Letshego Microfinance Bank blames profit decline on naira and cedi devaluation
Letshego has reported a P14 million (~$1.04 million) loss caused by currency depreciation, mainly in Nigeria and Ghana. This translated to a 7% slump in its profit before tax for H1 2023. Pan-African microfinance bank Letshego has said that the devaluation of the Nigerian naira and the Ghanaian cedi caused a 7% decline in the company’s profit before tax in H1 2023. Letshego said this equated to P14 million (~$1.04 million) in foreign exchange losses compared to a P23 million (~$1.7 million) gain in the same period last year. The company’s profit after tax was also down 12%. Letshego, founded in and headquartered in Botswana, operates in eleven markets on the continent and reports its earnings using the Botswana pula. Over the first six months of the year, the naira depreciated 69% against the pula due to Nigeria’s liberalisation of its foreign exchange rate. The cedi, on the other hand, depreciated 30% against the pula, spurred by Ghana’s runaway inflation. Despite stating that the macroeconomic conditions causing the FX losses were beyond the company’s control, chief financial officer Gwen Muteiwa said Letshego would proactively address the losses. Responding to a question from TechCabal about how the company plans to hedge against the losses, Mutaiwa shared that the holding company would extend borrowing to its Nigerian and Ghanaian subsidiaries, who might not be able to borrow from the local market. “One of the things that we do is that instead of giving that money to them in pula, we give it to them in naira, for example, so that if there are any exchange movements between the pula and the naira, it doesn’t hit the numbers directly,” Mutaiwa said. “Because at a country level, [the subsidiaries] can’t necessarily hedge some of these positions. But we can. So what we do is having given them local currency funding in Naira, we then go to the bank and then ask them for a hedge of the dollar against the naira.” Letshego, which is listed on the Botswana Stock Exchange, commenced operations in Nigeria in August 2016 and Ghana in January 2017. Over the years, it has doubled down on its East and West Africa operations, even appointing a regional CFO for the West Africa markets. According to CEO Oupa Monyatsi, when taking away the FX losses, the company’s profit growth was 4% year-on-year, driven by the well-performing East and West Africa markets. “Our East and West markets, which are the markets with scale, are doing well. The double-digit growth in most of these markets demonstrates that actually, the underlying businesses are performing optimally. It is when you translate them to pula, that you then lose the benefit of these double-digit and profitable growth because of the depreciating local currencies,” Monyatsi said.
Read More
TechCabal Daily – Visa taps away in Kenya
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning In its fight against shady money dealing, Kenya is treading into gray area. The East African country’s parliamentary committee on Finance is suggesting some major tweaks to the Anti-Money Laundering and Combating Terrorism Financing Laws (Amendment) Bill, 2023. These changes could make it completely legal to eavesdrop on the private phone calls and emails of anyone suspected of being involved in money laundering and funding terrorists. In today’s edition Patricia has a new solution Visa launches tap-to-pay in Kenya 16 African startups to compete for Startup Battlefield Competition Glamera expands to Saudi Arabia The World Wide Web3 Event: The Moonshot Conference Opportunities Crypto Patricia to use debt token to repay customers after $2 million hack Hanu Fejiro, Patricia CEO Patricia claims to have figured out a way to repay its customers. The Nigerian crypto platform released a whitepaper stating that it will use its newly created debt management token—the Patricia token (PTK)—to repay customers the $2 million in customer funds lost in a hack. How is this possible? The token is a stablecoin pegged to the US dollar, meaning that 1 PTK = $1. Customers who had BTC or naira balances on the platform at the time of the hack will have their funds converted to PTK. They can then redeem their PTK tokens for USDT, which can be converted to other cryptocurrencies or fiat currencies. However, all conversion rates will rely on the asset’s US dollar value as at April 29, 2023. According to Hanu Fejiro, the company’s CEO, “Our OTC Desk has been fully operational, and it is growing and bringing in revenue. We are totally confident in the redemption of Patricia tokens and that we will be able to pay our customers with the proceeds from our operations and our fundraising efforts.” He also added that Patricia is “working with legal partners and the product team on measures to launch a feature that guarantees transparency.” Zoom out: Valid concerns exist due to the lack of a smart contract for Patricia’s debt token. Fejiro addressed this by noting that the vesting schedule is still in its initial phases as users have not yet transitioned to Patricia Tokens. This will kick off on a scheduled basis once the app is relaunched. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Fintech Visa partners with banks in Kenya to launch contactless payments Image source: TechCabal Visa is rolling out tap-to-pay in Kenya. The payment technology company has announced its partnership with Kenyan banks and fintech’s to launch a new Tap To Pay service. What’s a tap-to-pay service? It’s a payment system that allows individuals to conduct payments through their banking app by tapping their Near-Field Communication (NFC) enabled smartphones or wearables at any contactless-enabled payment terminal. The service is also more secure, as it uses Visa’s tokenisation ability to protect customer data. Thales, a digital security leader, fuels the service, and this eliminates the need for cards or physical wallets during transactions. ICYMI: Safaricom once trialled the service back in 2021 with M-PESA 1Tap which was the quickest way to pay using MPESA. However, the One-Tap product did not pick up and was later discontinued. Zoom out: Visa has said it is continuously working with its partners in the banking sector to enable new and enhanced experiences for consumers. In June this year, the company partnered with Kenya Commercial Bank (KCB) to offer contactless payments powered by NFC. Grow with Vesicash Unlock new opportunities for your business with Vesicash! Seamlessly expand into emerging markets using our secure, all-in-one and cost-effective payment infrastructure. Contact Vesicash via our website www.vesicash.com or reach out to our dedicated team at info@vesicash.com Startups 16 African startups selected for Startup Battlefield competition African startups are battling it up. Sixteen African startups have been selected for this year’s edition of the TechCrunch Disrupt Startup Battlefield pitch competition. The competition showcases the top 200 early-stage startups chosen from around the globe, across multiple industries who compete for the 100,000 equity-free prize. Image source: Zikoko Memes The selected startups will receive pitch training from TechCrunch journalists and VCs and then pitch to investors attending the conference over three days. Nigeria had the most representation at this year’s competition with 7 startups, Uganda with 2, South Africa with 3, Kenya and Uganda with 2 startups each, Tanzania and Ghana with 1 startup respectively. Zoom out: Zoom Out: The selected African startups for this year’s edition have the chance to join a prestigious list of companies like Dropbox, Trello Yammer, Tripit, and Redbeacon, who have emerged from the competition. Fintech Glamera is expanding to Saudi Arabia Image source: Zikoko Memes The Arabians are getting glammed up! Egyptian beauty services booking platform Glamera has successfully obtained the fintech licence “SoftPOS” from Saudi Payments. The company says the licence will “unlock new horizons of growth and deliver an unparalleled customer experience” in the Saudi market. The newly acquired fintech licence paves the way for the launch of Glamera Pay, a service that offers secure payment options. Glamera? Glamera was launched in September 2019, to allow users book appointments with contracted beauty providers, including salons, clinics, spa, gym, and dental. Glamera serves audiences across Egypt and Saudi Arabia. Zoom Out: In October 2022, Glamera raised $1.3 million seed funding to help it expand operations across the MENA region. By setting up shop in Saudi Arabia through the acquisition of the fintech license, Glamera’s goal of expanding into the MENA region continues to thrive. Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $26,061 + 0.14% – 11.29% Ether $1,650 + 0.02% – 12.12% BNB $217 + 0.06% – 10.06% Cardano $0.26 + 1.67% – 14.53% * Data as of 04:20 AM WAT, August 29,
Read MoreTwo SA startups selected for TechCrunch Disrupt Startup Battlefield competition
Omnisient and FinanceGPT have been selected to partake in the TechCrunch Disrupt Startup Battlefield 200 pitch competition. South African startups Omnisient and FinanceGPT have been selected as part of 16 African startups for this year’s edition of the TechCrunch Disrupt Startup Battlefield pitch competition. The selected startups will receive pitch training from TechCrunch journalists and VCs and then pitch to investors attending the conference over three days. Omnisient is a “privacy-preserving” data collaboration platform that provides cryptography, advanced analytics, and AI to enable financial services institutions (FSIs) to leverage new consumer data sources in a secure and regulatory-compliant manner. Omnisient’s platform claims to have already enabled local banks to use retail shopper data to identify 3.2 million individuals as credit-worthy who would have previously been denied credit due to limited background information. In July, Omnisient was also selected to join the World Economic Forum as a Technology Pioneer. Commenting on the selection, the startup stated that partaking in the competition will help accelerate its fundraising process. “We are in the midst of speaking to investors locally and overseas to raise Series A funding for international expansion and further development of our technology,” said Omnisient CEO, Jon Jacobson. “Being invited to join TechCrunch’s Start-up Battlefield at TechCrunch Disrupt is not only international recognition of the disruptive nature of our platform and the impact we are having in growing financial inclusion, but also a fantastic opportunity for us to fine-tune our pitch and share our story with an audience of US investors.” FinanceGPT, on the other hand, uses machine learning to generate charts and insights based on data, providing a comprehensive view of a company’s financial health and forecasts to empower financial decision-making. The startup claims to have a user base consisting mostly of financial professionals and investors in multiple countries across Europe, Oceania, Asia, North America, South America, the Middle East and Africa. “We are happy to be selected for Startup Battlefield 2023,” said Phiwa Nkambule, CEO and co-founder of IPOXCap AI. “This is a great opportunity for us to showcase FinanceGPT to a global audience of investors and industry leaders. We believe that FinanceGPT has the potential to revolutionise the way financial analysis is done, and we are excited to share it with the world.” TechCrunch Disrupt Startup Battlefield 200 is one of the world’s most prestigious early-stage pitch competitions, with previous participants including Dropbox, Yammer, Tripit, and Redbeacon. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read MorePatricia’s ambitious plan to repay customers has one important caveat
Last week, Patricia announced that it converted customers’ assets into its Patricia Token (PTK), months after the company made a $2 million hack public. Now the company has said its plan to repay customers is tied to its profitability. Nigerian crypto platform Patricia has announced that it will use a newly created debt management token—the Patricia token—to repay customers the $2 million in customer funds lost in a hack. According to Patricia’s white paper, a smart contract will lock the tokens—which are dollar equivalents of respective customers’ assets—and gradually release them on a monthly basis. While the company did not specify the token’s vesting schedule, it was easy to spot one key detail: customers will only get their money back if Patricia is profitable. Per Patricia’s white paper, “This [smart] contract will lock the tokens and gradually release them based on the exchange’s profitability. This approach aligns users’ compensation with the success of the platform, promoting transparency and trust.” As a private company, Patricia does not disclose its financials, and customers will have questions about how they can independently verify the company’s profitability. Hanu Fejiro, the company’s CEO, told TechCabal, “Our OTC Desk has been fully operational, and it is growing and bringing in revenue. We are totally confident in the redemption of Patricia tokens and that we will be able to pay our customers with the proceeds from our operations and our fundraising efforts.” He also added that Patricia is “working with legal partners and the product team on measures to launch a feature that guarantees transparency.” There are also valid concerns about the absence of a smart contract for Patricia’s debt token. On the token’s vesting schedule, Fejiro said, “The vesting schedule remains in its early stages since users are yet to convert to Patricia Tokens. This would commence on a scheduled basis once we relaunch the app.” While public opinion is primarily skeptical of Patricia’s debt token, the company’s founder is hoping this will play out like Bitfinex, a cryptocurrency exchange platform that successfully used debt management tokens to recover 119,756 bitcoins eleven months after they were compromised in a hacking incident. But Patricia will need to do more to win over an understandably jaded public; it will need to show more transparency, share more information about its smart contract, and think announcements through before it shares them with the wider public. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read MoreBridging the digital divide for socio-economic empowerment
Keynote speech delivered by Oswald Osaretin Guobadia, managing partner DigitA, at the 2023 Lagos Business School Tech Founders Summit. This subject is deeply rooted in the problem we must solve. The digital age has brought unprecedented opportunities, but it has also revealed a stark reality: the existence of a digital divide that threatens to deepen existing inequalities. It is our collective responsibility to ensure that this divide does not become a chasm and that every citizen of Africa can benefit from the digital evolution. Why is this important? The answer is clear: digital inclusion holds the promise of transforming societies and economies, uplifting communities and individuals, and fostering innovation and growth. I strongly believe that in the near future, a nation’s poverty line will share coordinates with its overall digital literacy and access levels. Essentially, a country’s economic status will be linked to the extent of digital training and access of its producers and consumers. The efficacy of consumer access and producer enablement will define the economic vitality in the society. Digital inclusion enriches lives, but only for those who have access to connectivity. While the pandemic accelerated the adoption of digital systems in Africa and across the world, universal connectivity remains a distant prospect in the least developed countries. In the United States, they have offered states grants to support universal connectivity initiatives, as it was discovered during COVID-19 that a large number of citizens were essentially offline. The International Telecommunication Union (ITU) states that 2.9 billion people globally remain offline, that is around 37% of the world’s population. As of 2022, only 40% of the African population had access to the internet, leaving over 871 million people without any form of access. Now, with a ratio of 2:8 rural-to-urban access where 64% of urban dwellers had access to the internet compared with 23% of people in rural areas, people from poor communities, indigenous, and ethnic minorities, remain disconnected from an increasingly interconnected world. It is noteworthy to mention that this digital inequality doesn’t end with supposed poor Africans only; it also manifests majorly between genders. Women make up about half of the world’s population, but despite recent advancements, they still make up a disproportionate—and growing—share of the offline population, with South Asia and sub-Saharan Africa having the largest gender gaps globally. In Africa, it is estimated there are three men for every two women online. For these demographics, the potential of information and communication technologies to foster connections, facilitate essential services in healthcare, education, finance, commerce, governance, agriculture, and facilitate information sharing remains vastly untapped. One of the major factors responsible for Africa’s lags in internet connection—compared to global averages among youth, women, and those in rural areas—is the lack of access to internet-enabled devices. Internet-enabled devices like smartphones are critical for access to the digital economy and their affordability has improved steadily over many years. However, it still remains expensive for many Africans, with the cost of the cheapest available smartphone being equivalent to about 39% of the average monthly income. For a large population, smartphones remain out of reach, especially for women and people living in rural areas. Other accessibility barriers in Africa, include power shortages, high internet costs, and inadequate infrastructure. For instance, lacking power impedes mobile network establishment, leading to fewer devices in use. Moreover, device affordability poses another challenge, where network availability doesn’t translate to access due to actual device cost. We can die of thirst sitting on the ocean. So, who are these consumers and producers? To avoid delving into technicalities, let’s consider digital consumers as the user base or citizens from a governmental standpoint. Producers can be seen as founders and operators and also citizens. Producers innovate, creating markets, while consumers engage, deriving value and impact. In essence, the link between digital inclusion and economic prosperity is undeniable, and addressing barriers to access is crucial for Africa’s progress. What is the opportunity? I know that it has been established that there is a significant gap in digital access between urban and rural areas, as well as disparities along gender and socioeconomic lines. Ladies and gentlemen, there is more hope than despair. These statistics paint a compelling picture. What this means for us is the numbers are not just a challenge; they are also an opportunity waiting to be seized. Consider this (just 3 examples): Africa has the youngest population in the world, with over 70% of its inhabitants under the age of 30. Such a high number of young people is an opportunity for the continent’s growth–—but only if they are empowered to realise their best potential. Involving young people in politics and society is not merely a question of inclusion, but one that is vital for economic growth, innovation, peace, and security. By empowering these young minds with digital skills, we unlock a potential workforce that can drive technological innovation and economic growth. By 2030, young Africans are expected to constitute 42% of global youth. This means that Africa’s youth hold the key to its development potential. In 2019, a GSMA report estimated that closing the gender gap in mobile ownership and use could deliver US$140 billion in additional revenue to the mobile industry over five years. Closing the gap would also deliver an estimated US$524 billion increase in economic activity by 2025. Mobile technology has already demonstrated its transformative power across the continent. The mobile money revolution, for instance, has provided financial services to previously underserved communities. Harnessing similar innovations could unleash tremendous progress in education, healthcare, agriculture, and more. What does digital inclusion look like? Digital inclusion encompasses not just access to technology, but the ability to use it effectively. The stakeholders involved include governments, private sector entities, civil society organisations, educational institutions, and the communities themselves. At its core, it’s about ensuring everyone, regardless of their background, can participate in the digital world. It’s about equipping individuals with digital literacy skills, allowing them to access information, services, and opportunities. It involves establishing proper policy, legal and
Read MoreDespite legal issues, Flutterwave moves closer to securing Kenyan operating licence
Flutterwave will likely receive a payments licence in Kenya, but it still has a lot of legal hurdles to overcome. Flutterwave is currently making key developments to its operations driven by its plans to onboard more international partners and widen its market base. The company has made progress in securing a payment license in Kenya, a key African market. Several legal issues may have delayed the licensing process, but there are positive signs that the continent’s most valuable fintech company will get the regulatory nod in Kenya. Payments licence in Kenya is incoming Flutterwave has received name approval for its remittance business and is a few steps closer to acquiring a money remittance license from the Central Bank of Kenya (CBK). Specific details about when this will happen remain undisclosed, as it is within CBK’s jurisdiction to make this decision. “We got the name approval from CBK for our remittance business; it is a great start and a show of good faith towards getting a money remittance license from the Central Bank of Kenya (CBK). On the timelines, we cannot speak to that as it is solely at the discretion of CBK. We are, however, in active communication with CBK and are optimistic about the process,” Flutterwave said in an email to Techcabal. READ MORE: Flutterwave wants to make Kigali its settlement hub in East Africa Flutterwave remains optimistic about its cases in Kenya In 2022, ARA froze $3 million linked to Flutterwave, Hupesi Solutions, and Adguru Technology Limited over money laundering and fraud suspicions and another $52.5 million from Flutterwave and six other companies. While the first suit was formally withdrawn in March this year, the court rejected the ARA’s withdrawal request for the second case due to insufficient reasons provided by the agency and the importance of transparency. High Court Judge Nixon Sifuna’s ruling highlighted the need for ARA’s decisions to be guided by public interest. He emphasised the agency’s role in combating corruption, economic crime, and money laundering and declined the withdrawal attempt due to the lack of explanations for its decision. However, this ruling seems unlikely to delay Flutterwave’s efforts to secure a license for operating in Kenya after receiving name approval from the CNB. “As it currently stands, the court has directed the ARA to take some steps to complete the ARA’s withdrawal of the matter against us. We are optimistic about the ARA obeying the Court’s directions and closing out the matter. Regardless, we will continue to actively cooperate with the Court and the ARA, where necessary, to bring the matter to a conclusion,” Flutterwave told TechCabal.
Read More
Next Wave: The Ethiopian miracle has been waiting too long
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 27 August 2023 Some housekeeping news here. From September, we’ll be adding new voices to Next Wave as two of TechCabal’s senior reporters, Joseph Olaoluwa and Kenn Abuya, join me on the Next Wave beat! This is the last (for now) edition of our ecosystem reviews and was co-written with Kaleab Girma, of Shega, an Addis Ababa-based integrated media, data, and intelligence firm that focuses on the innovation, technology, and startup space in Ethiopia. Now on to today’s edition. Ethiopia has always enchanted foreigners with its rich history and dated traditions. Some of them are preserved in the form of solid rock monoliths that defy explanation, given the crude tools of the era they were built. More recently, Ethiopia enchanted global emerging market watchers with its average GDP growth of more than 10% from the mid-2000s to the 2010s. This economic growth miracle dipped to 8% in 2015 and has since struggled to break 7% since 2019, around the same time that violent fraternal conflict drew storm clouds over economic reform and progress. But investors, especially investors with geo-political interests, are not backing down. This historic nation of more than 120 million people and Africa’s 7th largest economy is far too important, especially in the face of a fracturing global order. This is despite lamentations from investors that Ethiopia is yet to shake off the remaining vestiges of its closed economy philosophy, they can’t seem to shake themselves away. Ethiopia is the one gem that, despite contradictions, global investors seem determined to have a foothold in. Naturally, technology is not left out of this drama. In 2021, the battle was over a drawn-out bidding process for a second telecom licence which a US-led consortium won over a China-backed consortium. Here’s how The Africa Report described the aftermath of the bidding in June 2021. “A new front” or even “a war of proximity” is taking place between Washington and Beijing, one that is creating “a new hitch” in the “deal of the century”. From the pages of the Wall Street Journal to the columns of the French press, the Ethiopian telecoms sector’s liberalisation—one of the most divisive battles within the industry in Africa over the past decade—has turned into a surprising ideological and geopolitical battle, open to the most varied interpretations. For those not familiar with the story, the US International Development Finance Corporation (DFC) backed the Vodafone-Safaricom consortium with a $500 million loan that enabled it to offer $850 million to beat their rival bidder, South Africa’s MTN Group. MTN’s $600 million offer was backed by the Chinese Silk Road Fund, which is financed by the China Development Bank and Eximbank of China, among others. Eventually, the DFC backed out of the Safaricom deal, but the deal was already done. And American money would still come in in another form. Earlier this year, the International Finance Corporation (IFC) joined the Safaricom-Vodacom consortium as a minority shareholder. To gain this privilege, the IFC paid $157.4 million for its equity position and put up an additional $100 million loan to Safaricom Telecommunications. Partner Content: How Africa’s Business Heroes is advancing entrepreneurship on the continent On the other side of the equation, Ethiopia has benefited heavily from Chinese investment in infrastructure, especially industrial and technology parks stretching back the last two decades. As you know, last week, the second-most-populated African country received an invitation to join the BRICS bloc of developing nations alongside Egypt. Partner Message Did you know that you can embed financial services with SeerBit Alpha? No??? Well now you do! Say goodbye to developmental stress and hassles, and launch your fintech products faster when you build with SeerBit Alpha. Click here to learn how you can add fintech to your product Why is all of this important? Because technology, especially today (and in fact for all time), never exists in isolation from economic prospects and the resulting social and political consequences. And Ethiopia, with a mostly young population, is as good as any candidate for the combination of youth, economic reform and tech-assisted advances to unlock the Ethiopian miracle. This miracle is already in the early stages so I invited my friends from Shega, to help shed light on this. The next section is what Kaleab had to say. A growth boom all round Early stage startups dominate the nascent ecosystem. Chart by Shega Research Not too long ago, news about Ethiopian startups securing funding was a rare occurrence. Nowadays, these advancements grace media outlets and capture public attention with greater frequency. Venture capitalists are increasingly directing their focus towards Ethiopian startups, while Ethiopia is witnessing a rapidly growing pool of startups launching various digital services that dared to change the traditional ways of doing business. Digitisation in Ethiopia is advancing at an accelerated pace. It stands as a national agenda supported by several international development organisations. With a vision to cultivate a digital economy, the Ethiopian government has enacted a comprehensive digital strategy known as “DIGITAL ETHIOPIA 2025”. This strategic framework is designed to extend digital services to pivotal sectors like agriculture, manufacturing, and tourism, with a particular emphasis on empowering the private sector. In addition, the country’s first National Digital Payments Strategy was passed in 2021 aiming to use digital financial services as a vehicle to enhance financial inclusivity. Several person-to-government and person-to-business payments have been digitised, with citizens only being allowed to pay for certain services such as fuel using only digital platforms. The state contends that it is at the forefront of driving the adoption of digital platforms throughout Ethiopia. In parallel, a massive liberalisation agenda is unfolding, including one that has seen a century-old state telecom monopoly come to an end. In the past three years, several home-grown fintech startups have also erupted making waves after working areas were freed for them simultaneously with changes. The likes of Chapa and Santimpay were able to process one billion birr (around
Read More
👨🏿🚀TechCabal Daily – Africa is BRICd up
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Musk is making do with his promise to make X the everything app. Last week, the platform announced two critical updates. First, it’s introducing grid display to its media tab so the media gallery will look similar to Instagram’s. And verified organisations will be able to list their job openings on X because there’s no better place to find suitable talents than a platform that rewards people for exaggeration In today’s edition Two African countries to join BRICS Hackers attack SA’s defence department SA joins China’s space alliance TC Insights: Big data for Africa The World Wide Web3 Event: The Moonshot Conference Job openings Economy Two African countries to join BRICS GIF Source: Tenor BRICS is adding more blocks to its building plans. The world economies have invited six new countries to join their crew. BRICs—Brazil, Russia, India, China and South Africa—have announced that they will be expanding their membership to include Egypt, Ethiopia, Argentina, Iran, Saudi Arabia and the United Arab Emirates. The expansion will take effect on January 1, 2024, if the countries accept. The announcement was made at the 15th BRICS Summit in South Africa last week. Side-bar: The BRICS countries are a group of emerging economies that have been meeting regularly since 2009. The group’s goal is to promote economic cooperation and development among its members. The group presently has five member states and a combined GDP of over $28 trillion, making it one of the most powerful economic blocs in the world. The BRICS countries are also major players in global trade, accounting for over 25% of world trade. The expansion of the BRICS is seen as a way to increase the group’s influence on the global stage. The new members are all important economies in their own right, and their addition to the group will give the BRICS a larger voice in international affairs. Zoom out: The expansion of the BRICS is a major development that is likely to have a significant impact on the global economy. Already, at the Summit, the group also announced plans to reduce dependence on the US dollar and global payments systems SWIFT which BRICS says is used as a bargaining chip in political discussions. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Cybersecurity Hackers attack South Africa’s defence department Cyber threats against South Africa are increasing. Last week, a ransomware gang called “Snatch” reportedly hacked the country’s Department of Defence (DoD) and stole over 200 TB of data. While the department is yet to confirm the hack, a source close to the case told South African publication MyBroadBand that the hackers have already posted about 1.9 TB of the data it stole online. Per MyBroadBand, the information released includes contact details for senior government officials including phone numbers of South African president Cyril Ramaphosa. ImageF Source: MyBroadBand A long time coming: The hacker group has also claimed responsibility for the hack. In a post online, Snatch claims that the data was stolen over the course of a year. It also notes that it specifically released the data the same week of the BRICS Summit to spread its message that South Africa is laundering arms for the US and money for corporations. “The BRICS summit for Africa is just a screen issued by the white masters from a country with a constantly stumbling president,” the attackers said. Zoom out: So far, DoD has yet to confirm the attacks or comment. This marks a continuous strain of cyber attacks on South African institutions following the 2020 hack of the ministry of justice where R10 million ($536,000) was stolen from the Guardian’s Fund, the 2021 simultaneous hacks on the ministry of justice and Space Agency, an attack on credit bureau TransUnion in 2022, and several other hacks. The 2023 MEST Africa Challenge is officially live MEST Africa is calling on all early-stage tech startups operational in Ghana, Nigeria, Kenya, Senegal, and South Africa to showcase their innovations on a global stage and vie for the grand prize of $50,000 in equity investment. Read more. Space South Africa joins China in space alliance Image Source: YungNollywood South Africa and China have become besties. During Chinese President Xi Jinping’s visit to South Africa last week, both countries signed two agreements to officially work together on space cooperation. What are the agreements? One agreement covers human spaceflight, and the other involves the International Lunar Research Station, a plan to build a base on the moon. The agreement is the first of its kind between the two countries and is part of China’s efforts to bolster its influence in the competition for lunar dominance against the United States and its allies. Forging partnerships: Space has become a frontier in the competition between the US and China, and they’re seeking out allies in their race to the moon’s south pole. The US has already made deals with more than two dozen countries to cooperate in space activities. China has been working closely with Russia, but their partnership might not be as strong anymore. Why? Over the weekend, Russia’s spacecraft, Luna-25, crashed on the moon, and this is likely to further strain relations between China and Russia. South Africa is teaming up with China, but some African countries like Nigeria and Rwanda are working with the US. Many groups want to offer space services to African nations, and this might create divisions. TC Insights Big Data for Africa’s digital economy African countries are increasingly turning to big data technology to drive economic growth as the continent pursues its digital economy ambitions. A report by the World Bank found that the digital economy in Africa could be worth $180 billion by 2025. Big data has facilitated the growth of e-commerce in countries
Read MoreKhalil Halilu’s ShapShap is working to improve last-mile delivery in Nigeria
Khalil Halilu is the founder of ShapShap, an Abuja-based logistics company looking to expand into other parts of the country and continent. In October 2022, ShapShap, an Abuja-based logistics company, won the Supernova Challenge Pitch competition at the Gulf Information Technology Exhibition (GITEX) in Dubai. The competition, one of the biggest pitch competitions in Africa, Asia and the Middle East, comes with a prize money of $8,000, which the startup used to facilitate some of its expansion plans. ShapShap, founded in 2019 by Khalil Halilu, has two offerings: a logistics app for drivers and vendors and an e-commerce app for vendors, with features ranging from delivery logistics to routing and payments. TechCabal spoke to Halilu about the challenges of running a logistics startup in Nigeria today and what opportunities for growth exist. How did you come up with the idea of ShapShap? KH: Logistics is something that moves everything. I was privileged to experience smooth logistics services while in school abroad. So when I came back to Nigeria, I thought investing in making deliveries easier was essential. There are a lot of SMEs in Nigeria, and commerce, primarily e-commerce, is thriving here. We must build a working system to enable products to move from retailers to consumers as seamlessly as possible. I saw a huge opportunity and threw my hat in the ring. What have been some of your biggest challenges in four years of operations? KH: I frequently tell people that I don’t envy anyone in the logistics industry because of the challenges. There are many of them, in terms of poor government policies, operational costs, and infrastructural deficits, but the biggest for us is the human element. By human element, I mean getting people to work effectively with the resources provided because that is within our control. You build a technology, and the riders use it differently or decide not to. We have riders who try to beat the system by bypassing payments, trying to get fake ratings etc. We don’t have the best work ethic here in Nigeria. Another challenge that rocks the industry is government policies and the lack of regularisation. There are a lot of players in the industry and no clear guidelines on how to enter or operate properly. Anyone can start a logistics business, as all it takes is to buy a bike, open an Instagram page and set prices. These people you’re competing with, and the customers on the other end don’t care. They want the cheapest prices. What is ShapShap’s strategy for improving the quality of customer experience? KH: Our unique strategy focuses on our riders and keeping them satisfied. We value our riders because they’re the business drivers, literally and figuratively. We try to make the work attractive in terms of salary, which helps us attract quality staff. We also approach it like any other job, there are growth opportunities, and we incentivise riders with bonuses so that they know that it’s a real job with a future rather than a transit job they’re doing to pass the time. What do you hope to see in the next few years in the logistics space? KH: I’d like to see better policies in place. We need better policies to support entrepreneurs because few are currently on the ground. We’re dealing with the effects of the fuel subsidy removal and high exchange rates. All these repel investors from putting their money into the country because they don’t know what they will wake up to the next day. What are the growth opportunities for ShapShap? KH: Africa has one of the fastest-growing populations in the world. We also have a booming e-commerce market, which makes last-mile delivery crucial. A lot of upcoming e-commerce platforms are looking for fulfillment partners that are already established, to take the headache of last-mile deliveries off their hands. We have over 400 riders and have completed tens of thousands of deliveries already, so we have the background required. We also want to collaborate with as many other logistics providers as possible. We’ve collaborated with Red Star, one of the biggest logistics companies in West Africa. We are also working on collaborating with Max to give us access to electric bikes for our riders. Collaboration is one of the fastest avenues for growth, and we don’t play with being able to leverage another organisation’s strength. We’re constantly looking for partners and companies with the same values to expand into other African cities and ride the current economic recession together.
Read MoreEden Care Medical: Y Combinator’s latest health insurance bet in Africa
Moses Mukundi, founder and CEO of Eden Care Medical —Y Combinator’s Summer class, 2023— speaks to TechCabal about how the team is re-imagining healthcare. In 2018, Moses Mukundi had a life-threatening health emergency. As an investment banker accessing health insurance, he needed the doctor to sign off on his form. “My insurance rejected paying a claim because the doctor had stamped but had not signed the claim form. I had an acute allergy attack and had to be treated immediately,” he said on a call with TechCabal. And as the turnaround time took much longer than usual, Mukundi had to pay out of his pocket to get treated. That was his motivation to begin Eden Care Medical, a health tech startup. Eden Care Medical uses technology to simplify access to healthcare through its group life insurance and wellness plans. Mukundi believes this can be achieved by making healthcare accessible in terms of price point while aligning payments of healthcare premiums to a monthly-based payment— as opposed to 12 months upfront. With the right product, Mukundi believes that via this method, fraudulent claims are reduced and a viable plan is generated. He tells me that he launched his startup first for personal reasons. “This is not just something that I think has a large impact. But it’s also personal. I think I would not want anyone else to experience what I went through just because of a very minute detail,” he said while speaking from San Francisco. According to Mukundi, access to Healthcare, which is facilitated by health insurance, remains very limited. “About 15 million Africans go into poverty every year due to a large medical bill. When you look at health insurance penetration in Africa, it’s sitting at about 0.2%,” he said. In Rwanda, healthcare has been historically low over the years. The country has suffered shortage of medical personnel and high cost of accessibility. President Paul Kagame is paying more attention to this problem by creating health posts and unbundling the problem to a system of health insurance providers called mutuelles de santé. When I tried to use the app on the call, I was presented with a login that needed me to provide my company’s email login and password. Mukundi said the major target market for Eden Care is workers (remote or full-time) and students. “Already, the national health insurance covers anyone who’s unemployed. So, that’s not our target market. We believe where insurance will have material impact is for the employed and students. The product here is built with freedom for you to be able to buy the product through your employer. Or you can buy the product directly,” he said. To that end, the issue of defaults is lesser. He remarked that he had never encountered default issues while growing the startup. The road to Y Combinator As an investment banker who moved from Uganda to Rwanda to work, Mukundi knew all there was about crunching numbers and selling insurance—he spent six years understanding its failures and experiencing those failures on a personal level. During the pandemic, he got admission to Wharton for an MBA. But he didn’t finish. “I was not going to pay another $100,000 for another Zoom university. So I decided to drop out of school and go build a business,” he told me with a chuckle. In 2017, the Rwandan Central Bank had placed a ban on new health insurance licences. According to the Eden Care Founder, the market was on the verge of collapse as competitor firms in the space cut prices until it became unsustainable. The Central Bank of Rwanda responded by regulating the market. After three months of convincing, the apex bank lifted all restrictions in August 2021. At this stage, the startup sought a funding raise to meet the financial obligations involved in getting a licence. Mukundi did not disclose how much was raised in pre-seed funding, but by the end of 2021, they succeeded in gaining their license and the funds required to forge ahead. In January 2023, the startup rolled out the product to the market. Mukundi says Eden Care Medical is present in over 500 healthcare facilities, but some of the challenge of building a digital infrastructure is repeatedly rethinking its tech infrastructure. “This is probably the most complex startup I have done in terms of all the number of moving parts, right? You are dealing with six plus stakeholders as opposed to many startups where you largely have two or three maximum stakeholders. This is a lot more complex, and you must figure out how to build technology and connect different parts of this stakeholder group.” The biggest win Despite the challenges with regulation, Mukundi’s biggest win is cutting the time of seeing a doctor from 30 minutes to five minutes. Instead of queuing to fill out paperwork before seeing a doctor, you can go to the hospital and show them an OTP on your mobile phone through your app and see the doctor. “We are making health insurance simple, fast and stress-free,” he said. Mukundi said that their tech infrastructure is fast enough to onboard staff in large organisations without having to fill out any paper. Mukundi says insurance is easily sold through an aggregator and that aggregator here could be your employer, university, or an association. This is how Eden Care Medical onboards large groups and receives premiums through which the individuals enjoy healthcare. Next steps The usual funding given to Y Combinator firm is around half a million dollars. Mukundi says the funds are for expansion into other African countries, making sense of the data they have collated in building something new and perfecting the app on wellness and prevention. “Eden care products are focused on wellness and prevention because we have identified that there is a big gap in the market,” he said. The Y Combinator funds, according to Mukundi, is a validation of efforts of the growth of African healthcare and the innovation of AI in diagnostics and
Read More