Five interesting takeaways from GTCO’s “Facts Behind the Offer” presentation
Guaranty Trust Holding Company (GTCO), the parent company of GTBank, Nigeria’s 5th biggest bank by assets, announced a public offer to raise ₦400 billion, joining Fidelity Bank and Access Bank to raise capital on the stock market to meet the capital requirements imposed by the Central Bank. On Monday, the lender held a “Facts Behind the Offer” presentation to investors, regulators, and stakeholders on the main floor of the Nigerian Exchange Group (NGX). Here are five interesting takeaways from the presentation. GTCO was always going to raise fresh capital According to GTCO’s GCEO Segun Agbaje, the plan to raise fresh capital was in the works months before the CBN increased the capital threshold for lenders by tenfold. “We aren’t only raising this because the Central Bank asked us to do so. We have decided before that we are going to raise capital. We are going to grow the business in Nigeria and grow the non-banking businesses,” he said. 90 billion shares up for grabs GTCO will offer 9 billion shares at ₦44.50 each. The lender hopes to conclude the offer by the first week of August. The Leading issuing house is Stanbic IBTC Capital Limited, while joint issuing houses include Absa Capita Markets Nigeria, FCMB Capital Markets, and Vetiva Advisory. Aggressive growth If there is anything to remember about the presentation, it has to be Agbaje’s emphasis on the lender’s growth and expansion ambitions. “There is no Nigerian company that has ever made a billion dollars in profit and we are going to be the first ones to give you that,” he said. GTCO, which has four main business segments, will use ₦370 billion of the total amount for the growth and expansion of the banking businesses (including recapitalisation of GTBank Nigeria). ₦22.4 billion will be used to expand the company’s asset management and pension business. It also plans to use N133 billion for corporate, commercial, and SME loans. The group will also expand to new countries like Senegal and grow existing subsidiaries like Ghana, Cote d’Ivoire, and Kenya. GTCO’s thesis for expansion is about scale and not just building across different markets. “I am not going to name any bank. We aren’t in 40 countries, there is no business in 40 countries. It is a waste of time. We go to countries where there is GDP growth, youthful population, and loan-to-population ratio is low,” Agbaje said. Maximising shareholder value Agbaje spoke about how the group prioritises maximising shareholder value. GTCO has averaged a 29% return on average equity (RoAE) in the last ten years. The company, with a market capitalisation of ₦1.39 trillion, accounts for about 9% of stocks traded on the NGX. “If you have invested in us over the last ten years, your return is about 253%,” Agbaje said. New subsidiaries growing rapidly In the last two years, GTCO has made inroads into non-banking industries, launching three new businesses: a fintech subsidiary, HabariPay, GT Fund Managers, and GT Pension Managers. These businesses have grown 10x, Agbaje claimed. The group hopes to strengthen these businesses with the new capital. “In three years, these businesses must give us 5% of group profit and they must be number one, number two, or number three in whatever industry they find themselves,” Agbaje said.
Read MoreHow businesses can prepare for the coming wave of technological disruption
This article was contributed to TechCabal by Teresa Morahan. In an era of unprecedented uncertainty, the headwinds facing businesses are stronger than ever. Businesses navigate a complex landscape where economic shifts and geopolitical challenges loom large on the horizon. In such turbulent times, the critical question is not whether change will occur but how effectively leaders can prepare for and adapt to it. Enter the Techtonic States research study by BDO Digital, a pioneering examination of the business landscape in 2026. This ground-breaking study envisions four distinct scenarios for the future, each shaped by the interplay of various factors. At the heart of every scenario lies one common denominator: technology. Indeed, technology’s transformative power emerges as the driving force behind resilience and innovation across all scenarios. Whether mitigating risks or capitalising on emerging opportunities, advanced digital solutions hold the key to success in the years to come. As leaders brace themselves for the challenges ahead, the message is clear—the ability to harness technology effectively will determine whether businesses thrive or falter. According to the findings of the Techtonic States study, a staggering 84% of business leaders believe that accelerating technological innovation is essential for survival. Incremental gains are no longer sufficient; organisations must embrace data-driven change to remain viable in an increasingly competitive landscape. From AI adoption to leveraging data analytics, businesses are doubling down on digital transformation to gain a competitive edge. However, amidst the promise of technological advancement, the looming threat of cyber risk persists. Across all scenarios outlined in the study, the spectre of cyber-attacks — including cyber fraud, espionage, and ransomware attacks — cast a shadow over business operations. In fact, cyber security is seen as the third most impactful risk to businesses over the next three years, after the cost of capital and economic downturn. Despite this awareness, our research reveals a concerning gap in cybersecurity preparedness, particularly among high-growth businesses. With cyber threats evolving in sophistication, organisations must prioritise investment in innovation and protection to safeguard their future. Yet, technology alone is not enough to guarantee success. As the study highlights, organisational culture plays a pivotal role in realising the full potential of technology. A receptive culture, aligned corporate goals, and a skilled workforce are essential ingredients for driving meaningful transformation. Unfortunately, many leaders express concerns about their organisation’s ability to fully leverage the benefits of technology due to a lack of implementation strategy and change management prioritisation. In an environment characterised by rapid change, agility and adaptability are more critical now than ever. Leaders must cultivate a culture of experimentation and openness to external expertise to stay ahead of the curve. Strategic partnerships also emerge as a crucial factor, with most leaders emphasising the importance of choosing innovation partners carefully for competitive advantage. As we stand on the cusp of a new era of technological disruption, the path forward is fraught with challenges and opportunities. The Techtonic States study serves as a wake-up call for businesses to embrace the spirit of preparedness, adaptability, and innovation. By leveraging technology effectively, fostering a culture of resilience, and forging strategic alliances, organisations can confidently navigate future uncertainties. The stakes are high, but the rewards for those who dare to embrace change are even more significant. The time to act is now. — Teresa is a Partner and Head of the Global Technology, Media and Entertainment, and Telecommunications teams at BDO Ireland. She has worked with clients ranging from large Indigenous companies to listed international groups with overseas operations. Teresa is a member of BDO International’s International Financial Reporting Standards (IFRS) Working Party, which sets IFRS policy for the BDO global network.
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Collaboration is key for Unified Payments as it begins recording POS transactions
Collaborate. That’s a word Agada Apochi, the CEO of Unified Payments (formerly ValuCard), used six times in ten minutes as he talked about his company’s new license. It’s easy to understand why; Unified Payments is a product of collaboration, founded twenty-six years ago by 14 Nigerian banks. In April 2024, Unified Payments was granted a Payment Terminal Service Aggregator licence (PTSA), only the second to be issued by Nigeria’s Central Bank. PTSA holders must have a processing and switching licence, an average uptime of 99% in 2023, and ₦1 billion capital requirement. The licence allows Unified Payments to maintain a database of payment terminals and record point-of-sale (POS) transactions, which is crucial to transparency as agency banking has found itself at the focus of fraud claims. The ubiquity and convenience of POS devices (they outnumber ATMs by over a million) have made them the desired channel for cash withdrawals. Yet with massive popularity comes the attention of bad actors. In 2023, POS transactions contributed 14% of the total amount lost to fraud, according to the Financial Institutions Training Centre (FITC), a financial research and advocacy organisation operated by the Central Bank of Nigeria. The central bank’s solution has been more transparency, requiring banking agents to register with Nigeria’s Corporate Affairs Commission in May and now improving visibility into POS transactions. Unified Payment’s history of battling fraud Unified Payment premiered cards with EMV chips—a global standard to improve card security—in Nigeria. “We enabled [Nigeria] to be compliant with [the] EMV standard, which led to a reduction of fraud at ATMs by over 99%. ATM fraud was eradicated,” Apochi said in his Victoria Island office. That history of tackling fraud at ATMs and providing payment processing services might have played a part in Unified Payments’ license as the central bank looks to provide Nigeria’s financial services industry with an alternative to NIBSS. “Upon getting our license, we had a meeting at the highest level between our company and NIBSS to understand [each other] and share points and ideas of how we can work together to ensure that there is service availability because what is most important to every operator and the Central Bank of Nigeria is service availability,” Apochi said. “As a processor switch, you are competing with others but as a payment terminal service aggregator, from our point of view, we are collaborating without any form of discrimination in the industry for the regulators to have oversight over what is going on,” Apochi added. Working with Fintechs The PTSA license will require Unified Payments to work with the leading companies in the agency banking sector, such as Moniepoint, Opay, and Palmpay. These companies have been in regulatory waters in recent months and in April, the central bank directed five Nigerian fintechs to pause onboarding new customers. That ban lasted six weeks and was lifted after fintechs committed to a list of conditions set by the central bank. For Agodi, Unified Payments will help fintechs “achieve their business goals without running afoul of” regulatory requirements. “The primary focus for us as a service aggregator is not about [the] enforcement of rules and regulations. It’s about enabling service providers, industry operators, to provide their services and solutions in compliance with rules and regulations defined by the Central Bank of Nigeria,” he said. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read MoreBridging the AI gap: Practical steps for enterprise adoption in Africa
This article was contributed to techCabal by Eric Munene. Is your business leveraging artificial intelligence? If not, you’re not alone. Andela’s research shows 61% of enterprise organisations haven’t adopted artificial intelligence (AI) tools. However, the landscape is rapidly evolving, with over 2,400 businesses in Africa specialising in AI. Statista projects the Generative AI market in Africa will soar to a staggering US$1.51 billion this year alone, with forecasts indicating a monumental rise to US$3.8 billion by 2028. But the reward is worth the effort, as companies failing to adapt risk falling behind more forward-thinking competitors. AI tools can make quicker work of large data sets and leverage the data companies already have. While most companies collect and store tons of data, they still need to utilise the revolutionary AI tools that can analyse and act upon that data intelligently. To support this significant digital transformation, we’ve created a design thinking model[pdf] with four steps to help businesses start an AI project. 1. Determine a use case Understanding where AI excels and where a business can most benefit is a great starting point. A few use cases include summarisation, documentation, content creation, design, programming, or personalisation. While there are many more use cases, we recommend starting within one of these realms. Many businesses need help managing vast quantities of unstructured data, such as processing countless PDFs to produce letters and legal findings, which traditionally consumes considerable manual effort in scanning and reviewing. Andela engineers have helped this process by leveraging ChatGPT into the business’s architecture to summarise the data, create content, and enable valuable conversations through prompts. As a result, the team has achieved an 80% reduction in time spent on researching and drafting, significantly streamlining their document processing workflow. Internally, Andela also leverages AI within the Andela Talent Cloud to efficiently automate and manage the complete global talent lifecycle. It’s a mix of a fantastic matching team and AI, which is why we have a 96% success rate. Powerful AI-matching algorithms learn from hundreds of touch points in the hiring journey to pinpoint the best engineers for the roles and skills required. Generate a company survey To get started, gather input from your company and home on where AI can be the most beneficial. We recommend generating a survey across the company to help with data-driven decision-making. Then, a steering committee was set up, comprising champions from all stakeholders related to the identified business problems. By having advocates across the business, you gain buy-in across the organisation to help get the transformational changes you want. Explain AI to your team Explaining AI and its potential is crucial to gathering the proper use cases. All your stakeholders likely have the info you need; they just need to know how it can work. It’s well worth speaking with your engineers to present various possible business use cases to the team or bringing in a consultant who can educate your teams on how AIs are trained. 2. Build a business case Next, leverage the data and input collected from the survey or committee to prioritise. Is there an overwhelming amount of employees interested in AI support for a particular area? For example, the summarisation of information, accounting, or personalising interactions with clients. Aggregate these results, identify common themes, and align them with overarching business benefits and a solid business case. Potential benefits may include cost reduction, productivity enhancement, revenue generation, competitive advantage, a deeper understanding of AI capabilities, or enhanced employee satisfaction. Incorporating a business case and ROI analysis will help determine the focal points for team development and the business objectives your generative AI project will advance. 3. Validate your customer journey Before you start any project, remember to stay focused on your customer. Get a clear picture of your customer journey and examine the pain points across awareness, consideration, decision, service, and advocacy. How does AI solve a real customer problem? Once you define your current customer journey, you can better understand what a new one might look like. 4. Define measurement Lastly, understand what metrics you will use to measure success and ROI. Ask yourself questions that you will get from the business to help define these. You can consider questions like: How is user engagement measured? How does AI help with retention through hyper-personalisation? How much can we reduce cost? How fast can a workflow or process be improved? What programming languages are your developers familiar with, and is the architecture scalable? What data do you need to make your AI successful? How can you ensure your AI meets ethical standards? Prerequisites Remember that as you define your project, you will also need a solid team to bring this vision to life. As new models and Generative AI processes mature and evolve, your team must be equipped with the relevant skills. The engine’s success depends on the models themselves and a supporting architecture and ecosystem. Depending on the use case, you’ll likely need large language model deployment engineers, data engineers, and software developers. New titles are also emerging, such as AI content design engineers, ethical engineers, AI auditors, AI security engineers, and prompt engineers. How does Andela help businesses in this space? Andela helps businesses streamline and automate their AI initiatives. Our AI and machine learning (ML) solutions power big data models and reduce the labour-intensive processes associated with them. Our GenAI Impact Assessment[pdf] is a tailor-made six-week program that focuses on identifying and realising a GenAI business solution. We set up a wholly managed team of experts to ensure the program’s success from start to finish. We can also help set up AI talent and teams at the production stage, meeting you anywhere in your AI journey. Explore AI solutions, establish and test infrastructures and AI models, create and define a model, and then learn how to scale it with the help of Andela’s skilled engineers. — Eric is the Director of IT at Andela and has over ten years of experience driving organisational growth and profitability.
Read MoreGTCO, banking’s efficiency leader, eyes $1 billion profit as it begins ₦400bn raise
Guaranty Trust Holding Company (GTCO), a Nigerian financial services group valued at ₦1.39 trillion, flagged off its public offer to raise ₦400 billion to meet new capital requirements on Monday. While the Central Bank raised capitalisation requirements for the country’s biggest banks tenfold in March 2024, Segun Agbaje, GTCO HoldCo’s CEO, claimed the bank had a capital raise in the works anyway. In a passionate presentation on Monday, Agbaje defended the public offering, arguing that given the massive devaluation of the naira and the government’s stated goal of having a trillion-dollar economy, banks needed to shore up their balance sheets. GTCO, which began in 1990 as Guaranty Trust Bank backed by 42 shareholders and $2 million, must make a bull case because of accelerating inflation and historical skepticism of the Nigerian Exchange (NGX). The occasion called for bold predictions. “There is no Nigerian company that has ever made a billion dollars in profit and we are going to be the first ones to give you that,” said Agbaje. Beyond profitability, the financial services giant talked up its ruthless efficiency. “Cost to income ratio is about 16%. That means you’re running your organisation on blood. Cost has always been a source of competitive advantage.” “Our business model is very simple; we don’t go out and take money just for the sake of it because we want size. We concentrate on efficiency and profitability. Our balance sheet could be three times what it is today but we would be less profitable. The reason we’re profitable is that we’re a low-cost operator. “ What will GTCO use the money for? ₦370 billion of the total capital raised will be used for growth and expansion of the banking business (including recapitalistion) with a plan to “aggressively” roll out more branches in the next year. With 35 million retail customers and 2.9 million SME customers, GTCO believes the Nigerian banking sector is still significantly underserved. It will also expand to new countries and grow existing subsidiaries like Ghana, Cote d’Ivoire, and Kenya. Despite these plans, the company will take a cautious approach to opening new subsidiaries. The group also plans to double down on acquisitions in Asset Management and Pension Fund Administrations, having used the strategy to drive growth. Both subsidiaries account for 1.5% of the group’s revenues. “We are not thinking of the next couple of years as baby step growth, we are thinking of the next few years as the years where we separate this bank and this organisation forever from everybody; we want a market capitalisation that Nigeria would be proud of,” Agbaje said. Having deliberately gone slow in growing its loan books as macroeconomic conditions on the continent worsened, GTCO believes it has the ingredients to convince the worst of skeptics to buy a “slice of the orange.”
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₦714 million glitch: fintech giant OPay gets court order to restrict customer accounts
Chinese-backed fintech giant OPay has received approval from a Federal High Court in Lagos to freeze customer bank accounts in thirty listed banks as part of a process to recover ₦714 million received by customers during a system glitch. The system glitch occurred from December 10, 2023, to March 4, 2024, and allowed customers to receive value for unsuccessful transactions, according to court documents seen by TechCabal. OPay contacted customers who received value for sums above ₦500,000 via emails and phone calls and asked them to fund their accounts so the retained funds could be debited immediately after it became aware of the issue. The fintech recovered 10% of the total amount from those customers. “While some customers responded positively to the Applicant’s request and cooperated with the Applicant in respect of the recovery of the Erroneosly Retained Credits, some customers have refused, failed, and/or neglected to fund their accounts to enable the Applicant to deduct the value of the Erroneously Retained Credits from their respective accounts,” the company said in a court filing. The fintech asked the court to freeze the customer accounts and filed an affidavit of urgency alongside its application. The orders were granted by the court on June 28, 2024, and OPay will now begin asking thirty banks to restrict the affected customer accounts. OPay declined to respond to comments. OPay customers received money for pending transactions Financial institutions use bank response codes to categorise successful, pending, or failed transactions. For OPay, ‘RC 09’ is the code for a pending transaction for which the company does not debit its customer. However, from December 10, several cardholders made payments for pending transactions without getting debited. “The Switching Company (Interswitch) that facilitated the said card transactions between the Applicant and its cardholders during this period inadvertently settled all the RC 09 transactions as successful,” OPay said in its filing. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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Next Wave: Unfortunately, startups that go into administration are basically dead
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield Firt published 07 July, 2024 Unfortunately, startups that go into administration are basically dead There’s a dark joke circulating in the Kenyan startup scene right now that once a startup enters administration, which is technically a form of bankruptcy, it will never recover. The end usually involves administrators selling off assets to repay creditors, leaving founders with nothing but a series of explanations to make. “Few companies in Africa emerge from administration,” I have been told by over five industry experts. But is this always the case? What leads to such failures, especially when founders have poured their heart and soul into the product and survived increasingly cautious investors demanding rigorous due diligence? The reasons why the administration of a startup sometimes leads to the closure of a business are fairly common for those familiar with the startup landscape. First, it is worth understanding that the world of startups thrives on innovation and taking calculated risks. But with great risk comes the possibility of failure. Despite that the dream might be to bring new life to a struggling startup from closing shop, the reality is that for most, administration marks the end of the road. For lack of a softer phrase, a “failed startup” that chooses to pick the administration way becomes subject to many financial obligations, including but not limited to outstanding bills, debts owed to suppliers, and legal liabilities. Unlike sole proprietorships, startups are typically separate legal entities. This means the startup itself, rather than the individual founders, bears the responsibility for these debts. Creditors, mostly venture capitalists/investors and service providers, want to recoup some of their investment. Based on their legal agreement, there is always a party that needs to be paid first. Secured creditors with collateral like legal claims take priority and take ownership of assets before anyone else. Unfortunately, and through no fault of their own, investors and equity holders often find themselves at the back of the line. In many cases, their entire investment disappears. Shares become less valuable as the startup’s assets are simply not enough to cover their initial contribution. Sometimes, amidst the rough administration process, there might be salvageable assets; intellectual property (IP) like patents, copyrights, or even core technology could hold value. The company might attempt to sell these assets to recoup some losses, but these sales rarely come close to covering the total financial crater left behind—and in some cases, the sale does not materialise considering buyers usually do not want to own “dead” assets. Why does the administration come knocking, per numbers? According to a study by Founders Factory, two of the biggest hurdles involve funding and market fit. Another study in 2022 by Skynova revealed that a lack of financing dooms nearly half (47%) of startups. Economic uncertainty and dwindling investor confidence only make this issue worse. The same Skynova study also showed that 58% of founders regretted not conducting deeper market research. There are cases when startups enter a market not yet receptive to their offering, which ideally shows that these companies are neglecting customer needs. In some cases, some startups fail to fully see the importance of adapting to changing consumer preferences. What is happening in Kenya Kenya’s startup scene can make a solid case study for successful startups, but recent high-profile failures raise questions about navigating the path to success. Three major startups—Sendy (e-logistics), iProcure (an agritech), and Copia (B2C e-commerce)—all entered administration despite recording growth at the start. A closer look reveals a common trend: these startups secured significant funding (tens of millions of dollars actually) but struggled to adapt to changing market conditions. Copia, for instance, ventured into loan services and suffered heavy losses from defaults. Even after securing more funding in 2022 and pivoting to order fulfillment only, Sendy couldn’t turn its business around, and it eventually shut down in August 2023. iProcure, another Spark Fund recipient, ultimately chose administration due to an undisclosed debt. The trend worsened because, in an attempt to revive itself, Copia laid off its entire workforce and sought further investment but found no takers. It has since started liquidation processes, which means it is on the path to a permanent exit from the market. Sendy, too, has failed to report any significant progress in over a year. The fate of iProcure is not clear yet. While the administration process is ongoing, the trend suggests a likely business closure. Let’s not forget that these companies raised a lot of money: iProcure raised $17.2 million from investors to expand and develop its technology stack. Despite raising $20 million in January 2020 in a funding round led by Atlantica Ventures, Sendy went into administration after failing to find a buyer. Copia raised over $123 million. “The PR around these companies was always about how much they have raised, not what they are doing and the impact they are having. My hope and prayer is that we start focusing more on the important metrics, not the vanity ones,” Ali Kassim, a serial entrepreneur, and a regular startup commentator, told me a few weeks ago. And which are these important metrics? “Path to profitability,” he clarified. The focus on profitability makes sense since it determines the difference between sustainable growth and burning through investor funds on high salaries or launching products that would likely fail. Lastly, note that I have not yet discussed startups burning through investor funds through high salaries or launching products they know are likely to fail. That is a post for another day. Kenn Abuya, Senior Reporter – East Africa Feel free to email kenn[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click
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Next Wave: What is Africa’s place in the EU AI treaty?
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 30 June, 2024 Regulators around the world are in a race against time to come up with rules to govern the artificial intelligence (AI) space. The warnings that computers could soon have the level of human intelligence has raised a new regulatory headache for most governments. However, proponents warn that over-regulation could kill innovation and cut its benefits. Innovations around AI have been moving so fast that regulators appear lost in formulating frameworks to govern the sector. The European Union (EU) is among the first to come up with a treaty, meant to make AI ethical and trustworthy. The treaty spells out global standards for responsible AI development and deployment and will influence other frameworks developed in different countries. What will be the place of Africa in this fast-developing technology? At the beginning of 2024, there was a lot of talk about this being the year that most countries will pass AI regulations. Halfway through the year, nothing much has happened on the continent. Possibly this is why the African voice is missing in the drafting of the EU AI Treaty. Partner Content: Read: Infinix GT 20 Pro: Redefining mobile gaming here. The treaty was drafted with input from countries outside the EU including the US, Argentina, Israel, Japan and Uruguay. While non-EU members are welcome to sign the legally binding agreement, the non-involvement of an African player could mean it does not contain local perspectives. All signatories to the treaty, which will be ratified on September 5, 2024, must ensure responsibility and accountability for the impacts that AI has on human rights. The exclusion of Africa in the development of the treaty raises challenges for a continent burgeoning with innovation. Without Africa on the table, the new treaty risks worsening the data dependency that has plagued the continent in technological developments. Much of the current AI development relies on foreign technology and data housed outside the continent. With Africa not involved in the treaty process, it is unlikely that the companies involved in AI development would consider setting shop on the continent. This raises a serious concern, algorithms trained on non-African datasets may further existing racial biases, resulting in unfair outcomes. Partner Content: Read: GreyDots AI launches Nigeria’s first generative AI to rival other LLMs here. The lack of diversity in datasets raises serious ethical challenges that could hamper the adoption of AI on the continent. AI has been touted as a technology that can be used to bridge existing societal gaps such as increasing financial inclusion among marginalised groups. But without proper safeguards, biased data used to develop AI algorithms could disproportionately affect African populations and other minority groups. For example, a surveillance algorithm developed without diverse data could inaccurately target certain communities. Many African countries still lack comprehensive AI regulation. The Malabo Convention ratified by the African Union (AU) in 2023 guides the AI policy on the continent. This is not sufficient. Only Mauritius and Egypt have formulated AI laws while South Africa, Nigeria and Kenya have initiated plans to create regulatory frameworks. There lies a risk that the AI regulatory gap in Africa will widen if the continent does not sit at the same table with other countries. This exposes most African states to unregulated AI developments that could pose negative economic and social impacts. Despite being excluded from the negotiations over the future of AI, Africa still has a role to play in shaping the treaty. The treaty is pushing for international cooperation, and with over 1.4 billion people, African states advocate for inclusive discussions to have local perspectives considered. By participating in global AI forums held by the United Nations (UN) and OECD’s Global Partnership on Artificial Intelligence (GPAI), the continent can reclaim the position it has been denied on the table. Partner Content: Read: Bvndle partners with UBA, PiggyVest, others to reimagine customer rewards in Africa here. African nations can collaborate and build a regional framework, picking lessons from the EU AI Treaty. This collaborative approach could promote a unified voice in the AI discourse and ensure that regulations are tailored to local needs. Regional economic blocs like the East African Community (EAC) or the Economic Community of West Africa (ECOWAS) can consider regional frameworks. For instance, it makes little sense for Kenya to develop an AI regulation, when EAC is advocating for further regional integrations including a monetary union. The EU AI treaty represents the first step towards a global ethical AI standard. While there is a long way to go for Africa, there are some promising initiatives that show commitment to responsible AI development. Mauritius has developed a national AI policy that puts human beings at the centre. It emphasises fairness, transparency and accountability, ensuring the technology benefits everyone. Nigeria and Kenya are in the process of doing the same. The African Institute for Data Science (AIDS), a pan-African organisation, is promoting responsible data practices and has programmes to help African states build capacity for AI. Adonijah Ndege, Senior Reporter – East Africa Feel free to email adonijah[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri) brief of all the technology and business stories you need to
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👨🏿🚀TechCabal Daily – The president, the slasher, the public speaker
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning If you watch Amazon’s The Boys, the latest edition of Entering Tech spur your interest. Here’s a piece of what I wrote on Saturday: “Before The 7, Firecracker was exactly who you’d think a superhero named Firecracker would be: a right-wing extremist wielding a podcast with a few hundred listeners, peddling all the phobias that presently run conversations on X (formerly Twitter). Two weeks after joining The 7, Ms Gray [Firecrcaker] gains millions of followers across social media, is hosting the evening show—the most watched slot, by the way—of the Vought News Network, and has the world’s most powerful man, Homelander, attached to her. Literally. So how did Firecracker get her milkshake to bring all the boys (pun intended) to her yard? How did she go from a nobody to a sorta important somebody? Well, she talked..and talked.” You should read Entering Tech #69 for the full story where I argue that one of the most infuriating characters to be introduced, Firecracker, is definitely also teaching young people an important lesson in talking about their work. In today’s edition POS agents registration deadline extended by 60 days Ruto slashes Kenya’s FY budget Why is crypto crashing? Digital IDs to the rescue How many internet users does Nigeria have? The World Wide Web3 Job openings Fintech POS agents registration deadline extended by 60 days Last week, we argued that Nigeria would have to register at least 30,000 POS agents per day to meet its July 7 deadline. When this deadline was announced in May, the business registry, the Corporate Affairs Commission (CAC), had 62 days to register some 1.9 million POS agents scattered across the country. Well, the deadline has been extended by another 60 days. POS agents now have until September 5, 2024, to register or face prosecution for aiding and abetting criminal activities. They also risk losing their businesses, many of which serve as a second means of income for small retailers who don’t make that much money. According to the MoniePoint informal economy report, half of business owners in the informal economy run more than one business, with 79% earning less than ₦250,000 ($161) in monthly profits. The large number of agent registrations caused challenges. To address this, the CAC collaborated with leading agent banking providers like Moniepoint, Palmpay, Opay, and Paga. These financial institutions received access (through APIs) to the Special Registration Portal (SRP). This allows agents to register directly through their familiar fintech platforms. The reason behind the registration rush? POS transactions saw a 40.69% year-on-year increase but making cash readily available came with a fresh problem. In 2023, POS terminal fraud surged, comprising over 26% of all reported fraud cases, according to a report by Nigeria Inter-Bank Settlement System Plc (NIBSS). The mandate to register POS agents with the Corporate Affairs Commission (CAC) aims to enhance transparency and curb and clamp down on these criminal activities. POS agents aren’t taking the directions sitting down: Complaints are far and wide about the legality of this notice. But the registrar-general of the CAC, Hussaini Magaji noted that the registration aligns with the Companies and Allied Matters Act 2020 which mandates all persons who want to carry out business in Nigeria to be registered. Elegbede Oluwasegun, National General Secretary of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) noted that POS operators plan to challenge the CAC’s authority, arguing the Commission has no jurisdiction over individual operators, only companies. Process payments smoothly with Moniepoint And we’ll have processed almost 5,000 more by the time you’re done reading this. Your business payments can be one of them. Click here to sign up. Economy Ruto slashes Kenya’s budget and spending If you’d told several Africans last week that some would get the chance to join their president on a Twitter Space and air their concerns directly, many would have called it a fib. Yet, that’s what happened in Kenya. On Friday night, after announcing a slashed budget from KES3.9 trillion ($30 billion) to KES 3.67 trillion ($28.7 billion), over 134,000 people joined President William Ruto on X (formerly Twitter) in a three-hour-long Space conversation tagged #EnagagePresident. Why Kenyans are engaging: Kenya’s OccupyParliament protests led President William Ruto to scrap the proposed Finance Bill, and it’s coming with “huge consequences” for everyone, just as the president promised last week. The finance bill was a major component of the policy reforms Kenya agreed upon with the IMF under a $3.6 billion lending programme. The finance bill was also supposed to assist Kenya in repaying its debt which stands at $75.3 billion (equivalent to KES10 trillion). To close the $2.7 billion budget shortfall resulting from the cancellation of planned tax increases, President Ruto proposed spending cuts and additional borrowing. On Friday, he slashed Kenya’s 2024/2025 budget by KES177 billion ($1.3 billion). The government plans to implement several cost-cutting measures. These include dissolving 47 state corporations with redundant functions, suspending the position of chief administrative secretaries, and reducing the number of government advisors by half. Additionally, budgets for the offices of the First Lady, the deputy president’s spouse, and the prime cabinet secretary will be eliminated, along with confidential budgets allocated to various executive offices. Renovation budgets will be slashed by 50%, and all public servants over 60 will be mandatorily retired with no extensions. During the Twitter space, Ruto pledged to dismiss corrupt officials and contested the inflated death toll from recent protests, asserting the number was 25 instead of 40. He promised to investigate police brutality and follow up on reported abductions by state agents. He confirmed the withdrawal of the controversial finance bill and defended its pro-business intentions. He reiterated plans for spending cuts and emphasised the importance of addressing issues like taxation, debt, and unemployment. Issue USD and Euro accounts with Fincra Create and manage USD & Euro accounts from anywhere. Fincra allows you to issue accounts to your users, partners
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Businesses prefer saving on fintechs than banks and other things we learned from Moniepoint’s informal economy report.
Moniepoint, a fintech giant that operates one of Nigeria’s largest agent networks, has released its first informal economy report, detailing key insights into the informal economy such as financial habits and digital payments trends. The fintech spoke to over 2 million Nigerian businesses that signed up on its platform between 2019 and 2024 and excluded data from the thousands of agents Here are five interesting things we learned from the report. Cards dominate offline payments Of the 2 million businesses Moniepoint interviewed, about 80% prefer card payments to transfers for in-person transactions. This is in contrast to online payments dominated by online transfers, according to figures from the central bank. Digital payments enjoyed its best year ever in 2023, after an ill-thought cashless policy that made cash scarce forced many Nigerians to use digital means of payment. Despite a reversal of the policy, Nigerians still stuck to digital payments and companies like Moniepoint which processed 5.2 billion transactions, quickly became part of daily life. Unsurprisingly, Lagos is Nigeria’s commercial capital Lagos has always been Nigeria’s cash cow despite being its smallest state since the country’s independence thanks to its location and it being the first capital of the country. The state houses 15% of Nigeria’s informal economy, and is only surpassed by the North Central region—the nation’s food basket and home to the current capital— and the South West, where Lagos is located. Nigerian businesses would rather borrow money from loan apps than banks When loan apps burst onto the scene, they had a compelling reason to offer credit to Nigerians as commercial banks typically did not offer loans to small businesses and individuals. According to a 2023 report, credit use in Nigeria is only 6%. While the informal economy prefers to borrow money from friends and family, loan apps came in second and have surpassed traditional banks. Nigerian businesses prefer saving on digital platforms to banks According to Moniepoint’s report, 92.4% of informal businesses save money but would rather save on digital platforms than traditional banks, showing the growing influence of fintechs in Nigeria. Cooperatives and contributions account for almost half of the saving choices of the informal economy, as they are run by members of the informal sector. For the fintechs, customers saving on their platform represent a boon to the bottom line as these deposits become the loans they give out to customers. Only 1.3% of informal businesses earn above ₦2.5m monthly profits – Moniepoint informal economy report Nigerian businesses are relatively young More than 80% of respondents said that their business was more than five years old, a worrying trend that shows most businesses are dying young. The majority of businesses have been around for less than 5 years but more than 2 years, which was followed by businesses that were more than six months old but younger than a year.
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