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Renew Capital Legal Brief - February 2025
By Chukwudi Ofili and Temiloluwa Sotonwa | Wed Feb 26 2025
The latest changes in Africa's regulatory environment
With a growing presence in Africa’s startup ecosystems, the Renew Capital team stays on top of the legal landscapes shaping the venture capital and investment space and provides insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment.
Egypt
New fiscal incentives for small and medium enterprises (SMEs):
- The President of Egypt has introduced a new fiscal framework for SMEs engaged in professional activities, with an annual turnover of up to $40K (20M Egyptian pounds), provided they meet certain requirements. This framework offers exemptions from stamp duties, company and land registration fees and capital gains taxes, along with reduced minimum corporate income tax rates for qualified SMEs.
Why it matters: The new fiscal framework establishes a conducive environment for business operations, thereby encouraging increased commercial activities and promoting economic growth.
Ethiopia
Ethiopia prepares for foreign investments in its exchange market:
- The National Bank of Ethiopia, alongside the Ethiopian Capital Market Authority and Ethiopian Investment Holdings, is actively pursuing the opportunity to allow foreign investments in the exchange market. The foreign investments may, however, be capped at a quota of 30%.
Why it matters: Allowing the entry of foreign investors will boost Ethiopia’s exchange market and provide more capital inflow within the country.
Ghana
Ease of doing business:
Ghanaian companies are now categorized into small, medium and large enterprises -
Ghanaian companies are now categorized into small, medium and large enterprises -
- Small companies - Companies with revenue or assets up to $26K (400K GHS)
- Medium companies - Companies with revenue or assets between $26K to $646K (400K GHS to 10M GHS)
- Large companies - Companies with revenue or assets exceeding $646K (10M GHS)
With this categorization, small companies are now exempt from mandatory external audit requirements, while medium and small companies no longer need to file full annual returns with the Office of the Registrar of Companies.
Why it matters: This new classification system reflects a significant step toward reducing administrative burdens for these enterprises.
Introduction of carbon registry:
- The Ghana Carbon Registry has been established under the Environmental Protection Act of 2025. This critical database will effectively catalog mitigation projects aimed at reducing carbon emissions and will regulate the buying and selling of carbon credits within the voluntary carbon market. The Carbon Market Committee will oversee the registry and approve mitigation projects in the registry.
Why it matters: The establishment of the Carbon Registry signifies Ghana’s commitment to the Paris Agreement and ensures the implementation of proper regulatory standards in the Ghanaian carbon market.
Kenya
Regulatory framework for carbon trading:
- On February 11, the National Environment Management Authority (NEMA) issued draft Climate Change (Carbon Trading) Regulations for public review. The draft regulations outline the regulatory authorities for carbon trading activities and requirements for establishing an exchange for trading registered carbon credits. Any comments on the regulations may be submitted on or before March 5.
Why it matters: The draft regulations show Kenya’s devotion to achieving low-carbon climate development.
Morocco
Finance Law 2025:
With the signing of the Finance Bill into law in Morocco, the Finance Law for 2025 introduced the following changes:
With the signing of the Finance Bill into law in Morocco, the Finance Law for 2025 introduced the following changes:
- Revised tax incentive scheme for corporate group restructuring;
- Revised withholding tax rates on income from shares and dividends;
- Exemption threshold for income tax for individuals increased to $4K from $3K (40K MAD FROM 30K MAD);
- Extension of value-added tax (VAT) exemption on fresh or frozen seasoned meat;
- Suspension of import tariffs;
- New taxation rules for joint ventures and economic interest groups; and
- Temporary VAT exemption on importation of select live animals and agricultural products.
Why it matters: Companies and other stakeholders must proactively review their tax policies and measures to align with the new fiscal regulations.
Nigeria
Launch of Foreign Exchange (FX) Code:
- On January 31, the Central Bank of Nigeria (CBN) launched the Nigeria Foreign Exchange Code. The code sets the basic standards for all participating institutions in the FX market while reinforcing ethical market practices and good governance measures.
Why it matters: The launch of the FX code signifies the CBN’s commitment to improving the FX market and ensuring compliance by all stakeholders. It is also expected to improve FX liquidity and stop unethical FX trading practices.
South Africa
Upcoming changes in the labor industry:
- The South African National Economic Development and Labour Council recently issued a law reform report proposing several changes including increased statutory severance pay, exclusion of startups from council agreements’ requirements, limitation of remedies for unfair dismissals and statutory provisions for large-scale retrenchment processes.
Why it matters: The proposals, if accepted, present more favorable conditions for both employees and employers in South Africa.
Uganda
Electricity market moves from a single-buyer model to a multiple-buyer model:
- The Electricity Regulatory Authority has directed that consumers with the stipulated electricity demand (mostly industrial and manufacturing companies) can now purchase electricity directly from authorized generation licensees. This directive deviates from Uganda’s previous model of a single buyer purchasing electricity on behalf of the general Ugandan populace.
Why it matters: This change provides qualified consumers with a dependable alternative for their electricity needs.
Zambia
Changes in Property Taxes:
- Starting on January 1, 2025, the Property Transfer Tax in Zambia increased from 5% to 8%. Additionally, moneylenders and building societies can benefit from tax relief on foreclosed property transfers.
Why it matters: These changes will result in increased costs for asset transfers in Zambia but will encourage foreclosures in the property market.
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