- July 17 2023
African countries are making digital service tax for foreign companies a norm as Uganda joins the race
Uganda’s new law imposes a 5% income tax on non-resident companies offering digital services. Services covered include online advertising, data services, and online marketplaces. Major tech corporations like Meta and Netflix will be affected, joining Kenya and Nigeria in implementing similar taxes. Toward the end of March 2023, Uganda’s minister for finance, planning, and economic development presented the income tax (amendment) bill 2023 and the convention on mutual administrative assistance in tax matters (implementation) bill before parliament. The tax amendment bills cover key aspects such as income tax and VAT, among others, such as excise duty and lotteries and gaming. A section of the amendments proposed taxing non-residential companies that provide digital services to Ugandans. President Yoweri Museveni has signed the bills making them law, which means they will become effective soon. However, what do the new laws say and imply for foreign tech corporations operating in the country? Taxing foreign digital service providers The new law introduces an income tax of 5% on all non-resident individuals who earn income by providing digital services to customers within Uganda. The law specifies that a non-resident person is deemed to derive income from rendering services to a customer in Uganda if the digital service is delivered via the Internet, an electronic network, or an online platform. Within the scope of this legislation, “digital services” covers a range of services, including online advertising services, data services, and services facilitated through online marketplaces or intermediation platforms, such as accommodation, vehicle hire, and other transport-oriented platforms. Moreover, digital content services are also included, covering access to and downloading digital content, online gaming services, cloud computing services, and data warehousing. The bill encompasses other services provided through social media platforms or internet search engines. It allows for the potential inclusion of other digital services, subject to the minister of finance’s prescription through a statutory instrument issued under the income tax act cap 340. Which key companies will be affected? The new law has introduced a digital service tax (DST) on foreigners who offer online services like Meta, Netflix, Google, and others such as e-cab companies such as Bolt and Uber. However, how this proposed amendment will be implemented has not been discussed. Besides, it is unclear whether it will be implemented through withholding tax or requiring non-residents to file income tax returns. No exemptions have been mentioned for the final withholding tax of 15% on non-residents earning income under a Ugandan-source services contract when the DST is in effect. This implies that the effective tax rate reaches 20% if both measures are applied. The conflict may be addressed in a future amendment, but that has not been done for now. DST in Kenya and Nigeria Uganda now joins Kenya, which introduced DST under the Finance Bill 2020. The law saw the introduction of a digital tax at 1.5% of the gross transaction value. As a result, the tax was payable by individuals whose income from services and products was sourced within the state through the digital marketplace. The digital service tax was payable when transferring payment to service providers. It doubled to 3% in mid-2022. In 2022, Nigeria introduced a 6% digital services tax. At the same time, non-resident providers of digital services were required to collect VAT on their offerings. Like the Kenya and Uganda case, these digital services cover apps, high-frequency trading, electronic data storage, and online advertising. Foreign companies like Netflix and Meta, offering digital services, had to remit 6% of their annual turnover from their Nigerian business to the Federal Inland Revenue Service (FIRS) as per the regulation. Nigeria also separately introduced VAT on foreign digital services in January 2022.
Read More- July 17 2023
Driven by rising food prices, Nigeria’s June inflation hits 7-year high
Nigeria’s headline inflation increased to 22.79% in June, driven by a rise in the prices of food. According to the National Bureau of Statistics Consumer Price Index (CPI) and Inflation Report for June 2023, Nigeria’s headline inflation rate has increased to 22.79%, year-on-year from 18.60% recorded in June 2022. On a month-on-month basis, the figures rose 2.13% from 1.94% in May 2023 figures. Nigeria’s inflation rate continues its uptrend despite several monetary measures by the central bank to tame the rising rates. On a divisional level, inflation was majorly driven by food at 11.81%, followed by, housing, water, electricity and fuel (3.81%), clothing and footwear (1.74%), and transport (1.48%), amongst others. Food inflation was up by 25.25% on a year-on-year basis in June 2023; higher than the rate recorded in June 2022 (20.60%). Food inflation was driven by increases in the prices of oil and fat, bread and cereals, fish, potatoes, yam and fruits. States are not left out On a year-on-year basis, Lagos had the highest inflation rate (25.75%), followed by Ondo (25.40%), and Kogi (25.23%), while Borno (20.44%), Zamfara (20.93%) and Ekiti (21.06%) recorded the slowest rise in headline inflation. Global Chief Economist, Renaissance Capital, Charles Robertson, notes that the inflation data is good news, owing to the fact that the population is reeling from President Tinubu’s economic policies of the foreign exchange devaluation, and fuel subsidy removal. “Relatively good news from Nigeria’s inflation figure – with a rise to only 22.8% YoY, despite the official FX rate devaluation from roughly NGN460/$ to closer to NGN800/$. There could be more to come in July of course,” he tweeted.
Read More- July 17 2023
Despite public outcry, Kenya has received billions from recently introduced digital service tax
Kenya added digital economy taxes and collected $1.9B VAT revenue via electronic tax invoicing alone. The state also integrated betting firms into its tax collection systems, which has, so far, paid off. Kenya has been patching up tax leaks for a couple of months now. These changes have seen the Kenya Revenue Authority (KRA) meet and surpass targets after it recorded a 6.7% jump in the 2022/2023 financial year. KRA’s managed collection increased from KES 1.58 trillion ($23.2 billion) in the 2018/2019 financial year to KES 2.166 trillion ($32.2 billion) in the just concluded financial year ending in June 2023. These numbers imply that KRA added KES 586.259 billion ($8.9 billion) to its collection in the last half a decade. “Despite an economic slowdown occasioned by an unfavourable global fiscal environment, KRA recorded a revenue collection of KES 2.166 trillion for July 2022 – June 2023 compared to KES 2.031 trillion in the last financial year. The collection for the financial year 2022/2023 was, therefore, higher than what was collected in 2021/2022 by KES 135 billion,” said KRA in a statement. Digital revenue drivers Over the last few years, Kenya added new tax avenues, including taxing the digital economy amid complaints from locals. The state recently approved taxing crypto exchanges and social media influencers. However, the recent tax areas, which went live at the start of July 2023, will only be reported at the end of the 2023/2024 financial year. The previous government introduced a digital service tax (DST) alongside VAT on digital market supply. The legislation aimed to impose a 1.5% tax on the total value of digital services. Starting in January 2021, individuals earning income by offering services or products through online platforms were required to pay this tax. Furthermore, the law specified that both Kenyan residents and non-residents with permanent establishments in the country could utilise the tax amount as a deduction against their income liability for that particular year. And just last year, Kenya doubled DST to 3%. To this end, KRA collected KES 5.328 billion ($37.5 million) from the tax heads, translating to a growth of 207.9% compared to the previous financial year. KRA notified the public and all taxpayers registered for VAT about the transition from old electronic tax registers to the tax invoice management system (TIMs). According to the KRA, VAT-registered taxpayers had to obtain the new electronic registers before mid-2022. This shift aimed at enabling them to generate and electronically transmit tax invoices in accordance with the VAT (Electronic Tax Invoice) Regulations of 2022. The introduction of eTIMS also sought to reduce compliance costs by lowering hardware expenses and enhancing the accuracy of real-time invoice transmission, thus improving declaration and reconciliation between returns and payments. Notable features of eTIMS include cross-platform access (computers and mobile phones), a user-friendly and adaptable design, and a convenient solution for taxpayers to fulfil their compliance needs. Based on the development, with 95,732 VAT-registered taxpayers now using eTIMS, remittances have increased to KES 272.365 billion ($1.9 billion). The revenue performance outlook is expected to improve even more as eTIMS is widely adopted. eTIMS is set to simplify filing tax returns by providing pre-populated VAT returns. KRA has also reaped heavily from integrating its systems into betting companies’ systems. This integration has granted KRA up-to-date access to all the companies operating within the gaming and betting industry. As a result, the KRA collected KES 15.190 billion ($107 million) in excise duty and withholding tax after onboarding 28 taxpayers from the sector. Plans to tap more into the digital economy KRA plans to implement a technology platform to generate revenue by transforming it into a digitised revenue administration. This will be achieved by integrating with e-Citizen, other government agencies, and private entities for payroll taxes. It will also be achieved by simplifying the customs payment process through inclusion in M-Service and implementing a risk management system through AI.
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- July 17 2023
Next Wave: Nigeria’s wrecking ball
Cet article est aussi disponible en français <!– In partnership with –> <!— –> First published 16 July 2023 For now Nigeria’s reform of its foreign exchange regime is looking more like if you tied a wrecking ball to a boomerang—for a section of Nigerian fintechs. But even the banks should not celebrate yet. A lot of problems Africa’s technology is set up to solve are structural problems that have their root in bad policies and failed governance. Take Nigeria for example. In the last 8 years, the government has banned, increased import duties or denied foreign exchange for the import of a number of items including staple food products like rice, maize and poultry. Full list here. The idea was that, by banning items, the country could save valuable forex and spur local supply to meet demand. But the opposite happened. Local supply failed to come near anywhere close to matching demand, and as a result demand for imported food went up. The result of this (plus poor monetary policy) was a significant gap between official exchange rates and what was more freely obtainable in the parallel market. By the end of 2022, spreads between the official exchange rate of the naira and the dollar were as high as 61%. Naira-USD spreads have narrowed dramatically following FX policy reforms and the removal of Nigeria’s unorthodox central bank governor, Godwin Emefiele. | Chart: Ayomide Agbaje — TechCabal Insights. That is more than 50% of pure profit if you could somehow get $ at official rates and resell in the parallel market. Nigeria has a fairly large number of people who need $ for everyday things like purchasing items on Amazon, paying for subscriptions or running a business with dependencies on international vendors/products. But banks no longer allowed international payments from Naira cards to go through, so importers of food and users of digital services had to source for $ from anywhere they could. As I said, a lot of problems being solved in Africa are structural problems with roots deeply resident in government policy. In the last three years, cross-border payment products have really been dollar-local currency arbitrage products. They solved an important problem and benefited from netting a smaller percentage of the arbitrage opportunity from meeting that need. And Nigeria made up the bulk or at least a significant propoertion of that market. Before moving forward, let us establish one truth, or something as near the truth as possible. All currency problems are policy and government problems. Therefore all cross-border payment problems are government problems. The degree to which they are business-solvable problems is tied to the attention and approach of the government. If you are in many African countries and run a business that is too exposed to swings in government policy, you are either close to the managers of government problems, or very brave. In my opinion, we had a lot of very brave businesses. In any case, governments change and there is not too much you can do to hedge against changing government policies if your business depends on bad policies to thrive. In this case, when things get better, your business suffers from it. Partner Message GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving sustained business growth in Africa at GrowthCon 1.0. Experience curated masterclasses, case studies, a growth hackathon and more. . Get your tickets now A few weeks after Nigeria switched from its tenuous fixed exchange rate policy to a managed rate, Bloomberg and other media reported the upward surge in the country’s stock exchange. Last week, Bloomberg reporter, Emele Onu, clarified that a lot of that upward momentum came from bank stocks. An index of bank shares gained 23% last month, the most since 2018. Clearly, the banks were “balling”. To rub it in, last week, banks in Nigeria have launched a slew of products targeting remittances. Access Bank, Nigeria’s largest bank by assets (2022), launched a product with remittance fintech, Remitly to capture remittance inflow. ALAT, the digital banking arm of Wema Bank will now allow naira cardholders to spend up to $500 without needing a dollar bank account. It was $0 previously. Guaranty Trust Bank has done the same, and United Bank for Africa (UBA) will allow customers will FX accounts to borrow in naira against the FX in their dollar or British pound accounts. Partner Content: With NearPays the future of payment is contactless It has been an onslaught of products capitalising on the FX policy reform and threatening the market of cross-border/dollar virtual card fintechs. It exposed the vulnerability of building a currency-policy-dependent payment product in Africa that is only designed to capture arbitrage opportunities. But not use the short term painkiller as a foothold to explore deeper user engagement models beyond the occasional need for a USD virtual payment option. @wquist – Slow Ventures In underwriting/spread based businesses, be very aware if you are building products to spot an arbitrage or to create one. Both can be great ways to make money but there is very little long term equity value in the former. — fintechjunkie (@fintechjunkie) July 13, 2023 And it showed that the banks are learning how to quickly turn on a dime (at least in launching new products that also capitalize on policy swings). Banks are better positioned to do these types of product launches, because they have deposits, serious cashflow, legacy positioning and their stock (thus available capital) is up! But banks cannot celebrate yet… They still carry a corporate and non-digital-first baggage with them. UBA will only give the FX-backed loan I mentioned earlier, if you walk into the bank and fill a form. And GT Bank’s new app launch was disastrous as it locked customers away from making any transactions for hours, until the problem was resolved. Interestingly these remittance products have been launched just as remittance inflow is tightening. Nigerians at home received $952 million in the
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- July 17 2023
TechCabal Daily – The naira card’s return
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Twitter’s new update is fighting spam bots. Starting last Friday, only users you follow will be able to send you messages that land in your primary inbox. Messages from verified users you don’t follow, meanwhile, will be in your Message Request folder. This is the new default. You can, however, change the settings to receive messages from anyone. In today’s edition Naira cards are making a comeback Uganda to tax foreign digital companies Access Bank acquires StanChart TC Insights: Big data for Africa The World Wide Web3 Event: The Moonshot Conference Job openings Economy Naira cards are making a comeback Image source: Tenor Great news for Nigerians: you’ll soon be able to make international payments with your naira cards. And yes, that includes Netflix, Apple, Amazon, and all the other online stores that aren’t naira-denominated. Last week, commercial bank Wema Bank became the first bank to increase its dollar limit for all users of its ALAT card—its naira debit card—from $20 to $500. Backstory: Since 2020, Nigerian banks have slowly reduced spending limits on naira debit cards due to what the Central Bank of Nigeria (CBN) described as a dollar shortage. Banks like Zenith cut spending limits from $500 to $200. At the time, the oil-exporting country was experiencing a steep fall in oil prices. It had also paused selling forex to retail currency traders after the ban on international travel due to the pandemic. By July 2022, the dollar scarcity worsened and banks cut down spending limits drastically—from $200 to $20. Some like StanChart cancelled international spends using naira cards, and anyone who had to pay in dollars had to open dollar accounts. And now? Nigeria is moving in a different direction with its newest government. Since he assumed office, President Bola Tinubu has taken steps to increase the inflow of forex into the country. Earlier in June, the CBN floated the naira, bringing official and black market rates for forex closer together. Last week, the apex bank also approved naira payouts for diaspora remittances. All this means that forex can flow a lot easier in the country. Zoom out: While only Wema has announced the increase in international spending limits, it’s expected that several other commercial banks will follow suit in coming weeks. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. Legislation Uganda to impose 5% tax on foreign digital companies Image source: YungNolly Kenya might be relaxing its laws to accommodate foreign companies, but its neighbour Uganda isn’t having any of it. Last week, the Ugandan government amended its Income Tax Act to include a new law that imposes a 5% tax on income earned by foreign companies operating in the country. A new change: This comes weeks after President Yoweri Museveni initially refused to assent to the Income Tax Amendment Bill 2023, stating that it needed to include taxes on non-resident digital companies in the country. In response to the Parliament, the president stated that, “The measure was meant to cater for taxation of digital economies such as; Twitter, Amazon, Netflix etc, the clause related to non-residents and non-residents in Uganda says it doesn’t relate to residents in Uganda as it was mistakenly stated in the minority report. It should be reinstated.” The Parliament then reprocessed the bill to include a 5% tax on foreign companies, and on Tuesday, July 11, the president assented to the bill. According to the Ugandan minister for finance Henry Musasizi, the country is not looking at the digital services. “We are looking at the income derived by the provider of these services. For Uber, the money goes to California; the man derives income, but pays no taxes. Now we are saying, can we have a mechanism of having the taxes?” he said. Zoom out: Uganda joins countries like Nigeria which, in 2021, instituted a 6% tax on foreign digital companies, as well as Zimbabwe, Tunisia, Tanzania and Sierra Leone which all have 5%, 3%, 2% and 1.5% taxes respectively on foreign companies. M&As Access Bank to acquire StanChart assets Another Nigerian commercial bank is making big moves. On Friday, British multinational bank Standard Chartered (StanChart) revealed that it had completed negotiations to have all its sub-Saharan African assets acquired by Access Bank. Image source: Zikoko Memes Where and where? The deal, which is set for competition in 2024, will see the sale of StanChart’s subsidiaries in Angola, Cameroon, Gambia, and Sierra Leone, with the exception of StanChart’s Nigerian subsidy. Access Bank will also acquire Standard Chartered’s consumer, private, and business banking business in Tanzania. “Access Bank will provide a full range of banking services and continuity for key stakeholders including employees and clients of Standard Chartered’s businesses across the five aforementioned countries,” Standard Chartered said in a statement. Divesting in Africa: This new deal comes as part of StanChart’s plan to decolonise divest in Africa and the Middle East. In 2022, the bank left seven countries—including Angola, Lebanon and Zimbabwe—across both regions in what it described as a move to focus on faster-growing markets in countries like Saudi Arabia and Egypt. This new move follows the same direction with its CEO for Africa and the Middle East Sunil Kaushal saying, “This strategic decision allows us to redirect resources within the AME region to other areas with significant growth potential.” Access Bank, on the other hand, is already Nigeria’s biggest bank by asset, and this deal will see its value skyrocket as it takes a more prominent position in the African banking scene It’s not a done deal yet, though. Regulators across the five countries will have to okay the acquisition before StanChart can wash its hands off. GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving
Read More- July 15 2023
Pharmarun wins $10,000 at Pitch2Win 2023. Here is what we know about the startup.
At the third edition of Pitch2Win, an event that connects startups to investors, health-tech startup Pharmarun won $10,000 in equity-free investment. Here is all you need to know about the startup and its co-founders, who have also been friends for 20 years. In less than five minutes, Teniola Adedeji convinced Kola Owodunni, Yuzuru Honda, Eloho Omame, Hiro Mashita, and Kola Aina, the five judges of Pitch2Win 2023, that her health tech startup PharmaRun was most deserving of the prized $10,000 equity-free funding. PharmaRun delivers medication on-demand to the doorsteps of customers. It competed for this funding with 14 early-stage startups that pitched AI, blockchain, fintech, e-commerce, and logistics solutions at Pitch2Win, an annual event that aims to connect startups to potential investors. This is not the first time Pharmarun has received external investment. In 2021, the same year it officially launched, the startup received an angel investment from Fedha Capital. But over a phone call, her best friend of 20 years and co-founder, Funmilola Aderemi, told me that Teniola had registered “Pharmarun” as a business name since 2015. By that time, Teniola had rounded up an investment banking internship at Bank of America Merrill Lynch and was working as a pharmacist at the National Food and Drug Commission (NAFDAC). Amused at the recollection of what now looks like a self-fulfilling prophecy, Teniola responded, “I just thought the name was really cool. I wanted to own a pharmacy of my own and call it that someday.” Pharmarun started out as a labour of love. “Too often, I heard people talking about how only pharmacies situated on the island [a more bourgeois part of Lagos and miles away from the mainland] had a medication that they needed,” recalls Teniola. Working at a pharmacy herself, she witnessed the frustration of customers when her workplace ran out of stock for a particular drug. Teniola took it upon herself to assist customers in finding the medication elsewhere, even extending her help to family and friends. As word spread, people started reaching out to her on WhatsApp, asking her to locate specific drugs and deliver them. The demand for her assistance increased significantly during the COVID-19 pandemic when movement restrictions made it even more challenging for individuals to access pharmacies. “That was when I realised that this could grow into a business,” Teniola reflects. She sought the assistance of her friend, Funmilola, who at the time was a senior product designer at a logistics company, MAX. Late-night calls became a regular occurrence as they collaborated on designing various aspects of the web platform where customers could order. Teniola disclosed that they had been concerned that no one would trust them enough to make payments on the website until they had their first paying customer. She had previously operated primarily through WhatsApp and relied on word-of-mouth referrals. To instil confidence in potential clients, the website was designed to include features such as “Speak to a pharmacist”, to assure users that real people were behind the platform. Pharmarun’s customer base has expanded to include individuals, hospitals that need to send refills of prescriptions to their patients, as well as insurance companies seeking to ensure timely refills for their policyholders. The business’s needs grew with time, so Teniola began to search for a co-founder to lead Pharmarun with her full-time. Even though Funmilola was spending plenty of time helping her with the product, Teniola was hesitant to ask her to leave her promising senior product designer position at logistics startup MAX. But she eventually did, and her best friend said yes to becoming her co-founder. Flashing back to that moment, Funmilola said, “It felt natural and almost like a promotion from a consultancy position to a co-founder position. Moreover, I enjoyed working on the product with Teniola, and like her, I was also passionate about the problem.” Teniola, with seven years of experience as a pharmacist and pharmacy operations manager, is the CEO of the startup, while Funmilola, due to her years of experience in product design, is the Chief Product Officer. Going the extra mile Both co-founders believe that Pharmarun needs to be more than a drug store. “If people know where to find a drug but do not have any money to buy it, they still lack access to medication,” Teniola mused on a call with me. Pharmarun also finances medication for its customers through embedded buy-now-pay-later (BPNL) services. “Through partnerships with some BNPL companies, customers who are out of cash to pay can still access medication.” Because the BNPL services are embedded at the checkout, they are not run on the balance sheet of Pharmarun, so the startup doesn’t need to work on recovering the loan from customers. Pharmarun’s operational model may evoke comparisons to Jumia, as users can simply place an order and have medications delivered to their doorsteps. However, unlike Jumia’s platform, users do not have to choose from an array of pharmacies like Medplus. When customers search for a specific drug on the Pharmarun platform, it assists them in finding the best price from any pharmacy that has the desired quantity of medication. “This is why we are onboarding as many legitimate pharmacies as we can,” Teniola said. Currently, Pharmarun collaborates with over 80 pharmacies across the country, with a significant presence in cities such as Lagos, Abuja, Port Harcourt, Ibadan, and Uyo. It is working on partnering with more pharmacies. Nevertheless, the process of onboarding these pharmacies has not been without challenges. Adedeji highlighted the stringent onboarding process to ensure compliance with industry standards, ensuring user protection. Additionally, many of these pharmacies are not tech-savvy, necessitating training on the web platform used to fulfil orders. Overcoming these obstacles is crucial as Pharmarun actively works to expand its network of partner pharmacies. During her pitch, Teniola mentioned the need for significant funding, estimating up to $500,000, to facilitate the onboarding of more pharmacies. Staffing also posed a significant hurdle as the customer base grew. Teniola acknowledged the difficulty of finding individuals with
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- July 15 2023
House of reps oppose CBN’s social media KYC requirement
Lire en français Read this email in French. Editor’s Note Week 29, 2023 Read time: 5 minutes Hello This week’s news roundup takes us on a journey across Nigeria, Kenya, Equatorial Guinea, and Egypt. Enjoy! Oh, before we dive in, can you to spare 3 minutes and fill out this survey? Your feedback means the world to us. Pamela Tetteh Editor, TechCabal. Editor’s Picks CBN’s social media KYC rule to take a pause Nigeria’s House of Representatives has asked the Central Bank of Nigeria (CBN) to press the pause button on their plans to make social media handles a mandatory ID for know-your-customer (KYC) operations. Read more. Lawyers caught using ChaGPT again South African lawyers, in the midst of arguing a case at the regional court in Johannesburg, got caught red-handed for presenting fake precedents concocted from ChatGPT. This is not the first time such a thing has happened. Learn more. A swahili-speaking Bard After some delays due to data privacy concerns, Google has announced the global debut of its multilibual AI chatbot, Bard. Swahili is the first African language the multilingual chatbot can speak. Learn more. Airtel launches 5G in Kenya Airtel took the baton and became the second telecom company to launch 5G in Kenya. They followed in the footsteps of Safaricom, which launched their 5G back in October 2022. It’s a race to lightning-fast connectivity, and Kenya is zooming ahead at full speed. Learn more. NFCCPC and Google to weed out abusive loan apps In a bid to protect lenders, Nigeria’s Federal Competition and Consumer Protection Commission (NFCCPC)and Google app store are respectively working to weed out pesky loan apps. Learn more. Entering Tech Interested in getting tech career resources and insights?. Then sign up for Entering Tech to get started! Egypt to launch satellite this year Egypt’s space dreams are taking off! The Egyptian Space Agency is setting its sights on launching the NExSat-1 satellite before the year’s end. Learn more. Flutterwave to the rescue Flutterwave has launched Tuition, a payment product enabling African users to pay school fees locally and abroad using local currencies. They’ve also partnered with IATA to enable airlines to receive payments in local currencies. Learn more. Safaricom to launch new VC funds Safaricom is planning to set up two new venture capital subsidiaries which will be tasked with identifying and investing in tech startups in Kenya. Will they replace its $1 million fund, Spark Venture Fund? Learn more. Kenya pauses new Finance Act Kenya’s Finance Act is causing quite a stir! Justice Mugure Thande has ordered a temporary stop to the implementation of the country’s freshly approved Finance Act 2023 Learn more. Equatorial Guinea’s e-visa Equatorial Guinea has partnered with VFS Global to launch a new e-visa service that aims to attract more tourists and business travellers to the country. Learn more. Who brought the money this week? Nuru, a solar company in the Democratic Republic of Congo (DRC), raised $40 million in equity funding. MYDAWA, a Kenyan online pharmacy, received $20 million in an undisclosed round from Alta Semper Capital, a private equity firm. Zuvy, a fintech company, secured $4.5 million in debt and equity funding from TLG Capital. Egyptian fintech company Masroofi raised $1.5 million in an undisclosed round from undisclosed investors. Kenya-based B2B company Revivo raised $ 635 K in pre-seed funding from Raba Partnership, Village Global, Musha Ventures, Satgana, and strategic business angels. What else to read this weekend? Is Africa’s financial ecosystem equipped to fight rising cyber fraud? GTBank’s new app debuts to dissatisfaction as customers report technical glitches Nigeria’s eNaira: High on blockchain, low on adoption Ride-hailing drivers in Nigeria are suffering after government triples fuel prices Written by: Ngozi Chukwu Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
Read More- July 14 2023
After raising $1 million, My 1Health looks to Ethiopia and South Sudan as its new markets
My 1Health launches a global platform connecting patients to healthcare services, merging companies, and eyeing new markets. Specialised health facilitator My 1Health has launched its global platform to connect patients to worldwide healthcare services. The platform was created by merging My 1Health (formerly MyHealth Africa) and International Medical Treatment. The firm, which raised $1 million in December 2022, operates in several African countries, including Nigeria and Egypt, and has plans to launch in new markets. In total, My 1Health has a presence in 14 territories. Some of its users also receive medical attention from outside Africa, in countries such as England and Turkey. In a conversation with TechCabal, the CEO of My 1Health, Ryan Marincowitz, revealed that following their December 2022 funding round, the startup is looking to expand its reach to Ethiopia and South Sudan. Marincowitz explained that the startup aims to transform how patients access specialised healthcare using tech and strategic partnerships. “By merging MyHealth Africa and International Medical Treatment, we’ve curated a unified platform that combines the best of both worlds. We’re also announcing our expansion into Ethiopia and South Sudan, an important step towards our mission of improving access to specialised healthcare services across the region,” Marincowitz said. How My 1Health operates and earns revenue Founded in 2018, MyHealth, now My 1Health, has been operating in this new tech-based medical facilitation field from its Nairobi office. If an individual needs specialised healthcare services, they can access My 1Health’s platform through a smartphone app or a web interface. The onboarding process is straightforward, but the team at the startup tries to help new users as much as they can. For example, if a person has been diagnosed with cancer or any other serious illness that needs expert attention, the team at My 1Health will connect them with two or three medical doctors for a second opinion. Once a diagnosis has been established, the patient can seek further medical care from a facility of choice, usually outside the country. If a patient chooses to travel for medical attention, My 1Health facilitates their travel, including visa applications and even insurance correspondence with their provider. Marincowitz told TechCabal they receive a facilitation fee from the hospitals or medical centres they collaborate with. Patients can also choose to connect directly with hospitals at no extra cost. “We work with leading hospitals, clinics and specialists across Africa and worldwide. We receive a coordination or facilitation fee for each patient we assist. The cost for the patient is either the same as if they are to visit the medical facility directly, or in some cases, it is actually cheaper if the patient goes through us as we can negotiate a discount,” he explained. The startup has assisted more than 35,000 patients in accessing specialised healthcare services. Currently, it is aiding over 1,200 patients each month, and its monthly patient visits exhibited an average growth rate of 11% throughout 2022. My 1Health forms a part of a growing crop of startups using tech to tackle the dearth of healthcare services in Africa. With their latest funding round and what seems like a steady focus, it is no doubt a startup to watch. It will be interesting to observe how healthtech startups improve access to healthcare by using tech and strategic partnerships to connect patients with doctors and hospitals worldwide, regardless of their location or insurance status.
Read More- July 14 2023
Alat becomes first Nigerian bank to increase foreign currency limit on naira cards
Alat, Nigeria’s first digital bank, has leveraged the country’s recently unified exchange rate to reverse a policy on Naira cards that limited international spending. On Friday, Alat, the first-of-its-kind digital bank in Nigeria, announced to its customers that they could now use their naira cards to spend up to $500 monthly on international transactions. This new development comes exactly a month after the Central Bank (CBN) floated the Naira. Before the float, the CBN maintained an artificial scarcity of foreign currency by limiting 43 items from accessing FX. As a result of the scarcity, banks placed a $20 limit on Naira cards for international transactions. Eniola, a freelancer, told TechCabal that the limit placed by banks was an “inconvenience.” “It was a limitation that did not help anything,” he added. Oluchukwu, a writer, told TechCabal he could do anything “worthwhile” with the limitation. Several fintechs have sprung up to offer virtual cards that allow customers to spend internationally without limits. David, a First Bank (a commercial bank) and PayDay (a fintech) user, told TechCabal that he opened his PayDay account because First Bank had a “ridiculous” limit on its cards. Alat’s new limit follows in the footsteps of announcements that other startups have made in the last week. Tayo Oviosu, the founder of Paga, tweeted on Wednesday that his fintech could deliver remittances in Naira for “any remittance company looking for a local partner.” On Tuesday, Flutterwave launched Tuition, a product that allows Africans to pay for international school fees with their currencies. Access Bank has also partnered with Remitly, an American remittance company, to allow its customers to receive dollars in their Access Bank accounts. President Tinubu’s administration has shown that, in its bid to increase how much foreign currency enters the country, it is willing to renege on the CBN’s limiting stance. On Wednesday, the CBN approved Naira payouts for diaspora remittances. With more than $1 billion stuck in Nigeria, foreign airlines were arguably the most affected by the CBN’s limiting stance. This week, Flutterwave announced that it would allow airlines to collect payments in Naira. With this development, the hope is that airline prices will fall (Nigeria has one of the highest international ticket prices in Africa) as airlines can easily withdraw their profits. Banks and fintechs alike are taking advantage of the new policies to offer new solutions for their customers, but can fintechs innovate fast enough to keep their customers? Dammy*, a designer who works at a digital bank, told TechCabal that she would not have opened a digital bank account if her regular bank allowed her to spend money internationally with ease. Adeoti, a Web3 designer, told TechCabal that he looks forward to banks removing the former restrictive limits. “I couldn’t make payments for tools I was using for work.” *Name was changed to protect our source.
Read More- July 14 2023
How Fifehan Osinkalu is building a safe online community for women and creatives
Fifehan Osinkalu describes herself as a very spirited person, who is also committed and loyal to the things that she believes in. She likes to balance her hard work with play and this reflects in the work paths she naturally gravitates towards. Osinkalu is the founder of Eden Venture Group, a social enterprise focused on developing, supporting and empowering underserved and underrepresented demographies in emerging economies. The Amazon alum spent over ten years helping startups secure funding in the private equity space before she pivoted to social impact, where her heart had always been. Osinkalu’s work at Eden is partly focused on leveraging online communities and networks to facilitate projects around social impact. The Eden team organises physical and virtual events with themes that cut across women’s empowerment and the growth of the creative industry. I caught up with Fifehan for Centre Stage, and we discussed her passions, current projects and her vision for the future. Impact and profit do not have to be mutually exclusive. Fifehan Osinkalu: Eden Venture Group was founded out of the desire to create a space for social entrepreneurs and people passionate about social impact. A space where they can feel safe, and access the resources, capacity development, and advisory services that they need. From my experience working in the venture capital and private equity space, I found that a lot of people, especially creatives, were left out and not really taken seriously. There’s the wrong perception that their work won’t bring in profit and I just wanted to challenge that. I was interested in impact, and I think that both don’t have to be mutually exclusive. We can make a profit from impact-driven projects, and this is what I set out to do. On #WEECREATE FO: #WEECREATE Africa came from my own personal observations of the market. In my previous role working in private equity and the VC space, I realised that most people, especially in the finance space, did not really understand the language of creatives, or even the language of women. Men are dominant in these workspaces, and there was just no communication. After I left the private equity space, I found myself working in the creative and entertainment industry and I realised that the same thing was happening. This just made me realise that we had to address it. I believe that we need to give women and creatives the tools to thrive. I worked on a project focused on gender equality with the Bill and Melinda Gates Foundation, and because of that, I was able to get myself embedded in the advocacy for women’s space. What we’ve been doing with that project is essentially working with influencers and celebrities with large platforms as well as NGOs to shift the mindset around critical issues pertaining to gender equality in Nigeria and Kenya. Before that, I had done some work with women and creatives, and it occurred to me that it was a good time to bring back my idea. So I went back to the drawing board and reworked the idea to include a lot of context around what’s going on in today’s world. On the role of the digital space in empowering women FO: Helping women access digital tools is one of the most important things we need to focus on. The internet is a valuable source of community and information which we can leverage in order to get more women empowered. Technology can open up pathways to empowerment for girls and it’s important that we pay attention to that. At Eden Venture Group, we use the internet to foster community, which is an essential feature of empowerment. Being able to find your tribe online is empowerment. Being able to access the internet is empowering. Being able to show up on the internet as authentically as possible is empowering. We need to help women stay safe online —the information is there, but our work is to make it easier and more accessible to women. Women’s voices need to be heard on the internet and we need to be included in various online spaces. This is especially important now that we have AI, which uses data found on the internet. It needs to learn how women think, what their ideas are, and what their realities are – in order for its solutions to be as inclusive as possible. Women are going to be interacting with these tools and we need to ensure that the tools are not biased. It’s important to me that women and girls are digitally savvy and can interact with digital tools as we continue this digital revolution. On Community as the bedrock of every healthy society FO: There are fundamental things that I’ve learned in the course of this journey. The first thing is that community is at the foundation of a healthy society and that there are many young people, women in particular, who are seeking inclusive hybrid (digital & in-person) communities where they feel safe enough to be themselves, express themselves freely and innovate creatively without fear of bias, judgement or abuse. Community has been a monumental part of my journey. One of the reasons why I’m so passionate about our work with women and creatives is because I myself have been through all these issues that I’m fighting for right now. After moving to Nigeria, I sought out communities that felt inclusive to women that I could be a part of but I couldn’t find any. It felt like a game of playing catch-up with the guys, and that just didn’t appeal to me. As a woman in the tech industry, especially one who had a creative side, I felt excluded from a lot of spaces and also faced a lot of negative experiences over the years, but there were no safe spaces for me. This fueled my commitment to creating communities for young girls and women, especially those who are creatives. Another thing I’ve learned is that many people are seeking opportunities
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