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Flutterwave inks deal with Amex as it continues its move to Africa

Read Moniepoint’s 2024 Informal Economy Report

Did you know that 57.7% of the business owners in Nigeria’s informal economy are under 34 years old? Click here to find out more about the demographics of Nigeria’s informal economy.

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Image source: IHS Towers Image

When a company is facing mounting losses, one of the most drastic measures it can take is to reduce some of its largest expenses. For IHS Towers, like many other companies, that meant cutting staff.

The company has been grappling with mounting losses, largely due to the devaluation of the Nigerian naira, its primary market. It incurred a loss of $409 million in the fourth quarter of 2023 after a currency devaluation in Nigeria reduced revenues and increased foreign exchange losses on dollar-denominated loans. In the first quarter of 2024, the business spent $88.8 million on power, its largest operating cost.

To mitigate these losses and extend its financial runway, IHS Towers has made the difficult decision to

lay off some members of its senior staff, most of whom have spent over a decade at the company. The affected employees received “significant” severance packages, according to one insider. 

By reducing its payroll in this way, IHS Towers, which currently employs 1,600 people, hopes to improve its financial health and position itself for future growth.

Image source: Uber

Kenyan gig drivers have been protesting against ride-hailing apps like Uber and Bolt since July. Their demands: make KES300 ($2.33) the minimum ride fare, remove VAT tax, and lower the commission fees.

These drivers have been rebelling since to force the hand of these apps, setting their own prices and going off-routes. They say that the high commissions they’re paying won’t cut it anymore, given the rising price of operating a ride-hailing business in Kenya. What used to be a decent earning opportunity for these informal workers no longer looks the same.

Yesterday, it appeared one of these apps, Uber Kenya, heard their cries and increased its base fare to KES220 ($1.71) and added another opportunity for drivers to earn more with a service that will charge an additional KES110 ($0.85) for a shorter wait time.

But drivers are not satisfied with this. “They’ve not gotten to 10% of our demands. We will be back at it again,” said Zakaria Mwangi, the Secretary General of Ridehail Transport Association (RTA).

The situation just as well puts ride-hailing apps in a pickle: drivers are demanding increased fares, but they cannot pass this off to customers so they don’t lose them. They do not want to self-sabotage with cheaper matatu buses and other public transport systems lurking to steal back customers.

And these ride-hailing apps are not willing to bet on their ability to make switching costs expensive for their customers either. So the default move goes something like this: drivers protest, the apps reduce their fees and increase fares, blow off steam and make the drivers happy. It might be doing the same again. Rinse and repeat.

Coin Name

Current Value

Day

Month

Bitcoin
$59,394

– 2.57%

– 11.47%

Ether
$2,591

– 2.87%

– 26.15%

TARS AI

$0.14

+ 11.13%

+ 16.88%

Solana
$142.61

– 2.75%

– 21.35%