Safaricom Ethiopia’s CEO Anwar Soussa leaves the operator
Anwar’s tenure lasted under two years. Safaricom Ethiopia has also not revealed who will take over his position. Safaricom Ethiopia’s CEO, Anwar Soussa, is leaving the company. Anwar joined Safaricom in August 2021, and his exit from the company will take effect at the end of July, ending a 2-year run. In a statement shared by Safaricom, the operator said, “Anwar Soussa, chief executive officer of Safaricom Ethiopia, will be leaving the business effective 31st July 2023 once his secondment comes to an end. Under Anwar’s leadership, the telco also secured a mobile financial services licence, paving the way for the launch of M-PESA services. Our heartfelt gratitude to Anwar for his leadership and contributions to Safaricom Ethiopia. Throughout his tenure, he has demonstrated unwavering passion and commitment, which have played a crucial role in our achievements thus far. We will announce Anwar’s successor in due course.” Safaricom Ethiopia’s parent company, Safaricom (Kenya), launched a bid to enter Ethiopia as early as 2020. Ethiopian authorities accepted the offer in 2021, when Safaricom launched pilot telco programs alongside its partners, Vodacom Group, Sumitomo Corporation, and CDC Group, collectively called Global Partnership for Ethiopia (GPE). The launch cost the consortium $850 million. Over the following months, Safaricom Ethiopia got its house in order by hiring employees, setting up network infrastructure such as data centres, and slowly onboarding customers. The official commercial launch occurred in October 2022. The company has since streamlined customer onboarding with digital biometrics and e-KYC processes at over 5,000 locations. It serves locals with up to five languages. It has also focused on being a youthful brand offering internet services, voice, SMS, and home 4G Wi-Fi. In the 2022/2023 FY results, Safaricom Ethiopia had a customer base of over 4 million, with approximately 2.1 million actively using their services while aiming to reach 10 million customers by 2024. The revenue generated by these customers amounted to KES 562.4 million (over $4 million), with mobile data contributing 63%, voice services accounting for 24%, and the remainder coming from messaging and mobile services. Safaricom has yet to reveal who will take over the role.
Read MoreShuttlers targets drivers with car models from 2007 as it expands its carpooling service
Shuttlers, a shared mobility startup, is expanding its fleet to meet carpooling demand. While it mainly deploys buses, Shuttlers is also intensifying its recruitment of private cars to join its network of vehicles. Nigerian shared-mobility sharing startup, Shuttlers is calling for more vehicle partners, including car owners. According to Shuttlers’ requirements, the cars must be a 2007 model or later, while the Hiaces and coaster buses must have air conditioning. Shuttlers operates a ride-sharing service powered by an app that lets users book seats on vehicles headed in their direction. The new cars Shuttlers is looking to add to its fleet will be assigned to new and existing routes. Using the app, customers can find and join these scheduled shuttles. Carpooling, the concept of sharing your car with other passengers on the same route as you, isn’t new. In Lagos, it’s common to see private drivers en route to work picking up passengers heading in the same direction. On some routes, gig drivers with Uber and Bolt sometimes pick up passengers, mimicking the practices of traditional public transport services. For car owners, carpooling is a way to recoup some of their fuel costs. While offline carpooling doesn’t need an app, it’s limited and may need you to wait longer than expected to find a driver with the same route as you. Shuttlers has found popularity with the Lagos working crowd who often live far away from their offices. Some employers arrange for Shuttler bus to transport their workers to and from the office exclusively. For workers whose offices don’t offer staff buses, Shuttlers is an unofficial staff bus, allowing them to pick their routes, and preferred seats, and commute in comfort. In a city that’s often chaotic, that comfort makes all the difference. Yet, some people will argue that while it’s relatively easy to get people to share a staff bus, carpooling is a more difficult proposition. Digitising carpooling has proven to be difficult by the limited success of companies like Hytch, Ridebliss, and GoMyWay which have at different times attempted it. But Shuttlers’s popularity with the office-going crowd may prove to be the secret sauce. The company’s founder Damilola Olokesusi told TechCabal that the company is redesigning its app’s interface to increase the visibility of its more diverse car options, affirming her confidence in this move. Yinka Aghedo, head of marketing at Shuttlers, also emphasized that the company and its customers are not unfamiliar with carpooling. “Although our flagship assets are buses, we have always complemented our existing fleet with cars and minivans,” he said. A look at the app shows that the app offers options to ride in a 6-seater sedan to some destinations. But TechCabal could not confirm if four-seater cars are currently on the app. Still, Yinka explained that “[We do use cars], and they are primarily required to be new vehicles [2007 models or newer] because we have observed that older cars tend to be less durable and more prone to breakdowns.” If this car model requirement rings familiar, it is because one of the ride-hailing giants, Uber, also had a similar condition when it entered the Nigerian market. Increased competition and the need to onboard more drivers eventually forced the company to relax those rules. Recent blog posts from Bolt show that the rules have been relaxed to include cars from 1998 models and sedans from 2002 models or newer. Uber’s website says that vehicles from the 2000 model year are acceptable. The initial requirements were likely established for safety reasons, similar to Shuttlers’ approach. However, they may have been adjusted to expand the pool of available drivers, as older cars are more affordable and commonly used by the targeted drivers of these ride-hailing companies. Regardless, Shuttlers remain confident in the superiority of its offering. Considering the state of Nigeria’s economy, there is no question of whether vehicle owners will be willing to partner with Shuttlers, mainly since it guarantees a predictable income. Shuttlers’s business model “People like to compare us to Uber and Bolt, but we operate very different business models,” Damilola told TechCabal during a call. She explained that, unlike Uber and Bolt, Shuttlers guarantees customers for its drivers as well as a predictable pay and route, unlike Uber and Bolt, where the drivers have to find customers by themselves and are left to guess how much they earn from a trip. “The amount a driver can earn on a trip is determined by the car they are providing and is agreed upon during their onboarding to Shuttlers.” The app shows that a customer’s price to be driven to a particular stop varies with the kind of vehicle. Cars cost more than coasters do because cars have limited seats, and customers have to sit through fewer stops.” The drivers are assigned to a route, and Shuttlers ensures that the seats are filled with customers.” Damilola told TechCabal.
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How to download WhatsApp Beta in 2023
WhatsApp Beta offers users the opportunity to test out new Whatsapp features and enhancements before they are released to the general public. If you’re eager to get your hands on the latest developments and contribute to improving the WhatsApp application, this article will guide you through the process of obtaining WhatsApp Beta. 1. Join the Beta Program To become a WhatsApp tester, you need to join the WhatsApp Beta program. Here’s how you can do it: a. Open Google.com on your Chrome device. b. Search for “WhatsApp Beta” in the search bar and open the first “Play sStore” option you get. c. Scroll down until you find the “Become a Beta Tester” section. d. Tap on the “I’m In” button to enrol yourself in the beta testing program. e. Wait for a few minutes for the Play Store to update, and you will receive the beta version. 2. Downloading Beta After enrolling in the beta program, follow these steps to download Beta: a. Open the Google Play Store. b. Search for “WhatsApp” and open the WhatsApp Messenger app page. c. If an update is available, you will see an “Update” button. Tap on it to download and install the beta version. d. If no update is available, you may have to wait for a short period until it becomes available. 3. Updating WhatsApp Beta Once you have successfully installed Beta, you can easily update it to the latest versions using the Google Play Store: a. Open the Google Play Store. b. Search for “WhatsApp” and open the WhatsApp Messenger app page. c. If an update is available, you will see an “Update” button. Tap on it to download and install the latest beta version of the instant messaging app. d. If no update is available, it means there are no new Beta versions released at that moment. You can check periodically for updates and install them once they become available. Final thoughts WhatsApp Beta Joining the WhatsApp Beta program allows you to access upcoming features and contribute to the improvement of WhatsApp. For example, the latest WhatsApp chat edit feature was long implemented on the Beta version before the general WhatsApp got it. So, by following the steps mentioned above, you can easily become a beta tester and stay ahead with the latest advancements in one of the world’s most popular messaging apps. Enjoy exploring the cutting-edge features and providing valuable feedback to the WhatsApp team.
Read MoreE-commerce 2.0 and the African landscape
This guest article was contributed to TechCabal by Osinachi Ukomadu. Lydia is a Ghanaian entrepreneur with an unwavering determination to create an African e-commerce empire. Despite encountering challenges like the unstable economy and limited infrastructure, she persevered. To build a successful e-commerce business, she knew she had to overcome hurdles such as securing reliable payment gateways, dealing with erratic internet connectivity, and consumer scepticism towards online shopping. So she spent a lot of time researching different solutions, trying them out to find the best fit for her business. Lydia collaborated with local banks and developers to create custom payment solutions for her website. She invested in modern technology to provide fast and quality service. Additionally, she established an efficient delivery network that could handle deliveries throughout the country. Despite her relentless efforts, her business struggled for years. Convincing people to buy online in a market where online shopping was not popular took a lot of work. But she kept pushing through, tinkering with her website, running promotions, and testing different marketing strategies to encourage people to try online shopping. Gradually, her perseverance started to pay off. Customers started appreciating the hassle-free and reliable service provided by Lydia’s website. People began to trust the entrepreneur and her business. Eventually, she expanded into new markets, attracting customers from all over Africa. It is undisputed that the African e-commerce landscape is progressing with the current surge of innovations and technologies. Currently, it is riding on the wave of e-commerce 2.0 and shows the tendency to adopt e-commerce 3.0 soon. However, in case you are wondering what the stages are about, here is an explanation for you: ● E-commerce 1.0: The e-commerce landscape is taking off with simply the basic functions of buying and selling online. ● E-commerce 2.0: Ushers in a more holistic experience, such as improved customer experiences and customization. Another aspect of e-commerce 2.0 is the B2B e-commerce system, where brands offer more innovative solutions and deal with a single business that would further distribute to others rather than dealing with multiple businesses. For instance, Market Force and Alerzo practise a form of B2B e-commerce. ● E-commerce 3.0: This era will focus more on integrating all the different aspects of e-commerce that a typical business owner would grapple with. It would provide more flexibility for the players and the customers. It would also combine both online, offline, and mobile experiences. With e-commerce 2.0, it is easy for regular mom-and-pop shops to access whatever product they want to sell in their communities, which drives a lot of offline African commerce. As earlier mentioned, e-commerce 2.0, which is more of the B2B e-commerce, is currently obtainable in Africa with the likes of Alerzo and Market Force. They are gaining ground because they tapped into the latent demand already in the market with the mom-and-pop shops. Additionally, large and fast-moving goods manufacturers like Cadbury, Nestle, and Coke have figured out how to disintermediate distribution mechanisms and acquire many mom-and-pop shops to help them distribute. Instead of going directly to the manufacturers to get products, e-commerce businesses operating within e-commerce 2.0 can act as distributors using technology to disintermediate that entire process and make it seamless. Furthermore, there’s e-commerce 3.0, where we’re gradually moving online. Some mom-and-pop shops will move online, with different players facilitating this transition through digitisation. These players will provide platforms for e-commerce businesses to sell peer-to-peer, sell on marketplaces, and even social platforms. For instance, Bumpa, Anka and other similar players are currently doing this. Some existing e-commerce businesses will adopt this new model even as we move towards this era. In addition, while we gradually move to e-commerce 3.0, B2B commerce will still be there for the hinterlands. But, likewise, there will be some businesses that will never go online, and that’s okay. It is usual for the kind of commerce system we have in Africa, and it serves the people as long as they get what they want. At the end of the day, it’s about goods moving from the manufacturing plants to the hands of the customers through whichever method is efficient and works for the customers at the right price points, at the right location, and at the right time. The rate of digital adoption I foresee a group of mom-and-pop shops getting digitised through players helping them with accounting and basic bookkeeping. The big challenge with many of these shops is that they give credit to people within the community, and it becomes challenging over a long period to keep track of that credit. I remember such happening when growing up. My grandma used to have a little shop in the village, and she would do exactly that. She would provide people with credit, but there would be different stories when it was time to pay back the money. We all have those experiences. A lot of that exists today, where nobody is keeping their books, or even if they’re keeping books, they’re incomplete or inaccurate. And so, some players are coming in to help digitise these books, making it easier for mom-and-pop shops to give credit to those within the community and collect that money when they ought to. This group of mom-and-pop shops may not necessarily sell online, but they are getting digitised. So, now their transactions are coming online, they can access credit, and they can perform several bank transactions that they couldn’t do in the past. Likewise, some of them would go all the way to selling online. That is how I see the process panning out, and it won’t be a complete transition, either. Some will be hybrid, while others will be entirely digitised. However, there will be enough players to support the two different spaces completely. As we look forward to Africa adopting e-commerce 3.0, we must remember that there are still many ways we can significantly harness e-commerce 2.0.
Read MoreBuilding from ground up in Kampala: An interview with Jonathan Ntege Lubwama
This interview was conducted and contributed to TechCabal by Luke Sheehan, chief editor and copywriter at CrossFund, an investor collective focused on emerging markets. Jonathan Ntege Lubwama is a young Ugandan with a challenging mission to build Ugandan startups to maturity. During a nine-month gap before starting university, and just a few years before the COVID crisis, he started reading about tech startups. Around the time he commenced his own studies, he founded a food delivery company for students. As with many first tries, it crashed after initial success, but he was not deterred. He moved on to his next idea: online real estate. That play received a grant but was impacted by the COVID lockdowns. He moved on from that, too, joining Kampala’s Digest Africa as a writer and editor. The journalism skills he developed in media would teach him how to carry out due diligence with founding teams. Lubwama’s focus now is building Benue Capital, which launched on March 31 this year. Benue is the first native venture capital (VC) firm in Uganda. What’s exciting in Uganda as you launch Benue Capital? Everyone understands tech in Africa as Kenya, Nigeria, South Africa, Egypt, with a second tier perhaps containing Ghana, Tunisia, and Senegal—Uganda might be in the third tier. Many people are building, and that is what is exciting here. The difficulty is that the quality of what they are building may not always be the best. That keeps the typical VC money out. What do you do at Benue that’s different? With Benue, we are not building like a typical VC. We invest like a venture studio; we do venture building with startups, and that’s a process that can take two to three years. We write smaller cheques to the companies, some of them pre-revenue, streamlining and helping them along the way, checking the metrics as we go, and checking the market. We help them make key hires, help with the legal side and the finances. We operate almost like a co-founder. After this process, the founders are in a better condition to go in front of the bigger VCs operating in the region to receive follow-on funding. What do startups most need mentorship with? Marketing, financing, coding? Am I allowed to say, “everything”? Some companies have great ideas but need help with everything. Others have a great product but can’t find users. Some have become well-known in the market but their product could be better. It sounds like, in some cases, you are truly going on the full journey with them. There have been some startups where the idea was there, but once we realised how big the problem set they were solving was, it was like starting from scratch. In those cases, we do take quite a lot of equity. Some of them are further along the journey already. Ugandan companies like Tugende and Asaak seem to focus on building financial opportunities and connectivity for entrepreneurs and have had success in fundraising in recent years. We already hear a great deal about the untapped potential of African SMEs. Food delivery is a trend that you yourself have tried. Can you highlight another trend? Solving the problem of credit is certainly a big one. A related one I would mention is the motorcycle taxi industry, the boda-boda taxis. I heard that, before, it makes up maybe 3–6% of Kampala’s GDP, which is a huge amount. A lot of people cannot afford to set up a company on their own in this area, but Tugende and Asaak help with that. Another name of significance is YC-backed fintech Numida (YC W22), which raised $12.3 million last year and perhaps $15 million in its lifetime. It offers loans to SMEs—obviously these companies are growing because credit is a problem. Solar energy is also receiving VC backing. Something to note is that a lot of companies receiving backing are led by expatriates, a situation one also sees even in Kenya; this highlights to me how absent local capital is. One sees companies raising tens of millions of dollars. They are not getting it from Uganda. They fly to New York, to Europe to raise it, even Japan. Those with the social capital or network to make it work are the ones getting ahead. Is there a specific problem you’d like to see solved? Proptech is interesting and underfunded. In the background, Uganda has a very big housing deficit. People often are forced to remain living with their parents [for longer than desirable]. If proptech can help move this along, then it’s a huge opportunity. I started one before (Twekobe) which linked property seekers to developers/agents/brokers. With no official qualification for real estate agents in Uganda, we built one internally, and a system to speed up house-hunting with an app. Since after we tried to solve these problems, we have not seen people take them on; people are building fintech and e-commerce companies, not proptech. It seems to be a problem in many parts of Africa, this difficulty in finding a home? It is the same in Nigeria, in Kenya. It’s everywhere. I’m surprised more people aren’t giving it attention. What will be the biggest challenge as you move forward with Benue Capital? I think simply showing people what venture capital is. Most people have a “grant-funding mentality” that comes from our existing system. The “tough love” mentality from the VC side, the “move fast” mentality is a new one for them. For some founders, I get this across by saying, “When you raise with us, you are competing with Kenyan startups, Nigerian startups.” As the investor I need to make the best returns, and this is not a grant. As we face an economic downturn, it’s even more important. Some founders have never mastered a term sheet, have barely a revenue of $2K but want to raise $500K. As you look around East Africa, what qualities are you looking for in founders? We want to know if they understand the problem
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Failure to launch: South Africa’s challenge in transforming technical talent into investable founders
South Africa produces the most software developers annually among the “big 4” tech hubs on the continent. Despite the technical talent, South Africa is dwarfed by countries like Nigeria and Kenya in producing scalable and investable startups. This article explores the disconnect in funnelling technical talent into entrepreneurship talent and how to address it. According to research [pdf] conducted by Google and the International Financing Corporation (IFC), South Africa produced 118,541 software developers, per 2020 figures. It was followed by Egypt, Nigeria, and Kenya with 86,599, 83,609, and 58,175 developers respectively. South Africa produces the most software developers on the continent. (Image source: TechCabal Insights) However, despite producing the most number of software developers, South Africa lags behind in churning out investable and scalable startups. According to data by Statista, Nigeria has the most number of startups on the continent, with 3,360 entities, followed by Kenya with 1,000 and South Africa with 660. When it comes to attracting venture capital [pdf], South Africa also lags behind, attracting $550 million in funding in 2022 through 78 startups. This figure is dwarfed by Nigeria’s $976 million from 180 funded startups, Egypt’s $812 million from 131 startups and Kenya’s $574 million from 90 startups. When it comes to producing fundable and scalable startups, South Africa lags behind countries like Nigeria, Egypt and Kenya (Image source: Disrupt Africa) So, why is South Africa’s tech talent and alumni not going on to found fundable and scalable startups? In theory, it would make sense for the number of tech talent to directly correlate with the number of investable startups in a market, a trend which holds in other markets like the US and Europe. Raphael Segal, a startup founder and industry veteran with over 30 years of experience in the industry, believes that South Africa’s talent pipeline problems stem from fundamental issues. This includes a lack of access to seed funding, which sees promising startups dying off before they achieve any sort of traction. “We have some fundamental challenges. This includes lack of seed capital to bet on these developers coming out of varsity to take their ideas to market. Even for those who are lucky enough to get funding, you see that even though they have the technical talent to build products, they lack the entrepreneurship skills to make a business case for those innovations. What then happens is that these startups run out of runway before really establishing their presence,” he told TechCabal. According to the Google and IFC report, the quality of technical talent coming out of South African universities is immense. For example, before going under in March, the Naspers Foundry’s R1.4 billion fund, the biggest in South Africa at that time, backed startups whose founders went to majority South African universities including UNISA, Stellenbosch, University of Pretoria, and largely, University of Cape Town (UCT) to the total tune of over R700 million. Beneficiaries of the now defunct Naspers Foundry were alumni of SA universities including Stellenbosch University, University of Pretoria and University of Cape Town. (Image source: preamble.africa) Another startup, which can trace back its origins to UCT, is Lipa Payments, a fintech startup whose product offering enables contactless payments via smartphones. Last year, the company raised a $600,000 seed round. According to co-founder Thando Hlongwane, who started the company whilst still pursuing his studies, what the university got right was its ability to support aspiring entrepreneurs by providing access to startup ideation initiatives, incubation facilities, and connecting students with the broader Cape Town startup ecosystem. “UCT definitely had an enabling environment [for building tech products]. The information systems department had an innovation lab which I was a part of. We had access to 3D printers, virtual reality machines, and a whole lot of other tech which allowed us to not only ideate but also create,” Hlongwane told TechCabal. “The alumni ecosystem of the school was also quite supportive and through it, I met Jason Basel, founder of Akro, who today remains a mentor of mine and helped one of my other startups, Zaio, raise its first round of funding.” Hlongwane further added that apart from the amenities offered by the university’s innovation lab, there were also ideation initiatives such as UCT Flux which allowed students to build new startups using a design thinking methodology. “The likes of Akro, who we connected with via the university, gave us free access to their co-working spaces which proved to be a huge help in our early days,” added Hlongwane. How to improve the “varsity project to successful startup” conversion rate in SA Like Hlongwane, Ndabenhle Ntshangase also started his startup, AirStudent Travel—a group booking platform where students can make travel bookings together and access group rates in the process—whilst still pursuing his degree in Economics at UCT. “I’m from Kwazulu Natal, in a small town called Fred, but I studied at UCT. At the end of each term, I had to travel between home and university and the trips got quite pricey. But I found out that there are also thousands of other students that did the same thing at the end of each term, so I came up with the idea for Airstudent Travel to address that pain point,” Ntshangase told TechCabal. On what could be done by South African universities and other tertiary institutions to foster the creation of sustainable and scalable startups by students, Ntshangase believes that beyond just amenities like co-working spaces and labs, there should be much emphasis on business development beyond just theory learning in classes. “It would be great for institutions to show support for the products created by these innovators. This would help with early momentum and traction which helps a lot when trying to raise funding. If the institution believes your product is good and they put you on the school newspapers, etc, they should translate that support into actual business transactions,” he added. Hlongwane further reiterates the need for schools to foster entrepreneurial lessons beyond just the classroom. “What my course gave
Read MoreICT regulator in Kenya fails to enforce guidelines for phone brands
Brands such as Samsung are now selling phones in Kenya without chargers, which is against the regulator’s guidelines. In 2018, Kenya’s ICT regulator, the Communications Authority (CA), published guidelines on features and technical specifications for mobile cellular devices imported into and distributed in the country. The guidelines outlined the basic requirements and technical standards that mobile cellular devices imported and distributed in Kenya must meet. The regulations covered a wide range of mobile cellular devices, including handheld devices like smartphones and feature phones, portable devices, vehicle-mounted devices, RF interface cards, and modems that connect to public mobile cellular networks using various technologies such as GSM. It’s important to note that the guidelines were not limited to the mentioned devices but encompassed a wider scope. Phone manufacturers are breaking the rules, and the regulator has done nothing much. The guidelines cannot be found on the regulator’s portal, meaning they must have been removed. Nonetheless, enforcement would have made more sense now when people in Kenya and other markets purchase devices without key accessories described in the document. For instance, the guidelines state, “A mobile cellular device shall be equipped with a wired or wireless earpiece facility.” These are earphones that customers use to listen to music or answer phone calls. Most devices officially sold in Kenya no longer ship with wired or wireless headsets. Another controversial decision that phone makers have made is selling phones without a charging brick. According to local regulations, this is not supposed to be the case. “The AC Adaptor for a mobile cellular device shall be fitted with a suitable and appropriate power supply cord and mains plug that meets the standards established by the regulatory body in charge of electricity in Kenya,” reads part of the regulations. The trend was started by Apple in 2020 when it launched the iPhone 12 series, which was sold without a charger. Other companies have followed suit, including Samsung, which started selling its phones in Kenya, such as the S23 lineup and select A-series smartphones without a charger in the box. The companies have mentioned environmental concerns for dropping chargers and earphones from phone packages. They argue that they are trying to reduce their environmental impact by reducing the amount of packaging and waste generated when they ship their devices. This helps to reduce the amount of e-waste that is produced. However, the major reason is cost savings. Smartphone brands save billions of dollars by not including chargers and earphones in the box. They do not have to pay for manufacturing and shipping these accessories. Phone brands are also in the business of making a killing from selling accessories to consumers. Apple started the trend with wireless earbuds (AirPods), which other brands replicated. The companies popularised Bluetooth audio, and removing earphones from packages forced consumers to spend more on wireless earbuds. The same argument can be made for chargers. For instance, some Samsung smartphones support up to 45W charging speeds but do not ship 45W bricks. Customers have to spend more on fast-charging bricks, which would have the same environmental impact, but at least manufacturers make money from the purchase. All is not lost because some manufacturers such as Chinese original equipment manufacturers (OEMs) like BBK Electronics (OPPO, vivo, and others), Transsion (TECNO, Infinix, and itel) and Xiaomi, among other brands, still ship their devices with charging bricks, cables, and earphones. We hope they will not follow the trend set by established brands and abandon packaging key accessories for their customers. TechCabal reached out to the CA via different channels to clarify why the guidelines are not being followed but received no response when filing this report. What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
Read MoreWith SA experiencing a cybercrime epidemic, startups are coming to the rescue
Cybercrime attacks are becoming a fairly regular occurrence in South Africa, with some research pegging the cost at R2.2 billion annually. What is causing this surge in attacks and how can this problem be tackled? Last week, streaming platform Showmax confirmed that a hacker had accessed 27,000 customers’ data, mostly login credentials, eventually offering them for sale on a hackers forum. Prior to this incident, JD Group, one of South Africa’s largest retail conglomerates, was also hacked, with over 500,000 customers’ personal data exposed. Hacking incidents in the country have become quite frequent, with the likes of Shoprite, DisChem, Liberty Insurance,TransUnion, and even government departments falling victim to cybersecurity breaches in recent months. “The reason attacks seem to be getting more prominent nowadays is that attack time is a lot quicker than it’s ever been before and the reason for that, among others, is encryption technology, which is now so progressive and available to businesses and consumers, is equally as available and can be leveraged by bad actors. This technology is so much faster than it’s ever been, meaning that security breaches can also happen much quicker. Back then, the dwell time for attacks, which is the time an attacker needs to make a break-in, was in the 290-day ballpark range. Nowadays, this has been reduced to about 84 minutes on average,” said Kate Mollett, senior director of southern Africa operations at Commvault, a cybersecurity firm. Mitch Adams, a cybersecurity professional who has done cybersecurity work for some of the country’s most prominent tech startups and corporates, believes that the advent of COVID-19 which pushed more people online and tough socio-economic conditions like unemployment, are the main reasons for the surge in cybersecurity over the last two years. “During COVID-19, work from home became so common, and it still is, which saw people taking their work away from firewalled work computers to at home with no any security whatsoever. Additionally, South Africa has high unemployment rates and technology professionals who cannot get a job can sometimes be tempted to exploit lax security measures in order to try to earn a living,” Adams told Techcabal over a call. According to INTERPOL’s 2022 Africa Cyberthreat Assessment report [pdf], South Africa leads the continent in the number of identified cybersecurity threats, with 230 million total threat detections. In second place was Kenya with 72 million. Phishing attacks, ransomware attacks and business email compromise (BEC) attempts were identified as the leading modes of breaches in the country. Research by Accenture also illustrates the severity of the cybersecurity landscape, with the country recording the third highest number of cybercrime victims worldwide, at a cost of R2.2 billion a year. The scale of cyber criminality in the country is further evidenced by the fact that the country is estimated to suffer 577 malware attacks an hour. The South African Banking Risk Information Centre (SABRIC) reported [pdf] that “gross fraud losses on South African-issued cards increased by 20.5% from 2018 to 2019” due to CNP fraud and banking malware attacks, putting South Africa as second only to Russia in this regard. Crypto fuelling the fire The mainstreaming of cryptocurrencies over the last three years seems to have fuelled the occurrence of ransomware attacks in the country, with retailer Shoprite falling victim to such an attack last year. RSAWeb, Transnet, and most recently, the Development Bank of Southern Africa, have been hit by ransomware attacks. Ransomware is a type of malware that encrypts a victim’s data and synchronises it to a remote node or blocks its access while a ransom is demanded. The average ransom demanded for the data is at least $300,000, mostly in crypto. “Ransomware criminals exploit the international nature of virtual assets like cryptocurrencies to facilitate large-scale, nearly instantaneous cross-border transactions, sometimes without the involvement of traditional financial institutions that have anti-money laundering and counter terrorist financing (AML/CFT) programs. Criminals further complicate their transactions by using anonymity enhancing technologies, techniques, and tokens in the laundering process, such as anonymity enhanced cryptocurrencies and mixers,” says the Financial Action Task Force (FATF). Another growing cybersecurity concern for South Africa involving crypto are scams, in which threat actors seek to defraud victims of their cryptocurrency. Over the last two years, South Africa has recorded two large-scale crypto scams. The first was a Ponzi scheme where thousands of investors were allegedly scammed out of $588 million in Bitcoin by the company Mirror Trading International in 2020. The second case involved the trading company Africrypt, whose founders allegedly absconded with $3.6 billion from investors in April 2021. Cryptocurrency scams seem to be quite lucrative in South Africa, one of the top ten countries worldwide where threat actors received the highest volume of cryptocurrency from illicit addresses. Additionally, South Africa was second only to the US in the list of countries from which most crypto scams emerge. Staying safe amidst the wave of attacks According to Mollett, the best way for businesses to stay safe during this wave of cybercrime attacks and breaches is to treat cybersecurity measures as a necessity for each and every business, not a privilege reserved for big companies only. “The prevalence of smartphones, through which both your staff and customers do everything from accessing emails to using banking apps, means that there is a huge risk factor for a breach and just education and awareness will not suffice. As a business, a breach always reflects back on you, so it’s best to take proactive measures to ensure safety. Recovery is great. What is so much better than recovering from something is preventing it in the first place. So Commvault made a key acquisition early last year of an organisation called ThreatWise, which is able to assist organisations with something we call “active defence”. And what that does is it provides early warnings of an attack within your environment before it even happens,” added Mollett. Adams also believes being proactive in combating attacks before they even happen is crucial in the fight against cybercrime attacks. “The
Read MoreKCB bank, Visa launch NFC-powered payments in Kenya where Safaricom One-Tap failed
KCB and Visa have partnered to offer contactless payments powered by NFC. Telco Safaricom had launched a similar service backed by M-PESA but failed more than five years ago. Kenya Commercial Bank (KCB) will now offer customers contactless payments using Android smartphones or Garmin wearables. The product is a first in Kenya, as other similar contactless solutions are not based on smart devices but a card such as those offered by Absa and Standard Chartered. Michael Kungu, KCB’s acting director of retail banking, said, “Eliminating the need for a dedicated terminal and enabling the merchant to use their cellphone to accept card payments is revolutionary and a significant game changer within the digital payments ecosystem.” Why is this important? Kenyans use mobile money services to settle bills at various retail stores. Debit cards are also another way to make payments. However, these two payment channels are not the quickest because of the friction involved. Cards, for instance, must be swiped and then authenticated with a PIN. Mobile money payments such as M-PESA are even slower because customers have to enter a pay bill number and authenticate the settlement with a PIN. Contactless payments overcome these issues since they offer convenience. They are effortless and speedy to use, as you don’t have to input a PIN code for all your frequent and minor transactions. Contactless payments offer advantages to multiple stakeholders. Issuing banks, in this case, KCB Bank, benefit from increased revenue as customers prefer using cards for low-value transactions rather than cash. Retailers enjoy faster check-out processes, improved security by reducing cash handling, and enhanced customer experience due to shorter queues. Readying contactless payments KCB, Visa, and Thales have partnered to introduce a new service for in-store payments using the KCB app and near-field communication (NFC)-enabled smartphones. Customers need to digitise their KCB Visa card through the banking app as a one-time setup to use the service. Once the card details are stored on their mobile device, customers can make payments by opening the app, selecting NFC payments, tapping their phone on a contactless-enabled payment terminal, and entering their PIN to complete the transaction. The PIN will only be needed for large transactions or less frequently accessed stores. The only issue that can be pinpointed is that a customer’s smartphone must be equipped with an NFC chip for the service to work. While many modern phones have NFC, some manufacturers skip the chip for cost-cutting purposes. “We are continuously working with our partners in the banking sector to enable new and enhanced experiences for consumers. We congratulate KCB for pioneering this technology in Kenya, which we believe will offer customers secure and convenient payment experiences. It builds on the work we have done to expand contactless payments, which has grown substantially over the last three years. This milestone is also indicative of the continued investment Visa is making in safe, reliable, and seamless digital payments as part of our mission to help individuals, businesses, and economies thrive,” said the country manager of Visa Kenya, Eva Ngigi-Sarwari. In 2017, Safaricom launched a similar product powered by M-PESA and NFC. The telco provided an NFC tag that could be attached to smartphones for M-PESA payments at retail stores. The One-Tap product did not pick up and was later discontinued. READ MORE: Kenya boosts payments interoperability with state-backed QR codes The use of bank cards to make payments is on the rise in Kenya. According to the Central Bank of Kenya (CBK), there were only 676,275 transactions made with bank cards in August 2014. By May 2022, that number had grown to 4.4 million transactions. What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
Read MoreArtificial intelligence can help scale inclusive digital public goods in Africa
The recent popularity of generative AI programmes has become a hot topic in conversations about society and technology. Allowing users to harness the power of cutting-edge technology in dreaming up remarkable creations, some see these applications as the next step in the history of technology while others see it as a danger to humanity. In the coming years, AI technology will likely remain at the centre of topics such as employment, copyright, finance, law, human creativity, and democracy. Al has another dimension beyond tackling transactional efficiencies: integrating AI-based applications with digital public goods. AI’s power for democratisation and inclusion has not been fully harnessed so far. If used properly, AI solutions could create a fairer world in which everyone can produce art, find legal advice, write software, and access information to an extent never before possible. Moreover, the ease with which AI applications can be used and their cloud-based nature could be essential in narrowing the digital divide. Consider financial inclusion, a perennial hot topic in discussions on banking across the Global South, where most inhabitants are unbanked: AI could prove a great disruptor. The cost of rolling out financial programmes is often too much for public sector institutions to bear. Still, the application of AI integrated with public digital ID and trusted data systems can provide sound financial advice to the low-income segments of society at minimal cost and bring millions into the economic mainstream. To broaden this, embracing a digital economy has become a prerequisite for leapfrogging legacy issues and moving into the next economic and social development phase. But for that to happen, the playing field of digital public goods must be expanded. Foundational rails Defined by the UN Secretary-General António Guterres’ Roadmap for Digital Cooperation as “open source software, open data, open AI models, open standards and open content that adhere to privacy and other applicable laws and best practices, do no harm, and help attain the Sustainable Development Goals SDGs”, digital public goods are an integral part of the open architecture of the internet. I like to describe digital public infrastructure as a set of rails on which you can run all sorts of trains—slow, fast, and bullet trains. The rails form the standard foundation on which the industry can design applications for various sectors, all with their own rules and regulations. Once this system is in place, you can’t deny anybody access to digital services because it is a public good. To participate in the financial digital public good, you only need access to the internet, a digital identity, a mobile phone number and a bank account. We need to identify the parties involved and ensure that the data is verifiable and that both parties consent to that data being exchanged. Once this is established, financial transactions can take place, and you can then move money and data at low cost with enormous benefits in efficiency and output. Putting a digital public infrastructure in place is worth the cost. In one of the world’s most successful projects in this regard, India has managed to build the infrastructure for 1.5 billion people at the cost of a dollar per person. Aadhaar is the world’s largest biometric ID system and was described by World Bank chief economist, Paul Romer, as “the most sophisticated ID programme in the world”. The benefits are already apparent. India’s finance minister, Nirmala Sitharaman, said that for the billion-plus dollars they had spent, they had already realised US$27 billion of benefit. The time is ripe for a digital economy This conversation might already be old hat in Africa, where mobile money is widespread, with Kenya’s Safaricom rolling out several telco-based products, such as the ubiquitous M-PESA, which several countries have adopted. It is an excellent system but they do not have a regulatory framework as robust as in financial services, such as banking. Nevertheless, given the public’s familiarity with digital transactions and their trust in it, as well as the advantages brought about by the African Continental Free Trade Area, African financial regulators can come together to align their thinking towards the creation of interlinked digital public infrastructure. Doing so would ensure that it is accessible, affordable and inclusive for all users to reap the benefits of increased digitalisation. Globally, Singapore has demonstrated the approach and has been working to establish multi-jurisdiction-linked digital services by linking its payment service PayNow with the faster payment systems of other countries, such as PromptPay in Thailand and UPI in India. Further, the Bank for International Settlements (BIS) is collaborating with several central banks on Project Nexus to establish a framework to develop multi-jurisdiction payment connectivity, and five countries in ASEAN, including Singapore, are part of this effort. Regardless of today’s popular diverse opinions regarding the future of AI, there is no doubt that AI is a massive boost to the speed, efficiency, accuracy, and security of day-to-day transactions. This is especially evident when AI takes advantage of the foundational new generation of well-structured and digital public good software deployed by countries such as Singapore and India. The software is also helping nations develop and diversify their economies more rapidly and raise growth while creating millions of jobs. What remains clear is that digital public goods will shape the evolution of finance across the coming decades, and we shall all be the better for it. —Sopnendu Mohanty, is the chief fintech officer, Monetary Authority of Singapore, and chairman of the board, Elevandi.
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