a>.

USAID’s Bureau of Humanitarian Assistance seeks to strengthen the trucking, transportation and logistics sector through technology innovation


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Fueling the Growth of Ethiopia's LogiTech Startup Ecosystem

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 

<h1>Renew Capital Launches እሷ! (Isua) Network for Women</h1>Empowering Women Entrepreneurs in Ethiopia<figure class="image"><img src="/uploads/CU_4_A5847_aa966a2acf.JPG"></figure>Renew Capital has launched the እሷ! (Isua “Her”) Network, a peer-to-peer networking, coaching and training platform for women-owned and -led micro, small and medium enterprises (MSMEs) in Ethiopia. A launch event for the network, held in Addis Ababa in March, brought together Ethiopian women business owners and executives, alongside resource providers and Canadian and American government officials.Canadian Ambassador Stéphane Jobin provided opening remarks, highlighting the Government of Canada’s commitment to building more gender-responsive economies around the world and their excitement to be supporting this initiative.&nbsp;Nkemdilim Uwaje Bejo, CEO of Futuresoft Nigeria, also shared some of the specific challenges that women in business face across the continent and seven inspiring lessons for women entrepreneurs. Menna Selamu, Ethiopian entrepreneur and co-founder of Flipper International School, also shared insight into her business journey.&nbsp;<img class="image_resized" style="width:97.56%;" src="/uploads/CU_4_A5858_968a13e132.JPG"> እሷ! (Isua) is the Amharic word for ‘her’ and the እሷ! Network is a&nbsp;membership-based network that brings together women business owners and executives from various industries in Ethiopia. Although women's entrepreneurship in Ethiopia is on the rise, female executives continue to face societal impediments that challenge their business growth. With peer support, training and partnership facilitation, the&nbsp;እሷ!&nbsp;Network aims to improve the private sector ecosystem for women business owners and executives.&nbsp;The suite of offerings from the network will support women entrepreneurs in driving their business growth. It aims to build market leaders in their respective industries and strengthen women-to-women business partnerships. Members can access an exclusive directory of fellow business leaders to support these endeavors. The Government of Canada is supporting this initiative as part of its gender-smart development priorities. Implemented by Renew Capital, the እሷ!&nbsp;Network is part of a larger objective to build a gender-responsive economic ecosystem for women in Ethiopia. Ultimately, it will contribute to a growing pipeline of investment-ready, woman-owned enterprises.&nbsp; Are you a woman business owner in Ethiopia?&nbsp;<a href="https://share.hsforms.com/1SOVX-k9JRMuRM3oZJV63_Qee4rj">Apply to be a member</a> of this prestigious network to start making connections to support your business’ growth.

Empowering Women Entrepreneurs in Ethiopia



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Renew Capital Launches እሷ! (Isua) Network for Women

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.



Homecoming: My Journey to Renew Capital

Turning trash into cash—-this blog discusses innovative solutions to waste recycling on the African continent, helping address urbanization and environmental protection issues in Africa’s cities.&nbsp;&nbsp;&nbsp;<h1>Dirty Money:&nbsp;African startups turning trash into cash&nbsp;</h1>African startups are getting creative to solve the waste collection issue without undermining the livelihoods of millions of trash pickers throughout the continent.&nbsp;According to the United Nations, Africa generated approximately 125 million metric tons of solid waste in 2012, expected to double to 250 million metric tons by 2025. The continent, however, is only recycling 4% of this waste, on average.&nbsp;In response, African startups are getting creative to monetize trash and encourage recycling.<figure class="image"><img src="/uploads/shutterstock_2259921699_6414c3891c.jpg"></figure>Waste management startups accounted for approximately 16.56% of all climate-related deals closed in Africa from January 2019 to March 2023, accounting for 4.67% of all funding for climate-related startups in this period. Waste management was second only to energy companies which dominated Africa’s climate-related deals, and attracted 85.12% of startup capital with a total deal volume of 67.21% in the same period.(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)&nbsp;<figure class="image"><img src="/uploads/image_161f7b542c.png"></figure>(Source: Renew Capital analysis of publicly reported deals tracked in “Africa: The Big Deal - Startup Deals Database”)&nbsp;Waste management is a key component of climate technology, contributing to the circular economy. This is a much-needed place for innovation, especially in Africa.&nbsp;<figure class="image"><img src="/uploads/unnamed_1_a4c3f05337.png"></figure>Source: ​​<a href="https://dealroom.co/guides/climate-tech">https://dealroom.co/guides/climate-tech</a>&nbsp;Anyone who has traveled to an East African city knows that waste collection remains a challenge. Governments are unable or unwilling to coordinate effective collection, and many trash pickers make a living from sifting through trash for valuables. Therefore, any potential comprehensive solution for waste management risks undermining a crucial part of the economy for some. African startups are getting creative to solve the waste collection issue without undermining the livelihoods of millions of trash pickers throughout the continent.&nbsp;<a href="https://theconversation.com/african-digital-innovators-are-turning-plastic-waste-into-value-but-there-are-gaps-188014">Innovative tech-enabled solutions</a> in waste management can be found in major African cities, many of which incentivize recycling for consumers and connect collectors to buyers. According to Briter Bridges, as of 2020, there were 140+ waste management startups in Africa.&nbsp;The impact of the rise of waste management startups is threefold:<ul><li>First, there is much to be gained financially by monetizing the nearly 250 million metric tons of waste and repurposing and recycling the significant amounts of plastics, electronics and other waste materials that are discarded annually in African cities.&nbsp;</li><li>Second, repurposing and recycling waste reduces carbon emissions and decreases the impact of climate change on the continent, which stands to suffer the most from adverse climate events.&nbsp;</li><li>Finally, there are a number of marginalized groups, who for decades, have worked as trash pickers in African cities. This is true of the&nbsp;<a href="https://www.weforum.org/agenda/2021/06/technology-egypt-recycling-circular-economy/">Zabbaleen</a> in Egypt, but the same is true in other African cities including Addis Ababa, Kampala and even Nairobi. Creating increased value for their work by repurposing and recycling waste materials creates previously unknown value for these communities, enabling them to live more financially prosperous lives.</li></ul><a href="https://www.renewcapital.com/" target="_blank" rel="noopener noreferrer">Renew Capital</a> is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the <a href="https://www.renewcapital.com/investing" target="_blank" rel="noopener noreferrer">Renew Capital Angels</a>, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.

African startups are getting creative to solve the waste collection issue without undermining the livelihoods of millions of trash pickers throughout the continent. 