<h1>Secrets of Rwanda’s Momentum&nbsp;</h1><figure class="image"><img src="/uploads/Linkedin_Size_e1e30cc237.png" alt="Scenic view of Rwanda’s skyline with rolling hills and lush greenery, showcasing the country’s mountainous terrain and vibrant landscape."></figure>Rwanda, the land of a thousand hills, has become a key hub for the Renew Capital team and a beloved home for me. The people here are warm and welcoming. The entrepreneurial spirit is alive and the city is constantly growing and changing. Every time I walk through Kigali’s streets, I feel the buzz of something new and exciting happening. I’ve spent a lot of time here meeting with local entrepreneurs, government stakeholders and other energized expatriates galvanized by Rwanda's potential. Read more to learn what makes Rwanda so unique and what I have learned so far.<figure class="image"><img src="/uploads/Image_2_1_f12fa8d63d.png" alt="A mother gorilla carrying her baby on her back during on of my gorilla trekking experiences in Rwanda."></figure>One of the wildest experiences Rwanda has to offer. Trekking with gorillas. No zoom!Kigali is the second highest-ranked international finance center in sub-Saharan Africa:&nbsp;Kigali, Rwanda's capital city, has been recognized as an international financial center that is likely to become more significant in the future. In 2021, the Kigali International Financial Centre (KIFC) first appeared on the Global Financial Centres Index (GFCI), a ranking that assesses the competitiveness of financial centers worldwide. In March 2024, the 35th edition of the GFCI ranked Kigali 67th globally, third in Africa and second in sub-Saharan Africa. Kigali is also ranked&nbsp;<a href="https://www.longfinance.net/programmes/financial-centre-futures/global-financial-centres-index/gfci-35-explore-the-data/gfci-35-rank/">sixth</a> in the Middle East and African region, behind Dubai, Abu Dhabi, Casablanca, Tel Aviv and Mauritius.&nbsp;<figure class="image"><img src="/uploads/Screenshot_2024_09_05_at_10_56_52_AM_ff95de969b.png" alt="A photo of the Global Financial Centres Index (GFCI) showing Kigali ranked 67th globally in the 35th edition, March 2024."></figure>Source: Global Financial Index (GFCI)Rwanda has a dense network of co-working, meeting spaces and tech hubs:&nbsp;The Rwandan government has been heavily involved in the establishment of several tech hubs and co-working spaces to facilitate ecosystem growth. While Rwanda’s small market size could limit founders’ ability to scale, its density of entrepreneurs, service providers and events means that ideas accelerate through the ecosystem. Norrsken’s Kigali House, where Renew Capital operates, is a prime example of Rwanda’s commitment to nurturing its startup community. Established by the Swedish group Norrsken Foundation, Kigali House serves as a dynamic workspace for startups, providing not only office facilities but also mentorship, networking opportunities and a platform for collaboration. Its presence in Kigali reflects a broader trend of international support for Rwanda’s entrepreneurial ambitions.&nbsp;<figure class="image"><img src="/uploads/Norksen_offfice_0776aca2a6.jpeg" alt="A photo of Norrsken Kigali House, a modern tech hub in Kigali, Rwanda."></figure>Norrsken’s Kigali House is located in Kigali’s downtown business district.Other spaces include:<ul><li><a href="https://kigali.impacthub.net/">Impact Hub Kigali:</a> Innovation lab, business incubator and social enterprise center.</li><li><a href="https://kigali.westerwelle.haus/index?&amp;v=latest">Westerwelle Startup Haus Kigali</a>:&nbsp;Supports entrepreneurship and economic growth.</li><li><a href="https://leaprlabs.rw/">Leapr Labs:</a>&nbsp;Focuses on scientific research and societal solutions.</li><li><a href="https://klab.rw/">kLab:</a> Open technology hub supporting startups and innovation.</li></ul>100% 4G national internet coverage:&nbsp;In 2018,&nbsp;<a href="https://thegreatlakeseye.com/post?s=Rwanda%E2%80%99s--investment--in--internet--connectivity--is--paying--off--_1175">95%</a> of the population had access to 4G LTE coverage, an increase from 26% in 2015.&nbsp;As of 2024, 4G is&nbsp;<a href="https://www.statista.com/outlook/co/digital-connectivity-indicators/rwanda#:~:text=The%204G%20network%20coverage%20in,k%20kbit%2Fs%20in%202024.">estimated</a> to cover 100% of the country.&nbsp;&nbsp;This extensive coverage facilitates mobile internet access, promoting digital inclusion even in rural areas. Moreover, investments in digital infrastructure have been a priority, with initiatives like the&nbsp;<a href="https://rdb.rw/the-republic-of-rwanda-africa50-unveil-the-kigali-innovation-city-urban-masterplan/">Kigali Innovation City</a> expanding internet access. This tech-friendly environment provides startups with the tools they need to innovate and compete on a global scale.Favorable legal and regulatory framework for financial and tech sectors:&nbsp;Rwanda has established a robust legal and regulatory framework that supports both the financial and technology sectors. The Kigali International Finance Center (KIFC) is backed by modern laws and regulations designed to attract international investors and financial institutions. These include favorable tax incentives, a focus on compliance with international standards and streamlined processes for setting up businesses. In the tech sector, Rwanda has implemented data protection laws and ICT policies that foster innovation while ensuring cybersecurity and privacy.&nbsp;Final thoughts: 30 years ago this year, Rwanda was in the midst of genocide and civil war and was one of the poorest countries in the world. Today, Rwanda’s GDP per capita (PPP) has rocketed from $367 in 1994 to around $3.2K in 2023 and from just $1.4B in nominal GDP in ‘94 to $14.2B in 2023. Moreover, the IMF projects that by the end of 2024, Rwanda’s real GDP growth rate will settle around 6.9%. This small African country is certainly on the rise.<h2>Rwanda's Meteoric Rise</h2>GDP per capita (PPP) growth of the six poorest countries in the world in 1994 by GDP per capita (PPP).<figure class="image"><img src="/uploads/Screenshot_2024_09_05_at_11_14_14_AM_9dcc6e882f.png" alt="Graph of Rwanda’s GDP growth from 1994 to 2023."></figure>Source: International Monetary Fund (IMF). Note: Based on global data available from the IMF.Go Deeper on Rwanda?<ul><li><a href="https://www.linkedin.com/feed/update/urn:li:activity:7237378476377309186" target="_blank" rel="noopener noreferrer">Rwanda in 12 photos</a></li><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Rwanda_Fact_Sheet_e76810f067.pdf">Rwanda’s Ecosystem Fact Sheet</a></li><li><a href="https://www.google.com/maps/@-1.9451017,30.0670117,13z/data=!4m2!11m1!2sTaoUorcIQMGcspk3-rAaOA?entry=ttu&amp;g_ep=EgoyMDI0MDgyNi4wIKXMDSoASAFQAw%3D%3D">Rwanda Ecosystem Google Map</a></li></ul> Interested in other African Startup Ecosystems?<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot"> Download Renew Capital’s Factsheets on other Ecosystems</a>. We’ll be adding new ones every few weeks!&nbsp;

Uncover the secrets of Rwanda's momentum as a thriving hub for entrepreneurship and innovation.


Ecosystems

Rwanda

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Secrets of Rwanda’s Momentum 

<h1>Ethiopian Birr Stabilizes, Business Owners Eye Risks</h1>Ethiopian business owners are adapting to rapidly shifting dynamics following the July 29, 2024 float of the Ethiopian Birr (ETB) by the National Bank of Ethiopia (NBE). Dropping a crawling peg (an exchange rate system where a country's currency is adjusted periodically in small amounts at a fixed, pre-announced rate) with rigid capital restrictions, which caused chronic forex shortages, was one of the conditions put forth during&nbsp;<a href="https://www.imf.org/en/News/Articles/2024/07/29/pr24291-ethiopia-imf-exec-board-approves-4yr-us3b-ecf-arr">negotiations with the International Monetary Fund</a> for a&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/ethiopia-imf-program-unlocks-16-6-billion-world-bank-package">$3.4B</a> debt deal, to support Ethiopia’s Homegrown Economic Reform (HGER) Agenda aiming to address macroeconomic imbalances, restore external debt sustainability and foster private sector-led growth. This arrangement is also expected to catalyze additional external financing and credit. Additionally, the World Bank pledged up to&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/ethiopia-imf-program-unlocks-16-6-billion-world-bank-package">$16.6B</a> over three years in support of Ethiopia’s aspiration to become a middle-income country.Renew Capital brought together members of the Isua Network, the Ethiopian women-in-business network, in Addis Ababa on August 22, 2024 to learn about how they are adapting to the change and to provide a legal overview of the impact of the float.&nbsp;<figure class="image"><img src="/uploads/Isua_Event_b68c906e84.png" alt="Members of the Isua Network, Ethiopian women-in-business, gathered in Addis Ababa on August 22, 2024, for an event arranged by Renew Capital to discuss adapting to changes following the Ethiopian birr float and receive legal insights."></figure>Major changes cascading from the NBE&nbsp;<a href="https://nbe.gov.et/wp-content/uploads/2024/07/FXD012024-FOREIGN-EXCHANGE-PR-English.pdf">foreign exchange directive</a> include:&nbsp;<ul><li>Banks can now buy and sell foreign currencies at freely negotiated rates. They are no longer required to surrender foreign currency to the NBE and may allow residents to hold foreign currency accounts inside Ethiopia.</li><li>Import restrictions on&nbsp;<a href="https://latest-api.renewcapital.com/uploads/Tariff_Items_Removed_in_2024_6434acb6fb.pdf">38 product categories</a> have been lifted and the forex market for imports has been broadly liberalized.</li><li>Interest rate ceilings on borrowing from foreign countries have been removed for private sector companies and banks.</li><li>Ethiopia’s securities market is now open to foreign investors.</li><li>Special Economic Zones companies may retain 100% of their foreign earnings in a foreign currency.</li></ul>In the medium and long term, this is a landmark move for Ethiopia’s economy. The previous system led to significant shortages of foreign currency, distorted import and export markets and difficulty attracting foreign capital into the economy. The changes enacted are expected to breathe life into the economy, especially in the form of foreign investment and credit, free up reserves previously used for maintaining the currency peg and enable market forces to attain equilibrium without government intervention.In the short term, business owners and consumers are concerned that Ethiopia’s trajectory will echo that of recent currency liberalizations, including&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-30/why-nigeria-s-naira-currency-ngn-usd-slumped-and-why-it-matters">Nigeria in 2023</a> and&nbsp;<a href="https://www.al-monitor.com/originals/2024/07/imf-greenlights-release-820m-egypt-cites-economic-improvement">Egypt in 2024</a>, which respectively resulted in 70% and 60% devaluations of the local currencies against the U.S. dollar. This rapid devaluation affected the already high inflation rates and in Nigeria, triggered a cost of living crisis. Indeed, the ETB has fallen 47% against the dollar in the four weeks since the float. This brings the official ETB-USD exchange rate to within 5-10% of the parallel market rate. Previously, dollars sold on the parallel market fetched a premium as high as double the official bank rate.<figure class="image"><img src="/uploads/image_3_ca6b9e5ac4.png" alt="A graph illustrating the exchange rate of 100 Ethiopian birr to USD from May 2024 to August 2024, showcasing the impact of the currency float on Ethiopia's economy."></figure><h2>Uncertainty for Businesses</h2>While most Ethiopians share concerns about inflation and cost of living, business owners are navigating an even more challenging landscape. The uncertainty of how markets and the government will react is top of mind for many. As is often the case in these situations, float-related fears led some businesses to&nbsp;<a href="https://www.bloomberg.com/news/articles/2024-07-31/-etb-usd-dollars-vanish-from-ethiopia-s-streets-as-residents-hoard-forex">hoard dollars</a> and shops to raise prices immediately on essential goods, such as cooking oil, by as much as<a href="https://www.reuters.com/markets/currencies/ethiopian-local-authorities-crack-down-price-hikes-after-currency-float-2024-08-01/"> 25%</a>. Authorities&nbsp;<a href="https://allafrica.com/stories/202408090072.html">shuttered dozens of shops</a> accused of price gouging and confiscated inventory, adding fuel to the fears of business owners.Exporters, whose access to foreign currency makes them a target of regulation, are seeing incremental changes. Prior to 2023, exporters were allowed to retain only&nbsp;<a href="https://www.renewcapital.com/newsroom/ethiopia-doubles-foreign-currency-retention-limit-for-exporters">20% of the foreign currency they earned</a> through exports, the remaining 80% was surrendered to the National Bank of Ethiopia for forced exchange into ETB. In 2023, the allowed retention&nbsp;<a href="https://ethiopianlawgroup.com/wp-content/uploads/2023/08/NBE-monetary-policy-2023-en.pdf">increased to 40%</a>. The 2024 directive nudged it to 50%. While these changes provide some relief for exporters, there remains uncertainty, as the government can still adjust the regulations at any time.<h2>Navigating Contracts</h2>One area where business owners may consider taking action is around contracts. Whether a contract is denominated in a foreign currency or in ETB, the value of existing contracts has changed overnight. Recognizing this challenge, Renew Capital invited Tsegamlak Solomon, Founder and Principal of the Addis Ababa-based law firm Tsegamlak Solomon &amp; Associates, to address this topic at the latest Isua Network event.The key takeaway for business owners was that the time to renegotiate contracts is now. Everyone doing business in Ethiopia is navigating this change together and there may be more opportunity and willingness to renegotiate within the first few months of this shift than later on.Mr. Solomon, who also has&nbsp;<a href="https://tsegasolomon.com/insights/f/how-will-ethiopia%E2%80%99s-currency-float-affect-your-business-contracts">written advice on the topic</a>, advised Isua members to:<ul><li>Review all contracts.&nbsp;Do any contracts contain a&nbsp;force majeure clause that includes unforeseen government changes? If yes, business owners should be prepared to renegotiate any such contract.</li><li>Evaluate&nbsp;the&nbsp;impact of the contract currency. Regardless of whether payment terms are delineated in ETB or a foreign currency, the reality on the ground has changed. Business owners should consider their own position and the counterparty’s to identify a solution that may suit both.</li><li>If negotiation is not possible, consider arbitration. Ethiopia’s Civil Code does not support court intervention in contracts, so strictly legal options are limited. However, the law does encourage parties to go through arbitration to determine a fair price that benefits both parties. Cases of onerous contracts – where one party is burdened with more costs than the other – are the most likely to be successful in this arena.</li></ul>One question raised by Isua members included whether there were any limitations to contracts being denominated in a foreign currency or a combination of ETB and a foreign currency. Mr. Solomon indicated that the chief constraint is that some contracts, such as employee contracts, may be set in a foreign currency, but must be paid out in ETB. Otherwise, business owners are free to use a variety of mechanisms. These include setting forex thresholds whereby pricing is reviewed once thresholds are reached or indexing different parts of the agreement to different currencies as desired.&nbsp;However the contract is designed, the most important point is to ensure that all contract elements, especially those related to forex, are crystal clear. This includes whether the contract follows the exchange rate on the date of signing or the prevailing rate of the NBE at the moment of payment.It is still early days and much remains in flux as the markets adjust. Isua business owners expressed both concern and optimism over the reforms. The question which remains is whether and how much this first critical step is followed by true market liberalizations in the coming months and years.

Ethiopian business owners are adapting to rapidly shifting dynamics following the July 29, 2024 float of the Ethiopian Birr (ETB).

Ethiopia

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Ethiopian Birr Stabilizes, Business Owners Eye Risks

<h1>Renew Capital Legal Brief - August 2024</h1>The Latest Changes in Africa's Regulatory EnvironmentWith a growing presence in Africa’s top startup ecosystems, the Renew Capital team stays on top of the legal landscapes shaping the venture capital and investment space and to provide insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment.&nbsp;<figure class="image"><img src="/uploads/Legal_1_a4c7d7c64b.jpg" alt="Photo of Renew Capital's August 2024 Legal Brief document."></figure><hr>Egypt:&nbsp;<ul><li>Egypt Privatizes Health Sector – Egyptian and foreign investors can now operate and manage public health facilities for profit. This presents a huge opportunity for investors!&nbsp;</li></ul>Ethiopia:&nbsp;<ul><li>Market-Based Exchange Rate Introduced – On July 29, 2024, the National Bank of Ethiopia (NBE) adopted a market-driven exchange rate system, ending its direct control. Key changes include abolishing surrender requirements to NBE, liberalizing import restrictions, improving retention rules for exporters, removing interest rate caps on foreign borrowing and allowing residents to open foreign currency accounts. Read the&nbsp;<a href="https://nbe.gov.et/wp-content/uploads/2024/07/FXD012024-FOREIGN-EXCHANGE-1-1.pdf">directive</a>.&nbsp;</li><li>Banking Sector to Open Foreign Investment – A draft proclamation allows foreign banks to acquire up to 49% of local banks, with potential for full ownership subject to NBE approval. Foreign entities can also establish banks, create subsidiaries or set up branches or representative offices with distinct legal liabilities. This is a long contested area of deregulation and it is currently not clear when the draft proclamation will become law.&nbsp;</li><li>New VAT Proclamation Passed – The VAT base now includes transportation services, portable water, electricity supply and digital transactions, while capital goods for production remain exempt to encourage investment.</li></ul>Ghana:&nbsp;<ul><li>Court Clarifies Termination Without Cause – Ghana’s Supreme Court ruled that employers and employees can end their relationship without providing a reason, affirming that neither can be forced to retain or continue employment. This is a big step forward for employers in Ghana!&nbsp;</li></ul>Kenya:&nbsp;<ul><li>New Income Tax Rules for Charitable Donations – The 2024 rules outline procedures for determining donation allowability and set administrative procedures for tax exemptions. They also restrict surplus retention by charitable organizations and limit tax deductions on donations exceeding 50% of total annual donations by a taxpayer.</li></ul>Nigeria:&nbsp;<ul><li>National Digital Economy &amp; E-Governance Bill Introduced – The National Assembly proposed a bill to regulate the digital economy and mandate electronic records and contracts within government bodies. It is not clear how long it will take for the bill to be enacted, but startup founders are watching it closely to identify opportunities to innovate and provide solutions for these agencies.</li><li>Single Shareholder Structure Approved – The Federal High Court ruled that companies incorporated before CAMA 2020 can now adopt single shareholder structures. This means that founders and investors who are looking to adopt a true holding company structure can now restructure their companies such that it is solely owned by one offshore entity.</li></ul>South Africa:&nbsp;<ul><li>Companies Amendment Act Brings Corporate Reforms – As of July 30, 2024, new laws require listed and state-owned companies to disclose pay gaps and mandate remuneration policies for public and state-owned companies.</li><li>Climate Change Act Enacted – Signed in July 2024, the law establishes a legal framework to regulate climate change impacts, reinforcing South Africa’s commitment to international agreements.</li></ul>Tanzania:&nbsp;<ul><li>Finance Act 2024 Enacted – Effective July 1, 2024, the Finance Act introduces major tax law amendments, enhancing public revenue management and aligning with broader African trends. It remains to be seen how this will impact foreign investments in the country.</li><li>Diaspora Gains Land Ownership Rights – The new legislation allows foreigners and companies with majority foreign shareholders to own land in Tanzania via the Diaspora Tanzanite Card and special non-citizen diaspora status.</li></ul>Uganda:&nbsp;<ul><li>Central Bank’s Immunity Partially Lifted – A new instrument from the Minister of Finance permits execution orders against the assets of the Central Bank of Uganda, reducing its blanket immunity.</li></ul>Zambia:&nbsp;<ul><li>VAT E-Invoicing Implemented – Zambia Revenue Authority’s Smart Invoice system for VAT collections launched on July 1, 2024. This is expected to improve transparency and improve efficiency in tax collection.&nbsp;</li></ul>Regulatory:&nbsp;<ul><li>US Bank Restricts Accounts for Certain African Residents – Historically, African founders who set up holding companies in Delaware typically open bank accounts for their startups with Mercury Bank. In a rather unfortunate turn of events, Mercury Bank has restricted account access for founders residing in Mozambique, Nigeria and 35 other countries, with closures effective by August 22. This means that many founders from these countries will have to move their foreign accounts to new banks in an already restrictive banking system in the US.</li></ul>Visit our blog to learn more about some of&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">Africa’s startup ecosystems</a> or contact us at&nbsp;<a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> if you need to get up to speed on any of these ecosystems! Stay tuned for more updates in our upcoming briefs!Disclaimer: The information included in his blog does not constitute legal advice. Consumers should consult their legal advisors.

Ghana’s Supreme Court ruled that employers and employees can end their relationship without providing a reason.

Legal Corner

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Renew Capital Legal Brief - August 2024

<h1>Why We Invested in MPost: Facilitating Universal Access to Postal Addresses in Africa</h1><figure class="image"><img src="/uploads/Mpost_1_e6a08f59c4.png" alt="A customer using MPost mobile service to receive a package."></figure>Reports indicate that billions of people worldwide lack a physical address. In Africa, where the population is expected to reach&nbsp;<a href="https://www.afdb.org/en/knowledge/publications/tracking-africa%E2%80%99s-progress-in-figures/human-development#:~:text=By%202050%2C%20the%20African%20population,by%20more%20than%20fertility%20rates.">2.4 billion people by 2050</a> and with two-thirds concentrated in&nbsp;<a href="https://amalicities.africa/the-latest-trends-the-urban-governance-implications-of-african-urbanisation/#:~:text=Africa's%20urban%20population%20is%20projected,be%20concentrated%20within%20urban%20areas.">urban areas</a>, the need for accessible postal services has never been more urgent. Inadequate infrastructure leaves a significant portion of the population without access to essential services such as government services notifications, banking and e-commerce. Traditional solutions like shared Post Office (P.O.) boxes often fall short, plagued by challenges such as identity verification, document loss and privacy concerns.MPost is changing this by converting phone numbers into functional addresses. The company is making it easier than ever to receive mail by leveraging Africa's extensive mobile connectivity, where, as of 2022,&nbsp;<a href="https://www.gsma.com/solutions-and-impact/connectivity-for-good/mobile-economy/wp-content/uploads/2024/05/ME-SSA-2023.pdf">980 million</a> people in sub Saharan Africa have access to a SIM card.MPost is transforming how individuals send and receive mail and parcels by allowing users to register for their service by linking their mobile phone number to a postal address via SMS, USSD code or online platform. Besides mail delivery, MPost’s solution also addresses a critical market gap by enabling fintechs, banks and governments to conduct Know Your Customer (KYC) checks on individuals without traditional postal addresses.The investment from Renew Capital underscores MPost's role in bridging the postal infrastructure gap and propelling Africa's postal services toward greater accessibility and efficiency.<figure class="image"><img src="/uploads/Mpost_2_c28b88dca6.png" alt="A photo of the MPost team in Nairobi, Kenya"></figure><h2>Strong Founder</h2><a href="https://ke.linkedin.com/in/twahirmohamed">Twahir Mohamed</a>, co-founder and CEO of MPost, launched the company in 2016 to address the inefficiencies of postal systems, starting in Kenya. He has extensive expertise in digital technology, holding a postgraduate degree in Artificial Intelligence and Machine Learning from The University of Texas at Austin, alongside a bachelor’s degree in Information Technology from Jomo Kenyatta University of Agriculture and Technology, Kenya. Twahir's grit, leadership and technical acumen have been pivotal in MPost's pioneering efforts to modernize postal services and enhance accessibility across Africa.<h2>Demonstrated Traction</h2>Some of MPost’s key milestones:&nbsp;<div class="raw-html-embed">
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</div><ul><li>In 2019, MPost raised&nbsp;<a href="https://afrikanheroes.com/tag/twahir-mohamed/">$1.9M</a> in its Series A funding round led by Cape Town-based VC firm HAVAÍC, along with new investors from South Africa, Australia, Japan, the U.S., Canada and Nigeria, including blue-chip institutions, VC funds and high-net-worth individuals.</li><li>MPost has partnered with Kenya’s state-owned Postal Corporation (Posta) and mobile network operator, Safaricom, to offer digitized postal office boxes.</li><li>MPost was selected to be part of the 10 startups from Africa in the 2023 Techstars cohort, a renowned accelerator program supporting promising startups.</li><li>MPost currently has 80,000 active users and 300,000 registered users across Kenya, Rwanda and Burundi.</li><li>In 2024, MPost launched e-P.O.Box in Rwanda in partnership with the national postal service i-Posita.</li><li>In 2024, MPost was featured in&nbsp;<a href="https://www.linkedin.com/posts/renew-capital_mpost-renewcapitalportfolio-globalstage-activity-7164248351763369984-MgL0?utm_source=share&amp;utm_medium=member_desktop">Times Square</a>.</li></ul><div class="raw-html-embed"></div><h2>Orientation Towards Growth</h2>In 2023 MPost relocated its headquarters from Nairobi, Kenya to Kigali, Rwanda, as part of its expansion strategy. Alongside its existing operations in Rwanda, Kenya and Burundi,&nbsp;<a href="https://kenyanwallstreet.com/mpost-partners-with-yobante-for-deliveries/">MPost forged a partnership</a> with Yobante Express, a delivery company, to extend its services into Zambia and other African nations. Additionally, MPost is actively exploring opportunities in North America to facilitate smoother e-commerce transactions between Africa and the continent.“MPost is addressing critical infrastructural gaps in Africa's postal services. This innovation not only enhances accessibility to essential services but also supports the e-commerce sector by enabling secure and reliable deliveries. As Africa continues to urbanize and digitalize, solutions like those which MPost offers are groundbreaking.” – Laura Davis, Managing Partner and co-CEO of Renew Capital.

Discover how MPost is transforming postal access in Africa by turning phone numbers into addresses.

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Why We Invested in MPost: Facilitating Universal Access to Postal Addresses in Africa

Renew Capital has a presence in 14 African countries. We aim to provide insight into Africa's startup scene, along with the opportunities and challenges it presents through a series of blogs from our in-country team. If you share our passion for developing entrepreneurship in Africa, we invite you to check out our&nbsp;<a href="https://www.renewcapital.com/careers">open roles</a>.&nbsp;<h1>Nihal Grii on Innovation and Morocco's Modern, Diverse Culture</h1>Q&amp;A with Renew Capital's investment ecosystem manager in Morocco.Renew Capital is expanding its presence in Morocco and to showcase this remarkable country, we present an insightful Q&amp;A with Nihal Grii, Renew Capital’s investment ecosystem development manager in Morocco. In this Q&amp;A Nihal shares insights on Africa’s growing startup ecosystem, Morocco’s diverse culture, innovation and advances in sustainability.For more details, explore our&nbsp;<a href="https://latest-api.renewcapital.com//uploads/Morocco_Startup_Ecosyestem_Fact_Sheet_006a5a8686.pdf">Morocco Startup Ecosystem Fact Sheet</a>.<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe1NnVkQvptzWTdcl4Llf0IyxJhFhVqSxhLRRGhQHluEu_v8KqJuxW-ywrf_JgbXa8KuKD7ZzN7tg6CZLm3PkeaOhInfzNkOo7jDVohmQtsGKl-baLD2EMNZB-2RvQ1YfMCuKOheorWHISryAGcft0fN4Ug?key=uetvN6jPUbvXgO7d4Bq6xQ" alt="Renew Capital founders and Investment Ecosystem Manager in Morocco pose for a photo after attending GITEX Africa 2024.">You have extensive experience in startup development. What initially drew you to work with startups?It's fascinating to see how startups can thrive and drive a nation's economy. What initially drew me to work with startups was their potential for innovation and impact. Startups can be an engine of job creation, technological advancement and economic diversification. They bring fresh ideas to life and solve real-world problems, often leading to significant improvements in quality of life. Seeing how a single startup can create jobs, attract investment and inspire an entire community is incredibly motivating. It's this dynamic environment and the chance to contribute to meaningful change that hooked me from the start.What excites you most about Morocco's and Africa’s innovation and startup ecosystem?What excites me most is the ambition and determination of Africans. There is a powerful drive to overcome challenges and find technological, scalable and impactful solutions to the many problems we face. It's inspiring to see members of the Moroccan diaspora returning with the expertise and resources to help grow the country and the continent. These individuals are true fighters, bringing energy and innovation that fuels the vibrant startup sector. The dynamism and potential of this ecosystem are truly exhilarating.<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdgP7tbgu7_jLcMlmok-_RNsiZC5-UQbE1sNTyn8cV8iHS4twYTr6GfqwroeBSfMSV-lel4PGxpm-6_GrX9MIVBIZHwyNNIKjYt8uAV-IoxYJdcA19gdQkeO2S3heTDUOsWnLOyS-1xt6rIacxq2-tFSJ4?key=uetvN6jPUbvXgO7d4Bq6xQ" alt="Founders of Renew Capital and Investment Ecosystem Manager exploring the vibrant startup ecosystem in Morocco.">What is one thing you wish more people knew about Morocco, its culture and its opportunities?I wish more people knew about the incredible blend of cultures that make up Morocco—Arab, Berber, Andalusi, Mediterranean, Hebraic and African influences all coexist here. It's a unique cultural tapestry that enriches daily life. Additionally, Morocco's strategic location, especially in Tangier, where you can see Spain across the Strait of Gibraltar, offers unique opportunities for trade and cultural exchange. Moreover, Morocco is making remarkable strides in clean and sustainable energy, particularly in water management. With plans to increase desalinated water production tenfold by 2030, and the integration of solar energy reducing production costs dramatically, Morocco is turning its natural challenges into strategic advantages.&nbsp;Morocco is a wonderful place to live! We have thriving expatriate communities in cities like Casablanca, Rabat, Tangier and Marrakech. After-work events are frequent, offering great opportunities for socializing and networking. The blend of modern amenities and rich traditions makes life here both comfortable and enriching.<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfH_h6RtOTSQqXrxFTblaPqiUWfRD5L5QYfHBCREsQiqk7sSm-rqJWwPwbu06y50EM5crAkjqaOTac_C_qK3HcPaCcoDwbg4ivA1UzxvxtChXSmJOKZlKmK0GkaWwe_Iz1kPEpVdgYiuWGTcDimb5Tj4ww?key=uetvN6jPUbvXgO7d4Bq6xQ" alt="Investment Ecosystem Manager reflecting on the Q&amp;A session against a beautiful green backdrop in Morocco.">Could you provide a brief overview of your role at Renew Capital and what you find most exciting?As Renew Capital’s investment and ecosystem development manager in Morocco, my role is multifaceted, involving project management, stakeholder engagement and investment sourcing and management. I support the execution of private-sector development projects, ensuring we achieve results and meet all project milestones. I also help develop and facilitate our core gender-smart programs by training and coaching SMEs. I also help build relationships with startups, SMEs, development organizations, government agencies and private sector partners.&nbsp; Part of my role also revolves around sourcing potential companies for our investment pipeline, processing new leads and performing due diligence.The most exciting aspect of my work is developing a robust investment pipeline in African countries. Recognizing that many African nations lack sufficient investment-ready startups, we strive to develop this pipeline not just for ourselves but for other investors as well.&nbsp;What advice would you offer to someone looking to enter the startup scene in Morocco?My advice for anyone starting in the Moroccan startup scene is to manage your reputation carefully. Be authentic and trustworthy—investors talk about their experiences, and a single bad experience can affect your future funding opportunities. Secondly, be realistic about your valuations. High valuations can deter potential investors, so use appropriate techniques to assess your true value and raise only what you need to scale. Finally, share feedback and collaborate with other entrepreneurs. Success breeds success, and a strong community can enhance the reputation of the country, attracting more foreign investors. By supporting each other, we can create a thriving startup ecosystem in Morocco.

I wish more people knew about the incredible blend of cultures that make up Morocco—Arab, Berber, Andalusi, Mediterranean, Hebraic and African influences all coexist here.

Morocco

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Nihal Grii on Innovation and Morocco's Modern, Diverse Culture

<h1>Secrets of Mozambique’s Momentum</h1><figure class="image"><img src="/uploads/Whats_App_Image_2024_07_22_at_2_50_32_PM_2_5ed5992460.jpeg" alt="High-rise buildings skyline in Maputo, Mozambique showcasing the city's urban growth"></figure><h2>Straight Talk About Mozambique's Complexity</h2>We’ve been hosting members of Renew Capital Angels Network this week in Maputo, Mozambique. This is my fourth trip to this amazing country. And when I think of Mozambique, I think of&nbsp;stunning beaches, an unfortunate reputation for corruption and the challenge of not speaking Portuguese. Also liquified natural gas, or&nbsp;LNG, comes to mind. My approach to trying to understand a bit about this complex and beautiful place involves trying to put my finger on what really drives its&nbsp;national identity, exploring its beautiful places and flavors and identifying areas where positive change is happening.&nbsp;Here is a bit of what we have pieced together from our conversations with people this week in Maputo and our desk research.Mozambique: The Hard Facts<ul><li>Demographics: More than 50% of the population is under 18. (<a href="https://www.unicef.org/mozambique/media/4501/file/The%20Situation%20of%20Children%20in%20Mozambique%202021.pdf">UNICEF</a>)</li><li>Literacy Rates:&nbsp;Overall literacy is&nbsp;47%, &nbsp; female literacy is 28% and male literacy is 60%. (<a href="https://www.usaid.gov/mozambique/education">USAID</a>)</li><li>Mobile Penetration: 55%. (<a href="https://www.statista.com/statistics/1253675/number-of-mobile-connections-mozambique/">Statista</a>)</li><li>Government Spending: 72% of tax revenue is consumed by the public wage bill. (<a href="https://www.bloomberg.com/news/articles/2024-07-16/mozambique-to-cut-5-000-ghost-workers-imf-says-after-warning">Bloomberg</a>)&nbsp;</li><li>Economic Growth: Projections exceed 6% for the next few years. (<a href="https://www.worldbank.org/en/country/mozambique/publication/mozambique-economic-update-9#:~:text=Growth%20is%20expected%20to%20accelerate,production%2C%20and%20high%20commodity%20prices.">World Bank</a>)</li><li>Inflation: Under control, with a stable currency. (<a href="https://tradingeconomics.com/mozambique/inflation-cpi">Trading Economics</a>)</li><li>Poverty: Depending upon your source 65-75% of the population lives below the poverty line and it’s gotten worse the last 10 years. (<a href="https://clubofmozambique.com/news/mozambique-65-of-population-lives-below-poverty-line-260369/">360 Mozambique</a>)</li></ul>National Identity: Unidad National&nbsp;Mozambique achieved independence from Portugal in 1975, but a subsequent 16-year civil war between two political groups, FRELIMO and RENAMO, hindered national progress. The war, driven by demands for leadership representation from the central and northern regions, underscored the need for inclusive governance. War sucks. A lot of people died. They don’t want to go back to all that. So today, the phrase "Unidade Nacional" (national unity) reflects the collective understanding that national progress and cohesion depend on shared leadership across all regions. This principle is a cornerstone in evaluating policies, initiatives and business ventures to ensure they align with the country's goals for a unified future​. And of course corruption is just part of the way things are done around here.&nbsp;<h2>Chapo’s Challenge: Can a Lawyer from Central Mozambique Chart a New Course?</h2>The national election is on October 9th, 2024. FRELIMO's presidential candidate, Daniel "Chapo," is the first since Mozambique's independence to have no military background. Yep – read that again. He’s a lawyer, born in Inhaminga in central Mozambique. Chapo's focus on national unity is significant – not sure yet what that means, but this is what the people say. He was a governor in Inhambane Province, near Maputo, until earlier in 2024 and he is known for improving healthcare and fostering trust. He is expected to win by a wide margin due to RENAMO’s current fragmentation. Supporters believe he will make progress in infrastructure and healthcare, strengthening the social contract. Critics assume he’ll be a puppet.Mozambique’s LNG Mirage: Is the Gas Boom a Bust?&nbsp;Here’s a brief timeline of LNG in Mozambique:2010-2013 - LNG Discovery - Mozambique discovered 150 trillion cubic feet of natural gas reserves. Subsequent concessions were sold to major organizations.<ul><li>Total's Onshore LNG Project: Expected to produce 13.1 million tons per year, but delayed due to insurgency and security issues. Force majeure declared in April 2021.</li><li>ExxonMobil's Rovuma LNG Project: Planned capacity of 15.2 million tons per year, with final investment decisions delayed due to security concerns.</li><li>Coral South Floating Production Facility (ENI): Capacity of 3.4 million tons per year, exports began in 2022.</li><li>2017 - Insurgency in Cabo Delgado: Began in 2017, causing significant delays and security issues.</li><li>2019 - Cyclone Kenneth: Devastated the economy and impacted LNG projects.</li></ul>2024 - Recent News:&nbsp;<ul><li>Mozambique's&nbsp;new sovereign wealth fund, part of the agreement with the IMF, aims to manage $91.7B from LNG exports over the next few decades, with a focus on transparency and governance. (<a href="https://www.bloomberg.com/news/articles/2024-03-12/mozambique-approves-wealth-fund-decree-to-govern-lng-billions">Bloomberg</a>)</li><li>Rwandan Security Involvement: Rwandan security company Isco Segurança has been hired to guard TotalEnergie’s $20B gas project. This move has sparked criticism over Rwanda's economic interests in Mozambique. (<a href="https://www.ft.com/content/d89e861c-3872-4649-afc5-9cb6f53a18d7">FT</a>)</li><li>Ghost Workers: Mozambique plans to remove 5,000 ghost workers, aiming to reduce public worker spending and unlock a $60M IMF fund. No wonder 72% of tax revenue is spent on public wages. (<a href="https://www.bloomberg.com/news/articles/2024-07-16/mozambique-to-cut-5-000-ghost-workers-imf-says-after-warning">Bloomberg</a>)</li></ul><h2>Mozambique’s Startup Ecosystem</h2>The startup ecosystem is fairly nascent. However, the discovery of natural gas reserves and rich mineral deposits and the country’s strategic location have positioned Mozambique as an interesting player to watch among Africa’s startup ecosystems.We that hear aquaculture, fintech and the energy sectors have seen some activity in recent years, but we mostly looked at deals in the logitech space. We saw some fintechs but they still have significant progress to make before they can compete with their counterparts in Nigeria or Kenya.More importantly,&nbsp;the government is modernizing its investment and banking regulations&nbsp;to create a more conducive investment environment. Read: it won’t take three years to get a license. Yeah…let’s see about that!If you’re looking for evidence that things are moving, the government's promotion of Small and Medium Enterprises (IPEME) is providing support to budding entrepreneurs. Although we couldn’t find many examples yet, I’m sure they’ll be sprouting up soon.&nbsp;Additionally, organizations like MozInnovation Lab and Standard Bank Incubator have been playing a crucial role in nurturing startups by offering mentorship, training and access to funding. Key sectors include agriculture, fintech, energy and health tech, so we should have plenty of pipeline to look at, right? Sidenote: a large investment group just told us they see only two to five legit deals per month.&nbsp;We need to get this ecosystem activated, ASAP!And for the challenges: The typical stuff - developing a regulatory environment, inadequate infrastructure including the internet and a pretty significant skills gap, in particular for tech-related fields. Nothing new.&nbsp;I’d conclude with one word: pipeline! We need more. We want more. Mozambique, you are beautiful. We see your potential. Let’s do this!Go Deeper on Mozambique?<ul><li><a href="https://www.linkedin.com/posts/renew-capital_mozambique-in-12-photos-activity-7219971399195455490-rlMD?utm_source=share&amp;utm_medium=member_desktop">Maputo in 12 photos</a></li><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Mozambique_Fact_Sheet_15e04085a9.pdf">Mozambique’s Startup Ecosystem Fact Sheet</a></li><li><a href="https://www.google.com/maps/placelists/list/0TKmqgP4OdVTRIUk3u2YUL4M8PE4-A">Maputo Startup Ecosystem Google Map</a></li></ul> If you are interested in entering Renew Capital’s pipeline, visit&nbsp;<a href="http://venturelab.renewcapital.com">venturelab.renewcapital.com.&nbsp;</a>And if you want to read more of our thoughts on other African Startup Ecosystems visit our&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">Ecosystem Fact Sheet webpage</a>.

Straight talk on Mozambique’s evolving startup scene, the impact of LNG and the journey toward national unity.

Mozambique

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Secrets of Mozambique’s Momentum

<h1>Why We Invested in BuuPass: Easing Intercity Travel Across Africa</h1><figure class="image"><img src="/uploads/IMG_2464_15e39b05ec.jpeg" alt="A photo of Renew Capital Angel investors posing alongside BuuPass founders at their office in Nairobi, Kenya."></figure>Over 30 million Africans rely on buses for inter-city and cross-border transportation daily, contributing to a $40B domestic transport industry annually. However, transportation systems in the region are underfunded and lack the necessary technology to operate efficiently. Historically, bus operators have relied on unreliable paper ticketing, which requires customers to appear in person and wait in long lines to purchase bus tickets. Furthermore, companies often oversell bus tickets because they lack a digital system to track the number of tickets sold, resulting in customers arriving on the day of their travel with a paid-for ticket in hand, but no seat available on the bus.&nbsp;<a href="https://buupass.com/">BuuPass</a> provides millions of travelers with ease and convenience through digital schedules, online bookings and streamlined intercity travel. BuuPass, operating on a B2B2C model, partners with transport companies by providing a platform that digitizes their ticketing and bus management to minimize overselling, increase asset utilization and increase convenience for their customers.Renew Capital invested in BuuPass because of its growth potential, strong founders and significant impact on easing transport challenges in Africa. Other investors in BuuPass include Founders Factory Africa, FrontEnd Ventures and Google for Startups Black Founders Fund.&nbsp;<figure class="image"><img src="/uploads/Whats_App_Image_2022_09_28_at_09_52_18_6ccec1449c.jpeg" alt="A photo of BuuPass founders being congratulated at a startup event."></figure>Photo courtesy of BuuPass<h2>Strong Founders</h2>BuuPass was founded in 2016 by&nbsp;<a href="https://ke.linkedin.com/in/soniakabra">Sonia Kabra</a> and&nbsp;<a href="https://ke.linkedin.com/in/wyclife-omondi-86054064">Wyclife Omondi</a>. Sonia, from India, and Wyclife, from Kenya, met during college in the U.S. They identified transportation as a significant challenge in their home countries and envisioned improving the sector through digitalization. Their innovative idea gained traction when they secured $1M in funding to bring their concept to the market through the Hult Prize award supported by President Bill Clinton. With visionary leadership, they are quickly establishing BuuPass as a key player in Africa’s transportation sector.<h2>Demonstrated Traction</h2>BuuPass’ key milestones include:<ul><li>Since launching first in Kenya and offering both domestic and international routes, BuuPass has sold over&nbsp;<a href="https://techcabal.com/2024/04/30/buupass-acquires-quickbus/#:~:text=Since%20launching%20in%202016%2C%20Buupass%20has%20sold%20over%206%20million%20travel%20tickets%20and%20generated%20over%20%24100%20million%20in%20ticket%20sales.%20The%20platform%20%E2%80%9Ccovers%20national%20and%20cross%2Dborder%20routes%20in%20East%20and%20Southern%20Africa%20and%20has%20served%20over%2016%20million%20passengers%2C%E2%80%9D%20the%20company%20said.">6 million travel tickets</a> and generated more than $100M in ticket sales.</li><li>BuuPass has strategic partnerships with African telcos and super apps like M-PESA. Through its partnership with the M-PESA app, a financial super app, it provides booking services to around 10 million Kenyans who use the mobile money app.</li><li>As of 2024, BuuPass has raised a pre-seed funding round of&nbsp;<a href="https://techcrunch.com/2023/02/13/buupass-raises-1-3m-to-scale-mobility-sector-digitization-in-africa/">$1.3M</a> from investors including&nbsp;<a href="https://www.renewcapital.com/newsroom/press-release-renew-capital-invests-in-buupass-a-kenyan-tech-transport-company">Renew Capital</a>, Founders Factory Africa, FrontEnd Ventures, Adaverse, Gullit, Five35, Changecom, XA Network, Ajim Capital, Artha Ventures, Daba Finance, Google Black Founders Fund and several angel investors.</li><li>In 2024, BuuPass made headlines when they announced an investment from veteran Silicon Valley investor&nbsp;<a href="https://techcabal.com/2024/02/28/buupass-secures-investment-from-silicon-valley-legend-tim-draper/">Tim Draper</a> after being selected to pitch for the African region on the show "Meet the Drapers." Tim Draper is known for funding major companies like Coinbase, Baidu, Tesla, Skype, SpaceX, Twitch and Hotmail.</li></ul><h2>Orientation Towards Growth</h2>BuuPass has expanded its presence across Africa by acquiring&nbsp;<a href="https://techcabal.com/2024/04/30/buupass-acquires-quickbus/">QuickBus</a> in 2024. This acquisition added international routes across 16 African countries, including Kenya, Tanzania, South Africa, Malawi, Nigeria, and Ghana. It also granted BuuPass access to the South African and Nigerian markets, supporting their expansion plans to&nbsp;<a href="https://disruptafrica.com/2024/05/20/kenyan-mobility-startup-buupass-plans-to-enter-8-new-african-markets-by-2025/">eight more countries</a> by 2025.&nbsp;"BuuPass is not only assisting transport operators in running more efficient businesses but also supporting a connected Africa. Efficient transportation is a crucial step in economic development, and BuuPass is an exciting part of the continent's transition." — Laura Davis, Managing Partner and co-CEO of Renew Capital.

Find out why Renew Capital invested in BuuPass and how it's enhancing intercity travel in Africa with digital ticketing solutions.

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Why we Invested in BuuPass: Easing Intercity Travel Across Africa

<h1>Secrets of Ethiopia’s Momentum</h1>Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now, and in that time much has changed. With a population of 126.5 million according to the World Bank and year-on-year economic growth despite various market-disrupting factors, Ethiopia cannot be ignored. Though the startup scene is slowly gaining momentum, we are patiently waiting and willing to share our thoughts with those interested in taking a look. Stop by the Renew Capital office above Galani Cafe in Jacros to meet with the team. If you are an entrepreneur looking for financing for your asset-light, tech-enabled business check out the&nbsp;<a href="https://venturelab.renewcapital.com/">Renew Venture Lab and apply</a>.&nbsp;<figure class="image"><img src="/uploads/Photo_0_29119a7e5a.jpeg" alt="Beautiful Addis Ababa skyscraper in Ethiopia's bustling cityscape, showcasing urban growth and development."></figure><h2>Key Developments in Ethiopia's Market Liberalization</h2>The two most impactful changes to the startup ecosystem in Ethiopia in recent times are Safaricom's entry into the market and the government's decision in May to open the banking and retail sectors to foreign ownership. In the coming months, further liberalizations in Ethiopia’s capital markets are expected. Here are a few of the key factors investors should keep in mind about Ethiopia's startup ecosystem:Government Support and Reforms:&nbsp;Ethiopia has been making significant strides in creating a supportive environment for startups. The government has introduced various policies and reforms, such as the Digital Ethiopia 2025 strategy, the Science Technology, and Innovation (STI) policy, and the draft Ethiopia Startup Act. The proposed Ethiopian Startup Act aims to support startups by establishing a National Startup Council and an Innovation Fund, overseen by the Ministry of Innovation and Technology. The Act seeks to foster innovation, remove barriers to entrepreneurship, and enhance access to foreign investment. The Innovation Fund will offer startup scholarships, cover intellectual property fees, and incentivize incubators and accelerators. Startups will also benefit from tax exemptions and simplified trade license processes, reducing operational costs and barriers​ (<a href="https://innobiz-k.et/ethiopias-startup-act/">innobiz-K</a>,&nbsp;<a href="https://www.spotlightethio.com/post/what-ethiopia-s-startup-act-means-for-entrepreneurs">Spotlight Ethio</a>,&nbsp;<a href="https://business.linkupaddis.com/ethiopias-startup-act/">LinkUp Business</a>, <a href="https://afrikanheroes.com/2021/11/22/proposed-startup-act-nears-completion-in-ethiopia/">Afrikan Heroes</a>).Focus on Digitalization: The Ethiopian government is heavily invested in digital transformation initiatives. The Digital Ethiopia 2025 strategy aims to leverage technology for economic growth. Additionally, initiatives like the Addis Ababa City Administration's Innovation and Technology Development Bureau and events like the Digital Startup Marketplace showcase Ethiopia's commitment to fostering a digital economy​ (<a href="https://startupgenome.com/ecosystems/addis-ababa">Startup Genome</a>,&nbsp;<a href="https://ethiopianbusinessreview.net/ethiopian-startup-ecosystem-transformed-by-groundbreaking-legal-reforms/">Ethiopian Business Review</a>).Labor and Energy:&nbsp;Ethiopia is positioning itself as an attractive destination for data centers and business process outsourcing (BPO) services, leveraging its abundant and cost-effective electricity and large labor force. The country has made significant investments in its energy infrastructure, primarily focusing on renewable sources such as hydroelectric power, which currently constitutes the majority of its energy production. This abundant and inexpensive energy supply is a critical factor for industries like data centers that require reliable and cost-efficient electricity​ (<a href="https://www.worldbank.org/en/news/press-release/2024/04/03/energizing-afe-ethiopia-new-world-bank-program-expands-access-to-electricity">World Bank</a>,&nbsp;<a href="https://www.iea.org/articles/ethiopia-energy-outlook">IEA</a>). Additionally, Ethiopia boasts a large and youthful labor force, with more than 61 million people as of 2023. This workforce is increasingly becoming skilled and educated, thanks to investments in education and vocational training programs​ (<a href="https://data.worldbank.org/indicator/SL.TLF.TOTL.IN?locations=ET">World Bank Data</a>,&nbsp;<a href="https://ycharts.com/indicators/ethiopia_labor_force">YCharts</a>). The combination of affordable electricity and a sizable, educated labor force creates a conducive environment for data centers and BPO services, which can benefit from lower operational costs and a pool of available talent.<h3>Challenges:&nbsp;Despite these positive developments, challenges remain</h3><ul><li>Stability: Investors often question the country’s stability and macroeconomic conditions, asking, "Are my assets safe?"</li><li>Limited Funding: Local investors are scarce, and foreign investors are cautious due to the closed nature of the economy and elements of instability.</li><li>Regulatory and Bureaucratic Hurdles: Despite recent reforms, bureaucratic red tape still poses a challenge. The process of registering and incorporating a company, although simplified, can still be cumbersome, including complex tax laws and regulatory requirements that can deter potential entrepreneurs and investors​ (<a href="https://www.benjamindada.com/reforms-give-ethiopias-startup-ecosystem-a-fighting-chance/">Benjamin Dada</a>,&nbsp;<a href="https://bti-project.org/en/reports/country-report/ETH">BTI 2024</a>).</li><li>Infrastructure and Connectivity Issues:&nbsp;The cost and reliability of internet access can create barriers for the smooth operation of tech startups. Additionally, other basic infrastructure needs like transportation and electricity can be inconsistent, impacting business operations​ (<a href="https://www.capitalethiopia.com/2021/06/28/ethiopias-startup-ecosystem-ranks-top-100/">Capital Newspaper</a>).</li></ul>Ethiopia's startup ecosystem is slowly and steadily evolving, with substantial government backing and a growing focus on digital innovation. The potential for growth is immense, given the young and tech-savvy population, government support, affordable energy and labor, and the ongoing digital transformation efforts. Having called Ethiopia home for more than 12 years, I am hopeful the country will continue to overcome its challenges and become a strong force among Africa’s startup ecosystems.Go Deeper on Ethiopia<ul><li><a href="https://www.linkedin.com/feed/update/urn:li:ugcPost:7218873899587911680/" target="_blank" rel="noopener noreferrer">Addis Ababa in 12 Photos</a></li><li><a href="https://latest-api.renewcapital.com/uploads/FINAL_Ethiopia_Startup_Ecosystem_Factsheet_bbd213f998.pdf" target="_blank" rel="noopener noreferrer">Ethiopia’s Startup Ecosystem Factsheet</a></li><li><a href="https://www.google.com/maps/placelists/list/YI7_3BViBuFS28_hOMRGaSTsoB0yqA">Addis Startup Ecosystem Google Map</a></li></ul> Interested in other African Startup Ecosystems?&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">Download Renew Capital’s Ecosystem Factsheets on other Ecosystems</a>. We’ll be adding new ones every few weeks!&nbsp;

Renew Capital has been a player in the Ethiopian startup ecosystem for more than 10 years now and in that time much has changed. Learn about Safaricom's entry, labor force potential, energy investments and challenges facing entrepreneurs in this evolving ecosystem.

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Secrets of Ethiopia’s Momentum

<h1>Renew Capital Legal Brief - July 2024</h1>The Latest Changes in Africa's Regulatory Environment<figure class="image"><img src="/uploads/Linkedin_Templates_21_eb566a2aff.png" alt="Photo of Renew Capital's July 2024 Legal Brief document."></figure>With a growing presence in Africa’s top startup ecosystems, the Renew Capital team works hard to stay on top of the legal landscapes shaping the venture capital and investment space. For the next few months, we will be publishing a monthly piece highlighting the significant legal and regulatory developments across Africa. We hope this offers insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment. If you like it, let us know at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> and it may become a permanent offering. &nbsp;Key Legal and Regulatory UpdatesEgypt:&nbsp;<ul><li>New Fast-Track M&amp;A Notifications - Starting June 1, 2024, companies involved in mergers and acquisitions can notify the Egyptian Competition Authority (ECA) using a&nbsp;<a href="https://eca.org.eg/en-us/%D8%AC%D9%87%D8%A7%D8%B2-%D8%AD%D9%85%D8%A7%D9%8A%D8%A9-%D8%A7%D9%84%D9%85%D9%86%D8%A7%D9%81%D8%B3%D8%A9/economic-concentrations/notification-file-simplified-procedures">fast-track procedure</a> with a 20-business day timeline and simplified forms for specific transactions. This procedure applies only to specific transactions detailed in the&nbsp;<a href="https://eca.org.eg/getattachment/793b7930-dee1-4815-bc27-c73d2cf632a6/Notification-File-Economic-Concentrations-subject-to-Simplified-Procedures.docx">simplified notification file</a>.</li></ul>Ethiopia:&nbsp;<ul><li>Data Protection Law - The Ethiopian Parliament passed the Personal Data Protection Proclamation in April 2024, aligning with international standards. It empowers individuals with control over their data and enforceable rights against data processors and controllers.&nbsp;</li><li>Foreign Investment Expansion - The Ethiopian Investment Board (EIB) now allows foreign participation in export, import, wholesale and retail trade sectors, previously reserved for domestic investors. Conditions include relevant experience, market linkages, capital thresholds, procurement levels, and contractual commitments. Read the&nbsp;<a href="https://investethiopia.gov.et/wp-content/uploads/2024/04/Ethiopian-Investment-Board-Directive-to-Regulate-Foreign-Investors-Participation-in-Restricted-Export-Import-Wholesale-and-Retail-Trade-Investments-No.1001_2024.pdf">directive</a>.&nbsp;</li></ul>Ghana:&nbsp;<ul><li>Crowdfunding Guidelines - In June 2024, Ghana’s SEC launched regulations for crowdfunding, establishing a licensing framework for platforms and intermediaries. These guidelines exclude rewards-based or donations-based activities.</li></ul>Kenya:&nbsp;<ul><li>Carbon Project Regulations - The Climate Change (Carbon Markets) Regulations 2024 create a regulatory framework for carbon projects. The Designated National Authority (DNA) will oversee implementation, with a two-year compliance period for existing projects.</li></ul>Mozambique:&nbsp;<ul><li>Leniency Regime Proposal - The Competition Regulatory Authority (CRA) is consulting on draft regulations for a leniency regime. This regime offers reduced fines for companies or individuals who report anti-competitive practices and provide evidence against other offenders.</li></ul>Nigeria:&nbsp;<ul><li>Debt Capital for Private Companies - The Nigerian SEC proposed rules allowing private companies to issue debt securities to the public, subject to SEC restrictions. The proposed rules can be found&nbsp;<a href="https://sec.gov.ng/wp-content/uploads/2024/05/Rules-for-Exposure-Issuance-and-Allotment-of-Private-Companies-Securities.pdf">here</a>.</li><li>New Measures for Remittances - The Central Bank of Nigeria (CBN) introduced measures to ease foreign exchange pressures. These include same-day Naira settlement for diaspora remittances using the Nigerian Autonomous Foreign Exchange Market (NAFEM) rate.</li></ul>Rwanda:&nbsp;<ul><li>Digital Currency Plans - The National Bank of Rwanda (NBR) aims to issue a Central Bank Digital Currency (CBDC) by 2026. The NBR is currently conducting public consultations and feasibility studies. The report on the feasibility study is available&nbsp;<a href="https://www.bnr.rw/payment-systems/cbdc/">here</a>.</li></ul>South Africa:&nbsp;<ul><li>Deposit Insurance Operational - The Corporation for Deposit Insurance, a subsidiary of the South African Reserve Bank, began operations on April 1, 2024. It manages the Deposit Insurance Fund, covering up to R100,000 per qualifying depositor per bank.</li><li>Spectrum Hoarding Policy - South Africa’s new Spectrum Policy promotes spectrum trading, sharing, and pooling among licensees to prevent capacity hoarding.</li></ul>Tanzania:&nbsp;<ul><li>Mining Act Amendments - Proposed changes to Tanzania’s mining sector include increasing the minimum capital investment for a mining license to $5,000,000, introducing penalties for false data and delayed payments, and clarifying royalty payments on imported minerals.</li></ul>Tunisia:&nbsp;<ul><li>Startup Ecosystem Watch - Tunisia's pioneering Startup Act continues to influence tech investment and startup growth in the region. We are monitoring developments closely.</li></ul>Uganda:&nbsp;<ul><li>Stamp Duty Exemptions - The Stamp Duty (Amendment) Bill 2024 introduces exemptions for investments in electric vehicles and private equity funds, effective July 1, 2024.</li></ul>Zambia:&nbsp;<ul><li>E-Hailing Platform Regulation - New regulations require road licenses for all e-hailing drivers and set guidelines for operators, with fines for non-compliance.</li></ul>Contact us at&nbsp;<a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> if you need to get up to speed on any of these ecosystem! Stay tuned for more updates in our upcoming briefs!Disclaimer: The information included in this blog does not constitute legal advice. Consumers should consult their legal advisors.&nbsp;

The Corporation for Deposit Insurance, a subsidiary of the South African Reserve Bank, began operations on April 1, 2024. 