Happy last day of October!

TechCabal did some important reporting this month. We had a major showing in banking as we reported issues with core banking software migrations across Nigerian tier-1 banks. We delved into details on how much tier-1 banks spend on building their core banking software, the struggles they face in migrating software, and the effect on customers. We also covered how Sterling bank, which custom-built its core banking software, is now pitching the technology to other banks and fintechs.

South Africa’s 2024 M&A streak also continued after Lesaka Technologies acquired Adumo. The good people of Kenya again made it clear that they do not want anything to do with the man Adani, or his group company, as “Adani must go” chants were heard during court trials for the contentious JKIA lease deal. The Adani Energy partnership, which was previously given a go-ahead, has also stalled.

What will November bring?

Globacom appoints industry veteran Ahmad Farroukh as new CEO

What do you do when your boat hits a rough patch? You call on a trusted captain to help navigate the storm. 

Nigeria’s third-largest telecom, Globacom, is currently weathering a storm and looking for great hands to steady its ship. The telco suffered a hack that locked its staff out of all communications channels. It also saw a 69% decline in its active customers. 

Yet, the telco is making a concerted effort to drive a turnaround. Last week, Globacom appointed Ahmad Farroukh as its new CEO.

Farroukh, who has over two decades of experience as a telco expert, has been called to steady Glo’s rocky boat. Farroukh’s telecom journey began in 1995 as CEO of Investcom Group in Lebanon. He later took on top roles at MTN Group, serving as CEO of MTN Nigeria from 2006 to 2010 and later as CEO of MTN South Africa in 2014. He also held leadership positions as CEO of Mobily in Saudi Arabia and most recently, at Smile Communications Nigeria.

Farroukh holds a Master’s in Business Administration and Accounting from the Lebanese American University and is a Certified Public Accountant (CPA) from New York, USA.

While Globacom is yet to make Farroukh’s appointment official, people familiar with the matter say the telco has notified the Nigerian Communications Commission (NCC), The company has also appointed a new board and has gotten approval from the regulator.

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Two months after finalising their landmark merger, Kenyan e-commerce firm Wasoko and Egyptian counterpart MaxAB have tapped an auto executive Mo Elshenawy to advise the combined entity’s technical teams.

Elshenawy is currently President and CTO of American self-driving car company Cruise. His expertise is expected to grow Wasoko and MaxAB’s new business units and position them to optimise AI-driven credit scoring and payments technology.

Like other digital lenders, offering credit needs sophisticated algorithms that evaluate customer profiles before issuing loans. These algorithms, powered by artificial intelligence, will be key for the business’s future growth, the company told TechCabal in August. 

The valuation of the merged entity has crossed $500 million, based on a financial report from VNV Global, one of its investors—suggesting a promising path to profitability. 

Although this valuation is still below Wasoko’s peak valuation of $650 million post-Series C funding in 2022, it shows the dip that saw Wasoko’s value drop to $260 million by 2023 as its core retail products business slowed.

In October 2024, MaxAB’s co-founder and COO, Mohamed Ben Halim, left the company to pursue new unnamed opportunities, marking yet another change in leadership for the combined entity.

Access Bank, Nigeria’s biggest bank by assets, continues to make inroads into the East African market through acquisitions.

The bank has gotten the first approval from Kenya’s Competition Authority (CA) to acquire tier-2 commercial bank, National Bank of Kenya (NBK). The deal, thought to be worth $100 million, will pull through after another approval from the Central Bank of Kenya (CBK).

But there is a catch: Access Bank must retain 80% of NBK’s workforce after the acquisition. Given Access Bank’s 316 employees in Kenya and NBK’s 1,384, this means that the former bank’s employee headcount is expected to reach at least 1,423. With a sharp increase in personnel costs, Access will spend more in operating expenses.

Beyond personnel costs, the acquisition could also place strategic pressure on Access Bank as it works to align NBK’s operations and corporate culture with its own. Maintaining a larger workforce may challenge its operational efficiency and pose a financial strain on Access Bank, which may need to optimise costs in other areas to offset this new expense.

While Access Bank is not new to expansions or having a large workforce, there is an undeniable backing that its new ventures get from the parent bank.

It’s a long-haul game for Access Bank as it is acquiring NBK—a bank that is evidently larger than its Kenyan subsidiary but also more distressed. NBK has struggled to shore up its capital base to CBK’s requirements in the past. It is also struggling with a high 25.3% in non-performing loans.

Yet, Access Bank appears willing to pour financial resources into its soon-to-be Kenyan acquisition until the bank can begin ekeing out profits on its own.