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The latest changes in Africa's regulatory environment
With 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 provides insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment.
Egypt:
- Non-Resident Foreigners Can Now Own Egyptian Bank Accounts Freely - The Central Bank of Egypt has, via a circular dated August 7, 2024, directed all Egyptian banks to open non-resident bank accounts for foreign customers not residing in Egypt and to grant them access to available banking services. The aim is to expand access by foreigners to a range of banking services while ensuring compliance with account opening regulations, Know Your Customer (KYC) requirements and anti-money laundering laws and regulations.
Ethiopia:
- Capital Market Regulatory Sandbox Launch - The Ethiopian Capital Markets Authority (ECMA) launched the sandbox on August 29, 2024. The sandbox provides a controlled environment for testing new capital market products or services with consumers under temporary regulatory flexibility. This is in line with similar approaches adopted by Nigeria, Rwanda and Kenya which have seen a lot of benefits for startups.
Ghana:
- Ghana is Set to Lift Cryptocurrency Ban, Issues Draft Guidelines on Digital Assets - Draft Guidelines on Digital Assets were issued by the Bank of Ghana (BoG) in August 2024. The Guidelines contemplate the existence of a regulatory framework for digital assets and Virtual Asset Service Providers (VASPs) in Ghana and the licensing duties of both the BoG and the Securities and Exchange Commission. Similar to Nigeria, this should eventually lead to a certain regulatory framework for digital assets and inspire investor confidence in VASPs which were largely neglected in the past because of a lack of regulation and licensing options.
Kenya:
- The Constitutionality of the 2023 Finance Act Remains on the Fence – The 2023 Finance Act was ruled unconstitutional by the Court of Appeal in Kenya in July 2024 due to the National Assembly’s failure to justify its decisions on public proposals and provide revenue estimates. However, the Supreme Court has stayed the lower court’s order pending the outcome of appeals filed on the matter.
Nigeria:
- Tax Holiday for Basic Food Items - From July 15 to December 31, entities can import food items like maize, husked brown rice and wheat with a zero percent customs duty rate and sell them on commodity exchanges without charging value-added tax (VAT). This tax holiday aims to encourage food imports, reduce food inflation and address the food crisis in the country.
- Busha and Quidax Receive Go Ahead to Commence Operations - The Securities and Exchange Commission (SEC) has issued its first approvals-in-principle to digital asset exchanges Busha and Quidax. Full registration will follow as the SEC reviews other participants in its Accelerated Regulatory Incubation Program. This groundbreaking move is expected to set a precedent for other digital asset exchanges to operate in one of Africa’s largest digital assets markets by volume.
Rwanda:
- New Intellectual Property Regime Emerges - The 2024 Law on the Protection of Intellectual Property took effect on July 31, 2024, introducing several changes. These changes include the creation of an independent Intellectual Property Office and the introduction of provisional patent applications for ongoing inventions.
South Africa:
- Satellite Service Operators Prepare for Licensing Framework - The Independent Communications Authority (ICA) has set up an inquiry to establish a licensing framework for satellite services in South Africa, particularly fixed, mobile and broadcasting satellite services. Stakeholders have until November 12, 2024, to submit suggestions to the ICA. This inquiry is a crucial step towards creating a transparent and efficient process for satellite operators, enhancing the delivery of satellite services across the country.
Tanzania:
- Tanzanian Parliament Raises Market Dominance Threshold - The Parliament has endorsed a bill proposing to raise the market dominance threshold from 35% to 40%. Therefore, a single entity will be allowed to control up to 40% of the market it specializes in. This also means that when two or more entities consider a merger, they will not be restricted to the 35% market dominance rule. This is expected to encourage foreign investments whilst also imposing restrictions on the misuse of market holdings by multiple individuals.
Uganda:
- ICT and Communications Laws Face a Likely Merger - The Uganda Communications Commission has declared its intentions to consolidate all ICT and communications laws for better regulation of all media platforms and the media industry.
Zambia:
- Zambia Opens Access to Energy Transmission - Independent power producers can now bypass state-owned Zambia Electricity Supply Corporation Limited (ZESCO) Ltd as the transmission entity and transmit power directly to consumers. This is expected to improve access to power, reduce losses and promote efficient metering.
Regulatory
- More African Governments Gear Towards Artificial Intelligence (AI) Regulation - In August, Nigeria and South Africa joined the growing number of African countries with national AI policy frameworks. Like Kenya and Egypt, they're developing policies to foster AI innovation and growth within their borders.
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 this blog does not constitute legal advice. Consumers should consult their legal advisors.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.
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