<h1 style="text-align:center;">Congratulations to the RENEW Investment Survey Winners</h1>As RENEW is currently exploring more investment opportunities in East Africa, we launched a 5-minute short survey to benchmark companies' perspectives and business needs for a chance to win a prize. Participants were eligible to win $500 or coaching.<figure class="image"><img src="/uploads/For_Newsletter_609876617d.jpg"></figure>We would like to thank the companies that participated in the survey. RENEW is excited to continue building a relationship with each participant in the coming months. We are pleased to announce that Donnah Kamashazi of <a href="https://clicktogotowebsite.wixsite.com/ingajufarms">Ingaju Farm </a>from Rwanda is the cash winner of the RENEW Investment Survey!&nbsp;We have also chosen 30 runner-ups who are being provided a 60-minute, one-on-one coaching session with a RENEW investment team member. Coaching session topics include Investment Pitch Presentation, Fundraising 101, Investment Readiness, Company Valuations and Strategic Planning. For those who have not participated in the survey, we will keep you posted with our upcoming trainings such as the<a href="https://latest-api.renewcapital.com/uploads/RENEW_LLC_Investment_Seminar_Series_cbf868ea76.pdf"> Private Equity Investment Seminar</a> and <a href="https://latest-api.renewcapital.com/uploads/RENEW_Exec_s_Curriculum_0a694da586.pdf">The Exec's Program.</a> We will be sharing the results from the survey in August for companies to benchmark their companies!

Announcing the winners for RENEW’s Investment Survey 2022

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Congratulations to the RENEW Investment Survey Winners

<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;">Plan to Attend the SG2X Playbook Launch Event</h1>You are cordially invited to the upcoming launch event of the SME Gender Growth Acceleration (SG2X) Playbook: a gender-smart investment toolkit for fund managers and SMEs operating in Africa. The SG2X Playbook is the culmination of an 18-month project conducted through USAID’s Women Economic Empowerment Fund that will be hosted on the <a href="https://www.2xcollaborative.org/">2XCollaborative</a> platform.<figure class="image"><img src="/uploads/SG_2_X_Comms_c60f406110.png"></figure>Event Details:●&nbsp; DATE: Thursday, September 22, 2022●&nbsp; TIME: 9-10:30 a.m. EST; 4-5:30 p.m.&nbsp; EAT●&nbsp; REGISTRATION: Please register via this <a href="https://us02web.zoom.us/meeting/register/tZYsfumorzMsGNFbdSErJAJWZ99xB9aJMEn9">LINK</a>.Starting in November 2020, USAID partnered with RENEW and a consortium of leading gender lens investing (GLI) initiatives, including members of the 2X Challenge, to support the creation of GLI success stories in Africa.The USAID SG2X Playbook project represents the first of three phases. The first phase focused on the creation of, and initial training on, various components of the Playbook with SMEs operating in Rwanda and Uganda. The second and third phases, beyond the scope of the USAID project, will focus on widespread adoption and implementation from a variety of SME portfolios, verification of impact and results, and refinement of the Playbook as needed.The long-term expected impact of this project is that the SG2X Playbook will help move the concept of GLI from an impact investment screening, policy, and monitoring and evaluation practice for gender-focused investors, to a mainstream strategy for investors to use to unlock SME portfolio growth in Sub-Saharan Africa. The SG2X Playbook seeks to improve SME performance by using gender-smart practices as a key business growth strategy alongside other SME growth best practices, thereby ultimately contributing towards USAID’s women’s economic empowerment objectives:●&nbsp; Women Prospering in the Workforce: Women prospering in the workforce as companies adopt gender-smart policies and provide better jobs and equal access to leadership roles and opportunities.●&nbsp; Women Succeeding as Entrepreneurs: Women prospering as entrepreneurs and attracting more financing as they effectively execute on their investment plans.●&nbsp; Women Enabled in the Economy: Women enabled to become entrepreneurs, executives, and managers and prosper in the economy by reducing or removing structural barriers for women.How is the SG2X Playbook different from other tools? The SG2X Playbook seeks to build on existing resources and provide a systematic and replicable approach in the form of a “Playbook” designed to help grow SMEs into gender-smart success stories that deliver competitive financial and impact results and demand attention from larger private sector investors. In summary, the SG2X Playbook outlines a fund manager’s investment game plan, including gender-smart policies, tools, trainings, and best practices to maximize portfolio results.We hope you can join us on Thursday, September 22, 2022, to take part in the discussion and learn more about the SG2X Playbook. Be sure to <a href="https://us02web.zoom.us/meeting/register/tZYsfumorzMsGNFbdSErJAJWZ99xB9aJMEn9">REGISTER</a> here to secure your spot.&nbsp;&nbsp;

Join USAID and other leading gender lens investors (GLI) for an engaging and practical discussion on GLI strategies and resources

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Plan to Attend the SG2X Playbook Launch Event

<h1 style="text-align:center;">The New Investment Incentive Scheme is Expected to Change the Investment Ecosystem &nbsp;</h1>As part of the country’s <a href="https://www.imf.org/en/News/Articles/2019/12/23/na122319-six-things-to-know-about-ethiopias-new-program#:~:text=The%20IMF%20has%20approved%20a,for%20sustainable%20and%20inclusive%20growth">economic reform program</a>, the government of Ethiopia adopted a new investment proclamation and regulation in 2020, repealing the decade-old investment Proclamation No. 769/2012 (read our blog on the new investment proclamation <a href="https://www.renewcapital.com/resources/blogs/Having%20Skin%20in%20the%20Game%20Can%20Help%20with%20Investment%20Reform">here</a>) and Regulation No. 272/2012, hereinafter referred to as the Repealed Regulation. Despite the adoption of these investment laws, investment incentives provided under the Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation No. 270/2012 were not repealed and were kept as transitory provisions until a new Incentive Regulation is enacted. The business community has been waiting for the introduction of new investment incentives and after more than two years, the Council of Ministers has approved new regulations to provide for investment incentives, hereinafter referred to as the Incentive Regulation.&nbsp;&nbsp;Investment Proclamation No. 1180/2020 clearly stipulates the necessity to further increase and diversify foreign investment inflow into Ethiopia to accelerate inward transfer and diffusion of knowledge, skill, and technology. The adoption of a separate and detailed Investment Regulation compared to the previous one can be considered as a move to achieve this commitment and make the country a destination for Foreign Direct Investment (FDI). Nevertheless, whether the Investment Regulation will achieve its targeted goal will be seen in the coming years. With this in mind, we have covered the major highlights of the Incentive Regulation briefly below.<figure class="image"><img src="/uploads/097_A2846_254237521f.jpg"></figure>Administration of Investment Incentives - The Incentive Regulation has given the Ministry of Finance (MoF) a broad range of powers in administering investment incentives. Previously, various government bodies were empowered to govern different sections of the incentives. For instance, the Ethiopian Investment Board was assigned to come up with a directive to regulate the exemption of motor vehicles, and the Ethiopian Investment Commission had the power to decide on the importation of duty-free capital goods and construction materials. However, under the Incentive Regulation, the MoF has the power to issue directives to govern these matters. In addition to this authority, the MoF can grant tax incentives, issue directives on the eligibility criteria for tax incentives, and conduct a cost-benefit analysis on investment incentives to determine the impact of tax incentives on the economy. Furthermore, the MoF is empowered as an overseeing body over other regulatory institutions in ensuring whether tax incentives are used for their designated purposes.&nbsp;&nbsp;Investment Areas and Incentives - Investors which invest in areas that are far from Addis Ababa have additional investment incentives provided under the incentive laws. The Repealed&nbsp; Regulation clearly mentions these areas; however, the Incentive Regulation does not. It states that investors who invest in areas far from the urban center and/or with very low infrastructure development will be entitled to an income tax deduction of 30% for three consecutive years after the expiry of the income tax exemption period. The MoF is expected to come up with a directive listing these geographic areas. Similarly, investors who invest in new, atypical, and selected tourist destination areas in hotels, lodges, and resorts with a rank of a star will be entitled to a five-year income tax exemption. The MoF directive is also expected to list these atypical and selected tourist destination areas.&nbsp;&nbsp; Employment Opportunities for Ethiopians Abroad - Investors who provide job opportunities for Ethiopians abroad are provided with income tax exemptions. There are three requirements to be fulfilled by the investors in order to benefit from this exemption. First, the employee who will go outside of Ethiopia should obtain a qualification certificate from an institution recognized for providing training to persons who are to be placed in a foreign country. Nonetheless, the Investment Regulation does not state the type of qualification or training necessary for employees who will go outside of Ethiopia. Secondly, the employer should bring evidence from the Ministry of Labor and Skills that proves the employment of Ethiopians outside of Ethiopia. Lastly, based on the number of Ethiopians sent abroad, the income tax exemption schemes provided under the Incentive Regulation can differ. Nevertheless, the investor will not get more than six years of exemption, regardless of the number of Ethiopians it sends abroad for work.Exemption for Expansion or Upgrading of Existing Investment - In relation to exemptions provided for investors who expand and upgrade their existing investment, the Incentive Regulation has made some changes. Under the new law, investors should bring evidence to benefit from such incentives. They should show whether the investment has achieved the type and volume of product and other preconditions as mentioned in their investment license. In addition, the expansion should be in line with the eligibility criteria listed under the directive that will be issued by the MoF. Finally, to benefit from such exemption the investors are expected to submit audit reports about their existing investment.Incentives for the Mining, Petroleum and Geothermal Works - Section four of the Incentive&nbsp; Regulation gives detailed coverage for mining, petroleum and geothermal works. Investors who engage in these sectors can import machinery, equipment and vehicles without paying customs duty for the operation of their investment. However, capital goods that are imported into Ethiopia cannot be sold to other parties without securing prior approval from the MoF, but the investor can re-export these goods without paying customs duty. Expatriate employees of a contractor and/or a subcontractor that engages in petroleum and geothermal works are allowed to import household goods and personal effects of any kind free of customs duties in accordance with regulations.&nbsp;Commencement Period for Income Tax Exemption - The starting period for the income tax exemption under the Repealed Regulation is the date of commencement of production or provision of services by the investor. The Ethiopian Investment Commission is required to notify federal or regional tax organs about the commencement of production or provision of services by the investor. Under the new Incentive Regulation, income tax exemption starts after the investor obtains its investment license or expansion permit. The EIC or a federal government body delegated by the EIC to issue investment permits will notify the Ministry of Revenue about the obtainment of an investment license or expansion permit.&nbsp;&nbsp;&nbsp;

As part of the country’s economic reform program, the government of Ethiopia adopted a new investment proclamation and regulation in 2020, repealing the decade-old investment Proclamation No. 769/2012.

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The New Investment Incentive Scheme is Expected to Change the Investment Ecosystem 

<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

<h1 style="text-align:center;">My Unconventional Path from University to the Investment World &nbsp;</h1>“What do you want to be when you grow up?” We've all been asked this question when we were kids, and coming up with the most fascinating profession was a competition hoping someone else didn’t say what we were thinking. Fast forward to college, in the process of discovering oneself; every decision turns out for the best or worst. But it is human nature to fail; we must rise from the ashes and keep on going. Although college life has its stressful thoughts, none is like the thought of landing your first job. All the questions come flooding in; “Where should I apply? When should I apply? Sector? Location?”. But the most important question is “Will I get the job?”. Jobs in Ethiopia are very competitive, with thousands of students graduating each year and most employers wanting to employ someone with experience only. Granted, entry-level employees, most of the time, want to build their CVs and leave for a better job. Internships are usually not available, and on top of that, most students don’t get the initiative to apply unless the college obliges them.<figure class="image"><img src="/uploads/Screen_Shot_2022_06_08_at_8_30_37_PM_b937762329.png"></figure>My story with RENEW began when I was in a situation most students in Ethiopia find themselves in; wondering what my first job would be after graduation. I didn’t want to blow with the wind as I saw my friends doing. Most saw the banking sector to be the most stable and promising job they could get, but not me. I wanted something different. Although I couldn't put my finger on it, I knew there must be something different out there than the trendiest job for an accounting and finance graduate. I didn’t want to work in a bank starting as a front desk clerk. I said to myself “there's got to be more”. Luckily, I was introduced to RENEW by one of my fellow interns. Just one week before my graduation, I was interviewed and landed an internship opportunity in October 2021. Most internships I had heard of, even with world-renowned organizations, were learning platforms only, without stipends let alone medical insurance as I receive from RENEW.Some say that you should start your career with a horrible job. Because as you move up the ladder, you will learn to appreciate the good people that come into your life and the improving environment you get to work in; on top of that, challenging jobs make you tough. That is why I think I am going to be a spoiled girl having worked at RENEW as my first job. These past months, I have experienced an environment where people genuinely want me to learn and improve, a&nbsp; team who is only superior on paper but who has treated me as a friend and equal colleague. My colleagues want me to excel not only in my career but in my personal life as well. This unprecedented environment was new to me. I have never heard of a COO of a company dedicating time to interns to work on projects and advise them on work and life. Everywhere I turn, I see people who are always there to help and teach. I was made to feel welcomed from the first time I walked through the door. This is one of the best places to kick off a career. I have learned about the investment sector, which I had zero knowledge of prior to my internship at RENEW. I also had the opportunity to learn about the different business environments of Uganda and Rwanda. I would say the highlight of my internship would be seeing companies pass through different levels of assessment and coaching and being able to finally pitch to investors; I got to see them grow and improve with each stage. And with RENEW being an impact investor, hearing all about the impact side of the businesses was inspirational.&nbsp; I also got to work with a dynamic team of people from seven countries that stretched across three continents, and I am pleased with the results in my life from working here. I fully recommend students in East Africa consider applying to RENEW for an internship.&nbsp;&nbsp; RENEW received 84 applications and is selecting 6 for the next cohort that starts June 2022 in Ethiopia. Check back regularly for additional internship opportunities in Ethiopia, Uganda and Rwanda.

2022 Intern Nuhili Girma shares why others should consider an internship at RENEW


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My Unconventional Path from University to the Investment World

<h1 style="text-align:center;">Survey: Benchmark your Company, Win a Prize</h1>RENEW is currently exploring more investment opportunities in SSA. We would appreciate if you'd take 5 minutes to complete a short survey with your perspective and business needs. We'll share the aggregated results with you and keep your information in our confidential pipeline.&nbsp;<figure class="image image_resized" style="width:100%;"><img src="/uploads/Edited_for_Mailchimp_518fed68c0.jpg"></figure><a href="https://docs.google.com/forms/d/e/1FAIpQLSc7-loCFPlGiO99_sQHBvN4PmgSxuylR0FuKigf_Kd9pqfLTg/viewform">Complete Survey Now</a>YOU WILL BE ENTERED TO WIN $500 OR COACHING Please note, your information will be kept confidential. Only aggregated information will be publicly shared. Deadline is Friday, May 20th&nbsp;by 12PM EAT&nbsp;

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Survey: Benchmark your Company, Win a Prize

<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;">White Paper: Current State of Ethiopia’s Angel Investing Landscape&nbsp;</h1>As a legal professional supporting RENEW’s investment practice in Ethiopia for five years now, I keep a close pulse on commercial, tax and economic related regulations that impact private equity investors including angel investors. I recently prepared a white paper to help you understand the opportunities that are on the horizon for local and foreign angel investors and the crucial work that must be undertaken by my government to increase the attractiveness of early-stage investing and the startup ecosystem in Ethiopia in the years to come.&nbsp;<figure class="image image_resized" style="width:100%;"><img src="/uploads/Screen_Shot_2022_05_12_at_11_13_40_AM_1d149622f5.png"></figure>I am hopeful that the Homegrown Economic Reform, the Digital Transformation Strategy, the Capital Markets Proclamation, and the draft Startup Proclamation will help set the stage for increased economic prosperity for Ethiopians and support for the private sector, but much work must still be done to ensure the legal frameworks are effectively implemented in support of an optimal environment for startups, angel investors and the private sector in general.&nbsp;&nbsp;As the famous quote by Walter Wriston says, “Capital goes where it is welcome and stays where it is well treated.” As I see it, the Ethiopian government has an important opportunity to ensure that more angel capital flows to Ethiopian startups through the following efforts:<ol><li>Coordinating the enactment of subordinate legislations&nbsp;</li><li>Broadening the label “startup”&nbsp;&nbsp;</li><li>Building a strong institutional backing&nbsp;</li><li>Providing a waiver for the sector restriction for angels&nbsp;</li><li>Easing the work permit and residence ID acquisition process</li><li>Reducing regulatory burdens&nbsp;</li></ol>To read more about my recommendations, download the white paper: <a href="https://latest-api.renewcapital.com/uploads/2022_05_2022_FINAL_Angel_Investing_Landscape_52783c12e3.pdf">LINK</a> &nbsp;