👨🏿‍🚀TechCabal Daily – Finance workers are feeling the squeeze
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy mid-week! Kenyans may be seeing the number of commercial banks in the country reduce after a new amendment bill aims to raise core capital requirements for banks to KES10 billion ($77 million) by 2027 from KES1 billion ($7.7 million). As many as 24 Kenyan banks could be forced to close if the proposed capital requirements are implemented. Those banks will have eight years to raise their minimum statutory capital to at least KES10 billion. In other news, Amazon is working on a new and improved version of Alexa AI that can customise responses to real-time user queries about the news. The new version of Alexa is powered by generative AI and will answer complex user queries, such as the status of polls during an election. Nigerian finance employees are unhappy with their salaries AltSchool Africa expands to Europe Access Bank’s remittance play AfDB approves $170 million loan for Egypt’s wind project World Wide Web 3 Opportunities Features 56% of finance employees in Nigeria are unhappy with their salaries Image Source: Zikoko Memes At the office, everybody pays homage to the finance department on salary days. Who would have thought that the same numbers game would leave finance employees feeling shortchanged? A new report from Duplo showed that 56% of these professionals in Nigeria are unhappy with their salaries. Only a small number, about 3%, are happy with their pay. About 38% of finance employees working across different industries reported that their salaries have not increased in this past year, adding more salt to their injury as rising inflation continues to erode their spending power. According to the report, these professionals value job perks that provide them with economic stability and other opportunities for skill and career development. Compensation and clear career growth structures are two valid reasons anybody wants to work. Compensation satisfaction is closely tied to employee retention. Those dissatisfied with their pay are more likely to look for new jobs. Mid-level professionals earning between ₦500,000 ($302) and ₦1,000,000 ($603) said they are likely to leave their jobs, either for better pay abroad or at more competitive local companies. Like the tech industry, the finance industry is a competitive field for talent with professionals trying to climb up the income ladder faster. Financial institutions like banks often review staff salaries to stay competitive and keep other banks from poaching their employees. In 2024, two Nigerian commercial banks, Union Bank of Nigeria and GTBank increased employee salaries to help them adjust to the country’s cost of living crisis. From the report, organisations that provide clear pay structures will have a better shot at retaining talent in the finance sector. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Startups AltSchool Africa expands to Europe Image source: Google The answer to unlocking profitability and new revenue streams may sometimes be in new markets. This is why Nigerian edtech AltSchool Africa is expanding into Europe. AltSchool Africa launched in 2021 as a virtual platform for people to earn diplomas in engineering, data, and business analytics. Years later, the startup is adding a new layer to its offerings after receiving applications from companies across the world to help curate courses and build infrastructure for workforce development. The startup claims it has started conversations to offer such services to organizations in Malta where it will launch its first operations in Europe. AltSchool’s expansion into Europe comes with a new twist. The startup, whose primary business model in Africa has been focused on online learning, will set up campuses in Malta as it introduces a hybrid approach where learners can have in-person learning sessions with tutors. Racheal Onoja, the startup’s lead for market expansion, believes in taking the best of both sides by combining the traditional approach to learning and new-age ideas for a better learning experience. While AltSchool’s move to Europe is a no-brainer—Europe is its third-largest market, with learners from over 12 European countries—it will compete with well-established platforms like Bloomtech. CEO Adewale Yusuf believes the startup’s focus on community and personalised learning will set it apart. Dive into the Startup’s expansion plan here. 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! Banking Access Bank is building a payment rail to tap into Africa’s remittance market Image Source: ImgflipAccess Bank, the Nigerian tier-1 commercial bank, is building Access Africa, a payment product that will allow Access Bank account holders to send money across the continent. The bank has been building this payment rail since May 2024 when it announced a partnership with Mastercard. The product will address a gap in cross-border finance that allows intra-trade in Africa. What works for Access Bank with a remittance product is its scale. The lender has never been shy about its global ambitions and expanding into wide markets. That ambition has led it to 22 African countries where it now operates, with 19 as key regions for trade and commerce. The product will compete with the Pan-African Payment and Settlement System (PAPSS) designed to facilitate trade across Africa. It will also challenge alternative solutions like stablecoin remittance providers, often seen as a cheaper option for cross-border payments. Access Bank is betting on its 60 million customer base. It could introduce the remittance payment rail into its mobile banking app with over 5 million downloads. The bank also plans to partner with fintechs to drive adoption. Access Bank will not be the first Nigerian commercial bank
Read MoreAccess Bank is building a payment rail to connect Africa’s remittance market
Access Bank, a tier-1 Nigerian commercial bank present in 22 countries, is building a payment rail, Access Africa, to allow people and businesses to send money across the continent through Access bank accounts. “It’s our proprietary rail that connects Africa,” Rob Giles, Access Bank’s senior retail banking advisor, said at a media parley on November 22. Access Bank will use its presence in 16 key African markets including Kenya, South Africa, and Nigeria, to connect its African customers—the largest on the continent—to major international trade hubs through its physical offices in Asia and Europe and facilitate global trade.  The bank is also partnering with “as many fintechs as possible” that would use the payment rail to send money across borders. “We partnered with other remittance companies to [enable transfers] into a mobile wallet in Kenya, for example, or to facilitate transfers to and from China,” Giles said.  Access Africa will allow the bank to compete in the sub-Saharan African remittance market valued at $54 billion in 2023. Ecobank, a pan-African bank present in 33 African countries, also allows its customers to send money to each other across these countries through Rapidtransfer, its payment rail. Access Bank will face stiff competition from stablecoins, which offer instant transfer, remittance infrastructure startups like Zone and Keyrails, and the Pan-African Payment and Settlement System (PAPSS), an infrastructure developed by the African Export-Import Bank which enables instant cross-border payments in local currencies across Africa. The bank hopes its presence in 19 African countries and partnerships with fintechs will help it fend off competitors. “We’re [using] the Access Africa corridor to link countries [the bank is present in],” Giles said.Â
Read More56% of finance employees in Nigeria are dissatisfied with their salaries, says Duplo report
56% of finance employees in Nigeria are unhappy with their salaries due to reduced spending power, according to the 2024 Salary Report by Duplo, a Nigerian B2B payment automation startup. Only 3% say they’re satisfied, down from the 14.8% who said they were happy with their compensation in 2023. The survey gathered responses from 593 finance professionals across finance, technology, manufacturing, oil and gas, consumer goods, real estate, education, and agriculture. Respondents came from large and small organisations with job titles ranging from interns to accountants, chief financial officers, and financial controllers. 90.8% of these professionals said Nigeria’s high inflation and foreign exchange (FX) volatility affected their earnings. Nigerian workers are grappling with a high cost of living as naira devaluation and rising inflation have put their earnings under pressure, forcing employers to review salaries. While commercial banks have raised staff salaries in response to the macroeconomic condition, 37.7% of the finance employees surveyed reported no salary increase in the past year. Attractive compensation packages are crucial to help companies stay competitive in the finance industry. Job dissatisfaction is most pronounced among professionals earning less than ₦250,000 monthly. One-third of them say they don’t feel comfortable negotiating higher salaries. Meanwhile, only 7.2% of finance professionals earn over ₦1 million monthly, and professionals within this income band are the most confident negotiating salaries, reflecting a significant income gap in the sector. This frustration is fuelling talent migration. The report shows that 22.8% of respondents have relocated in the last five years, pursuing better pay and stability abroad. Economic instability, cited by 41.4%, remains the top retention challenge, followed by migration trends (34.5%) and shifting employee expectations (31.7%).  Despite the industry’s talent turnover rate, the report shows that finance professionals increasingly value more than just salaries—they want career growth, work-life balance, and transparent pay structures. Organisations offering inflation-adjusted pay, professional development, and benefits that match these needs can retain top talent. “Organisations can explore innovative benefits such as flexible work arrangements, performance-based incentives, and adequate technology solutions to retain and get the best from top talent without overburdening their budgets,” said Yele Oyekola, Duplo CEO. The report also shows a trend in upskilling among financial professionals. Over 79% of finance professionals have pursued training in the last five years, focusing on skills like digital transformation, fintech, cybersecurity, compliance, and data analytics. However, even with better skills, compensation dissatisfaction persists when salaries don’t reflect economic realities. Retaining skilled professionals is crucial for organisational growth and the sector’s long-term stability. To thrive, businesses have the option of rethinking their compensation strategies and offering growth opportunities that meet employee expectations. “CFOs and finance leaders need to prioritise transparent and inflation-adjusted compensation packages to mitigate the current economic pressures and give themselves the best chance of retaining talent,” said Oyekola.
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Next Wave: Mergers and acquisitions require more than financial synergy
Next Wave: Thinking about Jumia and the future of ecommerce Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 01 Dec 2024 Mergers and acquisitions are notoriously complex, high-risk ventures that often take months or years to finalise. Beyond the obvious financial intricacies, what many don’t realise is how important non-financial factors—particularly cultural alignment—are to their success. Deals aren’t just about combining balance sheets since they involve uniting people, processes, and philosophies. A mismatch in company cultures, values, or work ethics can derail even the most promising merge which can lead to employee dissatisfaction, high turnover, and operational inefficiencies. Due diligence goes far beyond financial audits. It includes a deep dive into organisational behaviours, decision-making styles, and leadership dynamics to evaluate whether the companies can function cohesively post-merger. For example, a fast-moving tech firm may struggle to integrate with a more traditional, hierarchical corporation, even if the numbers look promising. These differences can manifest in subtle ways, such as clashing communication styles or divergent attitudes towards innovation and risk. Next Wave continues after this ad. Join us at the Bluechip AI & Data Summit 2024 on December 2nd in Lagos! Explore the future of Africa through AI and data-driven solutions. Connect with industry leaders, attend expert panels, and discover innovations reshaping finance, healthcare, and beyond. Don’t miss this opportunity. JOIN US Moreover, mergers and acquisitions transactions are often accompanied by intense scrutiny from regulators, stakeholders, and the public. Missteps in integrating workforce policies, handling redundancies, or addressing supply chain overlaps can invite legal challenges or reputational damage. The most successful mergers don’t just achieve financial synergy—they also harmonise human and cultural elements. The structure of these deals can vary widely, with cash, stock, or a combination used as payment. Their success hinges on meticulous strategic planning and practical integration. As Chris Roush notes in his 2004 book Show Me The Money, “…many of them make acquisitions under the belief that a larger company can spread its expenses around more efficiently.” Yet, this assumption often oversimplifies the complexities of mergers and acquisitions. Financial synergy is only one piece of the puzzle; the transaction must also account for operational, cultural, and strategic compatibility to truly succeed. This is also a key departure from the 1980s when mergers and acquisitions were frequently criticised as destroyers of wealth, driven by aggressive takeovers and asset stripping. Modern M&A strategies demand a more nuanced approach that reconise that value creation often hinges on factors like retaining talent, taking advantage of technology, and integrating supply chains. Today’s deals are about building sustainable growth, not just cutting costs or increasing market share on paper. Partner Content: Read: Smile ID Releases Nigeria’s First Ever eKYC Report, Hits 200M Identity Verification Checks here. Also, today’s deals operate on a much larger scale and with higher stakes. While often justified as a means to expand market reach, the underlying motivations and outcomes can sometimes be, for lack of a better word, “undermined’. Strategic imperatives typically drive merger and acquisition activity, as companies or startups seek to dominate their market, leverage new technologies, or expand into new geographic territories. Achieving these goals is not easy. For instance, Rise, a Nigerian investment startup, recently acquired Hisa to strengthen its reach in the East African market. Rather than expanding its services locally—which also entails a number of legal hurdles, Rise chose to acquire a business in Kenya to align with its Africa-wide ambitions. Next Wave continues after this ad. PalmPay is a leading fintech platform focused on driving economic empowerment across Africa. Trusted by over 35 million Nigerians and 1.1 million businesses. Start enjoying a 99.9% transaction success rate with Palmpay. Sign up here. Yet, economic downturns can sometimes push merger and acquisition deals as struggling companies become attractive targets. For instance, Afreximbank has offred $40 million to Fidelity Bank for Union Bank UK’s acquisition and recapitalisation. Other merger and acquisition factors are sometimes unseen but make sense in the long run and should be considered more keenly for future transactions. First, the transactions should focus more on how marketing can minimise the negative consequences of merger and acquisition activity, such as customer switching or loss of consumer loyalty. Next Wave continues after this ad. Energy Trading in Africa has surged in recent times. Themes like Rising global prices, Deregulation, and Clean energy – are creating one of Africa’s largest opportunities in trade finance. As a tech leader, we are shaping this transformation. Our latest report explores opportunities and innovative models for financiers and energy dealers. Find more here! It is also important to look into both the pre- and post-merger stages; the scarcity of assessments connecting these stages is concerning, especially since linking them could positively impact merger and acquisition performance, generally and within specific industry contexts. Examining the relationships between critical success factors in the pre and post-merger stages can help companies better understand the overall merger and acquisition performance. Lastly, there are marketing-related reasons why firms engage in mergers and acquisitions; however, these reasons and the effects the deals have on both the companies involved and their consumer and supplier portfolios are hardly explored. Kenn Abuya Senior Reporter, TechCabal. 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 know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa. If you liked this edition of Next Wave, please share with your friends. And feel free to reply with thoughts
Read MoreMoroccan mobility startup Enakl raises $1.4 million in Catalyst Fund-led pre-seed round
Enakl, a Moroccan and French mobility startup that offers bus-sharing services, has raised $1.4 million in a pre-seed funding round. The company will use the funding to improve its technology and expand into other cities in the North African country and across Africa. The round was led by Catalyst Fund, with participation from Renew Capital, Digital Africa, Station F, and 15 other angel investors. “This funding allows us to deepen our impact in Casablanca, expand our reach, and accelerate the development of our technology,“ said Samir Bennani, Enakl’s co-founder and CEO. Founded in 2023 by Samir Bennani and Charles Pommarede, the e-mobility startup offers a pre-planned commuting service that allows users to book shared rides on mini-buses that follow fixed routes. Enakl’s bus-sharing service targets Morocco’s urban cities where commuters face overcrowded buses and inconsistent schedules. The bus-sharing business model will limit the number of daily commuters dependent on the public bus rapid transit (BRT) system, leading to fewer vehicles on the road. The company seeks to address the need for sustainable and efficient public transportation in Morocco’s growing urban cities. Casablanca, one of the busiest cities, has a BRT system with average wait times of fifteen minutes during peak hours which is a problem for commuters who want to move around quickly. Enakl’s pre-planning feature allows timely pickup for these commuters. “We invested in Enakl because they’re transforming urban transit in Africa with a scalable, green solution. By reducing emissions and congestion through tech-driven, shared transport, Enakl addresses urbanisation’s challenges,” said Maxime Bayen, Operating Partner at Catalyst Fund. With Morocco’s relatively small ride-sharing market, valued at $4.15 million in 2024, Enakl has a chance to grow and capture market share. After operating for 14 months, the mobility startup claims it manages over 15,000 ride bookings monthly and grows this number by one-fifth monthly. Aside from the public transport sector, Enakl faces competition from ride-hailing companies like Careem and Heetch operating in Morocco. While the ride-hailing services focus on offering private trips, Enakl helps users save cost on transport fares while providing the comfort of a private trip. “We recognise the problem Enakl is trying to solve in many of the cities we work in across Africa, and feel strongly that the collective transportation solutions developed by Enakl are key to solving these challenges,” said Adam Abate, Renew Capital CEO.
Read MoreAltSchool expands to Europe as it nears profitability
AltSchool Africa, the Nigerian edtech startup that trains Africans with in-demand tech skills, is expanding to Europe as it seeks to diversify its revenue streams and accelerate growth. The edtech startup will launch its first operations in Malta—after being part of a growth accelerator sponsored by the Malta government—and is hiring across its business and development, marketing, and content production teams. AltSchool’s expansion into Europe comes after it launched in Kenya in January 2024. While the startup was launched in 2021 as a virtual platform for people to earn diplomas in engineering, data, and business analytics, it has seen interest in its services grow beyond Nigeria. It now has a presence in the US and Rwanda, where it opened an office at the Norrsken Hub in 2023. Europe is the startup’s third-largest market, with learners from over 12 European countries, according to AltSchool CEO Adewale Yusuf. The company whose extensive curriculum covers business, data, engineering, media, and the creative economy will offer the same curriculum in Europe alongside AI and data analytics modules. AltSchool will take its first cohort of learners in Malta by 2025. Yusuf claims the startup is approaching profitability, and the fresh expansion will aid its revenue growth. AltSchool, whose business model in Africa has been primarily focused on online learning, will set up campuses in Malta as it introduces a hybrid approach where learners can have in-person learning sessions with tutors. “Because we’re an alternative school, there are some elements of the actual traditional school that work, and we want to take the best of both sides,” said Rachael Onoja, the startup’s head of innovation and market expansion. AltSchool will be exploring a B2B model alongside its B2C model in Europe by partnering with organizations to  curate tailored training courses for their employees and assisting them with content development and learning infrastructure. The startup is close to closing one of those deals, according to Onaja. “We noticed that in Africa and even some parts of other parts of the world, some companies have been reaching out to us, asking for support for workforce development. So we want to see how we can scale that to offer enterprise licensing to businesses looking to upskill employees,” Onaja told TechCabal. AltSchool will compete with startups like Bloomtech in Europe. Yusuf claims the startup will differentiate itself through community and personalized learning. The edtech will use the same subscription model for Europe but will charge different price points. AltSchool has so far supported about 100,000 learners across eight African countries and twelve European countries. “Right now, we are partnering with local universities on ground, and also partnering with organizations, companies, and even the government to implement some attributes of our implementation plan, because it takes a village.”
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👨🏿‍🚀TechCabal Daily – The tale of the “sickman” of telco
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! ChatGPT may soon introduce ads to challenge Google’s ad-tech business. The AI startup continues to experiment with different revenue models to become a for-profit company. It has the user base, we know, but there are concerns about ads affecting the user experience. On a scale of 1–10, how much would this, if at all, impact your AI search experience? The rise and fall of 9mobile Inside South Africa’s red ocean e-commerce sector Safaricom Ethiopia laments unfair competition Glencore signs $110 million solar deal World Wide Web 3 Opportunities Telco The rise and fall of 9mobile Image Source: Faith Omoniyi/TechCabal When Etisalat entered Nigeria’s telecom scene in 2008, it aimed straight for the hearts (and pockets) of the youth with its catchy “0809ja for Life” campaign, fronted by music star Banky W. The strategy worked; Etisalat becameNigeria’s fourth-largest operator by 2016, boasting 22.5 million subscribers and a 14% market share. But then, the telecom’s fairy tale hit a plot twist—thanks to financial woes, naira devaluation, and infrastructure deficit. By 2016, Etisalat’s balance sheet had more holes than a bad network signal. After a dramatic exit of Etisalat in 2017, the company rebranded as 9mobile, hoping for a reboot. Instead, it faced mounting debt, leadership drama, and subscribers dropping faster than calls on a bad day. Fast forward to 2024, 9mobile’s market share has shrunk to a mere 2.1%. Now under new ownership by LightHouse Telecoms, there’s talk of a comeback featuring roaming services and leadership shakeups. But to truly reconnect with Nigerians, 9mobile needs more than plans—it needs the creative spark that once got everyone “talking.” Find out more in our article. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. E-commerce Inside South Africa’s red ocean e-commerce sector Image source: Google E-commerce in South Africa is slowly becoming a red ocean market. In October, B2B e-commerce giant Jumia announced it would leave South Africa by the end of 2024, citing macro-economic conditions and intense competition. Takealot Group, another homegrown e-commerce mammoth, has complained about the competition. Its parent company, Naspers, admitted the company is under pressure from new entrants like Amazon and China’s Temu, whose aggressively low pricing has made them popular in the market. Takealot is battling a slow macroeconomic environment and shifting customer behaviour while trying to defend its market share. E-commerce is a volume game. If the gross merchandise value (GMV) and average order sizes are not increasing, then the e-commerce business is likely not growing too. In 2024, the South African Rand showed moderate stability in terms of currency volatility. However, e-commerce giants like Takealot are struggling with the effects of a sluggish economy, which has led to a decline in consumer disposable income. With consumers having less money to spend and e-commerce companies offering similar value propositions, businesses that stand out with unique offerings are more likely to attract customers. When Amazon entered South Africa in May 2024, frequent shoppers on Reddit said they flocked to the Jeff Bezos-owned company because they could buy books that were hard to find in local bookstores. Amazon also offered next-day delivery service, which was far better than Takealot’s average 3-day delivery wait. Chinese-owned Temu, after entering the market in January 2024, splurged on marketing and ran blitz adverts on Meta platforms. The company still has 420 active Meta ads running in this month alone. In Nigeria where Temu entered recently, it is running 1,500 of those ads. Temu spends a lot on acquiring customers; in 2023, it spent $2 billion on Meta ads, which is only justifiable if it has retention strategies in place to attract customers to buy repeatedly. Temu seems like it has found a home in Africa and it is likely because displacing Alibaba, which has China’s e-commerce market on lockdown, is a much harder task to undertake. It remains to be seen how its growing influence shakes up existing e-commerce players in Africa. 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 Safaricom Ethiopia raise concerns over unfair competition Image Source: AndertoonsSafaricom Ethiopia, a subsidiary of the Kenyan telco giant, has raised concerns about competitors and market leader Ethio Telecom about its unfair pricing. Safaricom Ethiopia’s executives have lamented that Ethio Telecom users are charged higher tariffs and extra costs when making phone calls to subscribers of the Safaricom network. Safaricom Ethiopia hopes to sway public opinion as it tries to grow market share in Ethiopia’s telecoms market which it entered in 2022. it feels like déjà vu for Safaricom—but this time, Safaricom is on the receiving end. CEO Wim Vanhelleputte told Ethiopian lawmakers that Ethio Telecom’s preferential pricing and lack of interoperability are stifling competition, making it harder for Safaricom to grow its 5% market share. He argued that higher call pricing to Safaricom subscribers is a monopoly tactic that contradicts Ethiopia’s push for a liberalised economy. But here’s the irony: in Kenya, Safaricom has long been accused of similar monopolistic tendencies, especially with its fintech product, M-Pesa, which controls over 90% of Kenya’s mobile money market. Kenyan lawmakers have since been calling for M-Pesa’s separation from Safaricom to encourage fair competition. In the Kenyan telecoms market, Airtel Kenya have also lodged complaints against Safaricom for practices eerily similar to those it now opposes in Ethiopia. The stakes are high for Safaricom in Ethiopia, where forex losses and regulatory hurdles are already dragging on its profits. Its calls for fair
Read MoreNew owners, new hope? Inside 9mobile’s struggle to stay relevant
When Etisalat – now 9mobile – entered the Nigerian telecom market in 2008, the country’s 64 million total subscriber base was dominated by three operators: MTN Nigeria, Zain Nigeria (now Airtel), and Globacom. Despite the fierce competition, the UAE-based company identified a gap in the market—unserved young subscribers. To capture this audience, Etisalat partnered with Banky W, a rising Nigerian music star whose popularity had skyrocketed after his hit song Ebute Metta gained traction the previous year. The collaboration birthed the iconic “0809ja for Life” campaign, which resonated deeply with the youth and significantly boosted Etisalat’s market presence during its peak years. This innovative approach ushered in a new era of targeted marketing and consumer engagement in Nigeria’s telecom industry. In no time, Etisalat became the fourth-largest operator in the market. The brand also gained visibility through strategic marketing, sponsoring two seasons of the popular Nigerian Idol reality show and launching the “Etisalat Prize for Innovation and Literature.” These initiatives connected, and by August 2016, the network had 22.5 million subscribers and a 14% market share. Nearly all telecom operators have adopted aggressive marketing and rapid infrastructure deployment as their entry strategy. While these strategies help unlock market visibility and subscriber recruitment, funding and marketing must align with corporate governance and regulatory compliance to make the business sustainable. In the case of Etisalat, the struggling corporate structure unravelled the company. The collapse of a once-innovative telco In 2016, Etisalat’s fortunes collapsed when it defaulted on a $1.2 billion loan to refinance a $650 million facility and modernise its network. The default was largely due to the devaluation of the naira, which significantly increased the cost of servicing its foreign-denominated debt. Unlike its competitors, Etisalat’s revenue streams were constrained by its limited spectrum holdings, including the 1800 MHz and 900 MHz bands for 2G and 4G LTE, and the 2100 MHz band for 3G services. Additionally, its fibre infrastructure was inadequate, with only 4,620 kilometres of fibre compared to MTN’s expansive 39,972 kilometres, leaving Etisalat unable to compete effectively across Nigeria. The company also lost a key revenue source after selling 2,136 base towers to IHS Towers in 2014 to streamline operations and cut costs, reducing its ability to generate income from infrastructure leasing. 9mobile declined to comment on any part of this story. One person familiar with the matter who asked not to be named told TechCabal that a plan to raise additional funding in 2018 failed after a boardroom dispute. The Hakeem Bello-Osagie-led EMTS disagreed on the structure of the new board. The regulatory environment did not also help, as the operators were on edge over the threat of heavy fines. In October 2015, the Nigerian Communications Commission (NCC) fined MTN Nigeria ₦1.04 trillion ($5.2 billion) for failing to deactivate 5.1 million unregistered SIM cards on its network. It may have explained why Etisalat Group did not wait for the regulator to intervene in the loan negotiation or resolve the boardroom squabbles. The hasty transition to 9mobile Etisalat Group in UAE was so scarred by its entire experience with banks, board of directors and regulators in Nigeria that it gave an ultimatum to the Nigerian entity to cease using its name in one month. The first name put forward was 9jamobile, which was rejected, and they settled for 9mobile, according to three people familiar with direct knowledge of the matter. In July 2017, Etisalat Group, along with the United Arab Emirates Sovereign Wealth Fund owned by the Mubadala Development Company, abandoned its 85% stake and exited its Nigerian operations, giving room for Emerging Markets Telecommunications Services, which previously owned 15% of the company to take over. Rebranding to 9mobile in July 2017 was supposed to be a fresh start for the telco, but the new company faced two major challenges from the beginning. One was retaining Etisalat’s business arrangement with Huawei. The UAE-based company had a managed service agreement with the Chinese technology company. In telecommunications, managed service is when a third-party provider runs the operation, management, and maintenance of specific telecom services or infrastructure. It allows the customer, often a telecom operator, to focus on its core business operations. Etisalat regularly met its financial obligations with Huawei until it left the country, according to one person with knowledge of the matter. Huawei continued to provide managed services to 9mobile from 2018 to 2021 when it ended the contract due to mounting debt, the same person said. 9mobile also had an internal management crisis. The company’s board and executive managers were dissolved when Etisalat left and no new appointments were made. “The interim executive that 9mobile put to run and manage the relationship with Huawei couldn’t manage it,” one former employee said. A new brand with old problems In 2018, the NCC stepped in to stabilise the company for acquisition. Two bidders Globacom and Teleology Holdings were shortlisted. According to two people familiar with the matter, Globacom lost out to Teleology Holdings because the NCC reasoned it would create an undue advantage for the Nigerian-owned telco in the industry. Teleology Holdings won the bid in February 2018 but the marriage was short-lived. 9mobile had accumulated so much debt that the new owners needed to raise funding to keep the business afloat. 9mobile also owed several vendors, including Huawei. Teleology Holdings could not raise the $500 million needed to keep the company running. 9mobile’s service quality suffered because the company could not afford crucial infrastructure investments such as deploying fibre optic cables across the country and building additional base tower stations. NCC data shows 9mobile lost approximately 8.6 million subscribers between August 2016 and 2023. From January to October 2024, it lost an additional 10.4 million subscribers following an NCC industry audit that removed subscribers without proper NIN-SIM registration from the system. The telco currently has a 2.1% share of the market. Leadership turnover and operational disjoint 9mobile attempted to address the subscriber decline with leadership changes hoping the new CEOs would bring fresh ideas to move the company
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👨🏿‍🚀TechCabal Daily – Holcim’s billion dollar windfall
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy new month! The spotlight is back on compliance for fintechs and other financial service providers. Coincidentally, it is a running theme in today’s newsletter. SmileID, a fraud detection startup, revealed in its new eKYC report that it recorded 200 million digital identity verifications in Nigeria between October 2022 and October 2024. Fintechs, adapting to stricter KYC rules, are using biometrics and National Identification Number (NIN) verification, a combination that SmileID says is four times more effective, to detect and fight fraud. Read SmileID’s eKYC report. Nigeria’s Central Bank fines 29 banks $9 million CBN to penalise banks for cash shortages Holcim to sell its Lafarge business for $1 billion Nigerian BDCs to buy forex from authorised sellers World Wide Web 3 Job openings Banking Nigeria’s Central Bank fines 29 banks $9 million Image Source: Zikoko Memes It seems compliance professionals will remain in high demand in Nigeria’s financial services industry. At the annual bankers’ dinner on Friday, Nigeria’s Central Bank governor Olayemi Cardoso disclosed that 29 Nigerian banks were fined a combined ₦15 billion ($9 million) for violating anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. While this sends shock ripples across the entire financial ecosystem, it makes sense for the apex bank which has prioritised strong compliance under Cardoso. This move will likely push more fintechs—and even crypto fintech companies now close to being regulated—to ramp up compliance hiring. One of the reasons is the illicit money flows in Nigeria that led to tighter Know Your Customer (KYC) processes for fintechs, closer monitoring of remittance startups on enhanced due diligence (EDD) checks, and Binance’s regulatory troubles. Compliance professionals are having their moment. Four top Nigerian fintechs—OPay, Palmpay, Kuda, and Moniepoint—have hired a total of 24 compliance officers in 2024. Crypto companies are currently part of a framework that the country’s Securities and Exchange Commission (SEC) is using to regulate crypto. Customer due diligence is key to this process; the regulator is working with crypto startups to track how they collect and store user data and monitor crypto transactions. Some crypto startups, like Yellow Card, have made key compliance hires this past year. Compliance professionals are not the flashy hires like software engineers and product leaders that conventionally show signs of growth in fintechs. But they’re growing in relevance to the financial services sector in its fight against fraud. The penalty fines on the 29 banks will keep everyone on their toes as they try to tighten security. One message is clear: non-compliance is expensive. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Banking CBN to penalise banks for cash shortages Image source: Betty Laura Zapata/Bloomberg Long before Nigeria had a cash crunch—due to the ill-timed currency redesign—POS operators were often the last resort for getting cash. These days POS terminals seem to be the only option as there is a cash shortage at ATMs and banking halls. What was once a solution for many Nigerians is growing to become a nightmare as many Nigerians now rely solely on POS operators—and sometimes cope with their exorbitant charges—to get cash. On Friday, the CBN said it would begin penalising banks that fail to provide cash to customers at their automated teller machines (ATMs). The announcement will come as a relief for many Nigerians who struggle to access cash. The CBN has also set up a new monitoring system to ensure banks comply with the directive. Any bank that fails to measure up to the CBN’s new standards will be penalised—although the CBN did not disclose the kind of penalty. While the CBN is moving to address cash shortages in banks, its cashless policy also played a part in the cash shortages. The CBN in its bid to encourage cashless policy reduced money supply to banks, limiting weekly over-the-counter withdrawals at ₦500,000 ($298,000). The bank now plans to inject an additional ₦1.4 trillion ($833.5 million) into the economy to alleviate cash shortages at ATMs and bank branches. 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! Companies Holcim agrees to sell its Lafarge business in Nigeria for $1 billion Image Source: GoogleFew companies have nailed how to use mergers and acquisitions (M&As)—and divestments—as a strategy to grow and expand their businesses. When you think of M&A machines, if one tier-1 Nigerian bank doesn’t come to mind, remember the Holcim Group. When CEO Miljan Gutovic told the World Economic Forum in January 2024, “If [the company] can, [it] will do 30 deals if it makes sense,” few people took him up on his offer. Yet, the Swiss-based building conglomerate is about to pocket $1 billion from a divestment deal in Nigeria. Holcim, a majority shareholder in Lafarge Africa, agreed to sell its 83.8% shares at equity value to Chinese company, Huaxin Cement. The deal is expected to be completed in 2025, subject to regulatory approval. Lafarge is Nigeria’s third-largest cement maker producing up to 10.5 million tonnes of cement yearly at full capacity. Holcim finalised the Lafarge acquisition in 2015 after describing it as a “merger of equals.” The merger was both companies’ plan to put Lafarge back on the map. Since 2018, the cement maker has been locked in a perennial battle against second-placed BUA Cement and won on a few occasions. With a $1 billion exit, this is good business for Holcim which moves on to the next thing. Holcim has traditionally adopted a move-fast approach to its acquisitions
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