Navigating Shifting Sands: Regulatory Changes Impacting African Tech

Across the continent, policymakers are reassessing foreign investment frameworks, creating both opportunities and challenges for tech startups.

Mixed Signals from Key Markets

Ghana’s parliament recently passed legislation that offers a double-edged sword. While scrapping a USD 500K minimum capital requirement for wholly foreign-owned enterprises is welcomed news, a draft bill reserves digital infrastructure licenses (cloud hosting, SaaS) for citizen-owned entities only.

This policy shift threatens established firms like Hubtel and mPharma that rely on foreign partnerships and expertise. Communications Minister Samuel Nartey George maintains the aim is to protect local companies and build indigenous capacity but acknowledges concerns about potentially deterring investment.

Kenya’s Finance Bill 2026 proposes a 15% capital gains tax on offshore sales of shares “derived from Kenya,” targeting structures used by venture capitalists for exits. Tax experts warn this could extend beyond intended targets, impacting legitimate reorganizations and raising compliance complexities.

Uganda’s Protection of Sovereignty Act criminalizes promoting foreign interests over national ones—though a broader provision requiring registration as a foreign agent has been narrowed to apply only to political funding.

Timing Concerns Amid Funding Slowdown

The regulatory changes coincide with an already challenging fundraising environment. Data from Africa: The Big Deal shows investor participation at a five-year low, with total equity funding down 13% in the first four months of 2026.

While initiatives like the Africa Finance Corporation’s USD 100M investment push seek to fill the gap, questions remain about whether local capital can fully compensate for regulatory headwinds.