Kenyan President, William Ruto, may have just earned back some good graces with the people of Kenya after dissolving his entire cabinet on Thursday. Only the deputy president and the prime cabinet secretary remain standing in what appears to be a dramatic response to mounting public pressure. Bureaucrats will now run the government until a new administration is appointed, according to Ruto.

This sweeping change comes after Ruto’s promise last Friday, following the #EngageKenyans X space, to “listen to Kenyans” more. This is his first move to assuage the vocal Kenyan populace about their desire for governmental overhaul.

No tax, now credit-risky: However, while Ruto may be scoring points with Kenyans, the international financial community is singing a different music. 

After Ruto’s administration back-pedalled on its plan to increase taxes and duties on consumer goods like bread, diapers, and sanitary pads, credit-rating agency, Moody’s has now rated Kenya a “credit-risky” country for investors, junking their rating from B1 to Caa1. With mounting expenses and debt, a forecast from a government analyst shows that Kenya needs about $26 billion over the next decade to pay off its existing foreign debt.

Yet, the country has had to slash its 2024/2025 budget by $1.3 billion—almost half of the $2.7 billion it would have raised from taxes if it hadn’t back-pedalled—and plans to borrow more.

While Kenyans are still calling for the resignation of some politicians in government offices, the hard-won victory, at least, is that Kenyans have stood together and overturned a decision that would have meant taxing households that can only afford to spend KES4,131 ($32) monthly. Echoing all over the streets of X is “rais William Ruto akisikiliza”—Swahili for “President William Ruto listens” (blame Google Translate if our Swahili is rusty.) Kenya still has a long way to go; but today, the government listens.

90% of businesses in Nigeria’s informal economy earn less than N500,000 in monthly profit. Click here to explore the financial profile of Nigeria’s informal economy from Moniepoint’s latest report.

Nigeria’s business regulator has dropped a bombshell: owners of the 4,173 BDC licences revoked in March 2024, have to rename their business or face dissolution.

What happened? The Corporate Affairs Commission (CAC) has issued a 3-month ultimatum to these BDCs to restructure their operations and change their names and objects. In CBN’s revocation circular, it stated that the affected BDCs have failed to either pay the licence renewal fees stipulated in its new guidelines for BDC operators, or haven’t complied with the directives issued in the Anti-Money Laundering, Countering the Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF) regulations.

Zoom in: The CBN issued a directive that all BDCs will now operate as either Tier 1 or Tier 2 BDCs, with Tier 1 BDCs required to pay ₦1,000,000 ($636) and ₦5,000,000 ($3,180) as non-refundable application and licence fees respectively. Tier 2 BDCs would pay ₦250,000 ($159) and ₦2,000,000 ($1,272) for the same purpose. 

But there is a stark difference between the two: Tier 2 BDCs can’t operate beyond one state in Nigeria, while Tier 1 BDCs are free to franchise their business. Additionally, BDCs are required to maintain a minimum capital base of ₦2 billion ($1,272,280 for Tier 1) and ₦500,000,000 ($318,070 for Tier 2), as opposed to the ₦35 million ($22,265) capital non-tiered BDCs operated with in the past.

Naira’s free fall: Since 2022, Nigeria’s currency has fallen by more than 350% against the US Dollar. The country’s apex bank is keen on floating policies and directives that help keep the parallel markets in check, including requiring BDCs to request data on private individuals who sell the equivalent of $10,000 and above to these BDCs. These directives have even led to two raids on BDC operators and arrests of over 100 of them, as the government believes they’re inflating prices and making the naira worse. 

BDCs remain agitated saying that the CBN capital requirements are huge as they are merely buyers and sellers—not deposit-takers.

Create and manage USD & Euro accounts from anywhere. Fincra allows you to issue accounts to your users, partners & customers to collect payments without the stress of setting up and operating a local account. Get started today.

South Africa’s telecom regulator, Icasa, is flexing its muscle against mobile network giants in South Africa. New amendments in the Electronic Communications Act aim to tackle potential market dominance in the mobile retail space.

What’s changing? Previously, market leaders MTN and Vodacom, who control the market with 31% and 41% respectively, had to disclose everything—retail prices, data revenue, tariffs—on their websites, and share confidential info with Icasa. Now, they only need to publish non-confidential reports publicly, while still sharing confidential details with Icasa quarterly. This move protects commercially sensitive information.

For big players like MTN and Vodacom, while this move means less demanding public disclosures, it also means more scrutiny from Icasa on price differences. For smaller operators, it makes it more difficult to compete and negotiate fair deals if they don’t know what their competitors are offering.

Not everyone’s happy. Cell C, a smaller player with 12% of the market share, wanted Icasa to maintain oversight over wholesale pricing for smaller operators (MVNOs) and access points (APNs). Icasa disagreed, arguing they haven’t found dominance in those markets. Telkom, which has 15% of the market, worries the changes create uncertainty in regulating market power. ISPA argues that Icasa can’t demand explanations from non-dominant players whose prices undercut wholesale costs.

Icasa listened to some concerns. They’re keeping a rule requiring dominant players to explain price discrepancies between retail and wholesale costs (regulation 7(f)). However, they’re scrapping a provision allowing Icasa to refer potential price squeezing to the Competition Commission (regulation 7(g)).

What’s next? This is a tug-of-war between regulators, big business, and smaller players. The amended regulations aim for transparency without harming competition. Whether it strikes the right balance remains to be seen.

Paystack Virtual Terminalhelps businesses accept secure, in-person payments with real-time WhatsApp confirmations and ZERO hardware costs. Enjoy multiple in-person payment channels, easy end-of-day reconciliation, and more. Learn more on the Paystack blog →

This week, South African digital banking platform TymeBank raised $77.8 million in a pre-Series C round led by African-focused growth-stage fund Norrsken22 and Swiss global impact investment firm Blue Earth Capital. (July 8)

Here’s the other deal for the week:

Tanzanian remittance startup Nala raised $40 million in a Series A round. The oversubscribed round was led by San Francisco-based VC firm Acrew Capital, with participation from DST Global, Norrsken22, HOF Capital, and existing investors, including Amplo and NYCA Partners. (July 9)
BasiGo, a Rwandan EV startup, raised $225,000 from Ireme Invest, a green investment facility, to upgrade its services in Rwanda and build new charging stations. (July 11)

Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. Before you go, our 2024 Nigerian Payments Report is out. Click this link to download it.

Migrate your IT infrastructure from AWS, Azure, or Google Cloud to Servercore and get a special bonus: three times the amount of your previous cloud bills in credits to spend on Servercore Cloud. Apply now to test our cloud platform.

You can still get an early bird ticket to the second edition of TechCabal’s Moonshot Conference!  From October 9–11, 2024, at the Eko Convention Centre, Lagos, Nigeria, you can join Africa’s biggest thinkers and players like join Iyin Aboyeji, Wiza Jalakasi, June Angelides, Kola Aina on a global launchpad for change. If you want to join these stakeholders in Africa’s tech ecosystem for three days of insightful conversations, then get an early-bird ticket to Moonshot 2024 at 20% off. 
The Nigeria Fintech Forum is set to hold its third edition on July 25, 2024, at the Civic Centre, Victoria Island, Lagos. Nigeria Fintech Forum plays host to the most senior leaders across Nigeria’s fintech and banking, uniting industry stakeholders who are defining the future of the ecosystem, If your work resonates with fintech, payments or banking, This is where you should be. Get a ticket here. 
JICA will organize an event related to Nigeria’s startup ecosystem in Japan on Sep 5th 2024. Find out more here.

Here’s what we’ve got our eyes on

The true cost of convenience: Why you pay more when you order food online
Exclusive: How a six-week freeze on customer onboarding slowed card demand for OPay and Moniepoint
Why Africa’s EdTech sector must focus on job creation

Written by: Emmanuel Nwosu & Stephen Agwaibor

Edited by: Timi Odueso

Want more of TechCabal? Sign up for our insightful newsletters on the business and economy of tech in Africa.

The Next Wave: futuristic analysis of the business of tech in Africa.
Entering Tech: tech career insights and opportunities in your inbox every Wednesday at 3 PM WAT.

TC Scoops: breaking news from TechCabal

ADVERTISE

To advertise with us send an email to

ads@bigcabal.com