Kenyan court to rule on jurisdiction in Facebook algorithm case over Ethiopia violence
A Kenyan High Court will hear a case against Meta, Facebook’s parent company, brought by two Ethiopian citizens and a Kenyan civil society organisation, The Katiba Institute, on Tuesday. The plaintiffs, Abraham Meareg, Fisseha Tekle, and The Katiba Institute, are alleging Meta promoted content that led to ethnic violence and killings during the armed conflict in northern Ethiopia from November 2020 to November 2022. “This morning, the High Court will hear arguments on whether it has jurisdiction to hear a case challenging the Facebook algorithm for allowing and promoting unlawful content,” Mercy Mutemi of Nzili and Sumbi Advocates, who represents the two Ethiopian petitioners, said on Tuesday. Abrham Meareg, whose father was killed on November 2021 after hate posts targeting him appeared on Facebook, and Fisseha Tekle, an Amnesty International employee facing online threats, joined Katiba Institute in suing Meta. They claim Facebook’s algorithms promoted harmful content, contributing to human rights abuses. Kenya’s Supreme Court’s ruling on Meta’s liability for the actions of its former content moderators in Kenya could potentially be relevant to the ongoing case against Meta in the Kenyan High Court. On September 20, the Supreme Court’s ruling established a precedent that could strengthen the petitioners’ case against Meta in the High Court. The ruling determined that foreign companies like Meta can be held accountable for their actions in Kenya, even if those actions were carried out through third-party contractors. However, the ruling may not directly apply to the case’s specific facts against Meta. The High Court will need to consider the case’s unique circumstances, including the nature of the alleged human rights violations and the role that Meta’s algorithmic recommendation systems played in promoting harmful content, a human rights advocate told TechCabal. African tech leaders and global players will be at Moonshot by TechCabal. You can get tickets here. International Ticket Moonshot
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SASSA October 2024 payment dates
The South African Social Security Agency (SASSA) has released the payment schedule for October 2024. In October, beneficiaries of the various grants will receive their payments on different dates. Older Persons’ grants The SASSA payment date for older persons’ grants is for 2nd October 2024. SASSA ensures that senior citizens, many of whom rely heavily on these funds, will have access to their grants on the first working day of the month. Beneficiaries can collect their payments at ATMs or participating retail stores. Disability grants Beneficiaries receiving the SASSA disability grants will get it on 3rd October 2024. This is the day following the payments for older persons. These grants support those living with disabilities, offering financial aid to improve their quality of life. Children’s grants Payments for children’s grants will be available from 4th October 2024. This grant includes the Child Support Grant, Foster Child Grant, and Care Dependency Grant. Families and caregivers can rely on these funds for the essential needs of children. Important reminders regarding the SASSA October 2024 payment Payment dates: October payments begin on 2nd October for older persons, 3rd October for disability grants, and 4th October for children’s grants. Access to funds: Payments can be accessed at various pay points, including ATMs and retail stores. Ensure you have the correct banking details linked to your SASSA account. Use funds wisely: Recipients are encouraged to manage their funds carefully, especially in these difficult economic times. Final thoughts on SASSA October 2024 payment dates and how to prepare 1. Check your balance before visiting the ATM or retail store to avoid unnecessary trips. 2. Update your contact information with SASSA if you have moved or changed your phone number. 3. Keep your SASSA card safe to avoid fraud or loss. The October 2024 payment schedule is a critical reminder for all beneficiaries to plan and make necessary preparations in advance to access their social grants without delay.
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👨🏿🚀TechCabal Daily – Double Double
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning If you’re looking to give your team a competitive advantage, Moonshot is offering a 30% discount for teams and groups. Moonshot 2024 provides valuable content to foster team growth and innovation. Your team members can engage in workshops focused on accelerating startup growth, participate in panel discussions about building elite teams, and attend additional sessions offering strategic insights to help achieve international development goals. Save a row for your team at Moonshot and get a 30% discount on 5 or more tickets. Last-mile delivery companies raise prices by 23% Safaricom doubles internet speed Kenya could’ve saved $220 million in Adani deal The World Wide Web3 Opportunities Logistics Last-mile delivery companies raise prices by 23% Image Source: Google After the 40% fuel price hike that rocked Nigeria on September 3, businesses heavily dependent on fuel were always going to react. One after the other, they’ve been adjusting to the new cost of doing business. Our first report looked at the gig economy where drivers asked customers to pay more or cancel their rides. Food delivery companies got creative, offering their riders incentives to avoid passing on some costs to customers. Yet, last-mile delivery companies are doing the hard thing: raising prices to stay afloat. They are able to do this because, unlike ride-hailing apps and food delivery companies, they do not operate two-sided businesses. Fez Delivery, for instance, said it will raise its base price from ₦2,500 ($1.55) to ₦3,075 ($1.9), a 23% increase for small packages. At least four last-mile delivery services told TechCabal that they have either raised prices or plan to raise them. Businesses that rely on them will likely pass on the increased costs to end-users. However, last-mile delivery companies that compete on price alone will struggle. Customers will simply choose the cheaper option and this could well lead to a pricing war. When there’s a pricing war, customers are clear winners—unless these companies do better to retain them on something other than pricing. Will these trade-offs come back to bite? Only time will tell. For now, these last-mile delivery businesses only want to survive. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Internet Safaricom doubles internet speed Image source: TechCabal Since Starlink began gaining popularity in Kenya, Safaricom, the country’s biggest telecom has responded in a number of ways. Safaricom first responded by asking the Communications Authority (CA) to stop granting licences to independent licences to satellite internet providers like Starlink. Safaricom argued that granting satellite providers independent licences could lead to illegal service provision, disrupt existing mobile networks, and pose a threat to national security. While the regulator waits to decide on Safaricom’s claim, the telecom has responded by doubling the speed of its fibre internet packages. Safaricom has now upgraded its 10 megabits per second (MBPS) connection to 15 MBPS at KES 3,000 ($23). Customers on the 20 MBPS plan now have a 30 Mbps connection, while those on the 40 MBPS plan will now enjoy up to 80 MBPS. However, these changes still dwarf Starlink’s offering to users. Starlink offers cheaper subscription plans and stronger internet connectivity to these users. The satellite ISP offers internet speed of 150Mbps for standard plan and 220 MBPS with its priority plan to Kenyan users at a cheaper fee. Users can get a 17 GB for $15 on Safaricom, while Starlink offers a 50GB bundle for $10. Although Safaricom dominates the Kenyan market with a 66% share, Starlink’s growing popularity poses a serious threat. While Starlink’s internet speeds are superior, the cost of purchasing its equipment remains a barrier for some users. But it is hoping to win over users through borrowing the kit for $15 monthly. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Companies Feasibility report shows Kenya could’ve saved $220 million in Adani deal It’s been widely reported that the Jomo Kenyatta International Airport (JKIA) lease deal between the Kenyan government and India’s Adani Group is getting a lot of flak. First, the deal got temporarily suspended on September 10, after human rights advocates petitioned the high court. The Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC) argued that the funds needed could be raised without a multi-decade leasing contract. “The Adani proposal is unaffordable, threatens job losses, exposes the public disproportionately to fiscal risk and offers no value for money to the taxpayer,” they said. Second, thousands of aviation union workers came out en masse to enforce a six-hour strike action that grounded all flight activities on September 11. The deal would have allowed Adani to finance JKIA renovations with $1.85 billion and run the airport for 30 years, starting in November. But the chances of the deal going through could become bleaker after a feasibility report commissioned by the Kenya Airports Authority (KAA) showed a cheaper option for upgrading the airport. This study, conducted by consultancy firm ALG, projected a 30-year upgrade and maintenance plan costing KES 211 billion ($1.63 billion). ALG’s report suggested a competitive bidding process for different local private bidders to handle different aspects of the project. This could’ve saved some money. However, the government ignored ALG’s recommendations and hurriedly gave the contract to Adani 17 days after a proposal came in on March 1, without allowing other companies to bid. That leaves one question: was this a case of favouritism by the government for Adani? The answer is not clear, but this will
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Breaking: Safaricom offers improved internet speed in response to Starlink’s growing popularity
Safaricom, Kenya’s leading mobile operator, has doubled the speed of its fibre internet packages in response to Starlink’s growing presence in Kenya’s broadband market. The 10 megabits per second (Mbps) connection has now been upgraded to 15 Mbps at KES 3,000 ($23). Customers on the 20 Mbps plan now have a 30 Mbps connection, while those on the 40 Mbps plan have doubled their speeds to 80 Mbps. The 100 Mbps package has been increased fivefold to 500 Mbps for KES 12,500 ($97). Safaricom is also the first internet service provider (ISP) to offer gigabit speeds (1 Gbps) for KES 20,000 ($155). Safaricom has introduced a family share plan, a bundled package combining mobile voice, data, SMS, and home internet into a single package. This plan can be shared with up to five family members and offers a discount of up to 20% compared to purchasing individual plans. “We have enhanced our Home Internet speeds to meet the increasing demand and usage, providing reliable connectivity and enhanced value for our customers,” Safaricom CEO Peter Ndegwa said on Monday in a statement seen by TechCabal. Safaricom plans to conduct estate clinics, increase capacity in congested areas, and offer 4G and 5G options for homes outside fibre coverage. Businesses will also benefit from dedicated internet plans, ranging from a 15 Mbps shared option for micro companies to a 100 Mbps shared plan for growing enterprises. These changes directly respond to Starlink’s entry into the Kenyan market in June 2023. By June 2024, Starlink had registered over 4,000 customers. Starlink speeds can reach up to 200 Mbps and cost KES 6,500 ($50). It also launched a 50 GB package for KES 1,300 and a rental option for customers who cannot afford to purchase the Starlink kit, priced at KES 45,000. On July 15, Safaricom asked the Communications Authority (CA) to block independent satellite internet providers with operations in other countries, including Starlink. The regulator supported Safaricom’s position saying the operator was right to raise concerns. African tech leaders and global players will be at Moonshot by TechCabal. You can get tickets here.
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Last-mile delivery services increase base prices to ₦3,075 as fuel costs bite
Like most businesses affected by the recent increase in fuel prices, last-mile delivery companies in Nigeria are reevaluating their pricing. “In light of the current economic conditions, particularly the significant rise in fuel prices, we find it necessary to make an adjustment to our delivery process,” Remedial Health, a health-tech startup that supplies medications to pharmacies, wrote to its customers via Email. Four logistics companies told TechCabal they have raised delivery prices or plan to raise them. Fez Delivery, which charges ₦2,500 ($1.52) for deliveries between 0 and 5kg, will now charge ₦3,075 ($1.88) for those deliveries. The company says it will raise prices by 23%. “Our prices definitely have to change. But what we want to do is to ease our clients into that phase. So, at the moment, we are taking serious blows to keep operations running,” said Seun Alley, Fez Delivery CEO. Raising delivery prices is essential to last-mile delivery companies with thin margins. Yet, it’s not always straightforward given the price sensitivity of many customers. “Depending on the urgency required some customers don’t mind going for the least priced service when items to be sent are not needed urgently,” said Seun Omotosho, the COO of Gokada. Some customers are now relying on regular buses to get their products delivered. “I now use public transport to aid my business because DHL prices jumped from ₦12,000 to ₦14,000 for phones and for Laptops from ₦12,000 or ₦13,000 to ₦21,000,” Olawale, an online phone and gadgets vendor said. Last mile delivery companies are faced with twin but difficult tasks of adjusting prices to make up for increased running costs while retaining customers. For some of these companies, offering incentives to riders (based on numbers of orders they complete) and discounts for top customers is the solution. Others are optimistic that electric vehicles might be the silver bullet. Moonshot by TechCabal is gathering Africa’s most audacious builders and thinkers in Lagos, Nigeria. You can get tickets here.
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👨🏿🚀TechCabal Daily – Access Bank records FX gains
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning Moonshot is giving out tickets to students at ₦5,000 only. As a student, you will get access to all Entering Tech sessions, all workshop sessions, and brand merch. Here is your chance to save a seat at Moonshot 2024. Get tickets here. Kenyan Appeal Court says Meta can be tried in Kenya Analysts expect a pause in interest rates in Nigeria Access bank records $257,000 as “unrealised” FX gains The World Wide Web3 Jobs Layoffs Meta ex-content moderators seek $1.6 million in compensation Image | Reuters On Friday, Kenya’s Court of Appeal upheld a ruling by a labour court filed in April 2023. The ruling meant Meta could face trial over the mass layoff of content moderators in the country. About 185 ex-content moderators filed a lawsuit against Sama, a third-party company hired by Meta to moderate Facebook content. These workers, who had the challenging task of filtering out hours of disturbing material from social media, sued Sama for poor working conditions and unjust layoffs. A case in 2022, filed by ex-Sama worker Daniel Motaung, sued Sama for being wrongfully dismissed for trying to form a union to lobby the company for better pay. Motaung’s case was previously dismissed for lack of jurisdiction. Meta had also argued that it was not a direct employer and couldn’t be sued in Kenya. However, the new ruling by the Court of Appeal lumps the two cases and rules that both Meta and Sama could be responsible for paying $1.6 billion in compensation to these ex-workers. Mercy Mutemi, a representative counsel for the ex-Sama workers said of the ruling, “Meta being sued in Kenya is a wake-up call for all Big Tech companies to pay attention to the human rights violations taking place along their value chains.” Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Economy Analysts expect a pause in interest rates Image Source: Imgflip To rein in inflation, the central bank’s Monetary Policy Committee has raised interest rates four times since the start of the year. The MPC raised interest rates to 26.75% in July. Inflation slowed for the second consecutive month in August with 32.2%, down from 33.4% recorded in July. The decreasing impact of the currency devaluation, the temporary removal of fuel subsidies, and a drop in food prices driven by the harvest season played a role in the inflation slowdown. Although analysts anticipate a potential pause in interest rate hikes, the central bank will likely remain cautious and assess inflationary pressures through November, considering the recent fuel price increase, before determining whether to ease or maintain its monetary tightening stance. The MPC will also make other decisions around short-term interbank interest rates. In July, it widened its asymmetric corridor, allowing commercial banks to borrow from the CBN at 31.75% (up from 27.25%) and deposit at 25.75% (up from 23.25%). Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Banking Access Bank records $257,000 as “unrealised” FX gains Image Source: Access Bank Access Holding, the parent company of Nigeria’s largest bank by customer base, has posted its second-quarter financial statement. The company reported a pre-tax profit of ₦348.9 billion ($218.1 million) for the first half, driven by a surge in interest income from loans and investments. Access Bank earned about ₦646.34 billion ($404.0 million), aided by ₦412.8 billion ($258.0 million) unrealised foreign currency translation gain. The bank’s personnel expenses surged to ₦415.8 billion ($260.0 million) from ₦65.1 billion ($40.8 million). This may have been driven partly by a surge in hiring due to the Access Bank’s recent expansion. In June, Access Bank acquired ABCT Bank in Tanzania to deepen its East African presence. Access Bank’s staff headcount increased from 7,567 to 8,009. The number of high-earning employees—staff earning ₦14.9 million ($9,312) monthly and above—increased by 689 in just six months. Aside from Access Bank South Africa and Kenya, all other foreign subsidiaries reported pre-tax profits. Access Bank South Africa and Kenya posted pre-tax losses of ₦10.6 billion ($6.5 million) collectively. Hydrogen Payment Services, Access Holdings’ FinTech subsidiary, reported a pre-tax profit of ₦238 million ($148,750). Access Pension and ARM Pension, its newly acquired PFA, were both profitable, reporting revenue of ₦15.1 billion ($9.4375 million). Introducing Pay with Pocket on Paystack Checkout Paystack merchants in Nigeria can now accept payments from PocketApp’s 2 million+ customers. Learn more → CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $63,909 + 1.37% – 0.29% Ether $2,661 + 2.38% – 3.11% Sui $1.62 + 12.17% + 63.11% Solana $1487.04 – 0.99% – 4.64% * Data as of 06:10 AM WAT, September 23, 2024. Events Earnipay – Digital Marketing Specialist – Hybrid (Lagos, Nigeria) Paystack – Finance and Strategy Specialist – Lagos, Nigeria KrediBank – Head of Liability Generation – Lagos, Nigeria Mono – Technical Product Specialist – Lagos, Nigeria Cowrywise – Backend Engineer (Infrastructure, API Engineer, DevOps) – Hybrid (Lagos, Nigeria) When – Sales and Marketing Operations Specialist – EMEA, Remote Spacefinish – Associate Designer – Lagos, Nigeria LemFi – Customer Support Representative (Chinese Speaking) – Remote (Any Location) Kuda – Senior Product Designer (3+ years of experience) – Lagos, Nigeria Apex Web Network – Marketing Specialist – Hybrid (Lagos, Nigeria) Issue virtual USD cards for you and your customers Do you want to issue virtual USD cards for your customers and business expenses? Use Kora’s APIs to issue cards, customise your card program, and set your customers’ funding
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🚀Entering Tech #74: Is Uploaded Intelligence a moonshot goal?
What happens when humans and machines merge? 21 || September || 2024 View in Browser Brought to you by Issue #74 IS UI amoonshot goal? Share this newsletter Greetings ET people This is the last edition of Entering Tech you will ever receive…on Saturday at 3PM at least. Future editions of ET will now come to your inboxes on Wednesdays at 10AM starting September 25. On to the business of the day! How many conspiracy theories about wealthy people can you think of? Aliens trying to contact Mark Zuckerberg, extraterrestrial monsters captured by the SCP, influential people plotting world domination at Bilderberg meetings, or the classic “all billionaires are shape-shifting lizard people” trying to freeze themselves for immortality. Here’s one more: Uploaded Intelligence (UI). While Hollywood often dramatises UI, shows like Amazon Prime’s Pantheon explore why uploading your brain to the cloud might make sense. A quick Google search shows that UI is still science fiction, but wasn’t artificial intelligence (AI) one a few decades ago? In this edition, we nerd about why UI makes for a good conspiracy theory about ultra-wealthy people could create new jobs in the future Emmanuel Nwosu Intelligence for intelligence In 1950, Alan Turing, a brilliant mathematician and computer scientist, woke up one day and decided he was going to create what we now know today as the “Turing Test.” Alan Turing He wanted to answer a simple question: “Can machines show human-like intelligence?” In the test, a human “judge” communicates with both a machine and a human by asking the same questions without knowing which is which. If the judge cannot distinguish between the two based on their responses, the machine is said to be “thinking” like a human. Seventy-four years later, this test remains the gold standard for evaluating AI. Here’s one fun fact: no AI model has successfully passed this test. There have been significant achievements. In 1997, for example, IBM’s Deep Blue defeated chess champion Garry Kasparov. Nineteen years later, AlphaGo defeated a European champion in the board game “Go.” AI has since become mainstream, with over 180 million ChatGPT users today, and countless businesses relying on its API to integrate AI features. However, with this increased accessibility comes a downside: fear. Many worry that AI’s rapid advancement (still in its infancy) and widespread use could lead to job loss, privacy concerns, and unpredictable consequences in decision-making. Will it really take our jobs? Will AI become sentient and take over the world someday? We’ve answered the first question in these two articles here and here. Only time—and Arnold Schwarzenegger, can answer the second one. Fundamentally, AI and UI are birds from the same branch of technology, but the difference is in who’s in control. With AI, it’s the machine making decisions, while in UI, a human mind is behind the system. Pantheon by Amazon Prime In Amazon Prime’s Pantheon, high-schooler Maddie Kim receives strange messages from her supposedly deceased dad, who has had his mind uploaded to the internet. He became an “Uploaded”—a term for those whose consciousness is in the cloud—living on as a digital self. Intelligence for intelligence, UI represents a perfect symphony between human genius and machines; while terrifying, there’s much we can achieve together. *Newsletter continues after break Get student discounts for Moonshot 2024! Are you a student looking to fulfill your dream career in tech? Moonshot is giving out tickets to students at ₦5,000 only. As a student, you will get access to all Entering Tech sessions, all workshop sessions, and brand merch. Here is your chance to save a seat at Moonshot 2024. To get tickets, click here. The five stages of tech shock Elisabeth Kübler-Ross, a Swiss-American psychiatrist, proposed that the human psychological response to grief occurs in five stages: denial, anger, bargaining, depression, and acceptance. This framework can also apply to the shock in response to terrifying technology. When AI and ChatGPT first emerged, many were in denial about the chatbot’s capabilities. Then, large language models (LLMs) improved, with Midjourney creating fantastic images and ChatGPT’s responses getting better. Then people started bargaining. “How can I use AI to work faster?” “How can I become productive using AI?” We have an Entering Tech Edition that answers these questions here. Soon after, people feared that AI would take all the high-paying critical thinking jobs and leave them fighting for scraps. We’re now witnessing AI acceptance, where people have learned to live with it and use it effectively. What many didn’t realize is that AI has created a slew of jobs as it became mainstream—AI ethicists, data annotators, AI product managers—and made machine learning engineers more sought after. UI’s obvious perk is offering humans a messed up version of immortality, but like AI, it could create new jobs too. We learned from ChatGPT that if UI becomes mainstream, it will open up industries. One thing preventing rapid tech development is its newness; we’re still learning how to apply it. When people are uploaded to the cloud, they gain access to unlimited data and technology. There will be less room for errors to happen. In healthcare, medical research becomes faster. In finance, market predictions become a lot more accurate; just ask any Uploaded. Image source: Google For the non-Uploaded humans that live on, we could become virtual reality designers, integration specialists, UI machine learning scientists, and hardware engineers (hopefully we don’t get more data centres than humans on Earth); and if the gig pays better, you could offer your services exclusively to the Uploaded. The technology is both terrifying and exciting. However, it is expensive; the closest existing thing to UI is Elon Musk’s Neuralink—and that says a lot. *Newsletter continues after ad break Hack Growth with the Africa Startup Festival! Join the Africa Startup Festival for an exclusive Marketing & Growth Masterclass designed specifically for founders like yourself. This hands-on event will provide real-world strategies to help accelerate your company’s growth and visibility. Register here. The future of work? The World Economic Forum estimates that 25% of
Read MoreMeta’s ex-content moderators seek $1.6 billion in compensation in Kenya
Meta now faces two cases in Kenya: an ex-moderator working for Sama sued the social media giant for moderating horrific content, and 187 former Sama moderators say they were unfairly fired and are seeking compensation. Kenya’s Court of Appeal has upheld the Employment Court’s ruling allowing 187 Facebook content moderators to sue Meta, the parent company of Facebook, WhatsApp, and Instagram. The decision means Meta can be held liable for the moderators’ treatment in East Africa’s largest economy, which could pave the way for a potential settlement after negotiations stalled last October. The ex-moderators are seeking $1.6 billion in compensation. “The cases by the content moderators against Meta, Sama, and Majorel can now proceed. Facebook had argued that it was a foreign company that couldn’t be sued in Kenya,” Mercy Mutemi, an advocate representing the ex-Sama Facebook moderators, said on Friday. Judges D.K. Musinga, Asike-Makhandia, and J Mativo said that the main dispute, which cites unfair dismissal, is still pending determination. This means the case will proceed to the trial court if a settlement is not reached. “Whether or not the redundancy was lawful is a matter for determination during the hearing. We say no more,” the judges said. Sama, a global Business Process Outsourcing organisation, dismissed the moderators after they attempted to unionise, even though Sama had claimed it had no objection to its employees being represented by a union. The moderators had also argued that their work exposed them to disturbing content and that their monthly pay of approximately KES 60,000 was not commensurate with the amount of disturbing content they had to flag. Sama and Majorel have since discontinued their content moderation business for Meta with the former now focusing on artificial labeling. Majorel laid off over 200 employees after failing to secure Meta’s business in 2023.
Read MoreGTCO’s fintech HabariPay begins recovery of ₦1.1 billion sent to customers in error
HabariPay, the fintech subsidiary of Guaranty Trust, has begun a legal process to recover ₦1.1 billion (*$1.1 million) erroneously sent to several thousand account holders in 2023. On Wednesday, a federal high court in Lagos granted an application for over 40 financial institutions to restrict accounts that received those funds. The fintech lost the money after it mistakenly credited merchants twice. As a condition for lifting those restrictions, affected merchants will be contacted and asked to refund the extra money received. “Any other account that benefitted or received the double credit transaction” will also be compelled to refund the extra money, said court documents seen by TechCabal. The court documents did not specify how the double credits happened. One person with direct knowledge of the situation said hackers accessed the fintech’s website using a strategy called race conditioning, which allowed them to trigger simultaneous transactions. At least one person connected to GTCO claimed the incident resulted from human error. Before instituting the legal process, HabariPay had begun recovering some of the funds by directly contacting merchants to reverse some of the transactions, one person with knowledge of the situation said. It only went to court to compel merchants it could not reach independently to also reverse the transactions. Court orders are crucial for financial institutions since they cannot reverse erroneous transactions without legal authorisation. The fintech’s delay in initiating the court process underscores the slow pace of legal proceedings in Nigeria, a challenge for financial institutions that need to recover lost funds quickly. Habari Pay’s fraud incident highlights the worrying trend in Nigeria’s financial sector, where financial institutions lost $25.7 million to fraud in the second quarter of 2024—a 1,784.94% jump from the previous quarter. *The naira’s exchange rate to the dollar in September 2023 was ₦923/$1. US rate cut could revitalise foreign inflows into African startups, increase debt deals
Read MoreUS rate cut could revitalise foreign inflows into African startups, increase debt deals
Africa-focused venture capitalists expect that the US Federal Reserve’s decision to cut interest rates could improve the inflow of foreign capital on the continent. The Federal Reserve cut the key rate by 50 basis points—the first cut in four years—higher than the 25 basis points predicted by several analysts. From 2020 to 2022, a zero-interest rate policy pushed investors to seek higher returns in more asset classes and markets. “Africa is always seen as an alternative to when the market isn’t great in the US. People don’t invest in Africa because they want to invest in Africa but because it’s just a better option for them with regard to what’s available to them and their original markets,” Haile Amegashie, an Africa-focused investor, told TechCabal. As interest rates rose in 2023, investors retreated, leading to a significant drop in funding and growth-stage deals across Africa. Only four Series B rounds were completed in the first half of 2024, reflecting the sharp decline in capital flow. This year’s rate cut comes as African venture capital firms are actively raising funds and could make U.S. fund managers more open to investing in Africa once again, two investors said. “I think [the rate cut] has a long-term effect to increase the sentiment of US investors or foreign investors to look at (the) African market. But I think it would take time; maybe we will see an actual positive sign six months from now,” a partner at an African growth stage firm who asked not to be named told TechCabal. In H1 2024, African startups raised $779.7 million, the lowest amount since 2020. This funding dip has led startups to shift focus from growth at all costs to a pursuit of positive unit economics. Cost-cutting measures, including layoffs, have become more common. Lower U.S. interest rates also lead to a weaker dollar, which might bode well for African startups seeking to raise debt funding, investors shared. Debt funding was the highest source of funding for African startups in the first half of the year. “[The low rates] will also make it more feasible for African companies to borrow, again, from US lenders, which used to happen a lot, but after 2022, in my understanding, it has shrunk quite a bit because it became almost suicidal for African companies, or companies operating in weak currency economies to take any US debt because the cost to payback was just impossible,” the partner, who asked not to be named, said. African currencies must remain stable for the benefits of a weaker dollar and low interest rates to be felt. Many African currencies have recently experienced devaluation, and if this trend persists, it could diminish the positive impact of the U.S. interest rate cut on the continent. The rate cut could also boost investment in smaller, less congested markets as investors seek better returns. A broader approach to investing will spur development across the continent and benefit Africa’s tech ecosystem.
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