Spar enters South Africa’s mobile market with MTN-backed MVNO
Spar Group, the South African retail giant, is expanding into telecoms with the launch of Spar Mobile, a prepaid mobile virtual network operator (MVNO) built in partnership with megsApp and backed by MTN. The move deepens the convergence of retail and telecom in Africa’s most developed mobile market, where affordability and loyalty-driven models are reshaping competition. The MVNO will offer prepaid voice, data, and SMS services, with a twist: shoppers can earn free mobile data by purchasing selected promotional items in Spar and Tops! stores. The company claims this model could cut mobile costs for customers by up to 50%. “The Spar Mobile offering is anchored on simplicity, affordability, and trustworthiness, giving us a chance to create one-of-a-kind deals for our customers – linking groceries and Tops! Products with free data,” said Blake Raubenheimer, omnichannel executive at Spar Group. Customers can buy Spar Mobile SIM cards in-store for R15 ($0.80), which come preloaded with 300MB of data and R10 ($0.54) in airtime. In addition to traditional SIM cards, Spar Mobile supports eSIM functionality and number porting, and will be integrated with the Spar mobile app to simplify top-ups and account management. “Spar is well-positioned to run and operate an MVNO. We are building the network from very competitive pricing that is simple and easy for customers to understand,” said Raubenheimer. The launch follows similar MVNO plays from South African retailers, including Pick n Pay, TFG Connect, and Boxercom, all of which have launched MVNOs using MTN’s network. Since launching its MVNO platform in 2020, MTN has become a key enabler of retail-led telecom services in the country, second only to Cell C in MVNO hosting. South Africa’s MVNO market is projected to hit $90.91 million in 2025, according to industry estimates, driven by growing demand for flexible, low-cost mobile alternatives. Retailers are betting that bundling mobile services with everyday purchases will not only strengthen brand loyalty among existing customers but also attract new consumers looking for seamless digital access, particularly in price-sensitive markets. If Spar Mobile proves successful in South Africa, there is potential for expansion into other markets where Spar and MTN both operate. Countries like Botswana and Zambia, where both entities have a presence, could benefit from similar retailer-driven mobile services. A Spar-branded MVNO could serve as a practical solution for consumers in these markets, particularly if the incentive-driven model of earning free data through shopping resonates well with South African customers.
Read MoreNigerians will pay more for calls and data under proposed 5% telecom tax
Telecom subscribers in Nigeria could soon be paying 5% more for data and voice services if the Nigeria Tax Bill 2024 is signed into law. Passed in the Senate on May 8, 2025, the bill reintroduces a controversial 5% excise tax on telecom services, a move operators warn would ultimately burden consumers and stall the country’s push for broader digital inclusion. The 5% excise duty was first introduced in the Finance Act of 2020 under former President Muhammadu Buhari. Designed to expand the list of goods and services subject to excise taxes, it was met with stiff resistance from telecom operators and consumer advocates. They warned it would raise the cost of already essential services in a struggling economy. President Tinubu suspended the tax in July 2023, citing its potential to worsen inflation and impede access to digital services. Fast forward to 2025, and the industry still isn’t buying it. As of August 2024, telecom operators reportedly paid 54 different taxes, according to the Association of Licensed Telecom Operators of Nigeria (ALTON). With the sector only just rebounding from currency devaluation and rising operational costs, operators fear the reintroduction of the excise duty could choke recovery efforts and slow digital inclusion. “We’ve had no clarity on how the 5% tax would be implemented, but the burden will fall on the consumer,” said Gbenga Daniel, President of ALTON, which represents major players like MTN Nigeria, Airtel Nigeria, Globacom, and 9mobile. “Telecoms should be treated as a social good, not taxed like luxury items. No one taxes telecoms like this in countries where infrastructure is taken seriously.” Industry stakeholders argue that excise taxes are typically reserved for luxury or harmful goods such as designer watches, luxury cars, alcohol, or tobacco, whose consumption governments might want to curb. Internet access, they say, hardly belongs in that category. An excise duty, however, is a specific type of tax that is levied on certain goods or services at the time of their purchase. The Nigerian Tax Bill describes excisable transactions as “transactions which take place— (a) physically in Nigeria, the excisable transaction is the provision of the service; and (b) remotely or virtually, the excisable transaction is the receipt or consumption of the service in Nigeria.” That means both domestic and international service providers offering telecom services in Nigeria would be liable to collect and remit the 5% tax, passing the cost on to the customers. “There’s no wiggle room for operators to absorb this cost,” said Anthony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON). “Operators are already working with a tariff increase that fell short of what they need. The new tax will squeeze margins and hit consumers the hardest.” Nnenna Ukoha, Head of Public Affairs at the Nigerian Communications Commission (NCC), told TechCabal that the regulator has not yet received the official version of the bill for review. Meanwhile, the bill does include some reliefs: 0% VAT on essential goods and services like food, healthcare, education, rent, public transport, and renewable energy. These categories, according to Presidential Fiscal Policy and Tax Reforms Committee Chair Taiwo Oyedele, make up around 82% of average household consumption, and close to 100% for low-income households. Still, the telecom sector, which recently implemented a 50% tariff increase on its services, remains uneasy. The timing of the bill is especially delicate, coming just as major players like MTN Nigeria and Airtel Africa are bouncing back financially. MTN posted a ₦133.7 billion ($83.1 million) profit after tax in Q1 2025, reversing a ₦392.7 billion ($244.06 million) loss in 2024. Airtel Africa reported $661 million in pre-tax profit for the year ending March 2025. These gains are a result of higher data usage, tariff hikes, and ongoing infrastructure investments. “The government should not be so extractive of the average Nigerian,” said ALTON’s Adebayo. “Someone recharging ₦1,000 will feel this 5% tax the most. It also places an additional compliance burden on operators to collect and remit the tax.” They argue that short-term tax revenue shouldn’t come at the cost of long-term growth. As the bill awaits harmonisation between the Senate and House of Representatives before it is forwarded to the President for assent, all eyes remain on whether the Tinubu administration will heed the telecom industry’s calls or press ahead with its broader fiscal ambitions.
Read MoreOpera spins off MiniPay app to target Africa’s $54 billion stablecoin market
Opera, the Norway-based internet company best known for its web browser, has launched MiniPay, its stablecoin payments app, as a standalone iOS app, opening access to users across Africa for the first time. The app was previously embedded in Opera Mini, limiting reach to Android users only. Opera joins a growing list of foreign players like Coinbase seeking growth in African markets as stablecoins gain ground globally. Opera hopes to compete more aggressively in Africa’s fast-growing digital currency market, where stablecoins accounted for 43% of crypto transactions in 2024. With $125 billion in crypto payments flowing through the continent and stablecoins making up $54 billion of that, the company sees a growing appetite for dollar-backed digital assets as tools for everyday payments and savings in volatile currency markets. “Stablecoins are gaining widespread recognition, with increasing demand from both developed and emerging markets alike,” a company spokesperson told TechCabal. “In Africa, there’s a strong need for faster, more affordable, and accessible financial solutions.” Opera says it wants to make global payments “as easy as texting.” It first launched MiniPay in September 2023, but it wasn’t until October 2024 that it built a standalone app for Android users. Now, Africans can access the app on iOS and Android smartphones. “It made sense to launch the iOS and Android standalone app, making MiniPay accessible across all major mobile platforms,” said the company spokesperson. “We have seen rapid growth in key African markets, so the standalone app offers more flexibility and allows us to scale faster.” Opera partnered with Celo in 2021 to build the MiniPay app on the Celo blockchain network. Celo is known for its fast settlement times, low-cost transactions—which cost less than a dollar for stablecoin payments—and mobile-first design capabilities. The app offers M-Pesa and Apple Pay payments in key markets in Africa, like Kenya and South Africa, and Latin America (LATAM) to allow users to spend and withdraw money easily to their bank accounts. MiniPay plans to expand further in North America, LATAM, and Europe in the second and third quarters of 2025. 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The app supports three stablecoins—cUSD (Celo US dollar), USDT, and USDC—and offers a $0.10 welcome bonus alongside daily cash rewards when users log in. MiniPay operates as a non-custodial stablecoin wallet app, meaning it allows users to control their funds. The app does not handle fiat transactions directly; instead, it relies on partners and liquidity providers like Yellow Card, Fonbnk, Partna, TransFi, Transak, and Onramper for competitive exchange rates. According to Opera, MiniPay supports over 35 local currencies, making it easy for users to exchange their stablecoins for fiat money (off-ramping). “As a self-custody solution, it is an unregulated software product and does not manage fiat transactions directly,” the company said. “MiniPay integrates with a range of regulated partners who serve as the on-ramps and off-ramps in their respective markets. MiniPay itself only facilitates transactions in dollar-denominated stablecoins (such as USDT, USDC, cUSD).” Facilitating stablecoin trades means MiniPay will possibly be classified as a securities exchange in markets like Nigeria, requiring the app to be registered with the country’s Securities and Exchange Commission (SEC). The regulatory aspect of MiniPay’s global march may draw attention to its ambition. In markets like Nigeria, where regulators are tightening oversight, Opera says its reliance on
Read MoreKenya proposes ban on cashless-only payments below $775 under new bill
Kenya may soon outlaw cashless-only transactions for everyday purchases, under a proposed law that would make it mandatory for businesses to also accept physical currency for payments below Ksh100,000 ($775). The Central Bank of Kenya (Amendment) Bill, 2025, sponsored by Suba South Member of Parliament Caroli Omondi, would make it illegal for businesses operating in physical locations to reject cash for transactions under $775. Omondi said the bill is about protecting everyday Kenyans who are being left behind as more businesses go digital. If passed, the law would mark a significant regulatory intervention in Kenya’s fast-digitising economy, where mobile money and card payments have become the default in neighbourhood shops, restaurants, and public transport. It would compel businesses, many of which have embraced cashless payments to boost accountability and reduce theft, to rethink their processes. “A majority of Kenyans still rely on cash transactions while some older people do not know how to use mobile money services, making it discriminatory to deny them access to services or buying goods in cash,” Omondi said. Under the proposed law, businesses that violate the rule could face fines of up to $775 along with potential civil liability if customers choose to pursue damages. While the Central Bank of Kenya (CBK) has not publicly commented on the bill, the regulator has long pushed for digital payments and market-led adoption. The value of Kenya’s digital payments is projected to reach $14.5 billion by 2028. The bill could clash with the government’s digital transition, coming when all state services from park entry fees to birth and death registrations and passport applications are processed exclusively through the e-Citizen platform. Most of these payments are under $20. However, Omondi warned that overreliance on digital-only transactions leaves Kenya vulnerable, citing the July 2024 IT crash in the United States, which caused widespread disruption as electronic payment networks went offline. “Suddenly and without warning the exchange of goods and services stopped with the IT outage. Buyers were unable to effect cashless payments. Everyone was in need of immediate cash to make payments,” Omondi said. The bill, still in its early days, will go through a parliamentary committee review and public consultation before it returns to the floor for debate.
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👨🏿🚀TechCabal Daily – A for Access. B for Bank. C for consequence
In partnership with Lire en Français اقرأ هذا باللغة العربية Howdy! How much do you know about technology in Francophone Africa? What are the region’s most important startups or crucial policy developments around tech innovation? We’re excited to partner with Lina Kacyem, Investment Manager, Launch Africa Ventures to introduce a web-only newsletter about tech in Francophone Africa. Lina has almost twenty years of experience in various sectors of the financial industry and is the co-founder of the angel network, Next Millennia Angels. As an investment manager, Lina leads investments in Francophone Africa and will bring decades of first-hand experience, insider insights and analysis of the region’s technology landscape into curating a newsletter that will help you and our wider audience learn about the tech innovation, policy, culture, and economy as it unfolds in Francophone Africa. Expect a dispatch every two Tuesdays, beginning later today. Access Bank Kenya and ABC in regulator crosshairs MTN Group grew its revenue by 10.4% in Q1 2025 IHS shares hit 20-month high Egypt’s Nawy raises $75 million World Wide Web 3 Opportunities Banking Access Bank Kenya and ABC could get fined by the CBK over non-compliance on loan rate cuts Image Source: Zikoko Memes/TechCabal Bank ABC and Access Bank Kenya—the subsidiary owned by Nigeria’s largest bank by assets—could get fined by the regulator, Central Bank of Kenya (CBK), for refusing to comply with the loan rate cuts. The two banks top a list of five lenders that raised lending rates in March, despite warnings from the Central Bank of Kenya. Access Bank pushed its average rate to 20.5%, up from 20.39%, while ABC moved from 17.42% to 17.54%. Others—DIB, Kingdom, and Guardian Bank—also nudged their rates higher, putting them in the regulator’s crosshairs. This showdown has been brewing for months. Since August 2024, the CBK has been cutting its benchmark policy rate to make loans cheaper. But some banks, rather than follow suit, have held firm—or raised rates altogether. Frustrated, the CBK now plans to start fining non-compliant lenders from June: KES 20 million ($155 million) upfront or three times the gain, plus daily penalties. Bank executives, too, could be personally fined. So why the standoff?Banks argue that the CBK’s new pricing formula—pegging rates to its benchmark rate plus a lending margin—is too rigid. They prefer using the interbank rate, which they say reflects market realities better. Yet, Kenya is not an isolated case, even in Africa. In 2018, the Bank of Ghana (BoG) and commercial banks in the country went through the same dance. The BoG had cut its key rate by 550 basis points to 20% for nearly two years, but banks didn’t pass on the lower rates to borrowers—largely due to a high volume of bad loans. Elsewhere, in South Africa and Morocco, regulators have also struggled with banks to rein in lending rates, as lenders remain wary of credit risk. What the CBK has going for it is the Supreme Court’s June 2024 ruling, which stated that banks must seek approval from the Cabinet Secretary before raising interest rates on loans. This decision cleared the path for the CBK’s push to enforce compliance with rate cuts. And it seems determined to win this one. Whether through fines, pressure, or more inspections, it wants rates to come down—and fast. Because if credit doesn’t flow, the economy won’t either. In this tug-of-war, it’s borrowers who are still paying the price. Seamless Global Payments With Fincra. Issue accounts in NGN, KES, EUR, USD & more with one integration. Send & receive funds seamlessly across borders; no more banking hassles or complex conversions. Create an account for free & go global today. Companies MTN Group grew its revenue by 10.4% in Q1 2025 as fintech drives growth for the company MTN head office/Image Source: TechCentral On May 12, MTN Group, Africa’s largest homegrown telecom operator, reported a 10.4% year-on-year (YoY) increase in Q1 2025 revenue—from R42.90 billion ($2.34 billion) to R47.37 billion ($2.6 billion)—accounting for the currency devaluations across several of its markets. Nigeria reclaimed its title as MTN’s top-earning country—after Q4 2024’s slump. The country generated R13 billion ($710 million) in revenue, slightly ahead of South Africa’s R10.7 billion ($584 million). Regionally, the group’s’s West and Central Africa (WECA) operations led the charge, raking in a combined R15 billion ($819 million) to become MTN’s most profitable region this quarter. Data revenue increased by 17.9% as the demand for data reached 5,677 petabytes in the quarter. However, voice, which has historically been a top money-spinner for MTN, surprisingly fell, declining by 0.1%. Fintech was the standout performer. MTN’s mobile money platform (MoMo) handled $95.3 billion in transaction value—up 48.9% from $72.7 billion. The number of transactions also rose from 4.8 billion to 5.5 billion, with an average transaction size of $17.3. Put plainly: users transacted more often, and with fatter wallets. This high-octane activity helped fintech revenue climb from R4.9 billion ($268 million) to R6.2 billion ($339 million)—a 25.2% increase in constant currency terms. Uganda remained the fintech crown jewel, driving the lion’s share of growth. Meanwhile, Nigeria’s MoMo user numbers continued to decline, likely affected by delayed regulatory approvals and licence bottlenecks. MTN’s Q1 shows a company leaning heavily—and smartly—into digital services, driven by the increasing appetite for data services among subscribers. High data purchases lead to more smartphone use; more smartphone use exposes users to fintech adoption, which MTN plays in. The telecom operator benefits on both ends. It already has partnerships with satellite companies Lynk Global, Starlink, Eutelsat OneWeb, and AST & Science in different markets as it plans to strengthen its broadband reach. MTN’s digital bets are what’s keeping the engine humming—and shareholders smiling. Or at least, not frowning. Power Your Business With Paga Engine Join businesses already building smarter with Paga Engine. Get started today. Telecoms IHS shares hit 20-month high as Nigerian telcos bounce back Image Source: Google What is good for the goose is good for the gander. As Nigeria’s telecom operators—MTN and Airtel—bounce back from a
Read MoreAsk an Investor: Why is local capital important for Africa’s tech ecosystem?
For five consecutive editions of Ask an Investor, we’ve asked Africa-focused investors the same core questions: how can local capital fund the continent’s startups, how do those backers add value, and what makes money? This week, our recap of the past five episodes pulls hard-won lessons from every interview: Marge Ntambi (Benue Capital), Axel Peyriere (serial angel & founder), Fisayo Durojaye (Immerse VC), Biola Alabi (Delta 40/angel syndicates), and Alexandre Lazarow (Fluent Ventures). The importance of local capital and local knowledge When Uganda-based Benue Capital invited dozens of Kampala high-net-worth individuals (HNWIs) to a closed-door summit, Ntambi’s team started with a blunt provocation: “Every missed Series A is someone else’s yield farm.” She then pulled up a simple bar chart showing how a $100k cheque into Ugandan startups could already be worth 10× after a couple of years. “True ecosystem ownership starts with local investment,” she told TechCabal. Ntambi’s larger thesis is that local capital is not charity but risk arbitrage. A Kampala landlord most likely has information about land registries, boda traffic patterns, and parish-level politics that a Palo Alto associate might never acquire quickly enough to price. That knowledge compresses uncertainty, and local investors, if properly organised, can buy the same venture upside at a meaningful discount because they can diligence faster and support better. Peyriere echoed the point from an operator’s chair. After 14 years writing cheques across Africa and Asia as an angel investor, he backs only sectors he has operated in: mobility and marketplaces. His wins—Julaya, Termii, Grey—grew out of pain points he has lived through. “The best solutions are built ground up for local realities,” he said. By staying in sectors he’s familiar with, he avoids the tourist trap Lazarow warns about: importing a Valley checklist into markets that do not care about Valley heuristics. For Immerse VC’s Durojaye, local domain mastery is his first filter; it let him spot Shuttlers and OnePort early and walk away from financial-inclusion pitches that made people download apps. “If I know more about your industry than you do, I’m out.” Biola Alabi’s journey underscores the same psychology. Her first cheque—into Big Cabal Media—was tiny by today’s standards, but it snowballed because she paired cash with crisis-time mentorship. Local insight as a competitive moat Each investor gave a case where local context, not capital, was decisive. Durojaye only invested in Shuttlers because he had spent years in yellow buses and BRT queues. When a structured commuter-bus platform was pitched, he instantly saw the market others dismissed. Lazarow, on the other hand, recognised OffBusiness’s Indian model but only funded Matta after its founders proved they could underwrite credit in naira without bureau data, something a Brazilian or US team could not replicate. Designing exits in a market short on IPOs Every investor acknowledged an uncomfortable fact: Africa still lacks deep public-market or private equity demand for $200 million tech companies. They offered three ways to generate returns, like secondaries, exit-first deal design, and valuation discipline. Peyriere, Durojaye, and Alabi have each sold portions or all of their positions, sometimes grudgingly, when later-stage investors wanted cleaner caps or when they wanted to exit from their investment. These partial exits returned capital to LPs and angels without strangling upside. Their rules of thumb: if a secondary offers 5–10X on an early cheque, take at least some chips off; bake secondaries into term sheets: 10–15% of any Series B or C can be allocated to liquidity for earlier holders; keep founders above a threshold stake post-secondary. Lazarow will not enter a deal unless at least one of three paths feels realistic today: a strategic acquirer list with precedent multiples, local or regional private equity buyout appetite, or an active secondary market with discount parameters understood. Ntambi pushes founders to prepare governance artefacts—data room hygiene, board minutes, clean option pools—from the seed round. “Exit blockers seed themselves at incorporation,” she warned. Durojaye’s harshest critique: funds marking companies at $100 million at Series A in markets where banks or telcos rarely pay over $40 million. The inevitable down-round kills morale and dilutes everyone. What value-add looks like when cash is only 50% of the need Across all five conversations, value-add meant time-consuming, sleeves-rolled work: cap table surgery, hiring CFOs, co-founder matchmaking, and regulatory hand-holding. This is what often separates a good investor from a great investor. At Benue Capital, the value-add is geared towards local investors as the firm walks HNWIs through real exit case studies like Asaak and SafeBoda and offers co-investment vehicles so first-timers learn without too much risk. Peyriere, on the other hand, has an operator hotline for his portfolio startups where he offers advice, brokers warm intros to Series A investors, and pressure-tests founders’ market strategy using his AUTO24 playbook. Alabi operates as a crisis manager and syndicate shepherd. She helped engineer Big Cabal Media’s CEO transition, and in other deals, she structures paperwork, mediates disputes, and once even helped an angel liquidate their investment to handle mid-life emergencies. The common thread across these six stories is that investors insist that Africa’s biggest competitive advantage is context-specific execution. “If we want startups solving problems that matter to African communities, we need African investors at the table,” Ntambi said. Local money brings patience and accountability, local knowledge turns global playbooks into profit, and locally engineered exits recycle cash back into the next cohort of startups.
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What MTN’s first ₦1 trillion quarter says about the future of Nigerian telcos
This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, telcos, and financial institutions. A new edition drops every Monday. In the first quarter of 2025, MTN Nigeria made more money than any telecommunication company has ever made in a single quarter on the Nigerian Exchange Limited (NGX). The record performance was not by accident but as a result of rising data demand, strategic fintech expansion, tariff hikes, and sustained investment in infrastructure, according to MTN’s latest earnings report. As the broader telecom industry grapples with slowing momentum—GDP growth fell to 6.25% in 2024, the lowest in at least six years—such gains could offer a much-needed boost to the sector’s growth in Q1. MTN’s total revenue—which includes income from services as well as non-service items like SIM cards and device sales—jumped by 40.5% year-on-year, reaching ₦1.06 trillion ($658.4 million) in Q1 2025, up from ₦752.9 billion ($467.7 million) in the same period last year. Compared to Q4 2024, MTN’s total revenue grew by 6.8% from ₦990.6 billion ($615.3 million). In February 2025, the Nigerian Communications Commission (NCC) approved a proposal to raise tariffs on voice and data services after a decade, a move it justified as necessary to offset foreign exchange losses and inflationary pressure. MTN attributed the increase to its ability to sustain investments, with ₦202.4 billion ($125.7 million) spent on capital expenditure in Q1, up 159% year-on-year. “The tariff empowered us to accelerate network investments, boost capacity, and improve user experience,” Karl Toriola, MTN Nigeria CEO, said in its earnings report. Data remains MTN’s most bankable product MTN’s total revenue from data services rose by 51.5% year-on-year to ₦529.4 billion ($328.8 million), driven by a 46.4% surge in data traffic and the addition of 2.6 million new active data users in Q1. MTN now serves 50.3 million data subscribers, out of a total of 84.1 million. The company’s data revenue is higher than Airtel Africa’s revenue of $139 million for the same period. Data usage per subscriber jumped by 29.5% to 12.8 gigabytes (GB), even with higher tariffs. NCC data revealed that national data spending surged to ₦585.08 billion ($363.4 million) in March 2025, nearly double the ₦287.77 billion ($178.2 million) recorded in January. “Approximately 4.0 million smartphones were added to the network during the quarter, raising smartphone penetration to 60.7%,” Toriola added, attributing the growth to rising demand for high-speed mobile internet. According to the GSMA, a non-profit trade association that represents the interests of mobile network operators worldwide, 58 million Nigerians are active internet users, with 85% using mobile internet for video calls, 75% for free online video streaming, and 54% for free music streaming. MTN also continues to build enterprise services for corporate clients, offering broadband (FibreX), mobile engagement suites, bulk SMS, cloud services, and IoT connectivity, ensuring that wholesale contracts remain a stable revenue stream. MTN’s primary revenue source is not retail consumers but rather wholesale agreements with large companies, says a Lagos-based analyst at a major investment firm who asked not to be named to speak freely. “These big companies generate significant income for MTN through their high data consumption. Therefore, even if retail consumer spending decreases, MTN’s total revenue remains stable due to its reliance on these major corporate clients,’ he said. Fintech: Fewer users, more value MTN’s fintech play, often overshadowed by its core telco business, is beginning to pull more weight. Revenue from its financial services arm rose by 57.9% to ₦36.1 billion ($22.4 million) in Q1, largely due to growth in airtime lending (Xtratime) and increased float income. However, the number of active wallets declined by 25.7% to 2.1 million. MTN explained that this drop was strategic; it focused on acquiring high-value users who contribute more significantly to float balances and transaction volumes. “Since Q3 2024, we revamped our customer acquisition strategy, optimising incentives and engagement, resulting in stronger qualitative performance and deeper service penetration,” the company noted. Rising operating expenses Operational discipline helped MTN sustain profitability despite Nigeria’s tough macroeconomic environment. After taking a major forex hit in 2024, MTN returned to profit in Q1 2025 for the third straight quarter. Operating expenses grew modestly by 4.2% to ₦408.7 billion ($253.8 million), much lower than the 25% increase recorded in Q1 last year. Key drivers included renegotiated tower leases—especially with IHS Towers—and ongoing cost-efficiency initiatives. “Cost efficiency supported the containment of overall operating cost growth,” MTN stated in its earnings report. Gains for MTN but woes for consumers The 50% tariff hike means increased monthly spending for cash-strapped consumers. In an economy grappling with double-digit inflation, higher connectivity costs are biting into household budgets. According to the National Bureau of Statistics, headline inflation in Nigeria rose for the first time this year to 24.2% in March. Mobile and internet access are now essential services, making their cost a significant aspect of the cost of living. Although Nigeria meets the United Nations’ affordability standard (1GB of data costing no more than 2% of average monthly income), the total spending on internet services is still a burden for many Nigerians. Research by Utility Bidder, a United Kingdom-based business energy consultancy, shows that Nigerian households spend over 67.7% of their monthly income on utilities, comprising water, gas, electricity, broadband, and mobile data. “Data costs have significantly increased, nearly doubling my expenses. This data also depletes quickly,” Peace Michael, a Lagos-based freelance journalist, told TechCabal over a phone call. Before the tariff increase, she would buy 75GB for one month at ₦18,000 ($11.2) from a 15GB plan, which was ₦6,000 – ₦7,000 ($3.74 – $4.37) To manage this, Michael had to remove some social media apps like Facebook and TikTok from my phone. “It’s frustrating to deal with poor network service alongside rising tariffs,” she added. Another MTN user, Femi, who asked only for his first name to be used, said he typically purchases around 75GB of data, twice a month, due to heavy usage. However, sometimes he buys it only once
Read MoreIHS shares hit 20-month high as Nigerian telcos bounce back
IHS Towers, Africa’s largest independent telecom tower company, saw over 3 million shares traded on the New York Stock Exchange (NYSE) on May 7, its highest single-day volume in nearly two years. The surge in trading activity, accompanied by a 9.7% jump in share price to $5.7, underscores how investor sentiment is shifting in favour of infrastructure enablers as Nigeria’s top telcos rebound from a turbulent stretch. The spike also has real implications for the future of internet connectivity in Nigeria and across IHS’s other African markets. With Nigeria contributing 58.3% of the company’s total revenue in 2024, and MTN Nigeria and Airtel Nigeria accounting for a combined 57% of that revenue, IHS’s business performance is deeply intertwined with the operational health of these telecom giants. As both telcos return to profitability in 2025 after navigating currency shocks and rising costs in recent years, investor interest in IHS Towers is growing in tandem. “In Nigeria, the NCC’s tariff increase is a positive development for mobile network operators that is expected to unlock investment in communications infrastructure,” IHS Towers said in a statement to TechCabal. IHS Towers’ share price has climbed over 51% year-to-date, outperforming the S&P 500 and the broader tech sector. Starting the year around $4.00, the stock reached $5.94 by May 7, its highest since September 2023. The company’s Q4 2024 earnings beat analyst expectations with $437.8 million in revenue and $0.73 earnings per share, fueled by strategic lease renewals with MTN and Airtel and a well-executed cost management plan. “Most analysts price us above the level of our current share price, and we remain confident in our long-term value proposition,” the company said. IHS’s stable revenue has been key to drawing investor interest. In 2024, the company locked in 72% of its revenue under long-term contracts, reducing risk and offering greater predictability for investors. These long-term agreements with MTN and Airtel assure continued demand for IHS’s towers, particularly as the telcos expand their 4G and 5G networks to support rising data consumption and a surge in new mobile subscribers. This financial stability matters for internet connectivity because reliable tower infrastructure is the backbone of mobile broadband delivery in emerging markets. The more stable and profitable IHS Towers becomes, the more aggressively it can invest in building more towers and other telecom infrastructure, particularly in underserved rural areas where connectivity gaps remain wide. IHS plans to build 500 new towers in 2025, many of which are expected to support 5G and mobile data traffic in Nigeria. The spike in IHS Towers’ share trading volume highlights a broader market shift: investors are increasingly valuing infrastructure firms that underpin large-scale digital transformation. As telecom operators prioritise profitability and cost efficiency, many embrace infrastructure-sharing models to reduce capital outlay. In March 2025, MTN Nigeria and Airtel Africa signed a landmark tower-sharing agreement that directly benefits IHS by allowing telcos to expand network coverage without fully funding new tower builds. Investor sentiment was further boosted by CEO Sam Darwish’s decision to increase his stake in the company, a move widely seen as a strong internal endorsement of IHS’s strategy and long-term growth trajectory. Darwish increased the value of his stake in IHS Towers by $7.75 million over the past month, with his holdings rising from $56.21 million to $64 million by early May 2025, driven by a 13.76% increase in the company’s share price. Still, IHS remains exposed to considerable risk as a telecom operator, particularly due to its deep operational footprint in Nigeria. The company is vulnerable to currency volatility, regulatory changes, and broader macroeconomic instability. In 2024, the naira’s steep depreciation and revised lease terms with MTN temporarily eroded margins. However, renewed agreements with Airtel Africa in February and MTN Nigeria in August 2024 have introduced more sustainable pricing structures that help cushion against foreign exchange and energy cost volatility. These renegotiations are now supporting margin recovery and enhancing IHS’s long-term financial stability. Operational challenges also persist. The company acknowledged ongoing issues with site security, vandalism, unauthorized shutdowns, and currency exposure. “As a TowerCo, we continue to face operational challenges, such as those related to site security, sabotage, illegitimate shutdown of sites, and exposure to currency fluctuations, but we are committed to delivering for our customers,” IHS said. Despite these hurdles, the company’s ability to adapt and secure long-term contracts with anchor tenants like MTN and Airtel appears to be resonating with global investors, which is now reflected in both its share price and trading activity.
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Access Bank, ABC top five lenders risking CBK penalties for raising loan rates
Access Bank Kenya and ABC Bank top the list of commercial banks risking penalties from the Central Bank of Kenya (CBK) for raising lending rates despite warnings from regulators to align loan pricing with benchmark rate cuts. The two banks recorded the steepest average interest rates among the five commercial lenders that increased interest rates in March. According to CBK data, Access Bank raised its weighted average lending rate to 20.5% in March, up from 20.39% in February, while ABC raised its rate to 17.54% from 17.42%. DIB Bank followed with an increase to 17.07% from 16.58%, Kingdom Bank to 14.42% from 14.28%, and Guardian Bank to 13.94% from 13.68%. The rate increases place the banks in breach of the CBK directive. In February, the regulator warned that it would begin imposing daily penalties from June on banks that fail to adjust credit pricing in line with the central bank’s benchmark rate cuts. Since August 2024, the CBK has steadily lowered its policy rate, most recently trimming it in April from 10.75% to 10%. Access Bank, ABC, DIB, Kingdom, and Guardian Bank did not immediately respond to requests for comments. According to Kenya’s Banking Act, the CBK can impose fines of KES 20 million ($154,619) or three times the monetary gain on banks that fail to comply with industry regulations. Lenders also face a daily penalty of KES 100,000 ($773) per violation, while bank officials may be fined up to KES 1 million ($7,730). Other commercial banks, including KCB Group, Equity Group, Cooperative Bank, I&M, NCBA, and DTB, have cut interest rates by one to four percentage points. The CBK launched on-site inspections in February following growing frustration over banks’ resistance to adjusting credit pricing despite successive rate cuts. Governor Kamau Thugge said in April that the regulator had completed inspections of 13 out of 38 licensed banks and would finish all reviews by the end of June. “We will soon start having discussions with the boards of institutions with complete inspections. Following that, decisions would be made as to what kind of penalties, if any, that will be brought on board,” Thugge said. Since August 2024, the regulator has held multiple meetings with bank CEO and boards to urge them to pass monetary benefits to borrowers. “All we are asking is for banks to be fair and to act in the same way that they were quick to raise lending rates when the policy rate was increasing and the treasury rates were increasing,” Thugge said in December. CBK is also scrapping the risk-based credit pricing model in favour of pegging lending rates to its benchmark policy rate, which it hopes would improve the transmission of monetary policy decisions to borrowers and push for transparency in a market that has been criticised for opacity. However, the Kenyan Bankers Association (KBA) has rejected the proposal by the CBK to use the Central Bank Rate (CBR) as the benchmark for pricing credit, paired with a lending premium known as “K”. Instead, they are backing the interbank rate— the rate at which banks lend to one another—as a more market-sensitive benchmark.
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The Next Wave: Rethinking what banks are for
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 11 May, 2025 Rethinking what banks are for Image | TechCabal African economies are growing, fintech is booming, and mobile money has changed how millions handle cash. But behind all the progress lies a stubborn problem: we’ve copied banking systems that aren’t working even in the places they came from. Global banks keep failing. Big ones like Credit Suisse collapse or get absorbed. In the US, new regulations haven’t stopped scandals. In Kenya, Nigeria, and South Africa, banking is still shaped by colonial-era models, even as digital platforms leap ahead. That raises a basic but loaded question: what should a bank actually do? Financial systems are not neutral. They shape who gets credit, who holds risk, and who controls the flow of money. Get it wrong, and you either fuel inequality or crash the economy. Right now, the structure of African banking is caught between two extremes. On one side, licenced banks are slow, cautious, and risk-averse. On the other hand, fintechs and mobile money platforms move fast, but often lack the stability and safety nets of traditional finance. Next Wave continues after this ad. AfriLabs Annual Gathering 2025 lands in Nairobi, Oct 7–9, spotlighting Africa’s innovation future through policy, partnerships, and progress. Find out more here! Most African banks still mix different roles. They hold deposits, move payments, lend to governments, and dabble in corporate finance. That sounds efficient, but it creates hidden risks. If a bank uses customer deposits to chase high returns and loses the bet, who picks up the tab? In many cases, the public does. That’s what happened with collapsed banks like Chase Bank and Imperial Bank in Kenya, and the massive bailout of Union Bank in Nigeria years ago. Regulation tightens, but the model stays the same. A growing number of economists argue it’s time to split banking functions. This idea isn’t new. In the 1930s, the US introduced the Glass-Steagall Act, which separated commercial banking (deposits and payments) from investment banking (risk-taking and capital markets). It was repealed in the 1990s. Since then, global banks have become bigger, more complex, and harder to regulate. The 2008 crisis showed what happens when the line between safe and risky finance disappears. Next Wave continues after this ad. Moonshot is back, and this year, it’s about moving from resilience to results. With the theme Building Momentum, the 2025 edition explores how Africa’s digital economy can shift gears into scale, structure, and long-term growth. Expect more honest reflections, sharper insights, closed-door roundtables, and conversations that don’t end when the panels do. Watch the 2024 highlights. Early bird discount now available Reserve your spot here! One proposal that’s making a quiet comeback is “narrow banking”. Think of it this way: one kind of institution handles your everyday payments and savings. It holds only safe assets like government bonds and doesn’t make risky loans. Another type of institution raises money for investment, like housing or infrastructure, but does so without leaning on insured deposits. The two don’t mix. If the investment bank goes bust, it doesn’t bring down the payment system with it. It sounds neat, but it’s far from simple. Narrow banking could make it harder for banks to fund private sector growth, especially in places where public spending is weak. That’s a big deal in African markets, where credit is already tight and expensive. If banks can’t lend as freely, will governments pick up the slack? Will central banks become the main providers of credit? Or do we risk a new kind of financial drought? Next Wave continues after this ad. The Lagos Startup Expo returns on June 18–19, 2025, at Landmark Centre, Victoria Island, with the theme “Connect, Invest and Innovate.” This year’s edition will host over 200 startups across fintech, healthtech, AI, and more, offering live demos, founder meetups, and networking with investors. Open to the public, the expo features regular and VIP passes—with VIPs gaining access to expert-led masterclasses and investor lounges. Register here! Some might argue we’re already there. In Kenya, mobile money wallets like M-PESA dominate transactions but don’t directly fund business growth. In Nigeria, fintech lending apps are everywhere, but few can scale sustainably. In Ghana, the banking clean-up shrank the sector and left a vacuum for informal lenders. Without a rethink, we’ll keep patching a broken model. The next wave of banking in Africa won’t just be about who builds the best app, but about who dares to ask: should banks still do everything, or is it time to draw clear lines? And if we separate safe money from risky money, who gets left out? There’s no easy answer, but the time for lazy fixes is long gone. Next Wave ends after this ad. Save the Date! We’re taking over Art Hotel, VI on May 16 for an exclusive gathering of tech leaders. Expect: Insightful panels, Live demos, Real connections Limited seats available! Kenn Abuya Senior Reporter, TechCabal. Feel free to email kenn[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri) brief of all the technology and business stories you need to know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal
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