Kenya’s cash-strapped postal service fires staff with fake degrees
Five months after the Kenyan government directed state corporations to audit their employees’ qualifications, the cash-strapped Postal Corporation of Kenya (PCK) fired over 20 staff with fake academic papers. John Tonui, postmaster general, told TechCabal that the corporation sent the academic qualifications of employees to the Kenya National Examination Council (KNEC) and the Kenya National Qualifications Authority (KNQA) for verification. Tonui said the exercise has not ended and could weed out more people who falsified documents to get jobs. This comes as the corporation readies a turnaround plan that will see it lay off over 500 workers as it rejigs its workforce to invest in new areas like e-commerce and cargo clearance. The ICT ministry-backed plan was approved by the company’s board in December 2023. “The directive came from the Public Service Commission (PSC) and out of 780 academic papers we submitted for verification, those of 29 employees turned out to be fake,” John Tonui, postmaster general told TechCabal. The postal service is among 50 state corporations struggling with a bloated wage bill, and have been unable to turn on profit. While Tonui agreed that the clamp down on fake degrees is not part of the restructuring, he admitted that it would help the corporation achieve some of its restructuring goals. As part of the plan, PCK will reduce its headcount from 2,364 to 1,860. “The intention all lead to the same goal of having a lean corporation that is profitable and attractive to investors. We are working to turn around Posta to ensure it delivers efficient last-mile connectivity,” Tonui said. PCK’s business model took a beating after people ditched sending letters and new entrants like bus companies took over the courier business. According to government disclosure, the postal service has accumulated $45.9 million (KES6 billion) in losses over the past decade. To stay afloat, the government has handed the company contracts to provide last-mile delivery of medical supplies and passports. It also has an agreement with the Independent Electoral and Boundaries Commission (IEBC). Efforts by the ICT ministry to transform the corporation into an e-commerce and logistics service provider have hit numerous roadblocks including government bureaucracy, opposition from workers unions, and a tough operating environment that has seen established private players shut down.
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👨🏿🚀TechCabal Daily – Copia’s coping mechanism
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning TC Daily wants to keep being your go-to source for tech news. Here’s the catch: We need your help! Take our bi-annual survey and let us know what you think. Think of it as your chance to become the editor-in-chief (without the boring meetings). Tell us what you think in two minutes. In today’s edition Copia shutters its Central and Eastern Kenya services Canal+’s offer to MultiChoice is fair, Board rules Bolt blocks 6,000 South African drivers South Africa’s new use it or lose it rule The World Wide Web3 Opportunities Shutdowns Copia shutters service in Central and Eastern Kenya “Markets take the stairs up and the elevator down.” This saying, attributed to wealth manager Tim Egart, rings true for Copia, the Kenyan e-commerce platform that aims to revolutionise rural retail. Despite raising money from big-name VCs like DFC and GoodWell Investments, the Kenyan B2C startup could not crack the razor-thin margins of the e-commerce business. Here’s what Adonijah and Kenn wrote about the startup: “Copia, once a darling of venture capitalists—including the DFC and GoodWell Investments—received $123 million in funding but failed to turn a profit. The company sought to turn informal rural kiosks into a multi-billion digital retail platform, linking customers directly to fast-moving consumer goods (FMCG) manufacturers to lower product costs.” On May 24, the business entered into administration after failing to raise new capital. “Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” Copia said in a statement sent to TechCabal. As the company seeks to raise new funds in Kenya, it is taking steps to cut costs. Copia Kenya has now shuttered its business divisions in Central and Eastern Kenya. Naivasha, Machakos, Meru, Embu, Kericho, and Eldoret were the six markets affected by the new decision. While the company announced plans to lay off over 1,000 staff on May 16, staff working in spots across the affected markets have been sent home pending a decision from the company. Moniepoint is Africa’s fastest-growing fintech The Financial Times has ranked Moniepoint as Africa’s fastest-growing fintech based on its absolute and compound growth rate. Read more about it here. Streaming Independent Board says Canal+’s offer to MultiChoice is fair Canal+, a French media group, has been trying to buy MultiChoice since the beginning of the year. Its Initial offer of $2.5 billion—and an improved $2.9 billion—was rejected. However, by increasing its ownership in MultiChoice to over 35%, it is expected to formally offer to buy all remaining shares. It has since upped its ownership to 40.8%. You see, South African laws say that once a company has a 35% stake in another company, it has to make a mandatory buyout offer. And Canal isn’t new to these rules. Way back in 2016, around the same time Blackberries and man buns became a thing, it perfected a hostile takeover of France-headquartered Gameloft by buying over 30% of the company first, before convincing other shareholders to sell their stakes. It might be taking the same route with MultiChoice. After months of back and forth, in April, Canal+ offered MultiChoice $2.9 billion which MultiChoice again rejected because the latter company felt it was worth more. An independent board created by MultiChoice evaluated Canal+’s offer price for the remaining shares. This board, reviewed by Standard Bank, has now concluded the price offered by Canal+ is fair and reasonable for MultiChoice shareholders. It recommended that shareholders wait until the offer becomes final before approving it. A key challenge is regulatory approval. Several government bodies in and outside of South Africa need to give the green light before the deal can proceed. Additionally, South Africa’s ownership rules, the Electronic Communications Act limits foreign companies from owning more than 20% of the voting rights in a South African broadcaster, which creates a challenge for Canal+’s full acquisition of MultiChoice. Both companies have confirmed to be working together to find a structure that satisfies both the regulations and maintains MultiChoice’s commitment to black economic empowerment. The Canal+ offer is expected to close by April 22, 2025. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Mobility Bolt blocks over 6,000 drivers in South Africa for misconduct When South Africans were asked about their ride-hailing preference, Bolt took the top spot. The Estonian mobility startup, which launched in the country in 2016, is doing all it takes to keep its top spot. In recent times, Bolt has faced criticism for the misconduct of its drivers in the country. Those drivers have been accused of harassment and sexual assault, sparking a social media outrage. Emmanuel Mudau, a former Bolt driver, was sentenced to two life sentences and two 15-year terms for rape, kidnapping, and assault. Another driver in Cape Town was taken into custody and charged with allegedly stabbing two young women following a dispute over their drop-off location. The ride-hailing firm has now responded to this claim by blocking over 6,000 drivers involved in such misconduct over the past six months. “The company will continue to permanently block drivers and riders who have been reported for misconduct from accessing the platform,” Bolt said in a statement. Bolt’s action comes after it received threats of litigation for failing to hold its drivers to good standards. An attorney group also claimed it would launch a civil claim against Bolt for failing to protect passengers. Only time will tell if Bolt’s recent actions are enough to regain the trust of South African riders. What were the
Read MoreBreaking: Bolt blocks over 6,000 drivers in South Africa for misconduct
Bolt, a ride-hailing platform that has been accused of holding its drive partners to poor standards, has blocked over 6,000 drivers in South Africa over the last six months for misconduct. “The company will continue to permanently block drivers and riders who have been reported for misconduct from accessing the platform,” Bolt said in a statement to TechCabal. Gig drivers in South Africa have faced allegations of misconduct, harassment and sexual assault. Threats of litigation and public backlash have forced ride-hailing platforms to act. In March, a former Bolt driver Emmanuel Mudau was convicted and sentenced to two life sentences and two 15-year terms for rape, kidnap and, assault. Last month, another driver was arrested and charged for allegedly stabbing two young women during a feud over their drop-off location in Cape Town. Following the Mudau case, Godrich Gardee Attorneys stated that it would launch a civil claim against Bolt for failing to protect passengers. The Cape Town case has led to extensive social media outrage about the safety of women passengers on ride-hailing platforms. Bolt has been on a rapid expansion drive in the southern Africa region. After initially launching in South Africa in 2016, the company has launched in Zambia, Zimbabwe, and Namibia over the last eight months, bringing its total African footprint to 14 markets.
Read MoreUganda holds interest rates to calm inflation as the shilling steadies
The Bank of Uganda (BoU) held its benchmark interest rate at 10.25% on Tuesday, its monetary policy committee (MPC) said, to allow inflation to continue falling to the desired level. Uganda’s interest rate, which rose from 10% in March to 10.25% in April is the highest in nearly seven years as the East African nation battles inflationary pressures and a weak shilling that has made imported goods expensive. Michael Atingi-Ego said in a post-MPC briefing that the country’s inflation increased to 3.7% in May, up from 3.5% in April driven by a faster-paced jump in transport, healthcare, education, and fuel costs. However, the rate is still below the bank’s 5% target. The decision by Uganda to hold interest rates follows hikes in March and April meant to tame the local currency’s free fall since the beginning of the year and bring down the stubborn inflation. “Services inflation has climbed to 6.2% from 5.4%. Similarly, electricity, fuel, and utilities inflation have risen to 9.5% from 7.4%, reflecting recent increases in international energy prices and lagged effects of the shilling’s past depreciation,” Atingi-Ego said. The Ugandan shilling has weakened by 4% against the dollar since the beginning of the year. The MPC in past meetings attributed the shocks to internal factors like the exit of foreign investors from the Ugandan market. While inflation has seen Uganda’s interest rates surge, it remains the lowest in the East African region, averaging 3.6% in 12 months to May 2024. Neighbouring Kenya’s inflation rose to 5.1% in May, up from 5% in April. “Uncertainties persist around the inflation outlook, including the potential impacts of an escalation in the ongoing geopolitical tensions in the Middle East, possible price hikes, unfavourable weather patterns affecting food supply and production capacity pressures,” Atingi-Ego said. Atingi-Ego added that despite the current macroeconomic environment, the country’s economy is still within projected growth at 6% in the current financial year that ends in June.
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‘Unicorn’ is a bad word: Iyin Aboyeji’s Accelerate Africa pushes revenue-driven growth
At the demo day of the first cohort of Accelerate Africa, the accelerator aiming to be the continent’s version of Y Combinator, several people in the audience laughed when Iyin Aboyeji, a cofounder of the accelerator and two-time co-founder of startups valued over $1 billion, quipped, “Unicorn is a bad word.” His assertion is an honest reflection of how pursuing higher valuations can cause startups to burn out after incinerating millions of dollars. For a heady two years, founders were trying to match the optimism of cash-rich VCs buoyed by a zero-interest rate policy (ZIRP) and may have lacked deep market understanding. There has since been a return to earth. The Accelerate Africa team and the ten founders in the first cohort. Biola Alabi, general partner at Acasia Ventures who shared the panel with Aboyeji, noted that startups across African markets are now cutting their valuations to size. Investors are coming to deal tables with more scrutiny—evaluating the business’s unit economics and revenue generation before making investment decisions. This paradigm shift from building the next billion-dollar valued startup to creating multi-billion dollar revenue-generating businesses is the foundation of Aboyeji’s Accelerate Africa—to put participating startups on the path to $1 million in revenue. This shift was felt in the presentations by the 10 founders who presented on demo day. They tried to define their ambition by why their technology was important, how they planned to acquire customers, and how much they were asking customers to pay. Iyin Aboyeji, Yvonne Ike; the head of Sub-Saharan Africa at Bank of America, Abubakar Suleiman; the CEO of Sterling Bank, Yomi Awobokun; the managing partner at CE-IV, and Biola Alabi; general partner at Acasia Ventures. Remi Dada whose startup, Campus HQ, claims to be the AirBnB for workspaces, refrained from cliches about the millions of Africans in the addressable market and instead focused on how much revenue the business made during the 4-week programme. Amanda Etuk, the CEO of Messenger, said her startup which was gunning to be the Moove of delivery riders, secured a partnership from Bolt to offer vehicle financing to its Nigerian delivery riders. The Eswatini founder of JuiceMe, Sandile Dlamini, shared news of securing a liquidity partner that will scale the operations of its Whatsapp-based app that gives employees access to the wages they have earned before payday. After having its AI bot say two proverbs in Swahili, Yinka Iyinolakan, the founder of CDail, an AI startup also shared that his company’s revenue model includes licensing its AI model which speaks and understands over 1,000 African languages to much bigger companies. The other seven startups in the accelerator are; FlickWheel; a Nigerian auto-tech startup that offers on-demand vehicle repair, Afriskaut; a Nigerian AI and data startup that enables the discovery of sports talents across Africa, Agrails; a cleantech startup that provides AI-powered data systems that provide real-time Africa’s climate risk and opportunities, Checkups; a Kenyan health tech startup that offers affordable and accessible healthcare to the uninsured and underserved via micropayments, PipeOps; a Nigerian startup that allows companies without cloud expertise to automatically set up, deploy and manage their apps on the cloud, Settle; an Egyptian fintech that automates the process of B2B payments. Commending this more self-aware stance of founders, Abubakar Suleiman, the CEO of Sterling Bank, who shared the panel with Aboyeji and Alabi promised to increase access to liquidity for startups who currently seemed to be excluded from institutional lending despite the rise in debt funding. “Banking is designed to give you cash flow today, to accelerate predictable cash flow tomorrow,” Suleiman said, trying to explain why many startups that have little to no revenue have limited access to bank loans. ”Your valuation is not a source of payment for a bank,” he said matter-of-factly as he turned his gaze from Iyin Aboyeji, who moderated the panel, to the tens of founders, investors, and operators in attendance. “I would also like to partner with Accelerate Africa or anyone to organise learning sessions for founders,” Suleiman added during the panel discussion he had with three local investors. “This is to help them understand the difference between trying to attract VCs and taking a loan from a bank.” In addition, he offered to provide liquidity for a private capital market, if anyone were to build one. Growth-stage investments and IPOs becoming less feasible avenues of financing and shareholder liquidity. Yvonne Ike, a fellow panel speaker and the head of Sub-Saharan Africa at Bank of America, shared that a private capital market like the London private market exchange would be a better option. Suleiman announced on the panel that he is open to supporting both the building and providing upfront liquidity for such a platform. Accelerate Africa seems to be off to a good start, as the participating founders say that it lived up to its promises: to radically improve their storytelling, financial models, and product thinking, and connect them to corporates and investors. The accelerator is not obligated to make equity investments in the startups, however, during the event, investors were urged to indicate their interest in any of the startups. Selected startups can expect investments ranging from $250,000 to $500,000. It is unclear which startups Future Africa will invest in, but a spokesperson for the company says it will have decided by the end of June.
Read MoreCash-strapped Copia suspends service in Central and Eastern Kenya
Copia Global, a Kenyan B2C e-commerce platform that allows retailers to shop and restock essential goods using a mobile app or USSD, has stopped taking orders from Central and Eastern Kenya one week after cashflow challenges forced it to go into administration. The new administrators have cut back on Copia’s markets to preserve cash as it seeks new investors, TechCabal has learned. The six affected markets are Naivasha, Machakos, Meru, Embu, Kericho, and Eldoret. The staff working in the depots that serve the affected markets have been sent on leave. On May 16, the company said it would lay off over 1,000 workers. The company has 900 permanent employees and 200 casuals on its payroll. Anne Mwihaki, Copia’s director of human resources, told employees via email that the company would inform “all external stakeholders, including agents, customers and transporters.” In a separate email, Makenzi Muthusi, one of the administrators appointed by Copia, assured employees that the firm had funds to cover May salaries but delayed the disbursement because they “were unable to complete the administrative tasks relating to the bank accounts.” Copia Kenya appointed Muthusi and Julius Ngonga of KPMG, an audit and advisory firm, to help turn around operations and raise fresh capital for the Kenyan unit. “As a follow-up to our previous communication on the administration process, as a reminder, the objectives of the administration are to maintain the company as a going concern, and the administrators continue to work with management to raise capital from new investors for the Kenya business,” Mwihaki said. Copia, once a darling of venture capitalists–including US’s DFC and GoodWell Investments–received $123 million in funding but failed to turn on profit. The company sought to turn informal rural kiosks into a multi-billion digital retail platform linking customers directly to fast-moving consumer goods (FMCG) manufacturers to lower product costs. At its peak, Copia had 1,800 staff and over 50,000 agents spread across Kenya’s Western, Nyanza, Central, and Eastern regions. In 2022, the firm opened a hub in Uganda but closed after a year, stopping its pan-African expansion ambitions.
Read MoreAs it enters its third year, e-commerce enabler Sabi creates a lane of its own
In business, comparisons and generalizations are common and useful, but sometimes they ignore complexities. So with those generalizations aside, here’s how to think about Sabi, a Norskenn-22-backed startup valued at $300 million in 2023: it’s in the business of creating market intelligence that enables commerce. While many B2B e-commerce companies focus mostly on retail distribution—a notoriously thin-margin business if ever there was one—Sabi serves manufacturers, distributors, retailers, and even farmers. It builds digital infrastructure for anyone involved in buying and selling. Sabi provides everything that makes commerce seamless: payments, retail, logistics, and most importantly, market intelligence that can be the difference between success and failure. Market information and clear data points can be difficult to obtain in Africa, driving inefficiencies for several players in the value chain. For instance, a distributor’s inventory management becomes easier if they can know with a high degree of accuracy, each retailer within a given market and the frequency of their orders. Such seemingly simple data points can be difficult in a market where one retailer or agent can act as an aggregator for several other retailers, obscuring granular information to make just-in-time inventory management possible. The complexity of Sabi’s model and its goal of collecting actionable intelligence on all players in the value chain means that it’s a platform and a marketplace. The company’s revenue is from a take rate on marketplace transactions and a margin on credit-related transactions. “Sabi has become, over the last three years, one of Africa’s largest and most important e-commerce companies,” said Ademola Adesina, one of the company’s co-founders. Rarely in the news, the company grabbed the public’s attention when it hit $1 billion in 2023 Gross Merchandise Value (GMV). This month, the business will celebrate its third anniversary. Founded in 2021 by Ademola Adesina and Anu Adasolum, Sabi has grown exponentially in three years. It has 250,000 registered users, facilitates 15,000 monthly orders, and in 2023 nearly tripled its revenues on an annualized basis from 2022. Most of that growth has come from Nigeria, its primary market. The company is also present in South Africa, and hopes to replicate this success in new markets like Tanzania and Senegal. “Our key differentiators are our product design and our focus on aligning incentives across the value chain. We are a partner to our users and we deliver for our merchants’ top and bottom lines,” Adasolum said. The company operates in the fast-moving consumer goods (FMCG), agriculture, and minerals sectors. “We’ve never really felt any need to follow models, we do follow the market,” she added. Despite the breadth of the company’s ambitions and offerings to players along the value chain, it is still asset-light. While being asset-light is often a buzzword, it makes sense once you understand that this is essentially a market intelligence play. It can keep warehousing partners in business by using intelligence to get them consistent order flow. “We’re not trying to displace distributors. We’re platforming them, giving them the tools, the financing, the logistics, etc, to grow their businesses,” Adasolum said, highlighting their commitment to enabling commerce. “Sabi has been helpful and supportive in terms of our ventures and our trade. Without them, we probably wouldn’t be in business,” said Sadiq Mohammed, the founder of K2 agricultural processing company which has received close to N800 million in financing from Sabi for two deals. Facilitating trade beyond Africa Sabi has also talked up its vision to facilitate trade beyond Africa. Through its digital platform, Technology Rails for African Commodity Exchange (TRACE), the company helps big manufacturers facilitate commodities exports from Africa to Asia, Europe, South America, and the USA. “We’re one of the largest facilitators of exports from Nigeria to the rest of the world,” Adesina said. At a time when the AfCFTA agreement is only in its first phase, tools like SABI’s TRACE are using technology to meet buyers and sellers at every point of need. The company believes that it will benefit greatly from the implementation of the free trade area project in terms of the discovery of buyers and sellers, facilitation of cross-border logistics, tracking, and financing. With inflation and currency pressures in different markets, companies have been forced to close shop or cut costs. But Sabi sees this differently. The devaluation of the naira, while challenging, has also presented an opportunity for Nigerian exports. A weak naira makes Nigerian goods cheaper for international buyers and savvy businesses can capitalise on this opportunity to scale. “What we’re good at is spotting that directional move on the macro level and supporting our businesses to monetise that opportunity.”
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New home affairs online booking SA 2024
The South African Department of Home Affairs has a new convenient home affairs online booking system known as the eHomeAffairs. It streamlines the process of submitting ID and passport applications online, making online payments for applications, even making bookings where allowed, and consequently obtaining essential documents like smart ID cards, passports, and even marriage certificates. Here’s a step-by-step guide to navigate your home affairs online booking in 2024: 1. Confirm centre eligibility for the home affairs online booking 2024 The online booking system is currently not available at all Home Affairs offices. Before you proceed, visit the Department of Home Affairs website and check if your preferred office offers online bookings. There you’ll find a list of participating offices. 2. Get requirements While booking your appointment online, ensure you have the necessary documents readily available. These typically include proof of identity (your ID book or passport) and any additional documentation specific to your application (birth certificate for ID applications). 3. Go to eHome page With your chosen office confirmed and documents prepared, it’s time to visit the official Home Affairs online booking portal: https://ehome.dha.gov.za/eHomeAffairsV3/SGAccount/LogOn. This is the designated platform for all home affairs online booking. 4. Register or login If you’re a first-time user, you’ll need to register to use the home affairs e-portal. This involves creating a profile with your basic information. Existing users can simply log in using their saved credentials. 5. Book your slot Once logged in, find the “Booking” section and select the type of service you require (e.g., Smart ID application, passport renewal), provide the required information/documents, and make appropriate payments. The system will then display available appointment slots for your chosen Home Affairs office. Pick a date and time that best suits your schedule and confirm your booking. 6. Confirmation and reminders after home affairs online booking 2024 Following your home affairs online booking, you’ll receive a confirmation email with all the appointment details. Double-check the information for accuracy and make sure to note the appointment date and time. The system might also send you reminders closer to your appointment date. Final thoughts on the home affairs online booking 2024 By following these steps, you can enjoy a hassle-free experience with your next Home Affairs visit. The home affairs online booking may require you to pay some fees at some points, and these fees may vary depending on the service you’re applying for. So it’s important to bear cost implications in mind.
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👨🏿🚀TechCabal Daily – A broken Heritage
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy new month Before you dig into today’s edition, we think it’s pretty important for you to know that The Mastercard Foundation is hosting its inaugural EdTech Conference from July 8 – 10, 2024 at the Transcorp Hilton in Abuja, Nigeria. The Mastercard Foundation EdTech Conference, in partnership with the Federal Government of Nigeria, is themed “Education Technology for Resilient and Inclusive Learning in Africa.” You can expect conversations on the current state of the EdTech ecosystem, emerging trends, the role of EdTech in solving Africa’s educational challenges and much more. Click here to find out more. P.S Today’s edition is written by our Editor-in-Chief, Olumuyiwa Olowogboyega, and he’s going to be writing to you a lot more as part of a team-bonding team-building exercise we’ve got going at TechCabal. In today’s edition Nigerian fintechs can now onboard new customers Heritage Bank loses its licence Kimberly-Clark ramps up its Nigerian exit Seacom has completed all subsea cable repairs The World Wide Web3 Opportunities Fintechs CBN lifts ban on fintech customer onboarding Between 2020 and 2023, formal financial inclusion—a metric that measures a population’s use of financial services from banks or non-banks—has grown from 56% to 64%. An easier way to think about it is that 3 in 5 Nigerians are financially included. A 2024 report from EFInA points out that technology has played a significant role in driving inclusion. Neobanks like Carbon, Kuda, and ALAT allowed people to open bank accounts on their phones, an important evolution as smartphone and internet penetration grew. Agency banking, which has taken the form of physical agents with hard infrastructure embedded in markets and mom-and-pop shops, has allowed people in semi-urban, rural, and even underserved areas to open bank accounts and access cash-in, cash-out services. As important as the technology has been, regulation and a near obsession by the Central Bank leadership to improve financial inclusion have been equally pivotal. For years, some regulations allowed anyone to open bank accounts without sharing a lot of personal information. It was a gift that removed friction in the onboarding process, and Nigerian fintech startups don’t look gift horses in the mouth. They onboarded customers faster than we could blink and extended their distribution in Nigeria’s huge informal market. During Nigeria’s 2023 cash crunch, they rose to the occasion and showed that in countries with large informal markets, distribution is king. But as transaction volumes and value grew exponentially, bad actors took notice, and fraud—across fintechs and banks— grew. The fintech startups, which have not always been as tightly regulated as the banks, received outsized scrutiny. Threats were made, talks were had, a freeze on new customer onboarding was issued, conditions were shared to lift that freeze and after five long weeks, there’s light at the end of the tunnel. Here’s what Muktar Oladunmade wrote for TechCabal: The Central Bank of Nigeria has lifted a six-week-long ban on onboarding new customers imposed on five of the country’s most prominent fintech startups: Paga, OPay, Kuda, Palmpay, and Moniepoint. On May 20, 2024, the fintechs were given several conditions for the onboarding freeze to be lifted including asking them to block P2P crypto transfers and mandating physical address verification for all tiers of accounts. While the decision to lift the freeze on customer onboarding is a quick read, I recommend reading our exclusive coverage from April 29 that showed how the CBN arrived at the decision. Moniepoint is Africa’s fastest-growing fintech The Financial Times has ranked Moniepoint as Africa’s fastest-growing fintech based on its absolute and compound growth rate. Read more about it here. Banking NDIC takes over Heritage Bank “The market can stay irrational longer than you can stay solvent,” a saying attributed to John Keynes is a reminder that you can rightly spot a trend or make a prediction but the market will chug right on for months without blinking. While it’s not a perfect analogy, it’s how I think about Heritage Bank and the Central Bank’s decision to revoke its licence on Monday. Heritage Bank and its staggering (losses/high NPLs/weak capital base—take your pick) is the worst-kept secret in Nigerian banking. Many analysts began predicting the bank’s collapse in 2018, but its survival remained irrational in the face of their expertise. But like all good but inherently problematic runs (hello MMM), it had to end. Here’s what I wrote on Monday morning from the car park of a Heritage Bank branch in Victoria Island where I stalked watched NDIC officials who refused to speak to me walk into the bank to begin the takeover process: Heritage Bank’s high indebtedness has been public for five years and there has been significant coverage of the erosion of its capital base. In December 2023, a Nigerian publication claimed Heritage Bank failed a stress test, prompting the Central Bank to ask the financial institution to seek strategic investors to aid its recapitalisation. How bad was Heritage Bank’s situation? Part of the answer is in this article which gives you a sense of how inevitable this turn of events was: According to internal documents seen by TechCabal, at least 90% of the bank’s active loan portfolio of around ₦700 billion was considered lost or doubtful as of March 31, 2024. Two words: hot damn. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Shutdowns Kimberly-Clark, makers of Huggies diapers begins Nigeria exit Fifteen years and a $100 million manufacturing facility later, Kimberly-Clark, the American maker of Huggies diapers and Kotex announced its intention to exit the Nigerian market on Saturday in a terse statement: Kimberly-Clark today announces it has made the difficult decision to exit its business in Nigeria after almost 15 years, due
Read MoreKimberly-Clark lays off 90% of employees as it begins Nigerian exit
Three days after it first announced its decision to exit Nigeria, Kimberly-Clark, the American multinational that manufactures Huggies diapers, has begun the process of shutting down its operations in Africa’s most populous country after laying off nearly 90% of its employees, one person with direct knowledge of the matter said. At a company-wide meeting last Friday, some 150 workers were told about the layoffs. The company has a relatively small number for a factory thanks to a high level of automation, one person familiar with their operations said. It also outsources sales and distribution to Multipro. Maersk, the Dannish shipping and logistics company, handled its imports and exports. The retained employees will eventually be laid off when the exit is completed. A communications manager for Kimberly-Clark did not immediately respond to a request for comments. While it did not initially share a timeline when it announced its exit plan, the company’s actions mean it will write off its $100 million investment in a manufacturing facility that was launched in Lagos in 2022. It will also cease manufacturing or marketing its Huggies and Kotex products in the country. In a statement last Friday, the company said it is exiting Nigeria due to a “recently refocused company strategic priorities globally as well as economic developments in the country.” Kimberly-Clark’s departure from Nigeria after almost 15 years is a telltale sign of the struggles of manufacturing in Nigeria with companies having to deal with depressed consumer spending power, high cost of electricity, and FX scarcity. Multinationals like Unilever, GSK, and PZ Cussons have either scaled back or exited market segments entirely.
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