Delayed salaries and staff cuts at Tingo Group months after SEC fraud charges
Tingo Group, an agri-fintech company sued by the SEC in December 2023 for fabricating its financial statements, furloughed nearly all its full-time employees in March 2024. The furlough, which affected at least fifty employees, came after three months of salary delays, two former employees said. The company promised they would be paid by February 2024. “I appeal to you to stay, let us fix the system together. This will end, God willing, very soon… I do not want anyone laid off,” the group’s CEO, Dozy Mmobuosi, said in a recording of a January 31 company-wide call obtained by TechCabal. He also promised that the outstanding salaries would be paid in four weeks. The promises were made despite the company’s legal troubles. In late 2023, the SEC began an investigation into Tingo Group and found that while the company reported having cash and cash equivalent of $461.7 million for the fiscal year 2022, its bank accounts held less than $50. Weeks after the charges were filed, some Tingo employees were given a pay raise. “Some people received a 200% pay increase, some 300% and others 400%,” an executive at the company said. In March, employees were told they would be furloughed until the company could afford to pay them. “Based on present realities and considering the uncertainties ahead and in order to avoid setting unrealistic expectations, which could have an adverse effect on the well-being of our employees, the company will have to put the employment of all employees on furlough,” an email addressed to the entire Tingo team employees read. The furlough was effective March 1. A highly placed executive who still works at the company told TechCbal that it was a natural move for the company, considering its financial struggles. “The company’s assets have been frozen. Vendors who owe the company payment have taken advantage of the circumstances [to forfeit their obligations,]” he said on a call with TechCabal. The company did not share any information about the promised salary payments. Tingo Group declined to comment on the matter and invited TechCabal to a press event for a product launch. According to that invitation, Tingo Foods will launch two new beverages on March 16 at a cocktail event hosted by an affluent traditional ruler, the Ooni of Ife. “There was no money to pay outstanding salaries, but there is money to produce drinks?” an ex-employee said in response to the news. This is the second time Tingo has laid off staff this year. In February 2023, the company abruptly terminated about 40 contract staff while owing them salaries for work done for Tingo Mobile in December 2023 and January 2024.
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👨🏿🚀TechCabal Daily – A not-so-open view
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning We have amazing news! TechCabal’s WhatsApp channel is live! Get the latest insights from our newsroom on WhatsApp! What’s more? You get to interact with our reporters and get exclusive peeks at the reporting process. Click here to get started. In today’s edition Wema Bank battled $594,943 fraud in 2023 TikTok recommits to user safety in Kenya Openview wins against MultiChoice Paratus launches fibre network route between Johannesburg and Europe The World Wide Web3 Opportunities Cybersecurity Wema Bank battled $594,943 fraud in 2023 Financial institutions were reportedly among the ten fastest-growing sectors of the Nigerian economy in 2023, with a growth rate of 28.86% from 17.24% in 2022. But fraud is becoming a significant threat to Nigeria’s financial system, with both traditional banks and fintech startups struggling to contain it. In the latest fraud reveal, Wema Bank, a tier-2 Nigerian bank with ₦1.8 trillion ($1.6 billion) in customer deposits, reportedly lost ₦685 million ($594,943) to fraudulent activities in 2023. Wema, which saw its 2023 profits soar from ₦11 billion ($9.5 million) in 2022 to ₦35 billion ($30.3 million), had its performance overshadowed by the fraud. How did it happen? According to a Wema Bank spokesperson, the losses came from their digital banking channels, collection and payment services, and transactions involving third-party partners on their platform. The bank also cited inadequate Know Your Customer (KYC) procedures and compliance issues as contributing factors. To address the problem, Wema Bank has bolstered its fraud monitoring systems and expanded its digital compliance team. The bank also claims a decrease in fraud cases for the first quarter of 2024, though independent verification is pending. Wema’s experience is not unique. In October 2023, Fidelity Bank reportedly lost $2.5 million to fraudsters in three attacks. Court documents also reveal that Access Bank, Nigeria’s largest bank by customer deposits filed lawsuits in June and July 2023 to recover a combined $6.9 million lost to illegal withdrawals. Fintech giants like Flutterwave haven’t been spared either, with alleged cyberattacks in March 2023, resulting in a $3.7 million loss. According to the Financial Institutions Training Centre (FITC), Nigerian financial institutions have lost over $201.5 million to fraud since 2020. Read Moniepoint’s case study on family-owned businesses Family-owned businesses are everywhere, shaping our world in ways you might not expect. We’ve found some insights into how they work, and we’d love to share them with you. Dive in right away here. Social media Amidst parliamentary scrutiny, TikTok commits to user safety in Kenya TikTok has reaffirmed its dedication to maintaining a safe environment for its users in Kenya. Fortune Mgwili-Sibanda, TikTok’s director of government and public policy for sub-Saharan Africa, this week, talked about how TikTok’s policies will provide guidance and serve as safety measures while appearing before the parliament. Mgwili-Sibanda explained that TikTok’s Community Guidelines will provide guidance on the regulations of the platform and will help the community feel positive and safe. With a significant investment of over $2 billion globally in Trust and Safety initiatives this year, TikTok remains determined in its mission to prioritize user safety. Why is TikTok having this conversation? TikTok is engaging in a safety guideline discussion with Kenya’s parliament in response to a petition received by the Kenyan House of Assembly in 2023. The petition, submitted by a concerned citizen, called for TikTok’s ban due to explicit content. The petitioner highlighted a trend among users of creating sexual videos on TikTok during nighttime livestreams. Is a ban the solution? President Ruto thought that a ban wasn’t the answer since many Kenyans are using TikTok for their careers. Instead, he had a virtual meeting with TikTok to improve how they moderate content. The CEO of Tik Tok Shou Zi Chew agreed to set up a TikTok office in Kenya to coordinate its operations on the continent. President Ruto said the move would ensure that content on the platform is moderated to fit community standards. Moreover, the platform says it will continue hosting capacity-building workshops for policymakers and regulatory agencies, focusing on online safety, data privacy, and content moderation. TikTok has also invited lawmakers and other government officials to visit its Transparency and Accountability Centre in Dublin. During this visit, legislators will get to observe firsthand how TikTok’s teams ensure the safety of the community. No hidden fees or charges with Fincra Collect payments via Bank Transfer, Cards, Virtual Account & Mobile Money with Fincra’s secure payment gateway. What’s more? You get to save money for your business when you use Fincra. Start now. Streaming Openview wins against MultiChoice in ongoing broadcasting rights disput South Africa’s Openview, a free-to-view satellite platform owned by eMedia, has a history of battling MultiChoice, the pay-TV giant, over broadcasting rights. In October 2023, Openview took MultiChoice to court accusing the company of monopolising Rugby World Cup broadcasting rights. MultiChoice and the state-owned South African Broadcasting Company (SABC) reached last-minute agreements for the Rugby and Cricket World Cups, but with restrictions. SABC got rights to broadcast important matches, including those with South Africa’s teams, semis, and finals, but only on SABC channels, not Openview. This caused a dispute with eMedia. What’s the issue now? Openview wants SABC to be able to air live sports (sub-licensed from MultiChoice) on its free satellite platform as its parent company, eMedia, argues that SABC’s exclusivity limits viewer choice and hinders competition. The Competition Tribunal has now sided with eMedia in a temporary ruling. For the next six months, MultiChoice cannot enforce restrictions that prevent SABC from broadcasting sub-licensed sports on Openview. The Tribunal said the reasons for its decision will be issued in due course. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → Internet Paratus launches fibre network route between Johannesburg and Europe After it completed a high-speed fibre optic link stretching 1,890 kilometres from
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Next Wave: Is Nigeria ready for the AI revolution
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 14 April, 2024 Nigeria still has structural challenges holding it back from winning in AI. But all hope is not lost yet. Artificial intelligence (AI) is expected to add $15 trillion to global GDP by 2030, boosting countries’ growth by 25%. Where does this leave Africa? So far, nine African nations—Benin, Egypt, Ghana, Mauritius, Rwanda, Senegal, Morocco, Sierra Leone and Tunisia—have drafted national AI strategies, representing only a handful of African nations eager to thrive in the area. A good AI policy must clearly outline governance practices around data collection, management, protection and storage. Data protection is the foundation of solid AI policymaking, however, only 36 out of 54 African countries have established formal data protection regulations. The introduction of AI has both benefits and risks. AI could worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions. It has the tendency to fuel misinformation via deepfakes and use creators’ works without attribution. This is the reason government institutions around the globe are introducing or revising policies to regulate some of the risks that AI poses, ensuring a saner society that will benefit all. Next Wave continues after this ad. The Algorithm is a TechCabal vertical that focuses on the backend of the creator economy. We’ll bring you stories that delve into the creation process, the business of being a content creator, interviews with creators, and everything else about online creators! Read our latest story here. At the moment, Nigeria is putting together its own AI strategy. This is not the first time it is doing so. In 2022, the then minister of communications and digital economy, Isa Pantami, put together the first National Artificial Intelligence strategy draft, a 190-page document, which was eventually not acted upon. It remains to be seen what plans Pantami’s successor, Bosun Tijani, has for the strategy document. Meanwhile, Tijani recently invited 120 AI researchers and practitioners to Abuja, to co-create a comprehensive national AI strategy. The meeting is set to happen between April 15 and 18. The Nigerian challenge The great challenge with building AI is infrastructure, one that Nigeria doesn’t have. For AI to work, it needs the following elements: compute, data and manpower. None of these three are easy to get. Despite boasting of over 400 startups, Nigeria is still lacking skilled AI researchers and data analysts. Recently, a researcher faulted the ministry of communication’s desire to train 50,000 persons in AI, stressing that that number is still inadequate for the numerous use cases Nigeria could exploit with the technology. Next Wave continues after this ad. GITEX Africa returns a second time on May 29–31, 2024 to Marrakech, Morocco, discussing ways to accelerate the continent’s digital health revolution. GITEX is the continent’s largest all-inclusive tech event renowned for uniting the brightest minds in the technology industry Grab your tickets here Drawbacks like this are the reason why many Nigerians are not optimistic about the growth of AI in the country. Tijani has been criticised for getting his priorities all wrong. Still, some optimistic AI experts argue that despite some of these challenges, AI can thrive in Nigeria. Some use cases There are many use cases for AI in various fields like finance, national security, healthcare, criminal justice, transportation and smart cities. A low-hanging fruit for AI models in Nigeria revolves around customer care, healthcare, edtech and lending. Many banks and fintechs have easily adopted the chatbot function as auto responders, which seems like one of the easiest features to adapt. AI can work in medical diagnosis, collating medical histories and predicting the possibility of an ailment. In lending, AI is great at determining whether a lender is creditworthy or not. AI can also predict the right educational outcomes in teaching and scoring. Next Wave continues after this ad. GDM Group & Eko Innovation Centre announce MarkHack 3.0! Calling startups in AI, blockchain, VR to shape Africa’s media future. Network & win accelerator access. Apply now The importance of assessing Nigeria’s (and by extension the continent’s) readiness for AI is so that we can avoid a consumerist approach to the technology. AI represents an opportunity for Africa to rise and take ownership of advancing the technology. With a population of millions of young people under 30, there is a lot that Africa can do beyond just relying on InstaDeep as the poster boy for anything AI on the continent. Joseph Olaoluwa Senior Reporter, TechCabal Thank you for reading this far. Feel free to email joseph.olaoluwa[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 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 and feedback. We welcome those. 18, Nnobi Street, Surulere, Lagos, Nigeria View in Map You received this email because you signed up on our website or made purchase from us. If you
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Wema Bank tightens security after ₦685 million fraud loss in 2023
Wema Bank, a Nigerian tier-2 bank that holds ₦1.8 trillion ($1.6 billion) in consumer deposits, reported ₦685 million ($594,943) in fraud and forgery losses in 2023, highlighting the scale of fraud in Nigeria’s financial services sector. “These were aggregate losses from our digital and collection/payment channels, including third parties connected through our platform,” a spokesperson for Wema Bank told TechCabal. The spokesperson also cited KYC (Know Your Customer) and compliance issues. The bank is working on strengthening its fraud monitoring process and has hired more people in its digital compliance department. It also claimed that the number of fraud cases in Q1 2024 declined sharply. TechCabal could not independently verify this claim as the bank has not released its Q1 2024 results. “We do not anticipate similar volumes in the 2024 financial year.” Despite these fraud concerns, Wema Bank recorded impressive growth in 2023, tripling its profits from ₦11 billion in 2022 to ₦35 billion. That three-fold boost was partly thanks to a ₦13 billion FX revaluation gain. In March, the CBN barred banks from paying out FX currency gains as dividends or drawing on them for operational expenses. Nigeria’s headline inflation accelerates to 33.2% despite the naira’s strong performance Key takeaways Gross earnings were up 71% to ₦226 billion from ₦133 billion in 2022 Net interest income up 69% to ₦91 billion from ₦54 billion in 2022 Account maintenance fees grew 44% to ₦3.9 billion from ₦2.7 billion in 2022 FX transactions grew 119% to ₦4.1 billion from ₦1.8 billion in 2022 Loans and advances to banks and customers grew 42% to ₦122 billion from ₦85 billion in 2022. Additionally, Wema recorded an impressive return from loans offered to customers. The value of those loans rose by 53.6% for full-year 2023 at ₦801.10billion, up from the ₦521.43 billion disbursed in 2022. The bank also grew its digital income to ₦745 million and brought in a whopping ₦7.3 billion in fees on electronic products. Another bright spot was ALAT, Wema’s neobanking offering. The digital bank added 2.1million new users in 2023, although it is unclear how many total users it currently has.
Read MoreNigeria’s headline inflation accelerates to 33.2% despite the naira’s strong performance
Headline inflation in Nigeria accelerated to 33.2% in March, defying analysts’ estimates of a marginal increase. Those estimates were based on the strong performance of the naira, which became the world’s best-performing currency in April. Other policy decisions, including interest rate hikes in February and March, were expected to slow headline inflation, but a 150 basis points increase in March defied those predictions. Food continued to be a major driver of rising prices, with food inflation accelerating to 40.01%. “On a month-on-month basis, the food inflation rate in March 2024 was 3.62%, which shows a 0.17% decrease compared to the rate recorded in February 2024 (3.79%), a report from the Bureau of Statistics said. Electricity, gas and other fuels had smaller impacts on overall inflation. Last week, Nigeria approved a major increase in electricity tariffs for its top customers (Band A) as it looked to cut costs on electricity subsidies. Olayemi Cardoso, the Central Bank governor, said last month that he expected prices to moderate by May, which will coincide with the next meeting to decide on monetary policy decisions.
Read MoreBuilding trust: Why Africa needs inclusive cybersecurity solutions
This article was contributed to TechCabal by Sylvia Brune. In the last decade or more, it has been said that mobile penetration and increased internet access will usher in economic growth in Africa. But does smartphone penetration and internet connectivity automatically lead to economic growth or are there resulting digital challenges that could gravely affect economic outcomes? In Africa, fraudulent transactions amount to approximately $4 billion annually, with financial institutions and the telecoms sector bearing the brunt of attacks. Among others, the World Economic Forum highlighted that many African businesses are not adequately equipped to navigate cyber threats. It’s clear: the time to secure Africa’s digital future is now. More than just the financial toll, the real cost of fraud and data breaches? Trust. When online fraudsters strike, they steal identities and opportunities, excluding countless people from participating in Africa’s digital economy. The reality is that cybercriminals are evolving faster than a chameleon changing its colours, becoming ever more cunning in their exploits; so our digital defences must be ironclad to thwart them, yet inclusive to ensure everyone can thrive in this new digital age, tech-savvy or not. This is the big trade-off that lies ahead and the question that propels us forward: How do we effectively guard against these threats without sidelining the good actors we’re here to serve? At pawaPass, our mission is to find the challenging balance between combating fraudsters and ensuring the digital doors remain open for everyone else. In a continent as diverse as Africa, more than half do not have proof of legal ID, and the majority of businesses lack the means or tools for sophisticated verification, often resorting to manual checks. This approach can result in errors, particularly if verifications happen remotely while exposing the collected personal data to vulnerabilities. Therefore, as innovators solving the cybersecurity challenge, we must deliver solutions that account for the diverse needs and realities of Africans and resist the pitfalls of a “one-size-fits-all” approach. In the quest for a digital future that is both secure and universally accessible, innovative solutions that merge cutting-edge security with user-friendly verification are crucial. By focusing on creating systems that enhance user experience without compromising security, such as offering biometric verification for critical transactions, we can protect users without encroaching on their digital freedom. Collaborations between businesses and anti-fraud platforms like pawaPass need to take into consideration the types of users that the business has to ensure the approaches are thoughtful and risk-based, so as not to harm the overall user experience. This is why, at pawaPass, having tested multiple solutions, we are currently using FaceTec’s leading biometric technology, known for its focus on security and resilience against the most cunning frauds, with their $600,000 bounty offer for whoever successfully hacks into their security system. At pawaPass, our current solution has been tailored to work effectively for businesses that serve a large range of users across multiple African markets. This was important to the team because the challenge doesn’t end with active verification technology only. As we strive for inclusivity, we also confront the realities of data costs, device types, user behaviour, and internet accessibility across the continent. This reality means any verification process needs to be flexible enough to accommodate low-end smartphones used by many online users in Africa. Our goal is clear: to make it easier to trust people online. By creating anti-fraud and verification systems that cater to every segment of society, we can help break down digital barriers for people across the continent. This vision is already coming to life through our partnership with sports and technology brand Mchezo to facilitate $2 million worth of shares to over 200,000 betPawa’s committed customer base. It’s a testament to our commitment to creating a digital ecosystem where security and inclusivity go hand in hand. As I reflect on our path so far, it’s clear that building trust online is highly complex, and the road ahead is filled with opportunities and obstacles. But it’s obviously a journey worth taking because building secure, inclusive, and trustworthy digital infrastructure is not just about compliant transactions or safeguarding data; it is about laying the foundation for a future where every African has access to a wide range of opportunities that will enable them to prosper. — Sylvia Brune is the CEO of pawaPass. She has over a decade of experience as an entrepreneur with a dynamic career trajectory that spans various sectors and industries. She has a unique blend of problem-solving, connecting the dots, and a drive to create great experiences for customers.
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👨🏿🚀TechCabal Daily – Nigeria’s multipurpose banking card
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Our data and events arm TechCabal Insights is excited to announce the launch of its new website! The new TechCabal Insighst website makes it easy for you to read your favourite data stories and download your favourite reports. Check out our new website at insights.techcabal.com In today’s edition Nigeria purposes yet another ID card Canal+ increases MultiChoice stake to 40% Nigerian banks scramble to meet minimum capital requirements Togo and Niger to implement free roaming The World Wide Web3 Events Economy Nigerians to get new multipurpose ID cards via banks Last week, Nigeria’s National Identity Management Commission (NIMC) announced a new solution for Nigerians carrying multiple ID cards to prove their identity: a single General Multipurpose Card (GMPC). The GMPC is said to serve as both an identification and a payment method, and compared to the nine years it took at least 104 million Nigerians to register for the most prominent form of ID, the National Identification Number (NIN), the new multipurpose card seems to be much easier to obtain. How? According to NIMC, citizens can apply for the GMPC with their NIN through familiar channels— their respective banks, just like applying for a debit or credit card. They can also apply for the card through the NIMC online portal, or a NIMC office. Once approved, they can pick it up at a designated centre or have it delivered for a fee. The GMPC eliminates the need to juggle multiple ID cards, and combines verification and financial functionality, due to a collaboration between NIMC, the Central Bank of Nigeria (CBN), and the Nigerian Inter-bank Settlement System (NIBSS). Zoom out: Nigeria follows in the footsteps of Kenya, trying to roll out multipurpose Identification for its citizens. In October 2023, the Kenyan government introduced a digital ID, the Maisha Namba, also referred to as a Unique Personal Identifier, that will serve as a child’s school ID through primary and secondary education. By adulthood (18), it becomes their national ID, further integrating with essential services like health insurance, social security, driving license, and even death certificates. Read Moniepoint’s case study on family-owned businesses Family-owned businesses are everywhere, shaping our world in ways you might not expect. We’ve found some insights into how they work, and we’d love to share them with you. Dive in right away here. Acquisitions Canal+ increases stake in Multichoice to 40% Since 2020, French Broadcasting group, Canal+, has gradually increased its share in Multichoice, owners of DStv, Showmax, and SuperSport. Canal+ first acquired 6.5% of Multichoice shares in 2020. By 2023, Canal+ had increased its stake to about 32.6%. The incremental ownership was Canal+ parent company’s signature move in acquiring companies. According to South African laws, companies must make a mandatory takeover offer after reaching the 35% shareholding threshold. With the law requiring Canal+ to make a takeover bid, the French broadcast giant bid to acquire Multichoice in February, offering the broadcast 105 Rands ($5.6) per share. While the deal was above Multichoice’s current share price of R79, the broadcaster refused the deal, saying it was undervalued. Canal+ seems to be taking things up a notch. The news: Last week, Canal+ upped its stakes in the company offering an all-cash of about 125 rand ($6.6) per share up from R105 ($5.6) which was previously offered. The new deal gives Canal+ about 41% ownership in Multichoice, making the company its largest shareholder. The new deal values Multichoice at 55 billion rand ($2.9 billion). Per Bloomberg, Canal+ is in talks with JPMorgan Chase & Co. and Bank of America Corp to prepare a formal offer letter which is due by April. Multichoice is also assembling an independent board to review and advise on the new offer. No hidden fees or charges with Fincra Collect payments via Bank Transfer, Cards, Virtual Account & Mobile Money with Fincra’s secure payment gateway. What’s more? You get to save money for your business when you use Fincra. Start now. Banking GT Bank needs shareholder approval to raise $750 million Recently, Nigeria’s apex bank, the Central Bank of Nigeria (CBN), set new capital requirements for different bank tiers in the country. Capital requirements are the minimum amount of money that banks are required to have on hand. The CBN said the move was to protect the country’s economy from global shocks and help achieve President Tinubu’s goal of a trillion-dollar economy by 2030. The new capital requirement ranges from ₦10 billion ($7.6 million) for smaller banks, to ₦500 billion ($380 million) for banks with international operations. The search for a new fund: As banks around the country race to meet up with the new requirements, Guaranty Trust Holding Company, the parent company of GT Bank, Nigeria’s 5th biggest bank by assets has sought shareholder approval to raise $750 million. GT Bank will raise new capital by issuing new ordinary shares, preference shares, convertible notes, bonds and other instruments. The caveat: While the bank hopes to protect itself against external and domestic shocks, GT Bank’s new capital injection will dilute the shares of existing shareholders as the bank will be raising money by issuing new shares. GT Bank is not alone in the search for new funds. Since the CBN announced the new capital requirement, two other banks—Access Bank and First Bank—have been in the market for fresh funds. This is not the first time that Nigeria’s apex bank has set new capital requirements. In 2005, the CBN upped the minimum capital requirement for banks from ₦2 billion to ₦25 billion, triggering mergers and acquisitions and reducing the number of banks to 25, down from 89. While the CBN has set a hard stop of April 30 for banks to announce fundraising plans, this report suggests that 17 of Nigeria’s 24 banks might not meet the new capital requirements. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in
Read MoreLayoffs and job security push Nigeria’s tech workers to traditional industries
Until August 2023, *Bayo Samuel worked as a product designer at a Lagos-based edtech startup. However, a failure to raise fresh funding forced the company to lay off several employees to reduce operational costs. Samuel was one of the affected workers. “It felt like my world crashed,” the 26-year-old, who had worked at the company for two years, told TechCabal. After five months of job hunting, while living on his savings, he was hired as an analyst at an investment bank, which paid less than his previous role, where he earned ₦500,000. “The money isn’t great, so I have had to adjust my lifestyle. But it is better than being jobless.” Idowu is one of the many Nigeria’s tech workers who are now pursuing careers in traditional industries, representing a reverse in the generational shift of young graduates who entered the tech industry due to promises of mouthwatering salaries and flexible working conditions. A major appeal of the tech industry is its low barrier to entry, unlike traditional industries that often require a level of educational qualification and skill set. “Traditional industries offer a level of stability and structure. People want a growth plan and structured opportunities. This trend is very benefit-driven,” Chibuzo Ihentuge-Eric, a tech recruiter and human resource specialist, told TechCabal. Nigeria’s tech industry has witnessed impressive growth in the past decade with the rise of homegrown successful startups like Paystack and Flutterwave and billions of dollars in venture capital funding. But a global tech downturn has forced investors to write fewer checks. Nigerian startups raised $398.2 million in 2023, a 66% decline compared to the previous year. With less funding due to tough macroeconomic conditions, startups had no option but to cut costs to stay afloat. This sometimes, unfortunately, includes laying off staff. In February, Spleet, a property tech startup that raised $2.6 million in 2022 from investors, laid off an undisclosed number of employees following inflationary pressure on its business. Nigeria’s headline inflation rose to 31.70% in the same month. Tech layoffs mean Nigeria’s tech workers are flooding an already constrained job market for a fresh start. The country’s unemployment rate is projected to cross 40% this year as the country battles an economic recession. “People have no option; they have to take what they see. I think people now prioritise job security over job satisfaction,” said Emmanuel Faith, a people leader and talent manager. Unlike Samuel, *Sulaimon Kehinde wasn’t laid off from his role as a senior product manager at an early-stage fintech. He resigned from the company in July 2023, citing its toxic work culture and the fear of losing his job. “I was really after job security. I wanted to switch to a more established company with processes in place,” he told TechCabal. He had a side gig, working as a contract product manager for a retail marketplace app but later resigned to focus on his job search. In November 2023, he secured a role as a product portfolio officer at a capital markets infrastructure firm, which tripled his pay. He earned around ₦300,000 a month at his former workplace. “The work culture is way better. The company prioritises employee well-being and offers perks such as gym subscriptions, health benefits, quarterly bonuses, and travel allowances. You’d typically get these at growth-stage startups,” Kehinde said. The switch in career transcends beyond startups but also tech-enabled companies. *Remi Adewunmi worked as an enterprise resource planning (ERP) administrator at a traditional bank for eight years. Though he had a “rich and eventful experience,” he left to become a partner at a real estate venture where he oversees IT services and implementation. According to him, the new role offered better remuneration and working hours. “My experience from tech prepared me for this. The pay in my new role is much better. I earn at least 40% more than my previous annual salary,” he said. Faith, the talent manager, believes any traditional industry that hires tech professionals is lucky: “One thing tech workers bring to the table is the fast pace of execution. This might also be a challenge, considering the nature of traditional industries. They [tech talent] may have challenges with dealing with bureaucracy and the ranks of decision-making.” Nigerian startups lack established growth plans, which traditional industries often have in place, according to Ihentuge-Eric. To retain talent, the tech industry should work on comprehensive career development plans for employees. “When it’s known that the industry is big on developing talent, then people might consider staying,” she said. *Names changed to protect the source’s identity.
Read MoreIncentro Africa denies laying off staff at the beginning of 2024
Incentro Africa, a Kenyan reseller of Google Workspace and cloud services with operations in Rwanda and South Africa, did not lay off employees at the beginning of 2024, TechCabal has learned. Chatter from industry insiders claimed that the company fired some staff members. According to Incentro, the situation involved two cloud salespeople on year-long contracts with the company. However, after failing to meet their quarterly sales targets, Incentro decided against renewing their contracts. In an email to TechCabal, Dennis De Weerd, Incentro Africa CEO, said that the company communicated this decision to the affected ex-employees six weeks before their contracts were terminated. Per the company, their employment was discontinued according to standard practices for commission-based roles. Efforts to get comments from the dismissed staff were unsuccessful after they declined to speak on the matter. Incentro Africa also confirmed that no other employees have been let go since then. However, two other employees left the company around the same time for positions at different companies. “These departures are part of the normal employment cycle, with individuals pursuing other career opportunities,” De Weerd said. De Weerd further told TechCabal that the former salespeople initiated legal action for unfair dismissal. The case is ongoing, but Incentro says it prefers to settle the matter internally. In September 2023, Incentro Africa made the headlines after it initiated a liquidation suit against Twiga Foods, a Kenyan B2B agritech company, over a $261,000 Google cloud bill. The issue was resolved, with Twiga agreeing to settle the debt after securing a $35 million convertible bond deal in November 2023. In 2017, the company launched a software development business focusing on talent sourcing and client partnership but pivoted to reselling Google Workspace and cloud services in 2020. The change came after its software business was affected by the COVID-19 pandemic. Incentro clarified that even then, it did not terminate employees.
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Southern Africa is now the top investment region in Africa, according to private capital report
2023 was a tough year for the private capital space in Africa, as factors like inflation and currency depreciation , among others, made business incredibly difficult across the continent. Local currencies like the Kenyan shilling and naira sunk to historic lows, while a depletion in foreign exchange reserves increased the cost of doing business in Egypt. This had a significant impact on private capital activity on the continent in 2023, as the economic uncertainty pushed fund managers into being more wary and prudent with their investment strategies. In April 2024, The African Private Capital Association (AVCA) released its 2023 African Private Capital Activity Report which provides insight into dealmaking, fundraising, exits and the key trends shaping Africa’s private capital landscape. For over two decades, AVCA has been focused on enabling and championing private investment in Africa. Here are five interesting things we learned from the report: 1. The African market was more resilient than expected According to the report, there was a notable decrease in Africa’s total private capital deal volume, marking the first decline since 2016, with a 28% year-on-year decline to 450 deals. Despite this downturn, Africa displayed surprising resilience, performing better than other developing regions and still managing to achieve $5.9 billion deal value —the second-strongest year on record for deal volume in Africa, surpassing both the decade-long average and recent years’ averages. This number was primarily driven by two large infrastructure investments in the South African renewable energy sector of above $250 million each. 2. Tech and clean energy received the most attention Venture capital (VC) remained the star of the show, attracting 68% of all private capital investment in Africa. This trend reflects the continued interest of investors in backing tech-driven businesses across the continent’s rapidly growing markets since 2015. After VC, infrastructure also saw a significant surge in investment values which tripled to $1.8 billion, and was largely driven by renewable energy projects. According to the report, investors and experts are convinced of the continent’s potential to become a leader in clean energy transition in the coming years due to its abundant resources. 3. Southern Africa is now investors’ favourite investment destination Southern Africa made a comeback in 2023, reclaiming its position as a top investment hub. The region attracted the highest volume (26%) and value of deals ($2.6 billion) with South Africa in front amidst growth in sectors like IT, software, logistics, and transportation. West Africa attracted only 11% of the total value of private capital deals on the continent, after Southern Africa and North Africa; a sizeable decline from 2022 where it got 23% of the total private capital value while Southern Africa drew 19%. 4. Investors are still interested in Africa While final closed funds —funds ready for investment— declined slightly, the average value of capital raised for private debt and VC funds increased. Despite the global recession which was speculated to dampen investors’ spirits, there was some growth in interim fundraising activity (capital raised throughout the year) which suggests that investors are still interested in the continent. Africa experienced a 9% decrease in the total value of fundraising, while Asia experienced an alarming 39% decline. Europe’s decline was moderate at just 2%. 5. Exits are lower than in 2022, but still in line with the average There were 43 exits in 2023, which is only about half of the 82 we saw in 2022; but this is still more than the 32 and 36 exits recorded in 2020 and 2021 respectively. South Africa remains the most active exit market, affirming to is status as the prime destination on the continent for mature investments. While there was only one IPO exit, there were seven through management sales buyouts (MBOs)/private sales; 18 through trade buyers; and 14 through private equity and financial buyers. For the first time since 2015, there were no exits via the private equity routes within the financial services sector, which was one of the most popular routes in 2022. To read the full report, click here.
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