Nigerian digital bank Carbon set to resume card issuance after six-month pause
Carbon, the Nigerian digital bank, will resume issuing cards this month, six months after halting its card services. The decision followed changes to its card delivery system and rising customer demand, the company told TechCabal. “Our international card provider was expensive and some of the processes were too cumbersome for the product we want to give our customers. We looked at the flaws in debit card usage in Nigeria and optimised the experience to make it better for customers and businesses,” a spokesperson for Carbon told TechCabal. The fintech has refined its card collection and delivery system, one person familiar with the matter said. Fintechs, without branches, typically partner with logistic companies to deliver cards, which add costs to issuing costs priced in dollars. Like many neobanks, Carbon began issuing cards to retain customers and drive transactions after obtaining its microfinance license. At the time, the fintech described cards as “a big step” in its transition from a lender to a licensed microfinance bank. Despite the growing popularity of bank transfers, cards remain one of the most effective channels for customers to access their funds. For some, cards represent an easy option to access the cash in their accounts as Carbon operates without an agent network or physical branches. “Offering cards is not about attracting new customers to Carbon; it’s more of an essential service we provide. It’s about providing convenience and retaining our customers,” the spokesperson said. Most fintechs reevaluated their card operations due to the rising dollar costs of issuing Mastercard and Visa cards and a change in consumer behaviour. This reevaluation has boosted the popularity of Interswitch’s Verve card scheme, with the company issuing 17 million cards for Moniepoint and OPay. The Verve card faces competition from the central bank’s Afrigo card as both cards offer local costs and more accessible requirements. For Carbon, which issued Visa cards, it preferred to discontinue its card operation and rethink its operations. The fintech declined to disclose its new card issuer. .
Read MoreAccess Bank UK to acquire Mauritius-based Afrasia Bank
Access Bank UK, a subsidiary of Access Holdings, a financial services group with a market capitalisation of ₦1.28 trillion, will acquire a majority equity stake in Afrasia Bank, Mauritius’ fourth largest bank by total assets. The acquisition will help Access Bank UK expand its personal and corporate banking services to Mauritius with a robust financial services sector which contributes 13.1% to the country’s Gross Domestic Product (GDP). Afrasia Bank recorded total assets of more than $5.7 billion at the end of its fiscal year ended June 30, 2024. “Furthermore, Access Bank will utilise Mauritius as a strategic hub for trade finance and regional connectivity, thereby enhancing its capacity to facilitate cross-border transactions across Africa and beyond,” Access Holdings said in a regulatory filing on Thursday. The deal continues Access Bank’s strategic expansion across Africa through acquisitions. In October, the Competition Authority of Kenya (CAK) approved Access Bank’s acquisition of the National Bank of Kenya (NBK) from KCB Group. That deal is thought to be worth $100 million. In June, the bank acquired African Banking Corporation of Tanzania (ABCT) Limited. In January, it acquired pension firm, ARM Pensions, and Megatech Insurance Brokers Ltd. “Mauritius offers immense potential as an international financial hub, and through Afrasia Bank, we are excited to unlock new opportunities to drive trade, support businesses, and foster economic inclusion across the region as we continue our mission to be the World’s Most Respected African Bank,” said Roosevelt Ogbonna, Access Bank CEO.
Read MoreMoniepoint to acquire a commercial bank license
Moniepoint, the Nigerian fintech unicorn, is working to secure a commercial banking license from Nigeria’s central bank, according to three people familiar with the matter. While regulatory approval could take up to a year, these discussions are a key milestone in the nine-year-old startup’s strategy to expand its retail banking operations and increase its share of Nigeria’s financial services market. A commercial banking license would enable Moniepoint to expand its product offerings across Nigeria, including international transactions and treasury operations—both stable revenue drivers for banks. It would also allow the fintech to open physical branches, building trust in Nigeria’s historically low-trust banking environment. Foreign currency transactions could significantly boost Moniepoint’s revenue, tapping into a lucrative market that earned seven of Nigeria’s biggest banks around ₦3.37 trillion in the last nine months. The license would also give it a major edge over competitors like OPay and make it the first Nigerian fintech to own a commercial banking license. A similar strategy worked for Nubank in Brazil, where its banking license allowed it to become the primary bank for nearly 60% of its customers, serving more than half of the adult population. Pursuing a commercial banking license underscores Moniepoint’s goal to distribute financial services more efficiently than its competitors. Despite being a late entrant, the fintech has already become a key player in the agency banking sector by leveraging technology and a vast network of agents. Moniepoint declined to comment. If granted a commercial banking license, it will again be a late entrant. With 24 commercial banks, Moniepoint will hope its momentum in retail banking, launched in August 2023 will help it stand out. While its exact number of customers is unclear, industry experts claim it is second only to OPay and ahead of Kuda, which has 7 million users. This rapid growth places Moniepoint’s customer base ahead of relatively new commercial banks like Globus Bank, which had 60,000 customers in 2022. There’s significant potential for disruption in the market, as Nigeria’s largest banks are often criticized for serving millions of customers with subpar services. A fintech-driven commercial bank could shake up the sector. If successful in acquiring the license, Moniepoint will join other major commercial banks like FirstBank and Zenith, which have vast networks of banking agents. The fintech began preparing for the license in the first quarter of 2024, shortly after hiring Bayo Olujobi as its new Chief Financial Officer (CFO) from Stanbic IBTC, one person familiar with the discussions said. Acquiring the license could take a year, as the central bank’s lengthy vetting process must be completed before granting approval to commence banking operations. Moniepoint has significantly bolstered its compliance team, hiring more than a dozen new employees in compliance and fraud monitoring since the beginning of the year. At $15 million, the capital required for a commercial bank license is a fraction of Moniepoint’s recent $110 million raise, which elevated it to unicorn status. Besides the cost, the fintech will also have to set up physical branches across Nigeria with regulatory requirements like a strong room, loading bay, and banking hall. While commercial banks operate under stringent regulations, acquiring a license would signal Moniepoint’s maturity and its readiness to embrace a more established regulatory framework. This would be an important step, especially as the central bank has adopted a more stringent regulatory stance toward fintechs since December 2023, which has created challenges for many startups. A commercial bank license would allow Moniepoint to overcome the restrictions of its microfinance bank license, which limits both product offerings and geographic expansion beyond Nigeria’s South-West region—a significant barrier in a country with such a large and diverse market. The fintech has worked around its geographical limits by opening “support offices” nationwide to maintain a physical presence in regions where it cannot operate branches. However, there is no workaround for its product limitations. Nigerian microfinance banks cannot offer complex financial services such as large-scale corporate banking, investment banking, foreign currency transactions, or extensive treasury operations that are typically profitable segments for commercial banks. A commercial banking license removes these limitations for Moniepoint and allows the fintech to generate multiple income sources beyond microloans and savings accounts. In 2023, Access Bank, Nigeria’s largest bank, generated only 29.4% of its total profit from retail banking, with most profits coming from commercial and corporate banking. Similarly, most banks rely heavily on corporate deposits. United Bank for Africa, a tier-1 bank valued at ₦1.06 trillion, reported ₦8.2 trillion in retail deposits compared to ₦23 trillion from corporate clients. The fintech has also gone on a compliance hiring spree, hiring more than a dozen compliance and fraud monitoring employees since the start of the year in response to the central bank’s ban on fintechs in April. Although a commercial banking license comes with higher regulatory standards and capital requirements, the long-term advantages—such as diversified services, increased credibility, and expanded growth potential—make it an appealing move for Moniepoint.
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👨🏿🚀TechCabal Daily – Another inflation spike?
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Mark Zuckerberg is upping his new found swagger by a few notches. The Meta CEO announced a new song with singer T-Pain. Zuckerberg worked with T-Pain to write an acoustic cover of the 2002 rap song “Get Low”. It sounds just like you’d imagine—almost like a weird Al parody. In other news, Apple could release a tablet that mounts to your wall, controls smart home appliances, does video calls in March 2025. The tablet will also feature Apple Intelligence and will be controlled by voice commands. Analysts expect Nigeria’s inflation to quicken in October Africa needs more cross-border startups Telkom gets court order to investigate data breach South Africa mulls over introducing carbon taxes World Wide Web 3 Opportunities Economy Analysts expect Nigeria’s inflation to quicken in October Image Source: Wunmi Eunice/TechCabal Nigeria’s headline inflation for September quickened slightly as fuel price increases exceeded the price reductions from a bumper food harvest. That acceleration reversed a two-month easing period in the country’s headline inflation, which currently stands at 32.70%. With October inflation figures expected to be released on Friday, analysts predict the number to be between 33.5% and 34%. Although Nigeria’s harvest season helped ease food prices, flooding in key agricultural states like Borno and increased transportation costs due to a fuel hike have reversed those gains. The country’s failure to implement a 150-day waiver on food imports may also quicken food inflation rate which is already at 37.7%. If the National Bureau of Statistics (NBS) announces a quickening inflation in October, it will add to the worries of Nigerians who are living through the country’s worst cost of living crisis in decades. Regardless of what figures the NBS shows, the Central Bank will likely maintain the benchmark lending rate again. In September, the Monetary Policy Committee (MPC) delivered a shock 50 basis point interest rate hike. 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. Fintech Fincra’s play in Africa’s cross-border payments scene Fincra CEO Wole Ayodele/Image: Faith Omoniyi/TechCabal Now more than ever before there are more African-focused remittance startups that allow you to send and receive money abroad. NALA, Raenest, Grey Finance, LemFi, you can mention them with little effort. Yet these well-known remittance companies rely on lesser-known payment businesses like Fincra to succeed. Fincra provides payment infrastructure that enables remittance companies to process cross-border transactions. Since 2023, the company has processed $10 billion in transactions—serving clients like Lemfi, OneLiquidity, and Cleva—and is profitable. Fincra has remained largely bootstrapped, having raised only a $250,000 investment from Techstars in 2022. Read more about the business and what it does beyond remittance. Get Fincra’s Embedded Finance and BaaS Report 2024 for FREE Fincra in collaboration with The Paypers have released the Embedded Finance and Banking-as-a-Service Report 2024. This report examines the key challenges and innovative solutions defining the future of seamless cross-border payments and remittances across the continent, among other topics, with key experts. Get this valuable, free resource today! Telco Telkom gets court order to raid company over data breach allegations Image Source: Telkom In the hierarchy of cybersecurity mishaps, consumer data privacy breaches are probably the most costly for companies. The damages often go beyond financial losses for the company or the harm to customers. In the trust business, losing customer trust does not bode well for any company. Data breaches expose customers to risks like identity theft and fraud, but consumers have some power to act when companies fail to protect their data. In many countries, including South Africa, laws like the Protection of Personal Information Act (POPIA), 2013 require companies to notify affected consumers and report breaches to regulators. Consumers can file complaints and, in some cases, pursue legal action for damages caused by a company’s negligence. In September 2024, Telkom, South Africa’s third-largest telco with 21 million subscribers, was breached in an incident that saw the perpetrator gain access to crucial information on its customers. However, there was no reported financial loss to these customers. The breach occurred when an unnamed franchisee employee allegedly accessed and shared Telkom customer data with a third-party company, which then used the information to poach clients. Telkom responded swiftly to the data breach. The company notified the impacted customers and reported the incident to the Information Regulator, as required by POPIA. On Wednesday, Telkom received a high court order to raid both the third party’s premises and the employee’s residence, seizing records to assess the full extent of the breach. While Telkom may still get a slap on the wrist for employee negligence, the telco could still walk away without litigation due to the alarm bells it raised and the subsequent follow-ups to its affected customers. Introducing Paystack transfers in Kenya Paystack merchants in Kenya can now send single and bulk transfers to any Kenyan bank or MPESA account (including customer wallets, Paybills, and Tills) Learn more → Economy South Africa mulls over introducing carbon taxes Image Source: Google South Africa’s National Treasury has proposed plans to introduce carbon taxes to its tax regime to offset its carbon emissions. Carbon taxes are levied on companies that emit large amounts of carbon. Africa’s global contribution to carbon emissions and the consequential climate change may be a meagre 4%; but within the continent, South Africa is one of its biggest carbon emitters. This is no thanks to its national power-generating company, Eskom. Eskom produces and supplies 80% of the electricity the country consumes, with coal as a major energy source. This heavy reliance on coal means South Africa emits 435.9 million tonnes of carbon annually, with its coal power contributing about 85% to that number. Alongside Egypt and Algeria, South Africa is responsible for 60% of Africa’s
Read MoreProfitable Fincra believes Africa needs more cross-border startups
If you shake any tree, an Africa-focused remittance startup will fall out; so goes the joke. There’s a roll call of recognisable names in the sector: Lemfi, NALA, Raenest, and Leatherback. Yet these well-known companies rely on lesser-known payment businesses to succeed. Take Fincra, a B2B startup providing payment infrastructure that enables remittance companies to process cross-border transactions. In 2023, the company processed $10 billion in transactions—serving clients like Lemfi, OneLiquidity, and Cleva—and is profitable, though it declined to share specific figures. Fincra has remained largely bootstrapped, having raised only a $250,000 investment from Techstars in 2022. Ayodele’s belief in organic growth over-reliance on external funding has shaped this approach. “I don’t believe in funding as a growth strategy; I believe in adding value to people. If you add value, people will give you money,” Ayodele said. As African businesses expand globally and more Africans work remotely for international firms, Fincra is at the forefront of a wave of startups facilitating seamless cross-border payments. The company competes with players like Kora and Verto but differentiates itself with its unique payment infrastructure that simplifies the complexities of cross-border transactions. Fincra doesn’t view its competitors in the traditional sense. ‘In fact, the companies you might assume are our competitors are more likely to be our customers,’ says Ayodele. This mindset stems from Fincra’s strategy of empowering other businesses with its infrastructure rather than battling for direct market share Building a cross-border payment rail from the ground up has been a monumental challenge. Beyond sourcing the right talent to develop such a complex system, navigating the diverse and often stringent regulations across multiple countries has proven to be a significant hurdle. “In some countries, it can take about 48 hours to move local currency from one bank to another. You can’t innovate out of that.” Ayodele believes more cross-border solutions are needed to enable the easy flow of money within Africa. “We always look like a complimentary solution. One company cannot necessarily solve cross-border problems across the continent. This means we need many more people building the solutions we are building. We believe that the prosperity of Africa lies in the easy flow of money,” Ayodele told TechCabal. The company currently operates in Ghana, Kenya, Uganda, the United Kingdom, Europe, and North America and has plans to expand into the Francophone region. “These markets are extremely sought after by our customers, so it’s a no-brainer that we go to those regions. Ultimately, we plan to be in all 54 African countries. Next year, we are looking at places like Egypt and Ethiopia,” Ayodele said. Fincra has also faced its share of security challenges, particularly in the wake of fraud incidents that have plagued Nigeria’s financial sector. “The only way to solve fraud as a financial technology provider is by building better technology,” Ayodele said. “We are all learning painful lessons, if you don’t put in the right measures, you get found out, you get hacked.” Ayodele believes ecosystem collaboration and improved communication and awareness among users as other suggestions to curtail fraud. Fincra has deprioritized issuing virtual cards, following a wider industry trend, because Ayodele believes the current workaround used by Nigerian fintechs is unsustainable. Fintech partners with U.S. or UK banks to issue dollar cards to Africans. However, Ayodele argues this approach is flawed, as it introduces fraud risks when non-US residents are issued cards in increasing numbers. “The problem of issuing virtual cards is that when one fintech has a solution everybody tries to layer on top of it. It’s only a matter of time before fintech reaches a fraud threshold as the number of non-US residents issued cards increases.” Ayodele believes the ultimate solution to issuing dollar cards is to identify the countries you want to issue to and get a paying sponsor from that country. But then again, people don’t like to do hard things. It’s the hard things that will last.” The business also claims it deprioritized issuing dollar cards after the Central Bank of Nigeria (CBN) introduced the Investors’ & Exporters’ FX Window (I&E FX Window). “There is no joy in solving for what has already been solved. Ideally, every Nigerian bank should be capable of enabling naira cards for international payments. It is laziness that is not making every naira card work online.” Fincra has no plans to launch a consumer-facing product but will launch multi-currency accounts for small businesses. “We believe that it is faster to achieve our vision by building infrastructure for others rather than trying to face all the customers in Africa.” In October 2024, the business secured a Third Party Payment Provider (TPPP) licence in South Africa, enabling it to offer Pay-In and Pay-Out services, including card payments, to registered and pre-approved businesses in the country. Fincra will begin its South African operation within the next month.
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🚀Entering Tech #78: Trading Titles & Hats – What drives career switches?
And America’s failed shadowcat experiment. 13 || November || 2024 View in Browser Brought to you by Issue #78 Trading TitlesAnd Hats Share this newsletter Greetings ET people In the middle of the cold war—think 1961—America wanted to get ahead of its longtime competitor Russia. The CIA planned to turn cats into spy animals. The spy agency believed humans were too large, heavy-footed, and barely stealthy. It wanted a new approach to espionage. The project, titled “Acoustic Kitty” died after the first cat subject was hit by a car—$20 million flushed down the drain. The Bay of Pigs fiasco became a colossal failure. This remains a controversy to this day, largely because the US—masters of storytelling—never fully admitted that the Bay of Pigs failure was what spurred the experiment. Change can be daunting, uncertain, and, as in the case of Acoustic Kitty, sometimes leads to dramatic failures. But for three techies in today’s edition, facing that fear of failure was the only way forward. For Titilola Shittu, Olatomide Awoyomi, and Peculiar Richard, stepping into the unknown helped them find the career paths they now love. Emmanuel Nwosu & Timi Odueso For Titilola, survival was key While the US does not take ownership of its failed experiment, our first guest, Titilola, says her winding career paths have all been experimental. Only product marketing has stuck. Titilola Shittu Started Content Writing, 2019 Started Coding and Technical Writing, 2021 Graduated University, 2022 Started learning Product Design, 2022 HNG Internship, 2022 Started learning Product Marketing, 2023 Marketing Associate, Simpu April 2024 – Oct 2024 She started out writing flash fiction, then moved into brand copywriting and content writing, motivated by her desire to make money. Soon after, she had a brief stint in product design and another year learning software development. Titilola had graduated from Olabisi Onabanjo University in 2022 with a degree in Biochemistry, and even before she wore the university’s navy blue convocation robes, Titilola knew she would never wear a medical lab coat. “I think I needed an escape. During the COVID lockdown, I would catch up with my friends and they’d tell me what they were up to; I was so scared and thought the world was ending, so when my hostel-mate introduced me to sites that paid me to write, it felt natural because it was something I enjoyed.” Titilola started her career writing for Opera News—her first real paying gig. Later, she worked at a digital marketing agency, learning SEO, writing blog posts and sales copy for client brands. She called this her “first taste” of product marketing, though she didn’t know what it was at the time. She worked at the agency until she graduated, and then product design caught her attention. However, her lack of interest led her to admit, “I was bored of writing, so I decided to try it. After two months, I didn’t know what I was doing in design, so I left it.” Despite her inclination to experiments, Titilola says she knows “when to tell herself the truth,” and she feels this is important for anybody transitioning careers. In 2022, she joined HNG Internship as a sales and marketing intern, where she got her first proper marketing experience. In 2023, she fully transitioned into product marketing, after taking courses and completing internships. It took her six months to land her first role. *Newsletter continues after break Shoot better shots with HMD With a 108MP hybrid OIS triple rear camera with capture fusion and a 50MP selfie camera with eye-tracking autofocus, your shots are about to take off. Find out more. Design opened doors for Olatomide Olatomide’s career path, on the other hand, is anything but ordinary. It all started with a spark of interest he got as a kid when he first saw an MTN flyer. That curiosity grew into an obsession with computers. Olatomide Awoyomi Started Design, 2013 First professional design gig, 2016 Tried Fashion Designing, and Printing, 2018 Graduated University + First Corporate Design Job, 2019 HNG Internship, 2022 Founded a Design Agency, 2021 Transitioned to Brand and Comms Analysis, 2023 Shuttered his Design Agency, 2024 Transitioned to Marketing, 2024 He entered tech as a self-taught web designer because he wanted to build his friend a website that sold pirated music like naijaloaded.com at the peak of its popularity in 2012. He soon scratched that idea. Design and sales, brand and communications, and fashion design were a few other adventures that Olatomide went on to try. After a brief stint learning how to design websites, he decided to focus on design. It took him a while to establish himself, but as soon as he did, he went from graphic design to marketing and communications in the space of seven years. He started designing in 2013, though things didn’t take off until three years later when he volunteered to be on the design team that hosted the GDG Lagos event in 2016. This, as he describes it, was the first time he designed professionally or worked on anything big. Yet, it was the lift-off he needed. Between 2016 and 2019 during his undergraduate days, while his job description stayed as ‘designer,’ Olatomide ran ventures of his own, notably he won a Campus Hult Prize competition, started a failed t-shirt printing business for crypto bros, and even learnt fashion designing. Olatomide won a Hult Prize at EKSUOlatomide landed his first major role after graduating in 2019, courtesy of an employer he met at GDG. While building an agency on the side that provided design services to small businesses on the side, he noticed that businesses faced a unique problem: they didn’t know how to sell. “I was charging them ₦50,000 for design, they’d pay once, and never come back. I thought it was my price, but I soon discovered that these businesses were not making sales, so they were not coming back. This was when I switched to sales and eventually, the thought of marketing kicked in too.” This was 2021. He
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👨🏿🚀TechCabal Daily – Glo’s slippery slope
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy mid-week! You might soon see Sam Bankman-Fried, the former CEO of FTX, on screen. Lena Dunham, Apple, and studio A24 are adapting Michael Lewis’ book “Going Infinite: The Rise and Fall of a New Tycoon,” which explores Bankman-Fried’s life and FTX’s collapse under money laundering allegations. We hope you are looking forward to the movie as blockbusters don’t come in better wrapping than that. How Globacom declined in Nigeria’s telecoms market Mixed results for MultiChoice in H1 2024 Safaricom pauses advertising on Nation Media Group World Wide Web 3 Opportunities Telco Inside Globacom’s struggle to regain telecom relevance Image Source: Adaeze Chukwu/TechCabal One day, cock of the walk; next day, a feather duster. When Globacom launched in August 2003, it was entering a contested market. MTN, Econet, and MTEL were already market leaders in a nascent market, and the entry of Globacom, the upstart Nigerian-owned telecom operator, shouldn’t have fazed them. Yet, Globacom pushed its last-mover advantage, learning from the fact that customers hated the existing pay-per-minute method, which forced them to pay ₦50 ($0.03) whether they spent 1 second or 59 seconds on the phone. The upstart’s per-second billing was truly disruptive, forcing MTN and Econet to implement the same billing system two months later. Glo wasn’t done. It threw down the gauntlet and crashed SIM card prices from ₦20,000 ($12) to ₦3,000 ($2) before offering everyone free SIM cards. This was a late entrant forcing the market to adapt to its moves. Not done, Glo was one of the first networks to offer 2.5G internet and by 2009, it had landed a 9,800 km submarine cable in Lagos, showing its ambitions to connect all of Nigeria to the internet. Today, no one remembers Globacom as an innovator. Its service quality is spotty, and its market share has slipped to 13%. Competitors don’t remember the last time the Nigerian telco did anything worth copying. Here’s the story of how Globacom fell off and what its path to redemption looks like. 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. Companies MultiChoice revenue declines by 10% in H1 2024 Image Source: MultiChoice On Tuesday, MultiChoice, South Africa’s pay-TV giant, reported mixed half-year results for the period ending September 30, 2024, citing an “extremely hostile” operating environment. Revenue reached R25.4 billion ($1.4 billion), declining by 10% year-on-year (YoY), but up by 4% on a constant currency basis, if currency fluctuations are not accounted for. Trading profit before tax, which previously grew to R6.6 billion ($364 million), fell by nearly half, weighed down by a R2.3 billion ($127 million) forex loss, particularly in markets like Nigeria and Zambia where currencies depreciated sharply against the US dollar. In May, the company previously responded by increasing subscription fees by 25% in Nigeria. With this loss, we could see MultiChoice inflate prices again. MultiChoice’s streaming service, Showmax, saw strong growth, with a 50% subscriber increase and watch hours reaching 86,215, boosted by a R1.6 billion ($88 million) investment in local content production, marketing, and advertising. Despite this, the group reported a 1.8 million drop in active subscribers—defined as people who have active primary subscriptions during the reporting period—since H1 2023, mostly from the Rest of Africa, reducing its total base to 14.9 million. This represents an 11% decline. The decline was attributed to power cuts and load-shedding in key markets like Nigeria and Zambia, which led to lower engagement, customer frustration, and ultimately, higher churn rates as viewers struggled to access services. Due to the receding active subscriber base, the average revenue per user (ARPU) in its Rest of Africa markets declined to $8 per user (-14%) across its streaming platforms, while it increased to $289 (+3%) in South Africa. Globally, the pay-TV market plateaued, with other streaming services either expanding their value-added services or ramping up their spends. Nonetheless, MultiChoice saw improvements: its liquidity position rose to R10.1 billion ($558 million), and it led to higher cost-savings among its South African peers. Additional wins included a revenue boost from KingMaker, its gaming and sports betting product which gained momentum in Nigeria, bringing ₦68 billion ($41 million) in revenue. Its fintech arm, Moment, also gained traction in South Africa and other Sub-Saharan regions. MultiChoice will continue to splurge on Showmax—which it describes as being in its “peak investment cycle”—focusing on original content and marketing to rival Netflix and Apple TV. It is optimistic about Showmax’s profitability, after ending a streaming partnership with Comcast. 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 Safaricom suspends advertising on Nation Media group Peter Ndegwa, Safaricom chief executive/Image Source: Safaricom Journalism can be a double-edged sword. Most newsrooms keep the lights on by a limited number of revenue streams, including running advertisements for companies they report on regularly. While the purpose of journalism is to give the facts, expose what is untrue, and give information that is of public interest, many big corporations may be interested in the last segment as it sometimes involves critical coverage by newsrooms. These big corporations often try to intimidate media houses or threaten to withdraw advertising deals such as the case of Kenya’s largest telecom operator, Safaricom suspending its ad spending with Nation Media Group (NMG) platforms after it criticised the telco. Safaricom’s withdrawal of advertising spend comes after several NMG subsidiaries published critical reports about the company, including one that claimed Safaricom shared user data—including calls, texts, and location—without proper consent. Safaricom has denied
Read MoreThe Stunning Decline of Globacom, Nigeria’s Third Biggest Telco
When Globacom launched in August 2003, it entered a crowded telecom market, two years behind giants MTN, Econet, and MTEL. Despite this, it quickly made an impact with bold moves, positioning itself as a serious competitor. By pioneering per-second billing—unlike the ₦50-per-minute norm—it immediately disrupted the market, forcing rivals to follow suit. If per-second billing was a game-changer for the industry, Globacom pulled off another stunt in October 2004 by offering free SIM cards—undercutting competitors selling theirs for ₦2,000. This aggressive price war was only possible for a late market entrant, and Globacom backed it with hefty marketing campaigns, signing Nigeria’s biggest celebrities as ambassadors. By 2004, long before other Nigerian telcos recognized that data, not voice, was the industry’s future, Glo had begun offering 2.5G internet service to 70,000 subscribers. By 2009, it had landed a 9,800km submarine cable in Lagos, showing the depth of its ambition to connect Nigerians to the internet. “We got the people talking,” said one of its ads. Globacom raced to early success, and many Nigerians identified with the first local telecoms company with catchy ads. However, as the business grew, it lost its innovative DNA and struggled to maintain the momentum of its first eight years. The path to decline Despite its early success, Globacom now feels like a company in decline. With its market share down to 13% and just 19.1 million subscribers, the once-innovative leader now grapples with stagnation. Speculation has mounted for years that Nigeria’s telecom subscriber numbers—217 million in early 2024—were inflated. Industry insiders believed the lack of clear rules on counting subscribers who had been inactive for up to six months allowed telecom operators to pad their numbers. A recent audit and the rule that establishing 90 days of inactivity as the clear baseline by the Nigerian Communications Commission (NCC) has helped clarify issues. Due to those new rules, Globacom was required to recount its active subscriber base, shedding 40 million subscribers who were inactive in the last 90 days. While competitors MTN and Airtel also shed a few million active subscribers, they’re now the clear market leaders with 78 million and 53.7 million active subscribers, respectively. Globacom’s reputation for unreliable service has hurt growth. A major cyberattack in August 2023 exposed customer data to unknown hackers and went unreported for a year, exacerbating the reputational damage. The Globacom breach: How hackers held Nigeria’s telco giant hostage Corporate culture and governance issues One month after the hack was reported, the privately held company named a new CEO and board of directors in October 2024 after some pressure from the NCC. According to two company insiders, it is the first time since 2003 that someone outside Mike Adenuga’s family will control the company. As Adenuga’s leadership entered the 2020s, Globacom’s reputation for innovation had been undone, leaving an image of a company hampered by a one-man bureaucracy. “It is run like a one-man business, and everything runs up to Mike Adenuga. They can’t take any decision without his approval,” said one business close to the business. That person claimed several of Adenuga’s companies share the same employees, blurring the lines between the businesses. Telecom executives and analysts highlight a decade of underinvestment and weak corporate governance as critical factors behind Globacom’s decline. Once a leader in innovation, the company’s culture shifted, stalling progress and leading to mounting operational challenges. Telecom regulators have mostly looked the other way with issues connected to Globacom. Its curious culture may have cost the company more, with one industry source claiming Globacom was poised to enter a potential partnership with telecoms company Orange after the French company expressed interest in a Nigeria expansion. Ultimately, the move did not materialize. Regulatory and financial challenges As the only local telecom company in a market dominated by foreign players, Globacom has enjoyed a leniency that industry players have questioned. Despite owing MTN Nigeria ₦3 billion in interest on interconnection fees for 15 years, Globacom settled the debt for ₦2 billion without facing significant consequences. This penchant for indebtedness also extends to vendors and partners “They don’t pay Value Added Services on time, they don’t pay interconnect fees on time. It is the same thing they do to partners; they will not pay until 180 days,” said one person familiar with the company’s operations. At least two other vendors that have worked with Globacom in the past ten years claimed the company has a reputation for late payments. This reliance on Adenuga, who is widely believed to be the company’s sole financier, is believed to be linked to a perennial underinvestment in the company. “To be significant and deliver the right service, you probably need $1 billion in capital expenditure annually,” said Bolaji Balogun, CEO of Chapel Denham, who helped execute the $1.67 billion sale of Econet Wireless to Celtel in 2005, said at a telecom event in August 2024. Unlike other major operators, Globacom doesn’t outsource its over 8,700 towers to companies like IHS; instead, it builds and maintains them with foreign technical experts. “The cost of operating those towers alone is enormous, covering energy, security, community engagements, and personnel costs,” said an industry expert. Infrastructure-heavy sectors like telecoms require ongoing investment to maintain service quality. For example, you can have a submarine cable, but without deploying terrestrial cables to reach individual users, connecting towers with fiber cables, and building more towers where needed, the network will struggle. The need to continually improve quality is also why MTN and Airtel are investing in data centre infrastructure. While both companies started out with using existing data centres, they are now building their own data centres. Beyond infrastructure, Globacom has made little investment in its Payment Service Bank (PSB) licence, acquired in 2020, resulting in stagnant growth for the service. Meanwhile, MTN and 9Mobile, with similar licences, have added millions of users to their mobile money platforms.. The future outlook There are worries that Globacom could go the way of 9Mobile, another telco that had a flying start
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Safaricom suspends advertising on Nation Media Group publications over critical coverage
Kenya’s largest telecom operator, Safaricom, has suspended its advertising spending on Nation Media Group (NMG) platforms following critical coverage of the company, according to two NMG executives familiar with the decision. NMG-owned publications like the Daily Nation, Business Daily, and The East African have run stories critical of Safaricom in the past month. One story by The Daily Nation was about a $800 million public healthcare system contract awarded to a consortium that included telco and companies linked to Indian billionaire Gautam Adani. Another report highlighted the close ties between Safaricom’s chairman, Adil Khawaja, President William Ruto, and Adani. However, the key trigger for the advertising suspension appears to be a Daily Nation investigative report published on October 29, 2024. The report claimed Safaricom shared user data—including calls, texts, and location—without proper consent, a claim the company has firmly denied. One week after the privacy story was published, Safaricom ran ads in The Standard and The Star, reaffirming its commitment to customer privacy. Those ads coincided with the company’s 24th anniversary. Safaricom also chose not to publish its H1 2024 financial reports in any NMG-owned publications, a first since its 2008 IPO. It opted to publish in The Standard and The Star to meet legal requirements. The suspension highlights the growing pressure on independent media outlets to soften their coverage or risk losing ad revenues. Kenyan news outlets have seen a decline in ad revenues as banks, telcos, and the government cut advertising spending. Safaricom is one of Kenya’s biggest advertisers, with a monthly ad budget of $4.8 million (KES619.2 million). This is not the first time Safaricom has withheld advertising following critical coverage. In previous instances, the company would still publish its financial statements in NMG publications, but this is the first time it has refrained from doing so. In October 2024, Safaricom officials visited major Kenyan newsrooms to persuade them to tone down coverage, said one senior PR executive who asked not to be named so they could speak freely. The officials met senior editors and reporters during the visits. The company has significant influence in the market and, from time to time, withholds ads in response to critical coverage, the public relations executive said. It has never publicly admitted to suspending ads. Safaricom did not immediately respond to a request for comments. The media group’s troubles extend beyond Kenya. In October, the Tanzania Communications Regulatory Authority (TCRA) suspended Mwananchi Communication’s websites–a subsidiary of NMG–after one of its publications ran an animated advert depicting President Samia Suluhu and referencing recent abductions and killings of opposition groups. These pressures could compound NMG’s financial challenges, as it faces its first loss in decades and a shifting media landscape that is increasingly digital.
Read MoreAfrican founders say their jobs have impacted their mental wellbeing
A new report from Flourish Ventures shows that while African founders love their jobs, many say that it has negatively impacted their mental health. While African founders are passionate about their entrepreneurial journeys, factors outside their control, such as fundraising challenges and Africa’s volatile macroeconomic conditions, are taking a significant toll on their mental health, a new report from Flourish Ventures shows. The report, based on responses from over 160 founders across 13 African countries, shows that more than 80% of respondents struggle with mental health issues. Among them, 60% report experiencing anxiety, 58% high stress, 52% exhaustion, and 20% depression. Even founders of startups identified as “thriving” are not immune—over 70% of them also reported mental health challenges. “Prioritising founder wellbeing not only has a positive impact on founders’ lives but also on the long-term success of their businesses,” said Ameya Upadhyay, a venture partner at Flourish Ventures. “Our hope is that by sharing these early learnings, we can foster a broader conversation about how to support founders, both in Africa and globally.” Despite these challenges, 81% of African founders remain passionate about their entrepreneurial paths. However, they cited several key stressors affecting their mental health, with fundraising (59%), inflation (44%), and navigating economic instability (40%) at the forefront. Almost half of the founders surveyed asked investors to curb unrealistic demands and want investors to recognize them as individuals rather than merely contributors to financial returns. “The external stressors—factors largely outside our control—are big contributors tostress and burnout for most entrepreneurs. As an investor, I try to help my founders focus on what they can control and let go of what they cannot,” Iyin Aboyeji, founding partner at Future Africa, said. To cope with these pressures, many founders turn to exercise (59%), relationships (49%), sleep (45%), and healthy eating (42%). The report found that founders with strong personal support networks experienced 13% higher well-being compared to those with weaker networks. However, despite the benefits of open communication, only 14% of founders feel comfortable discussing their mental health struggles. This reluctance is driven primarily by fears of judgment and a lack of empathy from investors. “Founder stress and burnout are pervasive, yet founders are remarkably resilient,” said Efayomi Carr. He emphasized the importance of reshaping investor-founder relationships, advocating for greater transparency, realistic expectations, and a human-centered approach on a call with TechCabal. He added that a focus on founder wellbeing is not just ethical but also essential to business success, as a founder’s mental resilience directly impacts their company’s growth and sustainability. “Data is powerful, but it’s just the beginning of a conversation,” said Carr. “We hope this research sparks a dialogue between founders and funders on building a stronger ecosystem that ensures success for everyone involved.” African startups and investors need better communication to stop funding drought
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