<h1 style="text-align:center;">A Small Multicultural Team with One Common Goal</h1>A little over a decade ago in 2009, when I graduated as an engineer, I never imagined I would be working with a small multicultural and talented team. A team that has one common objective of helping emerging countries. Having had experience at an investment bank as a frontend investment banker and heading a family office VC fund back in India, it was really hard to step back and look at a completely new geography of East Africa; a region that has immense potential and needs to be seen from a truly different perspective.In India, the winter had already arrived and my search for a job which shared my values of finding start-up unicorns was still on. Then, in January 2020, I was offered a job with RENEW. I joined RENEW with mixed feelings of happiness and also a fear of living up to the expectations of a truly diversified close-knit team with a serious common objective of helping the emerging economy of Ethiopia. I remember my first day, the weather was slowly starting to get warm during the day, and I immediately started feeling the warmth of the team with their warm and friendly emails, that started hitting my mailbox first thing and made me feel comfortable and welcome.<figure class="image"><img src="/uploads/flags4_0_9b1323ba9a.png"></figure>In the next couple of weeks, I started working with the team on several assignments and directly with the partners and I was amazed by the energy that each member brings to the table with the objective of helping a company to become the unicorn in their space. The way of monitoring the workflow through weekly legend calls was new to me, but I really liked the concept as these calls helped each member to achieve those small milestones every week, which collaboratively adds up to the company's bigger goals. Soon, I realized I belonged to a super-talented team that lives across the world and who are always ready to help you. Though I have never met with any of the team members physically, I have never felt that I am not there with the team because of all the calls happening throughout each day.Life at RENEW is full of rewards and recognition, and lots of employee engagement. The feedback on the assignments by the team members and from the partners is a great way to enhance the quality of professional work. The shout-outs at the end of weekly calls are truly a wonderful way of motivating the employees and boosting them to continue the exceptional work they had done during the week. Being a small team, I never thought we would be getting involved with training at every level and I was amazed to see that each member of the team, including the partners, attends the training conducted by team members.With 7 months completed at RENEW, I have not only grown in my professional journey but also as an individual. In the last few months, I’ve experienced many different cultures, made some good colleagues, and have met charismatic leaders. I definitely look forward to meeting the team in person by visiting the country some time soon. &nbsp;

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A Small Multicultural Team with One Common Goal

<h1 style="text-align:center;">September 2020 Resource Blog</h1>For this month’s resource blog, we’re focusing on marketing strategies and trends. Specifically, these articles discuss marketing trends for 2020, effective brand marketing through COVID-19, and essential marketing strategies for any startup. Read the articles below to learn more.<a href="https://www.smartinsights.com/managing-digital-marketing/marketing-innovation/6-essential-marketing-trends-for-2020/">What’s new? What’s next? 6 essential marketing trends for 2020</a>: This article provides samples of digital marketing tools and techniques to give you an edge in the year ahead in your business. (Smart Insights) Time: a 5 minute read<a href="https://hbr.org/2020/04/brand-marketing-through-the-coronavirus-crisis">Brand Marketing Through the Coronavirus Crisis</a>: With so much changing so quickly during this difficult time, what actions can brands take to serve and grow their customer base, mitigate risk, and take care of their people? (HBR) Time: a 3 minute read<a href="https://www.forbes.com/sites/forbesagencycouncil/2018/05/30/five-essential-marketing-strategies-for-any-startup/#221be4e95795">Five Essential Marketing Strategies For Any Startup</a>: We all know marketing is essential for all businesses, but it's even more important for startups. Read this article to learn why. (Forbes) Time: a 3 minute readInterested in learning more about a specific topic? Contact us and let us know what interests you at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>.<figure class="image image_resized" style="width:100%;"><img src="/uploads/marketingpic_0_87402a7cf2.jpg"></figure>&nbsp;

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September 2020 Resource Blog

<h1 style="text-align:center;">The Ethiopian Business Environment in Light of the Homegrown Economic Reform Program</h1>Below we attempt to outline some of the most straightforward and honest assessments of the barriers that have historically choked the private sector and foreign investors in Ethiopia, and what the government is doing about it. After building one of the most active SME investment firms in Ethiopia, our companies have experienced every one of these challenges, and then some. So after we present the top five challenges holding back the private sector and the remedies Ethiopia’s progressive government is implementing to address them, we offer some color to bring these to life. These are real challenges, with real consequences, but if the government can implement these reforms from the top, down to each employee, then the skies are the limit for Ethiopia!In 2015, the World Bank published its <a href="https://www.enterprisesurveys.org/en/data/exploreeconomies/2015/ethiopia">2015 Enterprise Survey</a> on Ethiopia, which outlined information about the biggest obstacles that private sector companies face in the country. The survey summarized twelve business environment categories, including: corruption, crime, finance, firm characteristics, gender, informality, infrastructure, innovation and technology, performance, regulations and taxes, trade and workforce. As a result, the RENEW team compiled 10 takeaways and published a blog titled “<a href="https://www.renewcapital.com/resources/blogs/10%20Things%20You%20Should%20Know%20About%20Ethiopia%E2%80%99s%20Business%20Environment">10 Things You Should Know About Ethiopia’s Business Environment</a>” to address a number of insights from this survey.Five years later, Ethiopia has taken a number of measures and adopted an economic reform program known as the ‘Homegrown Economic Reform Agenda’ (the “Reform Program”). The Reform Program highlights the importance of the private sector to the national economy and a key part of the growing business environment. In light of the reform, here is our updated findings that the country is currently undertaking to make the business environment more appealing to foreign investors.<figure class="image"><img src="/uploads/er1_0cb7db6137.png"></figure>Access to Finance The World Bank asked 848 companies in Ethiopia to rank the most prevalent obstacles that they face while doing business in Ethiopia. From the list of 15 common obstacles presented, access to finance was identified as number one.The Reform Program recognizes that access to finance is a major challenge; as such it listed improving access to finance and developing capital markets as one of the requirements for the safeguarding of macro-financial stability. In order to tackle this problem, the Reform Program proposes the development of a competitive and well-functioning T-bills market; upgrading the financial market infrastructure; establishing a secondary bond market and a stock exchange market; and supporting the development of mobile banking.Spearheaded by the National Bank of Ethiopia, the access to finance reform sets different short term, medium term and long-term goals. These include creating a unified secured transactions legal framework, introducing and operationalizing collateral registry systems, and developing and implementing a credit scoring mechanism, among others.As a result, subsequent to the adoption of the Reform Program, the Government has adopted the <a href="https://nbebank.com/wp-content/uploads/pdf/proclamation/movable-property-security-right.pdf">Movable Property Security Right Proclamation No. 1147/2019</a>, which allows financial institutions to hold movable properties as collateral for providing loans. The types of items that could be collateralized include inventories, agricultural products, incorporeal assets, security rights in warehouses receipts and many others. This is expected to expand the reachability of bank loans to SMEs.Our take: Ethiopia is moving a lot of projects forward with regard to economic reform and access to finance. At first, it won’t be perfect. We expect a lot of changes and amendments until the government works out the kinks. But these are steps in the right direction. Of course, only when Ethiopia opens the banking sector to foreign investors will the country see access to finance and foreign currency really improve.<hr>For more resources, you can sign up for our Resource Library (<a href="https://renewstrategies.formstack.com/forms/renews_digital_library">LINK</a>), which includes a number of RENEW’s white papers, recordings and other publications.&nbsp;&nbsp;<hr>Challenges in Relation to Customs Clearance As per the 2015 World Bank Survey, it takes on average 19.2 days to clear import from customs, about 3 days longer than the SSA region’s average, and the proportion of inputs and/or supplies that are of domestic origin are significantly higher than SSA - 82.5% versus 66.1%. This may be a result of a shortage of foreign currency and protectionist trade policies.To address these issues, a year before the adoption of the Reform Program, the Ethiopian Customs Commission was established as an autonomous government entity independent from the former Ethiopia Revenues and Customs Authority. After its establishment per <a href="https://www.eia.nl/documenten/00000443.pdf">Proclamation No. 1097/2018</a>, the powers, duties and organization of the Commission were further defined by <a href="http://www.ecc.gov.et/images/Regulations/Customs_Commission_Power_Duty_and_Organization-437.pdf">Regulation No. 437/2018</a>. The Customs Commission is headed by a commissioner and is accountable to the Ministry of Revenues. The objective of the Commission is to provide equitable, expeditious and quality service by establishing a modern customs administration system among others. Using its power, the Commission has issued different directives to this end. These measures in effect are expected to improve the country’s ranking in relation to customs clearance and administration.The Commission has been given the responsibility of leading the Reform Program in relation to trading across borders. The Commission is accountable for launching pilot electronic single window systems, implementing simplified customs procedures, implementing pre-arrival clearance and many others. These were all set in an effort to reduce the lead-time in customs clearance and improve the country’s ranking in that regard. So far, the Commission has taken different steps including, but not limited to, launching a single window customer service system, reducing the number of documents required for import/export; and introducing a web based internal customs management system.Our take: This is very good news. It starts at the top. But if the person stamping the documents and interfacing with the private sector doesn’t believe their job is made possible from the tax revenues generated by the hard work of the private sector, the full benefits of these programs will not be realized. And with other countries engaging more with Africa, some of which do not have the same adherence to the rules of good business as those in the West, the game could get exponentially more messy. But if the top is truly committed to making the flow of goods and services in and out of the country seamless, then there's a good chance these programs will take hold. If the desk officers believe in this work, we will see thousands of small businesses grow into big companies that create hundreds if not thousands of jobs.<figure class="image"><img src="/uploads/er2_83bcde29a3.png"></figure>Tax Administration and Payment From the 2015 Enterprise Survey Data, RENEW learned that although the amount of time senior management spends dealing with the requirements of government regulations in Ethiopia is higher than that of SSA (11.9% versus 7.6%), the remaining indicators are all lower. Examples include the number of days it takes to acquire an operating license (5.4 versus 19.1), number of visits required to meet with tax officials (1.6 versus 2.2), and the percentage of firms identifying tax rates as a major constraint (22.8% versus 33.2%).In light of this, the government has taken a number of tax reform measures that will have a direct impact on improving the country’s ranking. This includes implementing an e-filing and payment system; reducing VAT refund time; enabling payments through banks, etc. One of the biggest changes is that through the new VAT Proclamation (<a href="https://chilot.me/2020/04/value-added-tax-amendment-proclamation-no-1157-2019/">VAT (Amendment) Proclamation No. 1157/2019</a>), companies with annual gross revenue of less than ETB 70 million (close to 2 million USD) are no longer required to report VAT monthly, but can now report quarterly.Our take: These are all very good measures. ERCA, the tax authority, has a reputation of conducting audits and always finding something, so be ready. But the VAT payment is a notable hat-tip to SMEs from the government, giving the heartbeat of the economy some better cash flow, and a lot less hassle each month (now quarterly) to pay their taxes.Electricity and Access to the Grid Per the 2015 World Bank Survey, generator use is much higher in Ethiopia than SSA (48.9% versus 26.5%), which is to be expected given that the country is quickly industrializing but in need of more power. In fact, electricity was listed as the second highest obstacle that firms face in Ethiopia. It takes companies 194.3 days to obtain an electrical connection upon application, versus the 33.0 days for the rest of SSA.The Ethiopian Electric Utility has been given the mandate to handle the reform measures in relation to improving access to electricity. Among these mandates are availing effective tariffs and changes online; reducing documentary requirements on the first application form and ID card; reducing the time it takes for connection and other related tasks. As a result, the Ethiopian Electric Utility has undertaken the following major measures:<ul><li>Eliminating the 10% guarantee deposit requirements for post paid bill customers and introducing a bank guarantee system for customers using bank payment and those using more than 10 megawatts;</li><li>Reducing time of site visit and cost estimation to 5 days from the date of application for a request ranging upto 150 kw; 7 working days for requests between 150 kw - 3 mva; 10 working days for requests between 3 mva - 10 mva; and fifteen working days for requests greater than 10 mva;</li><li>Reducing the number of documentations required to apply for connection; Introducing the new tariff system online and having a system to inform customers about their bill before it gets printed.</li></ul>Our take: Those who give you power, wield power. We have personally sat for hours, days and weeks in run-down government office buildings waiting for a meeting to beg the person across the desk to hook our transformer to the grid. Getting a transformer alone can take six months to a year, and then the steps to get a connection can kill any new factory’s chances for survival. This is a very real problem, and until Ethiopia eliminates the steps, it will remain a problem at the top of the list as one of the main chokeholds for Ethiopia to industrialize. A piece of advice for investors; add a 6-month cushion to deal with power issues alone or find a way to go off-the-grid.<figure class="image"><img src="/uploads/er3_0_629f14adac.png"></figure>A Closed Business Environment The 2015 World Bank Survey indicates that the proportion of private domestic ownership in a firm versus the private foreign ownership in a firm (95.9% versus 3.8%) shows that RENEW and the IAN are part of a very small percentage of foreign investors doing business in Ethiopia.Under the Reform Program, private investment has been given greater emphasis. The private sector has been presented in the program to succeed the government in leading the economy, which has been dominated for a long time by public investments. In order to bring its percentage of enterprise ownership down, the government has adopted a new investment proclamation and investment regulation, repealing the decades-old law. The new investment law loosened some of the major restrictions on foreign investment. Parts of these measures include the adoption of a negative listing approach, which resulted in the reduction of the number of sectors that were closed for foreign investment. In addition, the new investment laws introduced an accelerated investment permit issuance, renewal and cancelation procedure; favorable grievance handling and dispute settlement mechanisms; and an extended one-stop-shop service, among others.Our take: The negative listing approach is a welcome change and opens up many sectors to foreign investors. However, foreign investors should still be ready to make their case clear and compelling to DARA, one of the main groups that approves investments. We recommend hiring a very good local lawyer to help you work through the approval process and be ready to use kind persistence. After decades of approving certain types of investments for foreigners, government employees will need (and welcome) your patience.In summary, Ethiopia is opening up for business. If you are interested in learning more about investing in Ethiopia, please reach out to us (<a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>) or come by our office in Addis.For more resources, you can sign up for our Resource Library (<a href="https://renewstrategies.formstack.com/forms/renews_digital_library">LINK</a>), which includes a number of RENEW’s white papers, recordings and other publications.

Assessments of the barriers to the private sector.

Ethiopia

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The Ethiopian Business Environment in Light of the Homegrown Economic Reform Program

<h1 style="text-align:center;">Project Sage 3.0: Wharton’s Gender Lens Investing Report</h1>In July, Wharton’s Social Impact Initiative published <a href="https://socialimpact.wharton.upenn.edu/research-reports/reports-2/project-sage-3/">Project Sage 3.0: Tracking Venture Capital, Private Equity, and Private Debt with a Gender Lens</a> authored by Suzanne Biegel and Sandi M. Hunt. This report illustrates key findings on the current initiative to invest through a gender lens and how it’s being applied in impact investing.“Gender lens investing” is a relatively new term which emerged about ten years ago, and it’s when investments are made to not only generate financial returns, but also to create positive impacts for women. Over the last decade, this ecosystem has expanded to include numerous funds and companies and billions of dollars in investments. Project Sage 3.0 aims to track and present relevant data on the ecosystem and the current trends and insights within this fast growing field. Over the past year in 2019, Project Sage collected data with contributions from 138 funds and structured vehicles, including RENEW.Key findings pulled directly from Project Sage 3.0 Report (page 6).The number of funds continues to grow significantly. Project Sage 3.0 in 2020 identified 138 total funds deploying capital with a gender lens, up 58.6% from the 87 funds in 2019’s Project Sage 2.0, and up 138% from the 58 funds in 2017’s initial Project Sage report. Almost 50% of these funds launched in 2019.<figure class="image"><img src="/uploads/destapic_1_4b9a819bab.png"></figure>As in our previous reports, gender lens funds are still predominantly first time funds. Almost two thirds — 61% — of funds were first time funds, which are first funds from a given team with this thematic focus. The partners may not be first time fund managers, but this is their first fund with this focus or under this name.Geographic diversity continues to increase. In the original 2017 Project Sage, approximately 80% of reported investments were U.S.-focused. Now, Project Sage 3.0 showed that 38.1% reported North America as their investment target geography (this does not include the global funds). This demonstrates an increase in the diversity of targeted investment geography, with significant focus on regions including Asia, sub-Saharan Africa, and Latin America.Total capital raised has cleared $4.8 billion. The total capital raised, among those firms who allowed us to publish capital raised, was approximately $4.8 billion, more than doubling from Project Sage 2.0’s reported $2.2 billion.Gender lens investing is still broadly defined. When we gave funds six options for how they defined gender lens investing, and asked them to select all that apply, approximately 50% of funds included all five of the following classifications in their definition of gender lens investing, suggesting that this is still a very broad definition.<ul><li>Advancing women in finance: fund managers, on investment committees (ICs), etc.</li><li>Advancing women in leadership: C-suite positions, entrepreneurship, boards, etc.</li><li>Advancing products and services that improve the lives of women.</li><li>Advancing companies that have a positive impact on the women they employ.</li><li>Advancing companies that improve the lives of women in their ecosystem (supply chain members, etc.)</li></ul>Many funds’ investment criteria focus on gender as well as other forms of diversity. Among the funds surveyed, 45% consider gender as one of several key impact priorities of equal importance. Other forms of diversity publicly stated in their investment criteria include racial/ethnic diversity (24.6%) and LGBTQIA diversity (7.2%).Make sure to read the full report here: <a href="https://socialimpact.wharton.upenn.edu/research-reports/reports-2/project-sage-3/">Project Sage 3.0 </a>.

A look at the recent report published by Wharton’s Social Impact Initiative

Gender Equality

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Project Sage 3.0: Wharton’s Gender Lens Investing Report

<h1 style="text-align:center;">We Prepare Goals, But Are They the Right Ones?</h1>Read the average person’s weekly task list or “I must” and you might fall asleep from boredom and lack of energy. You might read…<ul><li>Recruit an Operations Manager for Company X.</li><li>Complete Y proposal.</li><li>Finish blog about INSERT TOPIC.</li></ul>But what’s wrong with them? At the end of the day will you be jazzed by completing them? Likely no. What is missing? How can you give yourself a little boost of energy? The answer: Ask yourself why you need to do a specific task, and work to give your goal a boost of meaning. Elevate the importance.A lot of people skate through life feeling unfulfilled and without energy in their work. Most of us are focused on the activity and not the “why” behind it. Alternatively, the people who DO feel fulfilled on a weekly, daily, yearly basis, tend to think, plan and do relative to the “why” of what they are trying to get done.<figure class="image"><img src="/uploads/execs_2_856f9fbd97.png"></figure>Of course, it is easier to take the checklist approach versus taking a little bit longer to shape your goals as the outcome you are trying to accomplish, but it’s worth it. When you flip the lights of your office off on a Friday night and walk out the door, you want to feel fulfilled. You can leave with the endorphins pumping knowing that your work ties into the larger picture and is making a difference for helping your company achieve its vision.And here’s a trick, write down your “I musts…” for the next week before you leave the office. It’s ok if you want to start out with a brain dump and write down the laundry list of things you need to get done, then pick the most important and articulate the “why” behind them.Here are some examples:<ul><li>Water the plants vs. make the office beautiful by watering the plants.</li><li>Go buy supplies vs. help provide a really great environment for the team by buying supplies.</li><li>Recruit an Operations Manager for Company X so that I can focus my attention on Z by May 2020.</li></ul>For more information, consider reading “<a href="https://www.amazon.com/Start-Why-Leaders-Inspire-Everyone/dp/1591846447">Start With Why</a>” by Simon Sinek or sign up for <a href="https://www.renewcapital.com/resources/blogs/Key%20Resources%20for%20Executives">The Exec’s Program</a> to learn these skills.

Whether it’s your weekly “I musts” or your quarterly OKRs, here’s how to make them great.

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We Prepare Goals, But Are They the Right Ones?

<h1 style="text-align:center;">IFRS - Highlights and Stories From Early Adopters</h1>IFRS (<a href="https://www.ifrs.org/">International Financial Reporting Standards</a>) refers to a single set of globally recognized standards and interpretations applicable to general purpose financial statements and other financial reporting of all profit oriented entities.IFRS prescribes:<ul><li>The items that should be recognized as assets, liabilities, income and expense;</li><li>How to measure those items;</li><li>How to present them in a set of financial statements; and</li><li>The related disclosures about those items.</li></ul>Application or adoption of IFRS is believed to result in financial reports of high quality which:<ul><li>Are comparable, understandable and reliable and relevant to users</li><li>Include increased transparency</li><li>Foster increased efficiency of contracting between firms and lenders and more efficient capital markets.</li></ul>120 nations permit or require IFRS for domestic listed companies, while close to 90 countries have fully conformed with IFRS as promulgated by the IASB (International Accounting Standards Board).When it comes to Ethiopia, for years, there was no single accounting standard in use, so businesses had to rely on different regulations and their own internal accounting policies for the preparation of financial reporting. This impacted comparability and reliability of the reporting.The government of Ethiopia issued a proclamation titled “Financial Report Proclamation of Ethiopia: 847/2014” and Council of Ministers Regulation 332/2014 instructing adoption of IFRS and establishing the AABE (Accounting and Audit Board of Ethiopia) to take responsibility and to guide and dictate the implementation of IFRS, which became effective December 2014.In Ethiopia, mandatory adoption of IFRS is scheduled in the following phases:<ul><li>Phase 1: Significant Public Interest Entities: financial institutions and public enterprises owned by federal or regional governments, starting in 2018</li><li>Phase 2: Other Public Interest Entities: ECX member companies and reporting entities that meet two of the below four criteria, starting in 2019: Annual turnover exceeding 50,000,000 Total employees exceeding 100 employees Total Asset exceeding 100,000,000 Total Liability exceeding 100,000,000</li><li>Phase 3: Small and Medium Sized Entities: whose turnover exceeds 1,000,000, starting in 2020</li></ul>Here are a few tips to highlight to get started with the IFRS process:<ul><li>Dedicate an expert or team who will be leading IFRS research or engagement</li><li>Determine if Ethiopia’s recent IFRS rulings apply to your company. If it applies, come up with an IFRS implementation plan including decision on in-house adoption or assistance through the help of an external party or consultant</li><li>Identify the list of relevant IFRS and IAS applications for an effective transition to IFRS</li><li>Develop the relevant accounting policy</li><li>Choose the appropriate costing model: costing model or revaluation model</li><li>Analyze the existing process and identify deviation with IFRS rulings</li></ul><figure class="image"><img src="/uploads/skyline_pic_09982e9145.png"></figure>Below are some of the top IFRS implementation challenges and frequently asked questions shared by early adopters. Challenges in deciding to do it in house or hire a professional. Not all certified or chartered experts have the experience in running the IFRS implementation process. Companies need to choose wisely who to onboard on this project, whether it is done in-house or sourced.<ul><li>Is the IFRS implementation a finance role only? Many believe so, but IFRS actually involves a number of processes and requires input from various teams including engineering, human resources, finance, legal, marketing, procurement and leadership to get input on estimates, valuation, severance, any legal claims, inventory impairment and others.</li><li>Are your key finance team members well trained or informed in the IFRS rulings or codifications? It is noted that at times, collaborations become challenging due to lack of skills by the finance team on IFRS. It’s important to plan in advance and have teams involved in short-term training ahead of implementation.</li><li>Do we need to re-evaluate all assets to be IFRS compliant? Many reports indicate that there is a tendency to have everything re-evaluated, but please consult the experts as this may vary on a case-by-case basis, depending on the circumstances.</li><li>Is the tax office (ERCA) fully compliant with IFRS? Not fully at this point – which implies some of the assumptions used in the IFRS reporting might not be accepted by the tax authority. In that case, firms may be forced to prepare two sets of financials – one for AABE and one for the tax office.</li></ul>Since the proclamation, a number of companies have adopted IFRS in their reporting process while the majority of SMEs (the small and medium sized entities) are expected to adopt it in the current fiscal year.In a recent news update from AABE officials, it appears that AABE has determined the overall IFRS implementation is unsatisfactory in terms of compliance and far fewer companies have adopted the standards in their recent reporting.It was indicated that AABE's team is working on charting out the next steps to address the obstacles and advance with the IFRS implementation process, details will be announced at a later date.Below are some of the centers that offers IFRS trainings in Ethiopia:<ul><li>AABE - <a href="http://aabe.gov.et/">Accounting and Auditing Board of Ethiopia</a> – for members only</li><li>AACCSA - <a href="https://addischamber.com/">Addis Ababa Chamber of Commerce and Sectoral Associations</a></li><li><a href="http://www.aau.edu.et/commerce/home/">School of Commerce, Addis Ababa University</a></li></ul>If you didn’t see your question answered above, feel free to reach out to RENEW (<a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>) for more information on IFRS.

A case study on Ethiopia's adoption of IFRS

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IFRS - Highlights and Stories From Early Adopters

<h1 style="text-align:center;">August 2020 Resource Blog</h1>For this month’s resource blog, we’re focusing on sales. Specifically, these articles touch on the 3 C’s of driving sales, questions sales professionals should be asking in the current business climate, and how to be a successful business. Read the articles below to learn more.<a href="https://www.businessnewsdaily.com/6767-make-more-sales.html">The 3 C's of Driving Sales: Connect, Convince, Collaborate</a>: In order to be successful with sales, people in the industry need to exhibit a key set of behaviors to boost their strategy. These behaviors are: connect, convince and collaborate. (Business News Daily) Time: a 3 minute read<a href="https://hbr.org/2020/06/4-questions-sales-leaders-should-be-asking-right-now?utm_medium=email&amp;utm_source=newsletter_daily&amp;utm_campaign=dailyalert_not_activesubs&amp;deliveryName=DM82910&amp;registration=success">4 Questions Sales Leaders Should be Asking Right Now</a>: In the current business landscape, it has been hard for sales professionals to predict what comes next during COVID-19. During times of uncertainty, it’s important to ask yourself important questions on how the sales team spends their time, how the process is structured and if the roles are still adding value. (HBR) Time: a 3 minute read<a href="https://www.businessnewsdaily.com/7471-focus-on-customers.html">Want to Be a Successful Business? Focus on Your Customers</a>: In order to be a successful business, you need to focus on your customers. The line between being successful and underperforming often lies in how a company treats their customers. Companies which fail to focus on this tend to encourage failure. (Business News Daily) Time: a 2 and a half minute readInterested in learning more about a specific topic? Contact us and let us know what interests you at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a>.<figure class="image"><img src="/uploads/hbr_article_0_546cbf7bef.png"></figure>&nbsp;

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August 2020 Resource Blog

<h1 style="text-align:center;">An Update on the ABG Project</h1>RENEW recently hit the four-year mark of the five-year Accelerating Business Growth Project (ABG) in Ethiopia, a collaboration agreement with <a href="https://www.international.gc.ca/gac-amc/index.aspx?lang=eng">Global Affairs Canada</a>. The ABG project aims to support high potential, responsible small and medium enterprises (SMEs) in Ethiopia so they can attract and efficiently use finance to scale up, enabling them to play a stronger role in the Ethiopian economy. The project addresses the gap found in the capital markets in Ethiopia and in many other countries in Africa, called the “missing middle”. Learn more about the project <a href="https://www.international.gc.ca/world-monde/stories-histoires/2021/business-growth-ethiopia-ethiopie-croissance-entreprises.aspx?lang=eng.html">here</a>.With four years completed and the May 2021 finish line quickly approaching, we thought it was a good time to look back and celebrate some of the project outcomes achieved to date (these results are also represented in a visual format below):<ul><li>We are supporting 5,806 jobs across the SMEs in our program of which 3,613 or 62% are held by women. The project target of 5,000 jobs was recently exceeded.</li><li>We have helped SMEs attract $56M CAD in financing for their businesses through 85 investments, to help them scale, create jobs, and contribute to Ethiopia's private sector. 29 of these investments have gone to women-owned businesses, with an average investment size of $493K CAD.</li><li>We have trained and graduated 84 finance professionals (of which 25 are women) and 61 executives (of which 26 are women) from our rigorous CFO100 and Exec's Program training and have equipped them to be strong and ethical managers of Ethiopian SMEs.</li><li>We have trained over 700 SMEs and resource providers on private equity through our PE500 incubator program, equipping them to access or help others access growth capital.</li></ul>As we reflect on this progress and these stories of impact in our <a href="https://www.renewcapital.com/resources/blogs/Celebrating%20our%20Impact">2019-2020 Impact Report</a>, we do so in a subdued manner recognizing the reversal of outcomes that are expected in light of the COVID-19 pandemic's severe impact on East Africa's already fragile private sector. According to ANDE<a href="#section1">[1]</a>, a funding gap of $930 billion already existed for SMEs in emerging markets prior to the pandemic, and this only stands to widen. The RENEW team has been working hard to develop and deliver virtual programs directly helping SMEs respond to the challenges of the current climate under COVID-19 and providing resources and dedicated coaching to help them access much-needed funding during this time.The economy of Ethiopia has increasingly strengthened during the last two decades as industrialization has expanded. Between 1999 and 2015, the poverty rate decreased by 7.6%<a href="#section2">[2]</a>, lifting roughly 8.3M Ethiopians out of poverty. COVID-19 is putting these developmental outcomes at risk by constraining business growth and capital attraction for SMEs which will be most impacted and will require timely support in order to survive. In fact, it is estimated that 42% of all SMEs in Africa are in danger of failing within the next six months<a href="#section3">[3]</a>. For this reason, we believe that programs like ABG, working to leverage capital into SMEs and training local managers to increase their capacity for scaling companies, have the greatest impact on development outcomes.Cover Photo by Ian Christmann: <a href="www.ianchristmann.com">www.ianchristmann.com</a><a href="https://www.macrotrends.net/countries/ETH/ethiopia/poverty-rate">https://www.macrotrends.net/countries/ETH/ethiopia/poverty-rate</a>

4 years into our 5 year project with Global Affairs Canada

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An Update on the ABG Project

<h1 style="text-align:center;">A Stock Exchange in Ethiopia</h1>During our June Impact Angel Network Members’ Call, members of the IAN and RENEW explored what happens when a country decides to open up a stock exchange. While Ethiopia is among the five largest economies in Sub-Saharan Africa and is the second-largest by population, it does not have a stock market. As you may have seen in the <a href="https://www.bloomberg.com/news/articles/2020-06-30/ethiopia-to-set-up-regulator-for-first-stock-exchange-this-year">news</a> recently, this is about to change as the Ethiopian Ministry of Finance has plans to open a stock exchange within the next year, though it will likely take more time to fully implement.&nbsp;<a href="https://renewstrategies.formstack.com/forms/astockexchangeinethiopia">CLICK HERE TO LISTEN TO THE MEMBERS CALL RECORDING</a> Given this exciting development, in the recording linked above, RENEW and members of the IAN discussed what this means for investors and what we should be doing now to prepare. We hope to work with our partners, including Global Affairs Canada, to begin educating SMEs on how exchanges work, as well as the benefits and drawbacks of becoming a publicly listed and traded company. Make sure to watch out for more information and webinars on this topic from RENEW in the future.&nbsp;If you’d like to join our monthly Members’ Calls to be a part of these discussions, we invite you to apply to <a href="https://renewstrategies.formstack.com/forms/renew_investor_accreditation_form">join the Impact Angel Network</a>.<figure class="image"><img src="/uploads/stockechange1_0_3ec92755cc.png"></figure>Photo by Ian Christmann: <a href="http://ianchristmann.com/">www.ianchristmann.com</a>

A discussion on Ethiopia’s future stock exchange and what it means for investors