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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
Business zones:
The Egyptian government is set to enact a law to create business zones in Egypt. These business zones will offer modern infrastructure and tax incentives for foreign investors, companies and other interested parties.
Why it matters: Establishing business zones will significantly promote foreign investment within Egypt.
New rules for pharmaceutical warehouses:
After a 6-month suspension, a new law has been enacted for licensing pharmaceutical warehouses. The Egyptian Drug Authority is to release detailed guidelines on the new requirements for pharmaceutical warehouse owners.
Why it matters: Pharmaceutical warehouse owners are to adhere to the new law and the requirements to be subsequently published by the EDA.
Ethiopia
Ethiopia welcomes foreign banks:
The Ethiopian Government has passed a proclamation allowing financially sound and well-established foreign banks to operate and provide core banking services in Ethiopia. Representative offices of foreign banks are also to register or re-register with the National Bank of Ethiopia.
The Ethiopian Government has passed a proclamation allowing financially sound and well-established foreign banks to operate and provide core banking services in Ethiopia. Representative offices of foreign banks are also to register or re-register with the National Bank of Ethiopia.
Why it matters: This legislation will increase healthy competition, encourage foreign investments and drive innovation within Ethiopia’s financial ecosystem.
Kenya
Startup Bill progresses:
On January 22, Kenya’s National Assembly passed the long-awaited Startup Bill. Although the bill still awaits presidential assent, it is expected to provide tax breaks, grants, guidelines for incubation and accelerator programs and government procurement opportunities for startups in Kenya.
Why it matters: The Startup Bill, when enacted, will hopefully create an enabling environment for startups to thrive, attract foreign investments and enable access to opportunities to accelerate growth.
New tax regime:
In December 2024, new tax requirements were introduced in Kenya and they include:
In December 2024, new tax requirements were introduced in Kenya and they include:
- Minimum top-up tax for local subsidiaries of multinationals
- Significant economic presence tax on digital services
- Reduced capital gains tax rate for investments certified by the Nairobi International Financial Centre Authority
- Excise duties on fees charged by local digital credit providers
- Excise duties on digital services provided by non-residents
Why it matters: The new tax regulations will increase the tax obligations for businesses in Kenya, including both residents and non-residents. The changes may potentially increase the cost of doing business in Kenya.
AI strategy:
The Kenyan Ministry of Information, Communications and Digital Economy recently issued a draft National Artificial Intelligence (AI) Strategy for public review. The strategy document embodies Kenya’s deliberate efforts to create a robust governance framework for AI.
The Kenyan Ministry of Information, Communications and Digital Economy recently issued a draft National Artificial Intelligence (AI) Strategy for public review. The strategy document embodies Kenya’s deliberate efforts to create a robust governance framework for AI.
Why it matters: With the global attention that AI is getting from international investors, the strategy shows Kenya’s commitment to developing a stable and well-governed environment for innovation by entrepreneurs using AI.
Morocco
Launch of Morocco Fintech Center:
Launched on January 15, 2025 in Rabat, Morocco, the Morocco Fintech Center (MFC) is a joint development platform backed by prominent Moroccan institutions including the Central Bank of Morocco. The MFC aims to support the development of fintech startups in Morocco through incubation, regulatory guidance and training.
Launched on January 15, 2025 in Rabat, Morocco, the Morocco Fintech Center (MFC) is a joint development platform backed by prominent Moroccan institutions including the Central Bank of Morocco. The MFC aims to support the development of fintech startups in Morocco through incubation, regulatory guidance and training.
Why it matters: The MFC is expected to boost the fintech sector, facilitate more innovations by entrepreneurs and attract foreign investments in Morocco.
Nigeria
Increased regulatory oversight for digital assets:
The Securities and Exchange Commission (SEC) is set to expand its regulation to include more operators of digital assets. This includes foreign or non-resident sponsors of digital assets as well as operators who actively target Nigerian investors. Additionally, the SEC has introduced a new registration category called Digital Asset Intermediaries. Draft amendments to existing rules are under review and expected to take effect on June 30, 2025.
The Securities and Exchange Commission (SEC) is set to expand its regulation to include more operators of digital assets. This includes foreign or non-resident sponsors of digital assets as well as operators who actively target Nigerian investors. Additionally, the SEC has introduced a new registration category called Digital Asset Intermediaries. Draft amendments to existing rules are under review and expected to take effect on June 30, 2025.
Why it matters: These proposed changes indicate increased regulatory oversight in the Nigerian digital assets sector as it gains prominence with increasing trading volumes in Nigeria.
Rwanda
Rwanda battles financial crimes:
The Rwandan parliament, on January 9, passed the law on the prevention and punishment of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction to intensify its anti-financial crime efficacy. The legislation introduced penalties for non-compliance with anti-money laundering and counter-terrorism financing obligations.
The Rwandan parliament, on January 9, passed the law on the prevention and punishment of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction to intensify its anti-financial crime efficacy. The legislation introduced penalties for non-compliance with anti-money laundering and counter-terrorism financing obligations.
Why it matters: These changes will assist in tackling risks of terrorist financing and financial crime vulnerabilities in Rwanda.
South Africa
Corporate governance changes:
Starting on 27 December 2024, the Companies Second Amendment Act became effective. The legislation introduced lighter requirements for intra-group financial assistance provisions, approvals of buy-backs and cooling-off periods for auditors.
Starting on 27 December 2024, the Companies Second Amendment Act became effective. The legislation introduced lighter requirements for intra-group financial assistance provisions, approvals of buy-backs and cooling-off periods for auditors.
Why it matters: This change eases internal corporate governance procedures and policies of companies registered in South Africa. It appears that this is geared towards improving the ease of doing business index of South Africa.
Tanzania
Data processors and controllers’ registration:
Tanzania's Personal Data Protection Commission (PDPC) has extended its deadline for registering all data controllers and processors in Tanzania to April 30, 2025.
Tanzania's Personal Data Protection Commission (PDPC) has extended its deadline for registering all data controllers and processors in Tanzania to April 30, 2025.
Why it matters: Data controllers and processors not registered before the deadline will attract a fine between TZS100,000 ($40) and TZS5,000,000 ($1,975).
Zambia
Zambia Startup Bill:
The Zambian Parliament is considering a Startup Bill and has issued a draft for public review. The bill proposes the creation of a government office dedicated to the registration and administration of startups and the establishment of the National Innovation Fund to raise capital for developing technology-related talent and education in Zambia.
Why it matters: The Startup Bill will boost the startup industry in Zambia, while also encouraging technological innovations and advancement across the country.
Pan-Africa
Regulation of crypto activities:
While Nigeria intensifies its legal framework on crypto activities, Kenya and Morocco prepare to join the league of African countries (Nigeria, Mauritius, Seychelles and South Africa) to establish legal frameworks for crypto activities.
While Nigeria intensifies its legal framework on crypto activities, Kenya and Morocco prepare to join the league of African countries (Nigeria, Mauritius, Seychelles and South Africa) to establish legal frameworks for crypto activities.
In Kenya, public reviews and consultations are underway for its draft National Policy on Virtual Assets and Virtual Asset Service Providers, and the draft Virtual Asset Service Providers Bill 2024.
Equally, Morocco is working with the International Monetary Fund (IMF) and the World Bank to create a legal framework to regulate crypto activities in Morocco. A draft crypto bill for regulating cryptocurrencies was shared with the Central Bank of Morocco’s council in December 2024.
Why it matters: These moves will advance financial stability in these African countries and attract more crypto activities from relevant stakeholders.
Visit our blog to learn more about some of Africa’s startup ecosystems or contact us at renew@renewcapital.com 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.
