Meet the 11 startups joining BIC Ethiopia Catalyser programme

Meet the 11 startups joining BIC Ethiopia Catalyser programme FUELING ETHIOPIA’S FUTURE Ready for some exciting news from Ethiopia’s entrepreneurial landscape? The country is buzzing with the energy and innovation of its young entrepreneurs, fueling its economy and shaping its future. And GrowthAfrica is proud to be a part of this transformation! As a key player in the BIC ETHIOPIA Incubation, funded by the European Union, we have the privilege of supporting #AgriTech and agri-business #startups and #MSMEs in their journey to success. BIC ETHIOPIA addresses several bottlenecks in the #Ethiopian incubation eco-system, by targeting the lack of sustainable and technically sound business models of exciting #incubators through regional benchmarking, best practice examples, new revenue models, standardised curricula, and professionalised operations. With the help of our experienced partners Sequa, Addis Ababa Chamber of Commerce and Sectoral Associations, Adelphi, icehawassa Foundation, and Menschen Fur Menschen, we are helping the entrepreneurs improve their market reach, increase their income, and create much needed jobs and job opportunities especially for youth and women. We’re honored to work with the first cohort of 11 game-changing entrepreneurs shaking up Ethiopia’s business world. And with over 20 years of expertise in the African #innovation ecosystem, GrowthAfrica is equipped with the tools and knowledge to guide these entrepreneurs in developing and executing their growth plans. We are excited about this chapter as we embark on this transformative journey, working with 11 outstanding entrepreneurs for cohort 1 of the BIC Ethiopia Catalyser programme. Meet the cohort: 1. Zafree: manufacturing of pulp from agricultural waste materials such as straw 2. Brana Audio Book: audio book production with expansion model to agricultural research and writeups on herbal medicine, botany and animal husbandry 3. Qeye: beautification and tree planting with urban agriculture expansion 7. YES Animal Feed Processor: animal feed processing and consultation 10. Tikus Delivery: delivery service of food and beverages. 4. Afrofarm Fund: crowd farming concept enabled by irrigation and investment from diaspora. 5. KSI Solar Incubator: manufacturing of solar incubator machine for poultry 6. The Day Agro Industry: agro processing with a focus on jam production 8. Bright Starch Manufacturing: manufacturing of starch from false banana tree 9. Mulu Solar Charging Station: solar powered mobile phones, laptops and other accessories battery charging station that focuses on expanding to semi urban and rural areas Expanding to grocery delivery focusing on agricultural products 11. Falcon ET: digital market linkage for agricultural produce and organic compost processing Keep an eye on this channel as we will be sharing about the journey and insights from the entrepreneurs and their businesses. BIC Ethiopia (https://bic-ethiopia.eu/) is a part of the larger BIC Africa (https://bic-africa.eu/) led by EBN.

Ethiopian Airlines To Resume Flights From Côte d’Ivoire To JFK

Ethiopian Airlines To Resume Flights From Côte d’Ivoire To JFK Ethiopian Airlines is set to resume flights between New York and Abidjan after nearly three years. Continuing with its impressive international route expansion, Ethiopian Airlines is set to operate yet another route between New York and Côte d’Ivoire starting on May 23. The airline will resume the flight between New York JFK international and Felix Houphouet Boigny International Airport in Côte d’Ivoire, commonly known as the Ivory Coast. This route was launched in June 2019 but was suspended in March 2020 due to the COVID-19 pandemic. Passengers flying from Ethiopia to New York can also board this flight as it will originate from the airline’s hub at Addis Ababa Bole International Airport. This year, Ethiopian Airlines has been showing its prowess in the aviation industry by flying to new territories as well as destinations it served in the past. The airline has already announced plans to fly to Atlanta Hartsfield-Jackson, Singapore, Jeddah, and Malta. According to the CEO Mesfin Tasew Bekele, the flag carrier plans to double its fleet over the next 12 years and expand its global network, making it one of the most incredible aviation superpowers to grace the skies. Ethiopian Airlines flights between New York and Africa Although flights between JFK and Abidjan were suspended nearly three years ago, the airline has sold tickets for this route for other operators. Ethiopian Airlines has strategic partnerships and codeshare agreements with major airlines like Lufthansa, Rwanda Air Express, Air Côte d’Ivoire, Air China, Air India, Singapore Airlines, and United Airlines. The Star Alliance member has scheduled service between Addis Ababa and Abidjan and from Abidjan to Conakry, the capital city of Guinea. The resumption of the service via Abidjan, which will start with four weekly flights, corresponds with Ethiopian’s plans to fly to Atlanta. The airline already has a flight to New York, but it is via Lomé, Togo. According to Ethiopian Airlines’ booking schedule, numerous flights are available between New York and Ivory Coast, operated by Lufthansa and ASKY Airlines. Ethiopian second hub ASKY is a multinational private airline based in Lomé. Ethiopian is a major shareholder in ASKY and has a management contract to manage and operate its services. The partnership between the two airlines has introduced new connectivity between West Africa and Ethiopia’s worldwide network. Ethiopian Airlines contributing to the development of African Aviation Through the extension of its network and service between Africa and major international hubs, the airline has increased trade, tourism, and the development of the aviation industry throughout the continent. In addition to route expansion, Ethiopian Airlines has been in the spotlight for reviving dormant African airlines. Nigeria Airways, which seized operations in 2003, could make a major comeback under the Nigeria Air brand following an investment from Ethiopian Airlines. In the deal to relaunch Nigeria’s flag carrier, the Ethiopian carrier will own a 49% stake, while the Nigerian Sovereign Fund owns 46% interest, and Nigeria’s federal government will own the remaining 5%. In Southern Africa, Ethiopian Airlines is set to revive Air Namibia. Last week, Namibian President Hage Geingob met with Ethiopian Airlines executives to explore how the East-African carrier could assist the Namibian government in reviving Namibia’s flag carrier, which was liquidated in 2021. Ethiopian Airlines CEO Mesfin Tasew and Chairman Girma Wake met the Namibian and Nigerian heads of state at the 36th African Union summit. Ethiopian Airlines has a long-term strategy to establish multiple hubs in Africa and develop an extensive network within Africa. With new partnerships, routes, aircraft orders, and a new aviation academy, the Airline is set to be one of the world’s largest aviation groups in the next ten years.

Ethiopian adds Xiamen and Shenzhen to its cargo destinations in China

Ethiopian adds Xiamen and Shenzhen to its cargo destinations in China Addis Ababa, 10 February 2023 Ethiopian Cargo & Logistics Services, Africa’s largest network operator, has started two weekly freighter flights today connecting Xiamen with São Paulo and Santiago via Addis Ababa. Ethiopian also plans to commence two weekly freighter flights between Shenzhen and Liège as of February 17, 2023. Ethiopian will deploy B777 Freighter on the new cargo routes. Regarding the launch of the new flights, Ethiopian Airlines Group CEO Mr. Mesfin Tasew said, “We are glad to expand our reach in China adding Xiamen and Shenzhen in our global freighter network. The new cargo flights will be instrumental in facilitating cargo shipments across the world by improving air connectivity among China, Africa, Europe and South America. As the largest cargo network operator in Africa and a key air cargo service provider globally, Ethiopian Airlines will continue expanding its services around the world by opening new routes and increasing flight frequencies so as to facilitate global trade and the flow of goods.” Ethiopian is launching these new flights as it marks the 50th anniversary of the start of its passenger service to China back in 1973. Xiamen and Shenzhen will join the vast Ethiopian network increasing its cargo destination in China to eight, including Guangzhou, Shanghai, Zhengzhou, Changsha, Wuhan and Chengdu. In addition to the cargo services, Ethiopian currently flies to four passenger destinations namely, Beijing, Chengdu, Guangzhou and Shanghai with its enhanced services and modern fleet. As one of the leading global air cargo operators, Ethiopian Cargo and Logistics Services covers more than 130 international destinations around the world with both belly hold capacity and 68 dedicated freighter services. Ethiopian Cargo and Logistics Services, one of the major strategic business units within the Ethiopian Airlines Group, has been winning global awards for its remarkable performance and service excellence. About Ethiopian Ethiopian Airlines (Ethiopian) is the fastest growing Airline in Africa. In its seventy-six plus years of operation, Ethiopian has become one of the continent’s leading carriers, unrivalled in efficiency and operational success. In addition to its main hub in Addis Ababa, Ethiopia, it is also pursuing its multi-hub strategy through a hub in Lomé, Togo with ASKY, in Lilongwe, Malawi with Malawi Airlines and in Lusaka, Zambia with Zambia Airways. Ethiopian commands the lion’s share of the Pan African passenger and cargo network operating the youngest and most modern fleet to more than 145 domestic and international passenger and cargo destinations across five continents. Ethiopian’s fleet consists of ultra-modern and environmentally friendly aircraft such as Boeing 737s, 767-300, 777s, 787s, Airbus A350-900 and Bombardier Dash 8-400 double cabin with an average fleet age of seven years. In fact, Ethiopian is the first airline in Africa to own and operate most of these aircraft. Upon early, successful achievement of its strategic plan (Vision 2025), Ethiopian is currently implementing a 15-year strategic plan called Vision 2035 that will see it become one of the top 20 most competitive and leading aviation group in the world by providing safe, secured, market driven and customer focused Passenger and Cargo Transport and Logistics Services, Aviation Training, Airport Management and Ground Services, MRO and Aerospace Manufacturing and Travel and Tourism Services. Ethiopian is a multi-award-winning airline including a Skytrax ‘Best Airline in Africa Award’ for five consecutive years. Ethiopian has been a Star Alliance member since 2011 and an Airline which has been registering more than threefold growth in the past 10 years. For additional information, please visit Tags ethiopia news ethiopian airlines ethiopian news ethiopian news today

Bole Fana Consumers Public Recreation Center demolished after 50 years in service

Bole Fana Consumers Public Recreation Center demolished after 50 years in service Bole Fana Consumers Public Recreation Center demolished after 50 years in service Addis Insight confirmed that the Bole Fana Consumers Association, which has been providing services to the community for the past 50 years, has been dissolved. It is not to be forgotten that when the unions were told about the demolition of this public entertainment center in the past, they were in tension with the district. This association, which has more than 4,500 members, is managing other entertainment centers from this center. The recreation center housed tennis courts and wedding halls, and the 17/19 recreation center alone had 207 employees. Fana Park, where various events including music concerts are held, is managed under the 17/23 Entertainment Centre. The land development and management office of Bole district, where the centers are located, announced in a letter to Bole Fana Shemach, who manages the parks, that the Addis Ababa city administration cabinet had requested the land on March 17, 2014. Addis Ababa city administration in Bole Sub-city has announced that it wants to give the 17/19 and 17/23 entertainment centers land, mall, apartment, as well as the construction of a five-star hotel to investors. According to the letter, of the two entertainment centers, the land is said to be wanted for a mall and apartments to be built by MWS Trading, as well as a five-star hotel to be built in Bekele, Gesena, Abebe. The members of the association said that they have the capacity to develop the place if it is necessary to develop it, and they said that destroying a center that is a place for people’s breathing is not thinking about the people. Addis Insight visited the site and confirmed that the shops that were built in front of Bole Shemach Entertainment Center and the halls that were used to provide services to the public are being demolished. Repeated attempts to contact the officials of the three land development and management offices of Bole district,could not succeed.

The need to revisit the Ethiopian Standard Industrial Classification Directive No.17/2019 in light of the New Investment Regime

The need to revisit the Ethiopian Standard Industrial Classification Directive No.17/2019 in light of the New Investment Regime By- Dereje Ashenafi It has almost been three years since the adoption of the new Investment Proclamation No.1180/2020 (Investment Proclamation) and Investment Regulation No. 447/2020 (the Investment Regulation) (together‘ the New Investment Regime’). The New Investment Regime has introduced a new policy shift from ‘positive listing’ to ‘negative listing’ regarding FDI.  With a negative listing policy shift, foreign investors are permitted to engage in any of the investment areas except sectors exclusively listed for domestic investors and joint investment with the government and/or domestic investors.  This policy shift has opened a broad door for foreign investors to come up with innovative businesses and legally invest in Ethiopia. Still after this new FDI policy shift, however, the Ethiopian Investment Commission (EIC), the Ministry of Trade and Regional Integration, and other specialized licensing authorities  (such as the Ethiopian Petroleum and Energy Authority, Ethiopian Communications Authority, etc.) issue licenses according to the Ethiopian Standard Industrial Classification Directive No.17/2019 ( the Licensing Directive). With the adoption of the negative listing FDI policy, one would wonder how this Licensing Directive is practically responsive. The Licensing Directive classifies the specific licensing categories within which business activities will be issued a license. The specific sector the investor intends to engage has to be indicated when issuing the investment permit and a business license pursuant to the ESIC. Following the adoption of a relatively wider investment framework for FDI, foreign investors are entering the Ethiopian market with innovative businesses for whatever is not expressly reserved to domestic investors and joint investment with the government and/or investors. The practical problems come, however, with the EIC and other regulatory organs, when issuing an investment permit and business licenses under the ESIC. Given ESIC is issued in the spirit of the old investment regime (Investment Proclamation No.769/2012 and Investment Regulation No.270/2012) when most sectors were reserved for domestic investors and actually don’t have all the business activities incorporated (from what I have seen in practice) has created difficulty in licensing businesses, particularly the foreign ones. It has always been a difficult exercise for the licensing authorities to categorize certain businesses (according to ESIC) emerging from abroad and they instead try to find the closest area within which the requested business activity would fall and issue licenses accordingly. With this trend, sometimes, an unrelated license happens to be issued for businesses simply because the requested activity is missing/not incorporated under the ESIC. This practically creates confusion between what the investor is granted a license and what it actually is doing on the ground. In other words, the very principle of investment licensing that ‘an investor is not allowed to engage in activities it actually is not licensed’ would highly be at stake. In fact, one may not expect ESIC to pre-capture all business activities in this very dynamic business world unless continuous updates have been done from time to time. With the present standing, the categorization of business licensing according to ESIC has become a difficult task, particularly with the recent relative liberalization of the market to FDI. It does not mean, however, that this problem wasn’t in place in the past but following the adoption of an open FDI approach, new foreign businesses are emerging and expected to emerge in the days ahead which calls for the revision of the ESIC and an up-to-date business licensing regime.

Ethiopian Airlines to resume direct flights between Abidjan and New York

Ethiopian Airlines to resume direct flights between Abidjan and New York Ethiopian Airlines, the largest network operating carrier in Africa, has announced the resumption of its direct flights between Abidjan and New York John F. Kennedy Airport as of 29 May 2023. Ethiopian first started serving New York from its main hub Addis Ababa via Abidjan in June 2019. However, the route was suspended in March 2020 due to COVID-19. Later, the flight resumed serving New York via Lomé starting in October 2020. The four times weekly flight will be operated between Addis Ababa and New York via Abidjan. Regarding the resumption of the flight, Ethiopian Airlines Group CEO Mr. Mesfin Tasew said “We are excited to bring back our direct flight between Abidjan and New York. We have long been offering flights with the best connectivity between the US and Africa. The resumption of our Abidjan-New York flight brings back the flexibility that our passengers love. We have been increasing frequencies and adding new destinations in Africa, Europe, Middle East, and Asia in the past couple of months and we are delighted that the Abidjan-New York route is coming again.” Ethiopian Airlines currently operates to more than 130 international passenger and cargo destinations from its main hub Addis Ababa including to Abidjan, where Ethiopia provided 42 years of uninterrupted service since November 1980. Ethiopian will also be commencing a new passenger service to Atlanta, USA starting on 16 May 2023. Atlanta will be Ethiopian Airlines’ 6th destination in the US following its passenger services to New York, Newark, Chicago, Washington DC, and cargo service to Miami. www.ethiopianairlines.com

Key local & international stakeholders meet in Addis Ababa to finalize regulatory & legal issues ahead of launching Ethiopia’s first Industrial Gold Mining Project

Key local & international stakeholders meet in Addis Ababa to finalize regulatory & legal issues ahead of launching Ethiopia’s first Industrial Gold Mining Project February 23, 2023, Addis Ababa, Ethiopia: Major local and international stakeholders of the Tulu Kapi Gold Project, Ethiopia’s first modern mining development today officially kicked off a workshop that aims to resolve remaining consents and approvals paving the way to commence activities on the ground. The participants of the workshop include senior officials from the Ministry of Mines, Ministry of Finance, National Bank of Ethiopia, representatives of international financiers, Tulu Kapi Gold Mines S.C, and its UK parent Company KEFI Gold and Copper PLC. The Tulu Kapi Project is Ethiopia’s only ‘ready-to-start’ industrial mining project, making it the country’s first large-scale mining project for some 30 years, and is designed to the highest international standards. It, therefore, is imposing many demands on a regulatory system that the Ethiopian Government is upgrading, under strong leadership, determined to build a modern minerals sector. Mr. Harry Anagnostaras-Adams, Chairman of Tulu Kapi Gold Mines S.C and its UK parent Company KEFI Gold and Copper PLC during his opening remarks said “our agenda in this workshop is resolve the few remaining regulatory and legal issues so that the project can be financed in an internationally standard manner for the mining industry. We have agreed on many things over the years and there are not many left. We are all meeting to hopefully resolve them now and finish all project preparations quickly – regulatory approvals, legal documents, security protection of our people, and project and preparation of the community. It is to be recalled that KEFI, the gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, recently provided an update reporting that the finance plan for the c.US$320 million financing of the Tulu Kapi Gold had been agreed upon in principle by the lenders, so that draft definitive agreements could be finalized for approval by syndicate members and regulators. Minister of Mines His Excellency Habtamu Tegene during the occasion for his part remarked that “The regulatory issues remaining to be resolved are a very small subset of the many matters resolved already. And I think the very existence of this workshop demonstrates the very positive attitude of everyone. The remaining matters include central bank procedures for the project bank accounts to service the foreign debt and equity financing provided. I understand that by the time full production is happening in 2025, the foreign direct investment will have exceeded $400M on Tulu Kapi. Other regulatory matters include the direct arrangements between the banks and mine and other Ministries to provide some protection to the banks. Our objective here is to make this a 21st-century project in all respects, financing, community, environmental, social, and of course technical. Tulu Kapi Gold mining project is located 28km east of Ayra-Gulliso town in the state of Oromia and is owned by KEFI Minerals, which formalized the Tulu Kapi Mining agreement with the Ethiopian Government.  Tulu Kapi Gold Project will employ approximately 1,000 local people in 12 months and many more people indirectly. It will be perhaps the largest single export earner of the country generating over US250 million per annum of export dollars and a huge local supply requirement to feed our production operation. =ENDS= About KEFI Gold and Copper plc KEFI is focused primarily on the advancement of its three development projects in Ethiopia and Saudi Arabia, plus its pipeline of highly prospective exploration projects in these two large jurisdictions of the under-explored Arabian-Nubian Shield. KEFI targets that production in Ethiopia (at Tulu Kapi Gold) and in Saudi Arabia (at Jibal Qutman Gold and then Hawiah Copper-Gold) will, in the aggregate, generate cash flows for capital repayments, further organic growth and, ultimately, dividends to shareholders. KEFI operates these projects via joint venture operating companies Tulu Kapi Gold Mines S.C in the Federal Democratic Republic of Ethiopia (TKGM) and Gold and Minerals SLA in the Kingdom of Saudi Arabia (“GMCO”). These operating companies are technically guided and supported by KEFI so that each of these operating joint venture companies as soon as possible builds the local organizational structure suitable for long-term production as well as exploration and future development opportunities. We have already appointed some of the key senior management into TKGM and GMCO and the teams are being built up as we move forward.

ETHIOPIA: A NEW COMMERCIAL CODE

ETHIOPIA: A NEW COMMERCIAL CODE Investors looking to enter the Ethiopian market or deepen their presence should seek to familiarise themselves with some recent legislative changes of the country’s commercial law that are set to significantly alter the legal landscape for both local and international players. Chief among those is the new commercial code (the “NCC”), approved by the House of Peoples Representatives on 25 March 2021. It replaces the former code that had been in force for 62 years (the “1960 Code”). In this briefing, prepared by Anthony Giustini and Nadezhda Varbanova (from Clifford Chance)1 and Tadesse and Dadimos LLP (“TDL”), we look at the key changes brought about by the NCC. It is worth noting that the NCC only replaces Books I, II and V of the 1960 Code (which cover traders, business organisations and insolvency). Books III (on carriage and insurance) and IV (on negotiable instruments and banking transactions) of the 1960 Code will remain in force until they are eventually replaced by the Financial Services Code, which is yet to be approved by the House of Peoples Representatives. BUSINESS ORGANISATIONS Introducing One Person Private Limited Companies (“OPPLC”) The 1960 Code only provided for two types of companies – share companies (the equivalent of the English public limited company) and private limited companies (“PLC”) (the equivalent of the private company limited by shares). The former requires a minimum of five members in order to be created, while the latter a minimum of two, leading in practice to many issues linked to the artificial association of partners for the sole reason of meeting the minimum number of shareholders. This requirement was particularly challenging for foreign investors who were expected to find partners. The NCC appears to solve this by allowing, in Title VII, the formation of companies by the unilateral declaration of a single member, referred to as OPPLC. However, further measures may be necessary because although the NCC does not expressly state that OPPLC can only be established by a natural person, the provisions governing OPPLC seem to imply that OPPLC is only allowed to be established by a natural person (and thus the code does not unequivocally support investments through holding companies). Recognition of “groups” of companies Another feature of the NCC is that Ethiopian law now recognizes the concept of “groups of companies”, which may be of interest to investors wishing to set up multiple entities in the country (art. 550). To that effect, the NCC defines a “group” as an economic entity comprising a parent company and both domestic and foreign subsidiaries. It also defines the terms “subsidiary”, “parent company”, “wholly owned company” and “control”, thus providing the framework for group companies and certain governance practices (art. 551 and seq.). Furthermore, the NCC provides for a holding company to have the right to access information on its subsidiary (art. 557) and give instructions to the management of its subsidiary (art. 556), and the right to redeem the shares of a shareholder with less than 10% of the shares (art. 558). Recognition of branches of foreign business organizations In contrast with the 1960 Code, the NCC introduces provisions that regulate branches of foreign business organizations. The NCC allows foreign business organizations to carry out their business through their branches in Ethiopia, provided the branch (i) is registered in the Commercial Register kept by the Ministry of Trade and Regional Integration and (ii) has its own manager. The NCC defines a “branch” as a fixed establishment of a foreign business organization or a similar entity that is staffed and set up to pursue economic activity for gain on behalf and for the account of the said business organization or similar entity for a definite or indefinite period (art. 578 and seq.). According to the NCC, a branch does not have an autonomous legal entity distinct from that of the entity that owns it. In addition, the rights and obligations arising from its activity are part of the assets of the entity that owns it. CERTAIN ASPECTS OF COMPANY FORMATION AND OPERATION As a general matter, the drafters of the NCC have taken a number of steps to increase corporate transparency and ease of doing business in the country. Requiring only a Memorandum of Association (MOA) for company formation Whereas in the 1960 Code it was required that a company have both a memorandum of association and articles of association (AOA), only the former is required under the NCC, thus significantly simplifying the company creation process in Ethiopia. Prohibition of the issuance of bearer shares Under the 1960 Code, shareholders could either request bearer shares or registered shares. In an attempt to provide meaningful regulation and to improve anti-money laundering efforts, the NCC formally prohibits the issuance of bearer shares and only allows the issuance of shares registered in the name of the shareholder (art. 267). The NCC further requires that holders of bearer shares convert their shares into registered ones via application made to the issuing company within three years from the date of publication of the NCC in the Federal Negarit Gazeta. Bearer shares that are not converted within this time will cease to confer membership rights to their holders. In-kind contributions Unlike the 1960 Code, the NCC illustrates what constitutes an in-kind contribution. According to the NCC, an in-kind contribution can be in the form of money, movable or immovable property, skill, trademark, goodwill, patent, lease right, usufruct, or other contributions. However, members of PLCs, shareholders of share companies and limited partners in limited partnerships cannot contribute skill as an in-kind contribution. This prohibition is provided mainly to protect creditors in so far as the liability of members, shareholders and limited partners, which only extends to their contribution, skill or service, will be of no value to creditors. Hence, they are required to contribute something which has monetary value. Catching up with technology Finally, in a sign of recognition of the technological changes that have occurred since 1960, companies are now required to have a website (art. 492 and seq.) and board meetings may be held via electronic means (art. 309 and 520). COMPANY MANAGEMENT Some of the most fundamental changes to the country’s business landscape brought about by the NCC are in relation to how companies are managed. We examine below some key changes. Share companies The NCC allows non-shareholders to become directors so long as their number does not exceed a third of the total number of directors (art. 296). This aligns with international best practice in so far as the board may now include independent and/or professional board members. It is mandatory to establish an audit committee in the board of directors consisting of members of the board alone. A director who takes part in the day-to-day management of the affairs of the company cannot become a member of the audit committee (art. 301(3)). In another departure from the 1960 Code, a share company may (without this being mandatory) now provide in its MOA for a supervisory board (in addition to the executive board) (art. 331). Interestingly, the NCC does not introduce mandatory employee representation in the board – a practice often associated with two-tiered boards. Private limited companies (PLCs) In relation to PLCs, the main revision is that they now have the option of choosing to be managed by a board of directors (art. 518) rather than by one or more managers under the 1960 Code. A PLC must still have a general manager, but where it has elected to have a board of directors, the general manager must be chosen by the board (art. 514). Moreover, where the 1960 Code was silent about the pledging or the giving of shares of a PLC in usufruct, the NCC, explicitly permits shares of a PLC to be pledged or given in usufruct. In such a case, the right to vote at meetings is, unless otherwise agreed, exercised only by the pledgor or the person who gave it in usufruct (art. 505). On a further note, it is now a mandatory requirement for PLCs to have an independent and impartial auditor when they are composed of ten members or more or possess a total asset value in excess of ten million Ethiopian Birr (art. 518). TAKEOVERS AND SHARE TRANSFERS With respect to takeovers and share transfers, the NCC has introduced a number of rules specifically regarding share companies which should, in theory, open the door to further inbound M&A activity. For instance, where a bidder is making an offer for 50% or more of the shares in a company, such bidder is required to make a tender offer to all the shareholders (art. 293). The NCC also contains “squeeze out” and “sell out” provisions. The NCC entitles a parent company controlling more than 90% of the shares and votes of a subsidiary to purchase the remaining shares (art. 558). Likewise, if a parent company owns directly or indirectly more than 90% of the shares with voting rights in a subsidiary, the other shareholders can request their shares be purchased by the parent company (art. 562). The shareholders of a subsidiary can request in court that the parent company or another person designated by it purchase their shares. INSOLVENCY Insolvency procedures Ethiopia’s lawmakers have also overhauled the country’s insolvency regime by adding a new insolvency procedure and replacing the “schemes of arrangement” and “composition” procedures in the existing legal framework by “reorganisation proceedings”. In addition to bankruptcy proceedings, creditors may now employ “preventive restructuring proceedings” or “reorganisation proceedings” (art. 588). The stated objective of preventive restructuring proceedings is to ensure that, with the unanimous consent of affected creditors, viable debtors in financial difficulties are able to contractually, at an early stage, restructure their debt and continue operating, or prepare for the sale of the business as a going concern (art. 617 and seq.). Meanwhile, under reorganisation proceedings, the consent of a qualified majority of affected creditors is sought to either restructure the debts and operations of the debtor in a reorganisation plan or conduct the sale of the ETHIOPIA: A NEW COMMERCIAL CODE February 2023 Clifford Chance | 5 company’s business as a going concern to the benefit of its creditors (art. 635 and seq.). Apart from the above, the NCC includes a special proceeding for small and medium enterprises. It applies to both reorganisation and bankruptcy proceedings: the “simplified proceeding” (art. 816 and seq.). It replaces the existing, yet very impractical “summary procedure” under the 1960 Code, and aims to allow the opening of simplified bankruptcy proceedings for companies which cease payments provided that: (i) the value of their assets in the balance sheet of the last twelve months is less than twenty million Ethiopian Birr, or (ii) their last twelve months’ turnover is less than five million Ethiopian Birr as adjusted for inflation; or (iii) their total number of employees is less than ten. Bankruptcy remoteness The NCC further regulates jurisdictional issues and remoteness in bankruptcy proceedings (art. 601). There were no such rules in the 1960 Code. Accordingly, each member in a group is treated as separate and, therefore, deemed independent from other member companies in the group. Consequently, extending a proceeding to other member company(ies) of a group is not possible. Cross-border insolvency and jurisdiction Finally, in departure from the 1960 Code, which did not regulate international bankruptcy, the NCC has expressly adopted the principle of “centre of main interest test” for the adjudication of cross-border insolvency, and also provides that a judgment opening preventive restructuring proceedings, reorganisation proceedings and bankruptcy proceedings with respect to a debtor having its centre of main interest in Ethiopia shall have universal effect (art. 602). In addition, the NCC provides that Ethiopian courts have jurisdiction to open territorial proceedings if an establishment of a debtor is in Ethiopia, and in this regard, the effect of territorial proceedings of the debtor having an establishment in Ethiopia is restricted to the assets of the debtor situated in the territory of Ethiopia. Moreover, a related concern with cross-border insolvency is the recognition and enforcement of foreign judgments in relation to bankruptcy. While the 1960 Code did not contain provisions on recognition and enforcement of foreign proceedings and insolvency related judgments, the NCC sets forth the conditions to be fulfilled for the recognition and enforcement of foreign judgment, as well as the documents a person must submit along with its application for enforcement of the proceedings in Ethiopia (art. 603). CONCLUSION The changes introduced by the NCC bring the country’s legal landscape further in line with international standards. More flexible group structures, the introduction of a degree of independence for company management and standardized M&A rules, as well as an overhaul of the insolvency regime should be of interest to foreign investors. Of course, it remains to be seen whether the changes in commercial legislation will result in the levels and types of investment the Ethiopian state is hoping to attract, but the NCC definitely goes a long way in providing some certainty to local and international businesses. 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Ethiopia Proposing $150 Million License Fee For M-Pesa and Other Mobile Operators

Ethiopia Proposing $150 Million License Fee For M-Pesa and Other Mobile Operators The National Bank of Ethiopia, the country’s industry regulator is proposing a $150 million license fee from M-Pesa and other mobile operators who want to set up shop in the country. In a draft proposal signed by Solomon Damtew, the Payment and Settlement System Director at the National Bank of Ethiopia, the regulator is referring to the $150 million fee as an investment protection fee. This fee is described as the amount paid by foreign nationals who invest in businesses exclusively reserved for domestic investors or the government. This draft law opens the way for discussion on the progress of Safaricom’s application to launch mobile money services in Ethiopia. The new directive also increases the amount that can be held in digital wallets  Level 1 accounts are subject to a maximum daily electronic account balance of 10,000 Birr, and an aggregate daily transaction limit of 20,000 birr. Level 2 accounts are capped at a maximum electronic balance of 100,000 Birr and an aggregate daily transaction limit of 300,000 birr. Since entering the Ethiopian market, Safaricom had indicated it was looking to introduce its mobile money services M-Pesa into the country. This was never the case as the license issued to Safaricom only allowed the company to compete against state monopoly Ethio Telecom, it couldn’t offer its revolutionary money-remittance services due to legal limitations. In April of that same year, however, Ethiopia’s Central Bank drafted a Bill that opened the door for foreign investors such as Safaricom to offer mobile money services. The government-backed bill stated, “Foreign nationals may be allowed to invest in a payment instrument issuer or a payment system operator business, or establish a subsidiary which shall be licensed as a payment instrument issuer or payment system operator.” With a population of more than 100 million people, Ethiopia is a highly promising market for companies such as Safaricom. Ethio Telecom, the country’s largest operator has over 50 million subscribers Source: Africa Business Communities