👨🏿🚀TechCabal Daily – The naira scare
Lire en français Read this email in French. 2 JUNE, 2023 IN PARTNERSHIP WITH TGIF Thank you for filling our bi-annual TC Daily survey. We are presently reviewing entries and will contact the lucky winner of the $50 gift card by next week. In today’s edition Nigeria denies currency devaluation Kenya launches second phase of Hustlers Fund Another data breach in SA TC Insights: Funding Tracker The World Wide Web3 Report: The impact of employee health on retention Job openings CBN DENIES NAIRA DEVALUATION Yesterday, the Central Bank of Nigeria (CBN) dismissed claims that it devalued the naira to ₦630 per $1 from the ₦461 it previously was. The CBN debunked the claim in a statement posted on Twitter, stating that “For the avoidance of doubt, the exchange rate at the Investors’ and Exporters’ (I&E) window, traded this morning (June 1, 2023) at ₦465/US$1 and has been stable around this rate for a while.” TechCabal also confirmed the official exchange rate of ₦464/$1 from Stanbic IBTC Bank, one of Nigeria’s top financial institutions. What led to these claims? Yesterday, Daily Trust exclusively reported that “the CBN devalued the Naira to ₦630/$1”. Based on a solitary transaction, the publication sourced its story from the rate obtained through the Importers and Exporters window, leading Daily Trust to believe that a devaluation had occurred. The origins of the devaluation reports can be traced back to Nigerian president Bola Ahmed Tinubu’s inauguration speech on May 29, in which he affirmed his administration’s commitment to addressing the existing foreign exchange (FX) policy. Notably, Nigeria operates multiple exchange windows, with the official rates (₦464) trading significantly lower than the parallel market rate (₦750). MONIEPOINT RANKED 2ND FASTEST-GROWING AFRICAN COMPANY Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. This is partner content. PRESIDENT RUTO LAUNCHES SECOND PHASE OF HUSTLERS FUND Kenyan president William Ruto Yesterday, Kenyan president, William Ruto, launched the second phase of Hustlers Fund. As part of this phase of the Fund, the government plans to provide financial support to Chamas and SACCOs, aiming to address issues of exclusion and barriers hindering their access to credit and savings opportunities. What are Chama and SACCOs? A Chama is an informal cooperative society that is normally used to pool and invest savings by people in East Africa, particularly Kenya. A SACCO is an abbreviation for Savings and Credit Co-operative. SACCOs are user-owned financial institutions that offer both savings and credit services to their members. Per Ruto, in this phase of the Hustler programme, the loan amounts provided range from a minimum of Ksh50,000 ($365) and have the potential to reach as high as Ksh1 million ($7,302). “Your credit score will determine the amount you can access, and the amount you will continue to receive,” he said. ICYMI: In April, TechCabal reported that the first phase of Hustlers Fund managed to dish out Ksh26.4 billion ($198 million) to a staggering 18 million Kenyans in just five months. MORE FROM TECHCABAL Increased fuel prices raise questions about the future of work in Nigeria. Two years post-acquisition, Paystack is expanding products and gunning for roots in African markets. 500K RETAIL CUSTOMERS AFFECTED BY DATA BREACH IN SA South African retail giant JD Group has announced that it suffered a data breach that exposed the personal information of over half a million of its customers. Affected stores include Bradlows, Everyshop, HiFi Corp, Incredible (Connection), Rochester, Russells, and Sleepmasters. The extent of the damage: According to the retail chain, the leaked data include names, email addresses, home addresses, ID numbers, and in some cases, phone numbers of over 500,000 JD Group and 67,000 Everyshop customers. The data was made available for sale on a hacker forum for as low as $3.60 (R70). According to the company’s CEO Peter Griffiths, “immediate action” is being taken to investigate and mitigate the impact of the breach. Zoom out: According to INTERPOL’s 2022 Africa Cyberthreat Assessment report, South Africa leads the continent in the number of cybersecurity threats identified. In 2022, the country had 230 million threat detections in total. In second place was Morocco at 71 million. TC INSIGHTS: FUNDING TRACKER This week, Morrocan PrestaFreedom, a home services marketplace, raised $1.1 million in an undisclosed funding round from Azur International Fund. Here are the other deals this week: Zofi, an Uganda-based fintech company, raised $1 million in pre-seed funding from Advancly, a Nigerian-based investor Advancly. Moroccan health tech company DataPathology received $1 million in an undisclosed funding round from Azur Innovation Fund. Zydii, a Kenya-based digital training company, raised an undisclosed amount in a pre-seed funding round from DOB Equity, Kua Ventures, Kaleo Ventures, and NaiBAN. That’s it for this week! Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. You can also visit DealFlow, our real-time funding tracker. EXPERIENCE VIVA TECHNOLOGY Book your pass to Europe’s biggest Startup and Business event here. This is partner content. THE WORLD WIDE WEB3 Bitcoin $26,890 – 0.77% Ether $1,868 + 0.23% BNB $305 – 0.07% Cardano $0.36 – 2.50% Name of the coin Price of the coin 24-hour percentage change Source: CoinMarketCap * Data as of 23:10 PM WAT, June 1, 2023. REPORT: THE IMPACT OF EMPLOYEE HEALTH ON RETENTION In a rapidly changing job market, the key to retaining top talent lies in prioritising employee welfare. But how does health insurance impact job retention, especially in volatile macroeconomic conditions? Our comprehensive report, in partnership with WellaHealth and Whirlspot Media, delves into the fascinating connection between health packages and job retention. It explores how health maintenance organisations (HMOs) influence the decisions of employees across 12 industries to stay or leave their jobs. Don’t miss out on the actionable insights from this study. Learn the best practices to foster a healthier, happier, and more loyal workforce by getting the report now. Download the report here. JOB OPENINGS Paystack – Data Engineering Lead – Nigeria (Not specified) Tony Blair Institute for Global Change
Read MoreIncreased fuel prices raise questions about the future of work in Nigeria
The removal of fuel subsidy in Nigeria has led to a significant increase in commuting costs for workers. Both employers and employees share their challenges and express the need for cost-saving measures in the workplace. Employers and workers in Nigeria are floating ideas for how to adapt to the ballooning fuel prices. In addition to record high inflation—22%—Nigerians now have to bear the weight of the full price of fuel which the government has partly shouldered for years through fuel subsidies. Now, the cost of fuel has nearly doubled, eliciting a commensurate increase in the cost of transportation and fuel-powered generators—common backups for the country’s unsteady power supply. People who work remotely, at the office or a combination of both are looking for ways to work around the situation and spend less money. James*, a salesperson at Access Bank in Port Harcourt, shared that the cost of his daily transportation using ride-hailing services has nearly doubled. “[Yesterday] I had to combine both public transport and [ride-hailing platform] Bolt as the price of the latter has increased. It will now cost me about ₦5,000 daily to go to and return from work daily,” James told TechCabal. He expressed a desire to work from home, but the nature of his job won’t allow that. “Most of my work requires access to bank applications that are limited to the bank’s wired network. Unless there are significant changes to the network infrastructure,I will have to continue hitting the road to work daily, even though it means increased expenses,” he added. Danjuma*, who works at a multinational fintech company, explained that his commute costs have also doubled. His company follows a global hybrid work policy, that requires him to be in the office three times a week. With the recent developments, he estimates spending ₦36,000 ($78) on transportation each week. For employees fortunate enough to have the option of full-time remote work, Nigeria’s erratic power supply poses a challenge. Only 57% of the population has access to the electricity grid. Mobalaji, a data analyst in Ogun State, shares that his work remains unaffected due to the reliable power supply in his area. But power outages remain common in most parts of the country, leading to a reliance on fuel-powered generators as an alternative power source. Unfortunately, the removal of fuel subsidies has increased the cost of operating generators. Lynda, who recently got a job at a tech startup that promotes remote work, initially planned to work from home. However, due to the changing circumstances, she now considers going to the office to reduce the expenses associated with using a generator. Her temporary solution is to work at the office until she can save enough money to buy an inverter or battery system for an uninterrupted power supply. Joseph, a writer at a tech-focused publication feels the same way. Even though he can work from home, he goes to the office instead. “Considering the unstable electricity supply in my area, it didn’t seem productive to stay at home today. Therefore, I have decided to work from the office until I can resolve how to go about the fuel situation,” he said. Others have found alternative power solutions to combat the increase in fuel prices. Tope Nkechi Akintola, a brand designer in Lagos, uses an inverter to power her workspace, providing uninterrupted electricity for her laptop and essential devices. Employers and human resource managers have varying opinions on how both employers and employees should adapt to the circumstances. Emmanuel Faith, head of talent management at Big Cabal Media, believes that employers should explore remote work policies to reduce employees’ financial and commuting burdens. He told TechCabal, “The effects of macro-economic changes like this vary from the hike in transport prices to hike in the cost of every other necessity. He strongly advocated for workplaces to implement remote work policies, and in cases where exceptions cannot be made or remote work is not feasible, he recommended exploring flexitime. Seye Bandele, the founder of an HR tech startup, Pade HCM, acknowledges the complexity of adjusting work structures to accommodate the diverse needs of different teams. As an employer, he is still evaluating how to adapt to the situation. He notes the challenge of finding a balance that is fair to all employees.”The administrative staff, who may be required to [bear the increased expenses of commuting and] be present in the office, are not necessarily the highest-paid members of the team. The sales team doesn’t need to come to the office at all but it feels unfair to ask the admin guys to come in and them [the sales team] not to,” he explained. Jude Dike, co-founder of VC crowdfunding platform, GetEquity, says that his team is currently fully remote and that the company is exploring means to reduce the burden of the increased cost of power supply. “At GetEquity, we already offer data packages, and are considering affordable alternate power supply options like Solyanta Energy [a subscription-based solar energy provider] to meet the power supply needs of employees,” he told TechCabal. He advises companies that can’t afford to have remote workers due to the dynamics of their team to consider transporting employees with bus-hailing services such as Shuttlers. Gbemisola Araba, the people operations manager at women-focused fintech Herconomy, emphasizes the importance of meticulous planning for organizations to keep their employees satisfied and maintain profitability. She suggests that if feasible, employers should consider reviewing employee salaries or offering additional perks such as providing lunch to boost morale. Gbemi mentions that her company’s team is currently working remotely, and she advises other employers to allow their employees to work from home if possible. She highlights that employees are now spending three times the usual amount on commuting to work, and companies need to find alternative sources of profit to cope with the financial strain caused by increased operational costs. In response to suggestions that employers should raise salaries, Jude expressed the following viewpoint: “If it is feasible for companies, they
Read MoreTwo years post-acquisition, what’s happening at Paystack?
TechCabal spoke with Paystack’s chief operating officer about the company’s post-acquisition trajectory and relationship with acquirer Stripe. Paystack, one of the Y Combinator’s first bets in Africa, remains one of the continent’s most prominent startups. In 2020, global payments company Stripe acquired Paystack for over $200 million, marking one of the most successful exits in the African tech ecosystem. Since then, Paystack has continued to operate under its brand name, expanding into other markets and setting up other African fintechs for success. In this interview with Amandine Lobelle, Paystack’s COO, she talks about the company’s structure, its relationship with Stripe, and some industry-collaborative attempts at stopping fraud. This interview has been edited for length and clarity* Caleb: Paystack’s acquisition by Stripe has become a standout success story on the continent. Can you share the changes that followed the acquisition and how Stripe has contributed to Paystack’s overall strategy? A.L: Paystack continues to operate independently, but now as part of the larger Stripe group. In many ways, Paystack has become Stripe’s gateway into Africa, given their absence on the continent. Post-acquisition, our collaboration with Stripe has taken three main forms. First, Stripe refers their merchants seeking access to African customers to Paystack. Second, we gain invaluable insights from Stripe, a company that has revolutionised global payments, enabling us to build a scalable business. Lastly, there has been a talent exchange, with some former Stripe employees joining Paystack, which I think is a really beautiful and poetic thing to have come out of the acquisition. Caleb: Paystack has expanded into Ghana, South Africa, and Kenya while solidifying its presence in Nigeria. How does the company approach expansion? Will we see more countries added or deeper penetration of core markets? A.L: Paystack’s remarkable success in online payments, particularly card payments in Nigeria, has prompted us to replicate that success in other markets. Our expansion strategy is based on thorough research, considering factors such as GDP, card penetration, population size, and the strength of the startup and developer ecosystem. We focus on penetrating markets that serve as regional hubs and are strategically positioned to facilitate sub-regional growth. Additionally, we are currently in early beta stages in Francophone Africa and have plans to expand into North Africa. Caleb: Paystack claims to process over 50% of all online transactions in Nigeria. What are the key factors behind the company’s success in the Nigerian market? A.L: The first factor is having highly technical and product-focused co-founders. Shola and Ezra, being software engineers, possessed the know-how to build exceptional products that people are willing to pay for. Second, we maintain unwavering standards. Handling payments requires utmost diligence, considering that merchants entrust us with their livelihoods. We are committed to doing the right thing at all times and maintaining exceptional quality. Lastly, it’s the people. We prioritise hiring exceptional talent and creating an environment where they can do their best work. Shola often says that the payments problem is a talent problem. So, if you get the right people in the room, there’s nothing that we can’t fix, solve, or create. Caleb: You’ve said that Stripe and Paystack are run independently. But I’m curious about whether Stripe’s broader market realities—growth, expansion, or as reported recently, valuation cuts—-affect Paystack’s operations or business. A.L: While we admire and draw inspiration from Stripe’s breakthroughs, the challenges we face as businesses are distinct. We operate in different contexts, and our struggles on the ground in Africa differ from those in the US tech community. However, we do share some similarities in our challenges. Although a valuation cut on Stripe’s end may indirectly impact employees with shares, it does not directly affect Paystack’s operations. Caleb: Paystack has achieved remarkable success and has been a trailblazer in the African tech ecosystem. How does the company recognise its position and give back to the tech community? A.L: We consider it an honour and a privilege to have played a significant role in Africa’s tech journey over the past seven years. As a crucial part of the ecosystem, we continuously ask ourselves how we can support and foster further growth in African tech. One example is Paystack Catalyst, where we provide support to other startups to help them create value and grow. We offer free processing up to $25,000 on Paystack and $20,000 on Stripe, in addition to providing access to free or discounted tools such as AWS. Caleb: Looking ahead, can we expect Paystack to expand into other fintech verticals to better support merchants? A.L: Our mission is to help African merchants accelerate their growth, and this involves exploring various dimensions. We see an opportunity in providing an omnichannel experience, catering to merchants who sell both online and in person. We aim to replicate the online experience for in-person payments. There’s also the possibility of providing financing for merchants, but I don’t think it’s worth going into the details now. Caleb: Paystack’s employees are said to be one of the happiest in the ecosystem. How does Paystack maintain its efficient staff base despite its scale? A.L: The magic lies in finding the best people for the job and empowering them to do their best work. At Paystack, we adhere to six core values: transparency, clear communication, kindness, high standards, pursuing growth and learning, and embracing the mission. Embracing the mission is particularly crucial, as we believe that what we are building is bigger than any individual. Shola is one of the most humble but driven people I’ve ever met and interacted with, and I think a lot of Paystack’s early culture came from him. But it’s also important to note that culture is not just one person. So whether at company gatherings or at weekly all hands, we reinforce and also reevaluate the culture because culture is not a static thing. Caleb: Fraud attempts are a challenge for many African fintech startups. How does Paystack combat this internally, and can you tell us more about Project Radar, the collaborative move between Paystack, Flutterwave, and others
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How to tap into FULIZA loans 2023
To help its M-PESA customers make purchases when they don’t have enough money in their account, Safaricom offers a continuous overdraft service called FULIZA. The FULIZA’s M-PESA overdraft service is available to customers who are registered M-PESA users with a valid Safaricom M-PESA line. And in order to make use of the overdraft service, customers will have to opt-in. Here, we’ll cover how to tap into the FULIZA loan M-Pesa feature. Eligibility for FULIZA Please note the following eligibility points for the overdraft service: While anyone who has activated M-PESA with a national ID, Kenyan passport, or Military ID can use FULIZA, not everyone who activates FULIZA will be approved for a loan immediately. Accounts on M-PESA created with a non-Kenya passport will not be able to activate the overdraft service. After signing up, you’ll be given a limit that determines how much of an overdraft you can access. Accessing FULIZA Follow these steps to get started with the loan service: Dial *334#/*234# Select Loans and Savings then navigate to FULIZA Opt-in to access the amount limit you have been given. Other notes about the loan service Here are other points to bear in mind regarding FULIZA: As long as it doesn’t go over their allotted amount, customers can make as many FULIZA loan requests as they like. A user can send funds to both verified and unverified recipients from the loan. Customers using the loan feature can use it to pay to Lipa Na M-PESA, buy goods and paybill, buy airtime for themselves and other via USSD or M-PESA APP There is an initial 1% entry cost, and then a daily maintenance fee of 1% beginning at 00.00 hours the next day. The access cost paid by a Customer additionally includes an excise levy of 20%. Customers who use the M-Pesa loan service and repay before the next day at 00.00hrs will only be required to pay the access fee and maintenance on the outstanding amount. What’s the FULIZA limit? A FULIZA limit will be assigned to a customer who has been using the network for at least six months depending on the usage of their line at the time of activation. Those who have been using the service for less than six months will have no access to using the overdraft services. Meanwhile, when you eventually have access to the loan feature, your first borrowing limit may be pretty low. So to increase your overdraft limit, you must maintain active use of Safaricom and M-PESA services, as well as timely repayment of your FULIZA M-PESA facility through M-PESA top-ups. Keep in mind that your FULIZA limit can go up or down depending on how much you borrow and how quickly you pay it back.
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How to check SRD SASSA status online 2023
The South African Social Security Agency (SASSA) provides financial assistance to vulnerable individuals through the Special Relief of Distress (SRD) grant. Checking your SRD SASSA status is essential to ensure that your application has been processed and to determine the progress of your payment. In this guide, we will walk you through the step-by-step process to check your SRD SASSA status. 1. Understanding the SRD SASSA grant Before we delve into the process of checking your SRD SASSA status, let’s briefly understand what the SRD grant entails. The SRD grant is a temporary relief measure implemented by SASSA to assist certain individuals affected by the COVID-19 pandemic. It aims to provide financial support to those who are unemployed, do not receive any other form of income, and do not qualify for other social grants. The grant application is slated to end in March 2024. 2. Check SRD SASSA status online This step requires you to visit the SASSA website first. So open your preferred web browser and visit the official SASSA website at https://www.sassa-status.co.za/ or https://srd.sassa.gov.za/sc19/status. Find the status-checking portal. This section is titled “Check Status”. Provide the necessary details: Enter the required information, such as your ID number and cellphone number. Ensure that the information you provide is accurate. After you double-check the information you have entered, and you are confident it is correct, click on the “Check Now” or “Submit” button. Review your SRD SASSA status: After submitting your details, the portal will display your SRD SASSA status. This could include information about the progress of your application, the payment date, or any additional instructions. 3: Check your SRD SASSA status via WhatsApp For some reason, you may not be able to use the portal, but there’s an alternative. The mobile messaging app WhatsApp also allows you to check your SASSA application status. Simply text the word “Sassa” to the 082 046 8553 number associated with the Sassa WhatsApp service. Type “Status” in your reply to any prompt you receive. Then respond “Yes” if you have a reference number which should be the next prompt. Then provide the cell phone number you provided in the grant application and follow up with the reference number. Final thoughts on how to check your SRD SASSA status Ensuring you check your SRD SASSA status is crucial to stay informed about the progress of your application and that you receive the financial assistance you need. By following the step-by-step guide provided in this article, you can easily check your SRD SASSA status online or via WhatsApp. Remember to have your personal details and application reference number ready for a smooth and hassle-free experience.
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Tech builders in Nollywood are trying to solve the industry’s production and distribution problems
Nollywood is the second largest in the world and contributes 2.3% to the GDP, and now filmmakers are creating startups to develop niche solutions for the industry. Last year, Nollywood, Nigeria’s film industry, made 1,923 movies, according to the National Film and Video Censors Board (NFVCB). That made Nollywood the second most prolific movie industry after Bollywood and before Hollywood, yet Nollywood struggles with box office revenue. In 2022, Hollywood made $7.37 billion, while Bollywood made $1.28 billion. The difference is glaring when placed beside the $203 million Nollywood made in the same year. Chart by Muktar Oladunmade, TechCabal A lot of issues can be blamed for this disparity. There are not enough cinema screens in the country; the consumer market is dwindling; there is a lack of quality control and avenues for feedback; there is a lack of patient funding; and creatives lack access. However, some filmmakers are taking matters into their own hands, using technology to solve some of these issues. At The Annual Film Mischief (TAFM’23) FilmTech Conference, a gathering of technology enthusiasts in Nollywood, you would be forgiven if you thought it was not a gathering of creatives. Armed with pitch decks, presentations, and reports, movie industry enthusiasts showcased how their startups use technology to solve critical problems in the Nigerian film industry. Ojie Imoloame, the conference’s convener, told TechCabal that the conference was designed to showcase “the overwhelming opportunity in the film and creative space overall using technology”. Amazon Prime Video commissions Nollywood’s Nemsia Films for 3 films Seun Afolabi, a Yoruba film director at the FilmTech conference, shared that he attended the conference to learn how to use technology to improve his craft. “Most of the Yoruba movies you see are done in four days, but I want my movies to stand out. The world is smaller now; Spielberg (an American filmmaker) can load up Amazon Prime and watch Nigerian movies. I want him to see my movies and be impressed.” Imoloame added that the conference also sought to bring like-minded creatives together to discuss how to advance Nollywood. “We were lucky to assemble virtually all the filmtech startups for a deep-dive conversation into startup building in this space,” he shared. One of the startups present at the FilmTech conference was Albantsho, an online screenwriting discovery platform that uses scriptwriting software and a story marketplace to help screenwriters create and sell their scripts. Julie Ako, Albantsho’s cofounder, told TechCabal that a lack of avenues for her as a screenwriter to sell her scripts led to her starting Albantsho with her cofounder, Nikita Mokgware. “Albantsho stems from my experiences as a screenwriter and filmmaker and the realisation that there were limited avenues for selling our scripts. This challenge wasn’t unique to us; many screenwriters and film creatives across Africa faced similar struggles,” she said. Albantsho also connects screenwriters together. “We often operate in silos, which hinders collaboration and growth,” Ako added. When asked what the proudest moment she experienced with her startup was, she told TechCabal that after launching a test version of the Albantsho platform, the startup brought 20 writers and film producers together for a programme last year and sold 10 scripts developed through the programme. For Chidinma Igbokweuche, a cofounder at Nollydata, a first-of-its-kind database for Nollywood movies, cast, and crew, her startup resulted from necessity. She told TechCabal that her filmmaking process was hindered by a lack of access to information as a writer, director, and producer. “When I wanted to make my first short film, finding information about the industry, the right cast, and their contact information was difficult. So I partnered with one of my cofounders, Ibrahim Suleiman [an actor], to solve this problem from different angles (behind and in front of the camera) with Nollydata.” Nollydata, styled after IMDb (an online movie database), is also building a community where filmmakers can interact with audiences and get real-time feedback, according to Igbokweuche. But things have not always been rosy. For her and Ako of Albantsho, funding has been a significant roadblock. Victoria Popoola, co-founder and CEO of TalentX Africa, a film-financing marketplace, told TechCabal that traditional financing institutions often demand collateral exceeding 120% of the film budget, making funding inaccessible for most industry participants. “Our survey in 2021 revealed that over 70% of creatives rely on self-funding or support from family and friends,” she added. Popoola says TalentX has invested over ₦400 million in Nollywood within two years. Some of the projects they have funded include Ba Ni [Mud Clan], produced by Anita Abada, which received multiple nominations at the 2022 AMAA Awards and won Best Feature Film at the Nollywood Week Film Festival in Paris. However, within that period, she shared that TalentX’s biggest problems were related to data and distribution infrastructure. “We have problems finding accurate and reliable data about the industry, making it difficult to make informed investment decisions, measure the success and impact of films, assess profitability, or make data-driven improvements,” she said. To remedy this, TalentX has “started gathering our data and leveraging our team’s industry expertise to build our early structures”. Distribution has typically been a Nollywood problem. Compared to the United States, which has over 40,000 cinema screens, Nigeria only has 251. As a solution, Popoola told TechCabal that TalentX is “building out an in-house distribution network that we have now leveraged for some of our funded projects”. Imoloame told TechCabal that he believes technology can be used to solve Nollywood’s problems and “solve them at scale”.
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It’s Africa’s time to lead, Lagos Governor tells GITEX Africa
Africa is ready to own its narrative in the global technology story. This was the clear message on the first day of GITEX Africa, the continent’s largest business and tech conference, taking place in Marrakesh, Morocco. Aziz Akhannouch, the Moroccan Head of Government, inaugurated the debut edition of GITEX Africa as influential role players from the global and African tech ecosystem converged for the first time to discuss digital transformation in the world’s rising innovation economy. West Africa shines at GITEX Africa Akhannouch welcomed 900 exhibitors and start-ups, 250 leading investors, 250 conference speakers, and 30 ministerial delegations while attracting tens of thousands of attendees from 120 countries. West Africa made a strong impression at the conference thanks to Lagos State Governor Babajide Sanwo-Olu, who delivered an inspirational message to his fellow African leaders and role players. “The fact that this conference has been brought to Africa is a testament to the continent’s growing importance in the global technology and start-up ecosystem,” Sanwo-Olu. “Africa is on an accelerated path to becoming the next Silicone Valley. The tech-enabled sector in Nigeria is experiencing unprecedented growth with record investments and expansion.” Sanwo-Olu words captured the sense of optimism and belief wafting through the halls of GITEX Africa among the thousands of VIP delegates, speakers and media. In 2020, African start-ups attracted investment of $1.3 billion, rising to up to $4 billion in 2022, Sanwo-Olu explained. Lagos State Governor Babajide Sanwo-Olu. Credit: @jidesanwoolu Sanwo-Olu pays homage to Africa’s youth The Lagos Governor, who is serving his second term, paid particular attention to Africa’s youth under 25, who make 60% of the continent’s population. “Our people are one of the strongest catalysts for development in the last 3 to 4 years. This is a significant opportunity for growth and development in the technology industry. According to reports by Partech Africa, Africa has 40% growth in tech start-ups in the last 2 years. We’ve seen over 600 of them across the continent. The majority of first-time tech founders are under 35.” Akhannouch echoed Sanwo-Olu’s comments and optimism about the continent’s future in tech. “Africa has increasingly worked to consolidate its position as a dynamic environment that supports innovation, and in this regard, GITEX Africa is an occasion to highlight the promising potential of the African continent and its accelerated efforts in developing talents and skills in the fields of technology and innovation.” For more on GITEX Africa, follow TechCabal on Twitter for the latest updates.
Read MoreNigeria’s Central Bank denies reports of a Naira devaluation
Daily Trust exclusively reported that a Naira devaluation in the early hours of Thursday. Nigeria’s Central Bank has denied that any such devaluation happened. Nigeria’s Central Bank has denied reports of a devaluation of the Naira that made the rounds this morning. A tweet from the CBN’s handle said, “CBN did not devalue the Naira,” alongside a picture of the front page of a Nigerian newspaper. The Nigerian publication, Daily Trust, exclusively reported this morning that “the CBN devalued the Naira to 630/$1.” The publication based its story on a rate it obtained from the Importers and Exporters window. However, it would seem that the I&E rate that led Daily Trust to believe that a devaluation had occurred was a single, one-off transaction. At the time of this report, TechCabal confirmed that Stanbic IBTC bank, one of Nigeria’s leading banks, has quoted today’s official exchange rate at N464/$1. It means that there have been no official changes in the FX rates. The devaluation reports undoubtedly have their roots in Bola Tinbubu’s swearing-in speech, where he confirmed that his administration will address the current FX policy. Nigeria operates a multiple exchange window, with the official rates (N464) trading well below the parallel market rate (N750). Tinubu’s intention to address the FX policy is curious, given that it is the purview of an independent Central Bank. Nevertheless, the Central Bank has repeatedly been advised by the World Bank to unify the exchange rates. The World Bank and many other leading economists say that multiple exchange rates lead to uncertainty and create room for arbitrage. Nonetheless, the CBN has held firm, retaining a pegged exchange rate. Still, it appears that it may change that position, given Bola Tinubu’s swearing-in speech. The new President began by declaring an end to fuel subsidies, with the country’s petroleum corporation announcing new and increased fuel prices on Wednesday. That move, alongside an earlier report by Bloomberg that a 15% devaluation of the Naira is among Tinubu’s earliest priorities, may have led observers to believe that the now-debunked news of the devaluation.
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👨🏿🚀 TechCabal Daily – Fuel Rush
Lire en français Read this email in French. 1 JUNE, 2023 IN PARTNERSHIP WITH Happy new month Here’s your weekly reminder to catch our shows on YouTube. If you want to see what startups are doing in Africa, then My Startup in 60 Seconds is the way to go. And if you’re looking to work in these startups and gain the skills needed, then you should check out Entering Tech. The great news is all the videos are one-minute each. In today’s edition Logistics services fees balloon in Nigeria Eskom suffers from fuel price inflation Starlink is adding naira cards soon Theranos founder starts prison sentence The World Wide Web3 Event: The Moonshot Conference Opportunities NIGERIAN LOGISTICS SERVICES TO INFLATE COSTS BY 20–50% Nigeria’s newly elected president, Bola Ahmed Tinubu, is kicking off his regime on a high note. Literally. The cost of fuel has skyrocketed to over ₦600 ($1.60) per litre from ₦185 ($0.40) since President Tinubu announced the removal of fuel subsidy, yesterday. Logistics service providers now say that this will result in a 50% increase in logistics service prices. Side bar: The federal government of Nigeria has been shouldering a significant portion of the actual cost of fuel. This has kept fuel prices artificially low for decades—between ₦25 ($0.054) to ₦185 ($0.40) per litre. But worsening government finances means that fuel subsidies no longer make financial sense. A fuel rush: This removal is not the new president’s idea, though. This change was bound to happen in June through the implementation of the Petroleum Industry Act. PresidentTinubu’s announcement may only have pushed the timeline up a couple of weeks—and prompted a mad rush to fuel stations. The new pump prices for fuel will range between ₦488 ($1.08) and ₦550 ($1.19) per litre, but some fuel stations are already charging more than that, even ahead of schedule. Like a baton, the price increases will be passed on to customers of transportation services. Bolt and Uber prices are already noticeably higher than last week. Logistics startups told TechCabal that customers should expect a 20–50% increase in delivery prices. MONIEPOINT RANKED 2ND FASTEST-GROWING AFRICAN COMPANY Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. This is partner content. ESKOM SUFFERS FROM FUEL PRICE INFLATION Fuel is also burning holes in government pockets in other African countries. Per TechCentral, the expenses of South Africa’s state-owned power utility, Eskom, paid a staggering R21.4 billion ($1.08 billion) in the 12 months leading up to March 2023, compared to the previous annual expenditure of R10 billion ($505.7 million). Why? The price of fuel has skyrocketed, and Eskom needed a lot of fuel to keep its open-cycle gas turbines running during peak-demand periods. Moreover, Eskom reportedly had to cater for unexpectedly higher volumes of operation than initially budgeted for. There’s more: Eskom’s fleet of primarily coal-fired power stations has been breaking down frequently resulting in unprecedented levels of blackouts, which have greatly affected the economy. South Africa’s central bank estimates that these power outages will shave off a significant two percentage points from South Africa’s economic growth this year. Really bad numbers: The energy availability factor, which measures the usable capacity, plummeted to 56% during the financial year. Eskom’s loss before tax has almost doubled, skyrocketing from R11.9 billion ($601.8 million) to a staggering R21.2 billion ($1.07 billion). To add fuel to the fire, gross debt securities and borrowings have surged by 11%, reaching a jaw-dropping R439 billion ($22.2 billion) in the year leading up to March. The rand has taken a significant hit this year, plunging by almost 14% against the mighty dollar. MORE FROM TECHCABAL Kenyan content creators are pushing back against proposed taxes. A last-minute increase in Nigeria’s borrowing threshold raises concerns over rising debt. STARLINK TO ACCEPT PAYMENT FROM NAIRA CARDS Starlink is on the verge of approving payments made with naira cards. In an email, the Elon Musk-owned internet company informed customers of its plans to process payments in naira, including more local cards in Nigeria. By June 6, customers will need to update their payment information on their account. This update is being implemented in response to customer feedback and may also be influenced by the challenges faced by Nigerians in purchasing the product due to restrictions. ICYMI: In March, Payfi and SD Global Impact Services Ltd (SDG) joined forces to provide Nigerians with the option to purchase Starlink devices in instalments using naira cards. This arrangement was introduced shortly after the launch of Starlink in Nigeria, as there were restrictions on naira cards for making purchases in dollars. Zoom out: Starlink received approval to launch in Nigeria in May 2022, and it started operating officially In January 2023. The one-time hardware officially costs ₦268,584 ($584) while its monthly service fee costs ₦19,260 (41$). Given the country’s current ban on international transactions on domestic cards, Nigerians have been paying more than the official rate. Except for those with domiciliary cards, users might have to pay up to ₦440,000—equivalent to $956 at the Central Bank of Nigeria’s official rate of ₦460 to $1—when using virtual dollar cards that offer parallel rates as high as ₦743 to $1. ELIZABETH HOLMES BEGINS PRISON SENTENCE Theranos founder Elizabeth Holmes began her 11 years and three months sentence in a Texas prison yesterday. Holmes is being incarcerated for defrauding investors in a failed blood-testing startup—Theranos—once valued at $9 billion. A quick recap:In November 2022, Elizabeth Holmes, the founder of Theranos, was sentenced by a federal judge to prison. This came after she was convicted by a jury in January 2022 on three charges of investor fraud and one charge of conspiracy. The trial, which lasted three months, led to her conviction and subsequent sentencing. The downfall of Theranos: At the young age of 19, Holmes founded Theranos, a company that claimed to revolutionise blood testing. With a technology promising to scan for hundreds of
Read MoreA last-minute increase of FG’s borrowing threshold raises concerns over rising debt
Nigeria’s senate has raised the Ways and Means provision from 5% to 15% prompting important questions about rising debt and inflation. Two days before the start of Bola Tinubu’s Presidency, members of the Nigerian senate held an emergency meeting to amend the Central Bank of Nigeria (CBN) Act. Presided over by the Senate President Ahmad Lawan, the Senate raised the Federal Government’s threshold for borrowing money from the CBN. The government borrows from the Central Bank through Ways and Means advances. For years, ways and means loans are capped at 5% of the government’s revenue from the previous year. The Senate amendment has now raised that limit to 15% despite the fact that President Buhari’s administration borrowed a record N22.7 trillion from the Central Bank. Section 38 of the CBN act says that whatever advance the CBN gives to the Federal Government must be repaid at the end of the financial year in which they are granted. But the Buhari’s adminstration’s excessive borrowing meant this was often impossible. In the end, the Senate also approved a request to restructure the N22.7 trillion loans as bonds. Money printing worsens inflationary pressures Ways and means advances are often referred to as “money printing.” While the Central bank doesn’t literally print the money it loans the government, the manner in which it funds the country’s budget deficits increases money supply. This increase in money supply without a corresponding increase in outputs often triggers or worsens inflation. A 2022 report by the World Bank and the European Intelligence Unit (EIU) pointed out that, “The CBN has continued to print money for the Federal Government…continued printing of money at the same time as tightening policy would prevent effective control of the price level.” Sheriffdeen Tella, a professor of Economics, makes a similar argument. According to him, “The amendment of ways and means is bad for the economy. Ways and means financing is inflationary. It allows the government to be carefree with borrowing for consumption.” Ugochukwu Obi-Chukwu, the Founder of the publication, Nairametrics, believes the increase in Ways and Means advances is worrisome. “Currently, Ways and Means is N22 trillion, if we are to start to payback, we are looking at N2.2 trillion annually on Ways and Means alone. There is also public debt to be serviced. In terms of fiscal revenues, it is bad.” The Central Bank will remain in the limelight Godwin Emefiele’s time as Central Bank governor has been complicated. Despite starting out with promise, he’ll be remembered for a failure to rein in inflation, which stands at 22% today, poor FX policies, and reducing transparency at the Central Bank. Notably, Emefiele has contributed to a massive increase in government’s borrowing, allowing ways and means advances to often cross the 5% threshold. Those advances were also left unsettled at the end of the financial year as prescribed by the constitution. When Emefiele leaves office later in June, there’s no doubt that the Central Bank will continue to play an outsized role; he has set the precedent. Under Emefiele, the CBN funded agricultural schemes like Anchor Borrowers Program (ABP). It also dabbled into the manufacturing and energy sectors, extending a total of $9bn in loans to these sectors. As the Tinubu government gets down to work and to the critical question of how to fund budget deficits—which will remain high even when subsidy payments end—it will know that it can lean on the Central Bank to print more money. Raising the ways and means threshold to 15% against a backdrop of a Central Bank that has not said no to the Federal Government in years may lead to more borrowing and even worse inflation.
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