Africa’s data problem is an aversion for learning
Cet article est aussi disponible en français <!– In partnership with –> <!— –> More and better data is good, but not enough. The why and what happens after are equally, if not more important. Last week, my colleague at TC Insights, the research arm of TechCabal, penned this brilliant read discussing how a lack of data in Africa might impact the prospects for African startups. Writing about data availability and accessibility pushes a lot of the right buttons and some of our readers wrote back with insightful comments. Victor Mosengo, a data scientist complained about the hurdles facing anyone who attempts to close the data gap: For example, in a jurisdiction where trade administration is a regional function, a company/org seeking to utilise trade data will now need to either: Seek permission to be a data processor only in the administrative units they have engaged Lobby the national government to kick off a process of data custodianship, which then opens a debate of regional autonomy, and after all this, then hope the national government can allow them to be a data processed Rely on surveys and desktop research; most fall back on this as the most practical approach. As someone who dabbles in market intelligence beyond desktop research, I fully understand Mosengo’s point. Navigating all of this complexity makes research expensive and laborious, especially if you seek to build representative intelligence. With some capital and political savvy, you could find a workaround. But you would not have solved the data problem. Because getting data is still on the lower rung of the bigger problem, which is creating fit-for-purpose solutions. The bigger problem lies in what happens after you have data. Unless this “huge gap is fulfilled, collecting and gathering a mountain of data will yield no benefit or result,” Naushad Kermalli, a Dubai-based banking and capital markets consultant wrote to us in a response to last week’s essay. Here’s one manifestation of this problem. Partner Content: This Wealth Management Startup, Twinku is helping Nigerians Organize, Plan, Manage their Financial life Better How many people live in Lagos? In the previous week, I followed (as I’m sure some of you will have) the debate, if you could call it that, about how many people live in Lagos. Everything from the staid rational to the weirdest extrapolations has been offered by experts and online trolls. The debate about the population of Nigeria’s commercial nerve centre inspires wild responses because of what happens after this data point is established. Why exactly do you need this data as a government? Why does Business X need this data? Why does Organisation Y need this data? Unfortunately, the answer and primary use of data points like this in Nigeria (and a handful of other African countries) is political and the business lobby is largely uninterested. If Lagos has more people than Kaduna (a northern Nigerian state), then it gets more political representation and, ostensibly, more capital resources from the national government. If Nigeria has more people than Egypt, Nigerian diplomats can use the phrase “most-populated African nation”, even though it means nothing and carries little significance, geopolitically speaking. Because this is the central aim for collecting basic foundational data, the incentive to be accurate may not be a priority. One effect of this is often that the data collected is not extensive enough. How could it be if the main (unstated) aim is political bragging rights? And this is only about basic foundational data. Data relating to market opportunity, like income levels and how they change over time in response to, or to cause, economic shifts also suffers from the challenge of what happens after. The answer a lot of the time is nothing. This dislocation between data and policy or decisions is a symptom of another problem. This problem is that we do not appear to care much for learning as a core activity for social progress. Partner Message VivaTech is only a few days away! It’s not too late to book a pass and meet Africa’s leading innovators at Europe’ biggest Startup and Business event. Get tickets now The learning problem Learning means the ability to modify behaviour, acquire skills and develop preferences based on new knowledge. It is an inbuilt human function. Literally! Your skin, eyes, ears, nose and tongue are foundational learning tools built into our sense of being and human function. Learning is also a great discomfort. Who hasn’t stubbed a toe, suffered an indigestion or struggled with some maths? Learning is the why we collect data—to acquire skills and develop preferences. If we have a data problem in Africa, it is because we have a failure of systemic learning. At the higher academic levels, how much learning happens relative to Africa’s societal ambitions? Do we even have enough social ambition as a collective? In business, the story is not much different. In everyday life, learning often happens organically. In business you will often have to seek it out intentionally. Partner Message In 5 minutes, you can get your health insurance, motor insurance, and life insurance on the P2Vest app. Available on Google Play & App Store. Get InsuranceParasol Learning is found in translation We focus so much on the problem of collecting data and very little on the easily solvable problem of translating what we already know into structures that can be used. Granted a lot of the time, what is already known is only known by a few people/organisations who are often physically and mentally divorced from the challenges that they could help solve. Very often it is basic data that is essentially useless because it cannot form a narrative that is coherent enough for public policy or private enterprise. The World Bank says Statistical Performace Indicator (SPI) scores are “strongly correlated with several leading development indicators, such as GDP per capita and indicators of human capital or government effectiveness.” This means that the extent to which a country collects and uses data will show in development
Read MoreKenya to fix FM transmission limitations with new technology
Digital sound broadcasting (DSB) is a better technology than FM and has many advantages. However, it is unavailable to most Africans but is accessible in South Africa and Tunisia. Kenya’s ICT regulator, the communications authority (CA), has announced plans to pilot digital sound broadcasting (DSB) anytime from September 2023. DSB is a technology that uses digital signals to transmit audio content. It is a more efficient use of spectrum than traditional analog broadcasting. According to the regulator, which hosted a media workshop highlighting its mandate and plans for the ICT industry, DSB will be useful in tackling the issue of limited FM broadcasting frequencies. This is important because sound broadcasting is a key source of information, education, and entertainment in Kenya. 98% of homes in the country have access to devices that receive sound broadcasts, with nearly 200 licensed broadcast services. However, frequency allocations for FM are close to saturation, meaning there is no more room to add new FM stations. Therefore, DSB provides an opportunity to introduce new sound broadcasting services in these areas. FM is also an older technology and is marred by several issues. As said, FM broadcasting airwaves are becoming saturated, leading to increased interference and poor signal quality. The lack of capacity for new services is also a problem. With so many stations already on the air, there is no room for adding new ones. The difficulty of innovating and offering new and unique services is another problem, not to mention the relatively poor audio quality of FM broadcasting. Kenya has already developed a framework for digital sound broadcasting to pave the way for the launch. The regulator mentioned that it is getting a budget to purchase all the necessary equipment for DSB pilot tests. Consumers will also be asked to purchase new receivers capable of processing DSB signals. However, the regulator will not phase out FM signals because they are still important to Kenyans who prefer consuming news and entertainment on their transistor radios. DSB receivers are also capable of processing FM signals as well. Digital audio broadcasting (DAB), the most widely used type of digital sound broadcasting, is being tested in Tunisia and South Africa. Tunisia, for instance, began using the technology in 2008. In 2010, it installed additional transmitters, covering 25% of the population. In 2019, four more transmitters were added, covering 51% of the population. In 2020, coverage increased to 71%. The North African country aims to have 98% coverage by the end of the year. Sudan has also expressed interest in deploying digital sound broadcasting to its people. It remains to be seen how Kenyans will respond to the new technology because they will want to use their FM receivers for longer. The regulator has also not mentioned how it plans to sensitize the government to avail DSB receivers. The cost of rolling out the service could also be high, which is one reason it has taken so long to launch it. Lastly, some digital sound broadcasts will be premium services, meaning they will attract additional costs to consumers who are used to FM, which is free.
Read MoreMeta appeals Kenyan Court ruling that calls it the “principal employer” of content moderators
A June 2 court ruling found that Meta is the principal employer of 184 content moderators. While Meta appeals the ruling, Sama, its former content partner, is caught in the middle. Earlier this month, an Employment and Labour Relations Court ruled in favour of 184 moderators fired by Sama, Meta’s content reviewer in Kenya. The 184 moderators also told the court that when Meta moved its content moderation contract to another firm called Majorel, the social media giant asked Majorel not to hire any moderator who had worked with Sama. The court blocked the firing of the moderators and mandated Sama and Meta to extend their contracts until the final determination of the suit. Meta will now appeal the ruling. Part of its argument is that the moderators are not Meta’s employees. It will also argue that the court’s demand that it extend contracts of the 184 moderators amounts to the court writing a new contract on its behalf. While Meta appeals, it remains to be seen what work Sama will provide the moderators with. Sama, which the court described as an “agent for Meta,” told TechCabal that the ruling was confusing. The content reviewer laid off the moderators in January 2023 after its contract with Meta had expired. Concerns over the disturbing content reviewers often had to watch prompted the company not to seek a renewal of the contract. The June ruling now means that despite having no existing contract with Meta, it must keep the moderators employed. The Ruling also acknowledges that the work of content moderation is inherently hazardous. #FacebookContentModerators pic.twitter.com/Gy0n2lHBWT — Mercy Sumbi (@MercyMutemi) June 5, 2023 The company told TechCabal via email, “The recent ruling from June 2 is confusing and, in many cases, contradictory. Sama fully exited the content moderation business earlier this year and did not have work to give the moderators. We care deeply about the health and emotional well-being of our team. We invested in creating a working environment that supported our content moderators’ needs.” The buck stops with Meta Sama’s position is straightforward. Without a contract to review content for Meta, it has no work for the moderators. Instead, the court ruling places responsibility on Meta’s shoulders as it determined that Meta is the “primary employer of the moderators. And because Meta moved the content moderation contract to another company, the Court “found that the job of content moderation is available” and that “the applicants will continue working upon the prevailing or better terms in the interim.” While Meta appeals, it remains to be seen what work Sama will provide the moderators with.
Read MoreRide-hailing drivers in Nigeria resume work despite unmet demands
Ride-hailing drivers in Nigeria return to work after last week’s strike. They’ll take small wins from their protest, such as reinstating some drivers whose profiles were deleted from ride-hailing platforms. After a midweek protest across Nigeria last week, ride-hailing drivers return to work today. Today’s resumption will happen despite drivers saying ride-hailing companies have not met their demands. According to two key members of the Amalgamated Union of App-based Transport Workers of Nigeria (AUATWON), continuing the strike was unreasonable because many drivers need daily income to survive. The Union’s general secretary, Ibrahim Ayoade, told TechCabal, “The decision is for our members to return to work today. They can seek tips from riders if the ride doesn’t favor them. ” An insufficient silver lining? Last week, Bolt offered the drivers a daily bonus of N6,000, amongst other incentives. But the drivers kicked against the bonus, which had several conditions; many drivers TechCabal spoke to called the bonus insufficient. Yet, the striker scored a critical point: a reinstatement of drivers’ profiles who were deleted from Bolt’s platform. The National treasurer for the Union, Comrade Jolaiya Moses, told TechCabal, “We gave (ride-hailing platforms) an ultimatum for the review of accounts blocked arbitrarily. They unblocked some profiles, and we started seeing testimonials from different drivers. Part of our demands is that these things should not be done unilaterally. They won’t be the only ones to review. Let’s check everything together to see which is genuine and immaterial. There are so many unjustified blocking, suspension and sanctions of drivers by app companies.” Unmet demands The demands of the Union, a 200% increase in fares, remains unmet; instead, Bolt and Uber increased fares by 30-40%. It is an acknowledgment of Nigeria’s market reality. Any steep increase will undoubtedly lead to a dropoff in demand. Yet, the Union remains optimistic. National treasurer Moses is hinging his hopes on the promised engagement between the Union and the ride-hailing companies, which occurred last Friday in Lagos and Abuja. Another impasse during those engagements will likely lead to another strike. According to Moses, “We plan that going forward, we will use a window of seven days to analyze all the immediate responses we have been able to get. While we are analyzing that, we expect that some of the app companies that promised to do something within the next seven days would have done those things and gotten back to us for further discussion on those demands. It is not over yet until our demands are met. Most of our demands currently are not met. They have however done some things in the interim— like unblocking drivers profiles.” Bolt is careful to increase prices as it tries to navigate rider sentiments to get a cost-effective approach. Moses acknowledges this fact but states that drivers suffer from the fuel situation. “Currently, we are driving with it to see the profitability. I can tell you that all the feedback we got is negative. It is eating into our profits. We are actually selling below the cost price, and definitely we have to embark on the strike if nothing is done about it within the next seven days,” he explained. Chairman of the media and publicity committee of the Union, Comrade Jossy Olawale, hinted that there may be another strike on June 16 if their demands are still not met.
Read MoreTermii raises $3.65 million to reimagine digital communication in Africa
This startup imagines communications in Africa should be radically different. So they are getting their hands dirty, with fresh support worth millions of dollars. If things were up to Termii, a pan-African communication platform-as-a-service (CPaaS) startup, digital communication in Africa would be decades ahead, in terms of innovation. The YC-backed startup has the goal of reimagining communication between African businesses and their users—and it has just raised $3.65 million to achieve this. Coming off the back of a $1.4 million seed funding in January 2021, Termii’s latest capital raise—led by Africa-focused VC firm Ventures Platform—signifies investors’ confidence in the under-funded CPaaS sector. “Not many companies in this space are raising capital, but Termi is doing many things right. Our product is not a nice-to-have; it’s a painkiller,“ said Gbolade Emmanuel, the company’s CEO. The round welcomed participation from other investors including Fintech Collective, Launch Africa Ventures, Nama Ventures, Aidi Ventures, Ralicap Ventures, Now Venture Partners, Vastly Valuable Ventures, NOA Capital, Assembly Investors, Probability Ventures, Adamantium Fund, MyAsia VC, Uncovered Fund, and Afropreneur Angel Group. Angel investors such as Aubrey Hruby of Tofino Capital and Eamon Jubbawy of Onifido also wrote their way into Termii’s cap table. Founded in 2017 as a messaging product that allowed businesses to communicate with their users across multiple platforms, Termii has evolved its product suite to function as a one-stop shop that powers interaction between businesses and their users. If you’ve ever waited for an OTP text message when trying to make payment through a fintech gateway—such as Paystack’s—then chances are that you’ve experienced Termii in operation. Termii’s infrastructure powers the fast and secure messaging that allows users to interact with about 9,000 fintechs, including Moniepoint, Chipper Cash, and Piggyvest. Gbolade believes his startup’s function in the day-to-day activities of African fintechs is a prime advantage that is of interest to investors—such as Fintech Collective, the global fintech-focused VC firm that participated in the round. Termii claims its list of over 10,000 clients is filled up by businesses across several sectors, including logistics and healthtech. According to Gbolade, one of Termii’s propositions that won investors over was Termii Go, the company’s latest product which he described as a “game-changing unified communications app”. Set to be publicly launched this month, Termii Go is a step up from Termii’s usual stealth infrastructure operations. The app aggregates Termii’s extensive network of clients across Africa into the platform, enabling swift, real-time, engagements between businesses and users. For businesses, this combines a CRM tool with a mobile comms infrastructure. Termii Go also innovates over the usual text messaging that could be intercepted or accessed by rogue players, ensuring that sensitive information is not compromised even when a device gets lost or stolen. Through partnerships with phone manufacturers like Tecno and Infinix, the product is able to bypass third-party messaging gateways and ensure more instantaneous delivery of messages. Perhaps, the most exciting thing about Termii Go is that it plugs into existing mobile virtual operators to enable users to make and receive calls or access the internet through a globally responsive electronic SIM card. This bit remains a B2B play, expanding the scope and affordability of communication between teams. Speaking about the product over a call with TechCabal, Gbolade said, “There’s no product like ours in the African market. We are bringing world-class innovation to the communications sector which has historically been controlled by a few mega players. Our goal at Termii is to redefine communications and optimise it for Africans, and we’ve only begun to scratch the surface.” Revenue in the global CPaas market is projected to reach $34.75 billion by 2026, growing at a CAGR of 38%. In Africa, the market is still taking shape, dominated by players such as Termii, Africa’s Talking, Beem, and SendChamp. In terms of funding, Kenya’s Africa’s Talking takes the lead with over $8.6 million raised to date. But Gbolade dismisses the notion of having direct competitors. “With this new play, we’ve been able to zoom past our regular competitive landscape. What we have now are fractional competitors—players across different sectors who are offering some parts of our one-stop-shop solution,” he said. In a press release sent to TechCabal, Samantha Wulfson, an investor at Fintech Collective, said: “In conversations we had with African businesses, Termii’s solution was cited as the fundamental piece of their infrastructure powering day-to-day business operations. Termii has been a game changer throughout the industry in ensuring the delivery of OTPs and transaction-related messages with a higher degree of certainty than ever before, and is still only scratching the surface of their vision as a communication layer.” Gbolade told TechCabal that this “higher degree of certainty” is made possible through a proprietary internal technology called ICS, which works intelligently to detect downtimes before they occur and direct traffic to alternative routes. Following its capital raise in 2021, Termii expanded to Algeria and launched operations there, but a tight regulatory environment forced the company to double down on other expansion zones, especially francophone Africa, where it is now deepening its roots. “With its recent fundraise, the company looks to further its expansion efforts, particularly in francophone Africa with a focus on Ivory Coast,“ the release reads in part. To make money, Termii operates a per-billing wallet system. Businesses preload the wallet which gets debited as calls and messages are sent to their customers. This model underscores the need for efficiency with the CPaas model, as businesses generally spend on customers before they’re onboarded. This means that an unreliable communications provider would incur customer acquisition costs for customers that could churn at their first contact with the business. For Termii, growing their adoption also means engaging the tech ecosystem. With its annual Termii Elevate programme, the startup brings developers, users, and stakeholders together to drive conversations on building world-class communications solutions. With technical founders—Emmanuel Gbolade and Ayomide Awe at the helm of Termii affairs, this move almost mirrors the playbook of Africa’s fintech giant, Paystack. But according to the CEO, “Termii
Read MoreTikTok’s sister app LetsChat wants to become the WhatsApp alternative for Africans, but users aren’t convinced yet
TikTok’s sister app LetsChat is expected to compete with WhatsApp and Telegram, but users believe the data-saving app isn’t a worthy challenger. When Yusuf Balogun first downloaded LetsChat after seeing its ads in online comedy skits, he had high expectations of the messaging app, which promises exciting features such as free voice and video calls, zero pop-up ads, and in-app games. But after a few days of using the app, he uninstalled it. “Though it was an interesting experience because it doesn’t consume data like other apps, I’m not sold on it,” he told TechCabal over a call. Launched in 2021 by Beijing-based tech firm and TikTok owner ByteDance, LetsChat was designed for young African users to compete with bigger rivals WhatsApp and Telegram. LetsChat’s entry into the African market has all the makings of a company looking not to keep up with the existing competition but to crush it. To pull this off, the Chinese app engaged influencers—including comedians—to spread its word. A check on Google PlayStore shows that the number of its downloads has exceeded five million. A worthy opponent? Depending on who you ask, young Africans want social content applications such as chat and video. WhatsApp is easily the most popular messaging app on the continent because of its features: voice and video-call functionality, group functions, stickers, and status updates. I used LetsChat for two days and consider it a direct challenger to WhatsApp, and it comes with more offerings. For example, the ‘”People nearby” feature allows you to connect with users in your present location, while “Lifie” captures real-time moments with a dual camera. From my experience, making voice and video calls on LetsChat—the selling point of the app—didn’t require data, but you’d need to turn on your data to stay connected. The calls weren’t seamless, but not bad for a two-year-old app. Like Yusuf, users who spoke to TechCabal confirmed that LetsChat has cool features but they stopped using the app for different reasons—chief of which were technical glitches. “My experience using the app was below average because of the jamming of calls and unrecognised numbers calling you. I think they need to work on the features. Sometimes when you make a call, it won’t show whether it’s ringing. They still have a long way to go,” Omojolade Michael, who used LetsChat for a few days, said. Susan, who has been using LetsChat since the beginning of the year, says she only uses it whenever she takes a break from WhatsApp. “My major problem with the app is that it keeps suggesting complete strangers to connect with. At least on WhatsApp, I have control over my contacts,” she said. For some, like Adam Opeloyeru, a digital marketer, these features make LetsChat unique. “I like the Lifie feature. Also, I can call 30 friends at the same time and be able to talk to them without any extra charges. There are also games on the app, just like iMessage. You know iMessage is designed for iOS phones, but for LetsChat, you can play games with anyone with the app,” he told TechCabal. Despite its appealing features, some see LetsChat facing an uphill struggle to retain users. “I won’t consider it a formidable competition to WhatsApp or Facebook Messenger. Even if WhatsApp isn’t an option, I’d still settle for Messenger. It could get better with time, but at the moment, I don’t see it as a close competition. The stakes are way too high,” Yusuf said. However, Adam is quite optimistic about the app’s success if the makers return to the drawing board. “They just need to upgrade those features to meet the expectations of people, and they need to do more research beyond the reviews on Apple Store and meet the users to know the kind of features they want,” he said.
Read MoreAfter introducing a blockchain act, Nigeria’s first move is to tax 10% of crypto profits
In a surprising move, the Nigerian government has introduced a new law that will create a tax on cryptocurrencies. Crypto traders say that it might not work. In 2021, the Central Bank of Nigeria banned cryptocurrency trading. Now, in 2023, on the eve of its departure, the Buhari-led government, with its history of being averse to crypto, surprisingly introduced a new law to tax gains on digital assets like cryptocurrency. The crypto tax comes from a series of amendments to the 2022 Finance Act. According to the Finance Act, there is now a 10% tax on profits on digital assets. Section 3(a) of the Capital Gains Tax Act is amended by inserting the phrase “digital assets” after the word “debt” as follows: “Subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” According to Adewale Ajayi, a partner at KPMG, digital assets include cryptocurrencies, non-fungible tokens, and other tokenised assets. Although the amendment comes as a surprise to crypto traders, it has been in the works for a long time. Nigeria’s 2023 budget comes with a debt service cost of ₦6 trillion—31% of the budget—and a budget deficit of ₦11.34 trillion—more than 5% of the GDP. To remedy this, the government is looking for new sources of revenue, and with over $260 million worth of crypto transactions concluded last year, a tax on crypto assets might come in handy. “We woke up to see it in the news” “How can you tax what you have not recognised or created a policy for?“ a puzzled Obinna Iwuno told TechCabal. Iwuno is the president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), a body comprised of private players in the Nigerian blockchain ecosystem and recognised as one of the stakeholders involved in the drafting of the national blockchain policy. “If you want to tax crypto,” he continued, “and it’s okay to do that because crypto generates economic activity that can contribute to the country’s GDP, you must first create a framework and gather stakeholders around a table for adequate policy formation. SiBAN knew nothing about this move from the beginning. Like everyone else, we woke up to see it in the news.” Last month, when Nigeria announced that it was introducing a national blockchain policy, most crypto enthusiasts didn’t budge. They generally cared less about the news, as crypto was still outlawed by the government. TechCabal reported then that the blockchain policy had lofty ambitions that excluded crypto. But in a later conversation with one of the bill’s stakeholders, we learned that the government was ready to “adjust its strong stance against crypto”. It may now be getting clear how these adjustments will play out, especially with this latest move: a 10% capital gains tax on digital assets, including cryptocurrency. How will the tax work? Wale*, a crypto trader, told TechCabal that for the tax to work, the government would have to partner with international exchanges and licence crypto traders. “If the government wants me to pay a tax on crypto, they have to legalise us and allow the exchanges to open offices in Nigeria. [The government] can’t be taking money from us if we are banned, and I have to fly to Dubai or Singapore if I have issues with the exchanges,” he said. Yesterday, Nigeria’s Securities and Exchange Commission directed Binance Nigeria Limited to immediately stop soliciting Nigerian investors in any form whatsoever. According to an anonymous source at the Federal Inland Revenue Service, Nigeria’s tax authority, the plan to enforce the tax is still in the works and will be decided by the Joint Tax Board, as either the FIRS or state bodies can enforce the tax. The Joint Tax Board was created in 1961 to ensure uniformity of standards and the application of taxes in Nigeria. Iwuno asserted that while taxing crypto itself is not a wrong move, over-taxing could bleed out an infant industry that is still taking shape. “The crypto industry in Nigeria is still a baby, and over-taxing or taxing it too early can kill it,” he said. When asked if the taxation could confer some form of legitimacy on crypto, Obinna said, “We can’t assume what they have not said. They’ll have to come out clear.” Davizoe Effiong, the CEO of BEI Consultancy, a Nigeria-based blockchain consultancy firm, told TechCabal that a tax on crypto gains would crash the adoption of cryptocurrency in the country. According to him, capping the tax profit at 5% would not (completely) demotivate players and allow for the continued vertical trajectory of crypto adoption in the country. “If the government wants to earn revenue from crypto, it must put skin in the game and really get involved. One way to do this is by insuring the deposits of crypto exchanges—akin to how it does for banks—so that crypto adopters can be reassured of the safety of their funds. They can also support crypto operators with loans and generally grow the ecosystem by making it more attractive to international players,” Effiong said. Like is the custom of Nigerian government agencies, this act may take forever to be enforced—if it ever is. Nigeria’s new president, Bola Tinubu, promised an administration that is bullish on crypto and blockchain technology. It will be interesting to see how his administration responds to enforcing this act. However, a harsh reality remains: by law, every crypto trader or “hodler” would have to give the government a tithe of their earnings, even while the government ban on crypto remains. *Name(s) have been changed to protect our sources
Read MoreKPMG: Higher taxes key to fulfilling Tinubu’s GDP growth targets
Independent auditors have warned President Bola Tinubu that raising the Gross Domestic Product (GDP) to an average of 6% is ambitious and unattainable for him Nigerians will pay more taxes if President Bola Tinubu’s goal of growing Nigeria’s Gross Domestic Product (GDP) by an average of 6% in the next four years is to be achieved. That’s the view of analysts from the audit advisory firm KPMG Nigeria. The auditors also added that Nigeria risks increasing its debt burden should Tinubu go all out to bring his inauguration speech- where he made this overambitious promise- to fruition. During his campaign, the president promised double-digit GDP growth. Last month, Tinubu removed fuel subsidy and spoke about plans to unify the nation’s exchange rates. The report, authored by Partner/Chief Economist KPMG Nigeria, Yemi Kale and Associate, Research and Insights KPMG Nigeria, Olanrewaju-Afuye Busayo, stated that Nigeria’s growth since 2019, has been fragile, not growing fast enough to contain population growth. The analysts have projected Nigeria’s growth in 2023 to hover between 2.7-3.2%. “Thus, if we assume a GDP growth of 3% in the first year, the economy will then have to grow by an average of 7% for the subsequent three years and moving growth from a forecasted 3% in 2023 to at least 7% in 2024 and afterward seems overly ambitious. “At the same time, attaining a 6% real GDP growth on average from 2023 to 2026 means growing the value of real GDP from ₦74.6 trillion in 2022 to ₦92.5 trillion by 2026 representing an increase of ₦17 trillion in 4 years. However, within 12 years, 2010 and 2022, real GDP grew by about ₦17 trillion, which will have to be replicated in just four years and within a much more challenging macroenvironment that cuts across the fiscal, monetary, external, and real sectors,” the report explained, justifying its position. “We are of the opinion that an average GDP growth rate of between 4-4.5% at the best is more feasible in the next 4 years. Even this will require the country to get its policies right and keep consistent faith with macroeconomic reforms,” the note explained.
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Binance is illegal in Nigeria
Lire en français Read this email in French. Editor’s Note Week 23, 2023 Read time: 5 minutes Hello hello everyone While you settle in for the long weekend, read a few of this week’s most interesting tech stories from the home front and abroad Pamela Tetteh Editor, TechCabal. Editor’s Picks Binance is illegal in Nigeria In a circular published yesterday, Nigeria’s Securities and Exchange Commission directed Binance Nigeria Limited to immediately stop soliciting Nigerian investors in any form whatsoever. Learn more. Is Tingo a scam? Tingo appears to be tango-ing in a web of lies. Hindenburg research group accused the NASDAQ-listed agri-fintech company of being an “exceptionally obvious scam.” Learn more. Twiga prunes its staff Twiga Foods is saying “Go big or go home.” Last year, the agritech fired 211 full-time salespersons and replaced them with “free agents”. There are also 2000 people waiting in line to replace these free agents if Twiga fires them for underperforming. Learn more. MTN is set to go off-grid Telecom operator MTN is looking for a way out of South Africa’s load shedding as the country’s power instability is taking a toll on its business. Now the yellow telco is preparing to go green with off-grid renewable energy. Learn more. Mara’s second layoff After a 21 million dollar fund raise, Web3 startup Mara has laid off its staff for the second time. This new wave of layoffs comes six months after it let go of nearly half its staff last year. Learn more. Bolt offers the drivers on strike more cash Fuel prices are touching the sky in Nigeria, and Bolt drivers have gone on strike to compel Bolt to increase its minimum fee to ₦2000. However, Bolt refused. Instead, it is offering them a bonus of ₦6,000 with terms and conditions to stop the strike. Learn more. Chipper Cash lays off COO In its third round of layoffs so far, Chipper Cash let go of more of its workforce last week, and this time, even the COO was affected. So far, the fintech has laid off over 150 staff members in a bid to restructure and focus on core products. Learn more. TC Daily Get the most comprehensive insights and stories about Africa’s tech and business ecosystem. TC Daily goes out every week at 7 AM (WAT). Sign up now. Tinubu suspends CBN governor Eleven days after his inauguration, Nigeria’s president, Bola Ahmed Tinubu, has suspended the governor of the country’s apex bank, Godwin Emefiele. Learn why. Nigerian banks get a discount Nigeria’s Inter-Bank Settlement System (NIBSS) has reduced the cost of transactions for Nigerian banks. However, this reduction in fees will not be extended to the bank customers. Learn more. Jumia goes offline Jumia is going offline in rural areas. On its 11th anniversary, the ecommerce company announced that it will be expanding its offline sales model (J-force) to rural areas in Uganda. Learn more. Another pricey Apple Apple unveiled a mind-blowing mixed reality and 3D camera headset this week. It costs $3499, so don’t start digging into your couch cushions for loose change. Good thing it won’t come out till 2024; you can start saving now. Read more. Who brought the money this week? This week, Helium Health, a Nigeria-based health tech company, received $30 million in Series B funding in a round led by AXA IM Alts. Nigerian logistics company Haul247 raised $3 million in seed funding. The round was led by Alitheia Capital, with participation from Investment One. What else to read this weekend? Sudan’s war is crippling its budding tech ecosystem. DFIs are playing in alleviating the pain of VC downturn in Africa. Missed GITEX in Morocco? Here is what you need to know. MTN’s MoMo is one year old but still has a lot more growing to do. Look at the state of mental health in the South African tech startup ecosystem. Why do African governments struggle with the digitalisation of public services? Written by: Ngozi Chukwu & Written by: Hannatu Asheolge Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
Read MorePresident Tinubu’s suspension of CBN Governor Godwin Emefiele raises legal questions
President Tinubu suspended the CBN governor in a move reminiscent of Sanusi Lamido’s removal as CBN governor in 2014. Once again, the move has thrown up questions about whether the President has the power to suspend the CBN governor. In an unexpected move on Friday night, President Bola Tinubu suspended the Governor of the Central Bank, Godwin Emefiele. In a statement that has now been published by several publications credited to the Director of information at the Office of the Secretary to the Government of the Federation SGF, Emefiele’s suspension was “sequel to the ongoing investigation of his office and the planned reforms in the financial sector of the economy.” Since Emefiele’s tenure as CBN governor ends in June, it is a surprising move that will now raise legal questions. In 2014, President Goodluck Ebele Jonathan suspended the then-CBN governor, Sanusi Lamidoo Sanusi. Many called that suspension illegal, citing the CBN Act. Section 11 of the CBN Act provides for the cessation of appointment by a CBN Governor, Deputy Governor and Director of the CBN. Section 11 (2) ( c & f) of the Act stipulates that “the Governor, the Deputy Governor or Director shall cease to hold office in the Bank if he- [c] he is guilty of a serious misconduct in relation to his duties under this Act; or [f] is removed by the President; PROVIDED that the removal of the Governor shall be supported by a two-thirds majority of the Senate praying that he be so removed” Against this background, many argued that Sanusi’s suspension was illegal. Tobi Balogun, a legal practitioner in Lagos, told TechCabal, “In the case of Sanusi Lamido v. President & Ors, it was decided by the Federal High Court that while the President cannot unilaterally remove the Governor, he can exercise some form of disciplinary control which includes suspension over him. The matter was not appealed.” Balogun added, “In the real sense, suspending the CBN governor as a disciplinary measure is meant to be exercised with the approval of two-thirds of the Senate. What is clear is that the President cannot outrightly and unilaterally remove the CBN governor. However, we understand that suspension more or less operates as a removal because there’s no path for him to regain office.” A move that can affect the markets Governor Emefiele’s time as Central Bank governor has been a mixed bag. Appointed under President Goodluck Jonathan, he remains the only Central Bank governor ever to serve two terms. However, since 2015, the CBN began to pursue pro-agricultural policies, which turned out to be controversial. One such policy was Anchor Borrowers Scheme. He is also rightly criticized for questionable monetary policy and an inability to exert the CBN’s independence, leading to record borrowing levels to the FG called Ways and Means. Those ballooning loans and 22% inflation have meant that Emefiele’s legacy as governor will be unflattering. His time as governor has also coincided with an increasing lack of transparency at the bank. The apex bank has not published its financial results since 2018. Chuwkwudalu Akabogu, a finance expert, told TechCabal, “The CBN is an independent body and is supposed to be run as one. Despite this, I expect the market to react positively as the CBN under Emefiele has been marred by several allegations that have weakened investor confidence. The market has eagerly anticipated this move.”
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