How African startups can find product-market-fit faster
Noel K. Tshiani is the founder of Congo Business Network. He advises major startups on their product development, expansion into new countries and fundraising strategies. He also organizes delegations of leading startups from Kinshasa to participate in the biggest business and tech events in Africa, Europe, and the United States with the goal to look for investors and business partners. The startup scene in Africa continues to get more media coverage at the local and international levels as entrepreneurs across the continent work to create innovative products and services to meet the needs of their local communities. But achieving product-market fit and becoming profitable is a challenge even for the most talented and experienced entrepreneurs. In this opinion piece for TechCabal, I share strategies that African startups can use to discover product demand, find clients, and become profitable faster. 1. Identify a clear target market The most successful startups are those that have a clear understanding of their target market. African entrepreneurs should focus on identifying a specific niche. Entrepreneurs should prioritise understanding the needs and pain points of their target customers through conversations and surveys. Before launching your product or service, take the time to do your research and understand the needs of your target market. Talk to potential customers, read industry reports, and study your competitors. 2. Build relationships with potential clients Building relationships with potential clients is key to discovering demand and building a profitable business. Entrepreneurs should be proactive in networking and building relationships with potential customers, listening to their feedback, and improving their products based on consumer preferences. Offering free trials or discounts is a good means to get potential customers to try your product or service. By using such a low-risk marketing approach, you will generate interest and get feedback from potential customers. 3. Prioritize digital marketing Digital marketing can be a powerful tool for African startups looking to reach a wider audience at the lowest possible cost. Entrepreneurs should invest in building a strong online presence, including a website and social media accounts, and using targeted advertising to reach their ideal customers. Startups that want to stand out from the competition should develop thought leadership content that can be published on social media, including LinkedIn, Twitter, and YouTube. 4. Seek strategic partnerships African startups can benefit from partnerships and collaborations with other established brands and organisations in their ecosystem. Business partners can help entrepreneurs to reach new customers, access new markets, and gain valuable insights from experienced industry players. Attending top events in your industry in your city and abroad is a good way to learn the latest trends in business and meet potential customers, partners, and investors. 5. Focus on profitability from the start Profitability should be a top priority for African startups from day one. Entrepreneurs should focus on building a sustainable business model that generates revenues and profits from the outset. Do not rely only on fundraising to sustain company operations. Providing excellent customer service is essential for any business that wants to succeed. It will enable you to build relationships with your customers while encouraging them to buy again in the future. Loyal customers can also refer you to people they know in their close circle. Achieving product-market fit is a requirement for any startup that wants to succeed. By following these recommendations, African startups can arrive at product-market-fit faster, discover product demand, find clients, and become profitable businesses in a reasonable time period. With a growing entrepreneurial ecosystem and a wealth of opportunities for innovation, Africa’s startup scene has the potential to drive economic growth and create meaningful prosperity across the continent.
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👨🏿🚀TechCabal Daily – Kenya’s content creator tax
Lire en français Read this email in French. 9 MAY, 2023 IN PARTNERSHIP WITH Good morning If you’re in South Africa and you heard the news about having to pay in order to listen to the radio in your car, you can rest easy. The SABC has denied the news. Car radios—and the melodramatic karaoke that comes with it—will be free for the foreseeable future. In today’s edition Kenya wants to tax content creators Ghana warns against phishing SA’s plans to get off the naughty greylist Exit receives new licence The World Wide Web3 Opportunities KENYA TO TAX CONTENT CREATORS Sorrows and prayers to all Kenyan content creators, Ruto is coming after you. Over the weekend, the Kenyan government proposed multiple amendments to the Finance Bill 2023, one of which includes a 15% withholding tax on all payments made to digital creators. Mo’ money, mo’ problems: Like many African countries, the Kenyan content creator space has boomed in the last few years. Last year, YouTube revealed that Kenya was the fastest-growing space for African content creators, with about 400 channels having at least 100,000 subscribers, and a 60% YoY increase in creators earning about Ksh1 million ($7,300) monthly. There’s also been a steady growth in users across other platforms. From sponsorship to sales: The 15% withholding tax will cover several sectors of content creation from subscription and membership fees content creators collect to merch sales and crowdfunding raises as well. The proposed tax is also noticeably higher than the 5% withholding tax presently being levied against professional services. WORK WITH MONIEPOINT At Moniepoint, we’re creating the best workplace for global talent using the 4M framework- Meaning, Membership, Mastery and Money. This isn’t an ad designed to convince you to join us, but it has all the reasons why you should. Watch it here. This is partner content. GHANA WARNS CITIZENS AGAINST PHISHING SCAMS Contrary to popular belief, there isn’t a hottie less than five kilometres away waiting to meet you, nor is there a million-dollar inheritance waiting for you somewhere. The Ghanaian government knows these scams, and it wants its citizens to be aware too. Yesterday, the Cyber Security Authority of Ghana released a circular warning its citizens against Google scams that have begun popping up on the internet. A warning for everyone: Ghana might be taking the extra step to warn its citizens, but it’s actually a notice for everyone. Over the past couple of weeks, Google has warned billions of Gmail users over dangerous new phishing scams. According to the platform, users are now receiving notifications that they have won prizes from scammers impersonating brands. Some have the subject line “Online Reward Program” informing people they have won prizes for having the 10th million search. Per its statement, “Google does not offer spontaneous prizes in this format and you will not win a prize by completing the survey or entering your personal information.” What you can do: It’s the same rules for all phishing attacks. Double-check the sender, and don’t share personal information if it’s ever requested. Google also recommends never to click on links in suspicious-looking emails that promise rewards. And, most importantly, take it slow. Scammers are likely to move at a fast pace, and they’ll create a sense of urgency or fear, so take your time, the same way you do when you have critical tasks at work. P.S. TechCabal realises how ironic this message sounds given that we’re offering a $50 gift card to one random user who fills our survey. But we promise, we won’t sell your data…unless it’s the only way to save the world. SA PLANS FOR BETTER FINANCIAL REGULATIONS In February, Paris-based Financial Action Task Force (FATF) put South Africa on the grey list for financial crime because it seemed like they weren’t doing enough to stop illicit financial flows and terrorism financing. It sounds pretty concerning, but according to Fundi Tshazibana, a deputy central bank governor, it might not be as bad as it seems for the country’s credit ratings—at least not right away. Especially since the country is working on getting on the good books of FATF. Sidebar: Per Bloomberg, the FATF is also responding to a period of serious corruption in South Africa under the rule of former president, Jacob Zuma. His successor, Cyril Ramaphosa, says that R500 billion (that’s a whopping $27 billion) of taxpayer funds were stolen. Back in October 2021, the country was put on a one-year observation period by the FATF, giving them time to address 67 recommended actions following an evaluation. But fast-forward to January 2023, and South Africa has managed to whittle those 67 recommended actions down to just eight strategic deficiencies. Not too shabby, right? But before the country could breathe a sigh of relief, the FATF decided to greylist South Africa until those remaining deficiencies were addressed. But there’s a deadline for them to shape up: January 31, 2025. How can SA get off the grey list? South Africa is set to adopt a bunch of legislative changes over the next three to five years to make sure they’re aligned with international standards. The country’s national treasury is working on a Conduct of Financial Institutions Bill that will streamline the licensing of financial institutions and increase transparency in their business practices. The Financial Markets Act is getting a revamp, too. By enhancing controls over short selling and securities financing transactions, and adding more disclosure requirements for pre- and post-trading data, South Africa is set to really up its market surveillance game. If things go well, SA will get off the naughty list. Even though South Africa’s deputy central bank governor says the country’s credit rating will be fine, it is worth noting that the country’s credit ratings are reportedly at their lowest point since 1994 when the country first obtained credit ratings. EXITS MENA GETS LICENSE FROM EGYPTIAN FRA Egyptian investment platform Exits MENA has hit some major milestones. Like its name implies, Exits MENA aims to support
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No South Africans, you don’t have to pay for a car radio licence
The SABC has clarified its stance on the topic of introduction of car radio licences. This morning, a memo widely shared on social media stated that South Africans would start paying for car radio licences in order to operate their automobile stereos. The memo was purportedly shared by the South African Broadcasting Corporation (SABC). The memo stated that over the course of the last few years, the broadcaster had seen its revenue dwindle as a result of streaming services like Netflix. It added that these services have taken consumer attention away from cable television, reducing the SABC’s television licence revenue. “Under the new section 69 of the telecommunications act of 1996, all South Africans who utilise motor vehicles with radios will be required to always carry a car radio licence with them,” the memo reads. Furthermore, the licences would attract a charge of R401 a year with non-compliance resulting in a fine of up to R750 or up to 90 days in jail. The widely shared memo purported to be from the SABC introducing car radio licences. The memo caused quite a stir on social media with users pointing to the absurdity of the supposed revenue collection initiative. In response, the SABC has released a press statement refuting the validity of the memo. In the statement, the broadcaster stated that it did not make any public pronouncements pertaining to licences for car radios. The SABC has refuted the validity of the memo. Regarding TV licences, research shows that the majority of South Africans don’t pay for them, affecting the SABC’s bottom line. The broadcaster’s annual report for 2022 showed that there was an evasion rate of 81.7% over the course of the year. The SABC has a database of 10.5 million TV licence holders, with approximately 8.6 million currently not holding a licence.
Read MoreInside the shutdown of Lazerpay, the Web3 startup that was high on hope but short on capital
A year and a half from its incorporation, Lazerpay ceased operations. Here’s the story of how the lauded startup was unable to secure funding and its eventual shutdown. Two months after sponsoring Blocathon, a hackathon for Web3 designers, crypto payment platform Lazerpay shared that it was shutting down its business. It was bittersweet, considering the fact that a blockchain hackathon is also where the company’s founder, Njoku Emmanuel, reportedly built his first smart contract. He would eventually get to the final stage of the hackathon, and he credits his success to a lot of Udemy courses and hours of coding practice during the pandemic. By 2020, the decentralisation bug had bitten Njoku and in 2021, he launched Lazerpay. The ideation of Lazerpay In 2021, crypto was having a high-water moment in Africa. Every conversation was about decentralisation, the blockchain, and the big changes crypto would make. While crypto-optimism elsewhere was driven by a distrust of banks and the idea that the current monetary system is obsolete, the premise in Africa was simple. For Africans, crypto was a way to make and preserve wealth and a way to simplify payments. On a continent where international payments can be complex, it was a compelling promise. It explains why Njoku said he rejected a $300,000 job offer at Avarta. Instead, he, Abdulfatai Suleiman, and his cousin Prosper Ubi founded Lazerpay in October 2021. The newly formed company provided APIs that let platforms integrate and collect crypto payments. It also provided links that anyone could use to collect payments directly into their wallets. This was a sensible play, with crypto-acceptance on the rise. Investors were also falling over themselves to fund African blockchain startups. Every blockchain engineer with gumption was partnering with trusted and skilled friends or work colleagues to solve Africa’s payments problem. The thinking was that taking away the banks and issuing partners as middlemen could be profitable businesses. In the end, the marketing spiel was simple: Lazerpay was gunning to be the Stripe for crypto. “We only deal in [stablecoins] BUSD, DAI, USDC, and USDT. We focus on only these because they are backed by the US dollar, and it is important for us to provide a stable, secure, and relatively risk-free financial solution for our users,” Njoku told Disrupt Africa in an interview. This quote doesn’t tell the whole story of how audacious the idea for Lazerpay was. According to Ohalewe Richmond, the designer who came up with Lazerpay’s first logo, “I thought the idea was crazy. We know Paystack and Flutterwave, but the idea of getting businesses to process payments in crypto seemed crazy to me, and I think that was the general vibe about crypto payment in Nigeria then.” The early days In several interviews, Njoku stated that he and his CTO, Abdulfatai Suleiman, often worked overnight to build Lazerpay’s infrastructure. “We had our toothbrushes in the office, and only went home if we needed a bath,” he said in a Founders Connect interview. Richmond Ohalewe, the designer, says it took him three weeks to develop the initial Lazerpay logo—an infinity sign that took the shape of an L. “If you look at the logo, you can see a bridge. Lazerpay wanted to connect people by giving them and their businesses fast crypto payments anywhere in the world,” he explained. “At the time, they were looking to raise money to get started, and I was there to help them produce a compelling brand identity,” Ohalewe added. The company stuck with Ohalewe’s vision and went on to announce an angel round of $100,000 in November 2021 after incorporating it in October. The round came from investors like Paystack’s CEO, Shola Akinlade, Xend Finance’s CEO, Ugochukwu Aronu, and several other angel investors. Four months later, the company redesigned the logo to a solid blue image that sits like the quadrant of a pie but with rectangles shooting out from the sturdy L- shaped base, like lasers. However, it became apparent that the most prominent identity of the brand was in fact the young founder, Njoku. An instant darling Nearly every major piece of publicity that the company mentioned centered on how incredible it was that a 19-year-old was running his own tech startup and getting investors to put their money behind it. It was a captivating story. Njoku started learning to code at 15, dropped out of the university to take a tech internship, landed a $3000 per-week job, and eventually rejected a $300,000 job offer from Avarta. According to Joyce Ameigha, a co-producer of Founders Connect, a show that Njoku appeared on and that spotlights African founders, “He was 19 but didn’t talk or act like a teenager. He was confident, very assertive, and obviously intelligent. He articulated his thoughts and opinions about the blockchain problems that he was solving so well.” Joyce later went on to be his personal brand manager and do some PR work for Lazerpay. At the time of the Founder’s Connect interview in the first quarter of 2022, the startup had grown to a team of 15 people. Popular opinion about his leadership was that he was empathetic, considerate, and inspiring. A former employee told TechCabal, “We had a flat organisational structure so he was a very accessible leader. You could go into his DMs to recommend ideas or make complaints.” However, some employees maintain that he was rather too friendly and sometimes allowed his personal relationship with his workers to interfere with the hierarchy at work. “There was a clique at work. While cliques are not uncommon, this was uncomfortable because our CEO was in it. It was as though more people had access to him than others,” the source told TechCabal. Others emphasized, however, that “Even though he has expressed that next time he would not sacrifice performance for the sake of relationships, I thought he was very professional. He took action against apparently bad behaviour and rewarded exceptional attitude and work.” Life at Lazerpay While the company still operated, the
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Next: We are doing 5G wrong in Africa
<!– In partnership with –> Cet article est aussi disponible en français Instead of trying to serve retail users at scale, Africa’s telecoms industry should concentrate 5G on transforming the continent’s industry and business operations. In the 11th episode of Season 1 of our eponymous show, Next Wave, Big Cabal Media CEO, Tomiwa Aladekomo, had a chat with Angela Wamola, head of sub-Saharan Africa at GSMA, the telecom industry group; and Mazen Mruoé, group chief technology and information officer at MTN, one of Africa’s largest mobile network carriers. The topic was 5G, and the question under review was how 5G would fare in Africa. 5G deployment is well underway in Africa. | Infographic: Mobolaji Adebayo & Ayomide Agbaje – TechCabal Insights. This week’s Next Wave is my extension of that conversation with a simple argument, i.e., we are making a mistake by thinking, talking about and orienting 5G capabilities in Africa for individual retail or small business users. Should ordinary people like this writer have access to faster internet to play online games or stream the latest motion picture on Netflix with a much smoother experience? Yes. But should Africa’s 5G development be oriented towards serving this market of personal users? I think not. Here’s why. 4G has a long way to go. Leave it to retail users More than 90% of Africa’s internet connections are mobile. Fixed broadband internet with a penetration rate of 11.5% lags behind other world regions, per research from Omdia, a technology research consultancy. 5G constitutes just a small fraction of this penetration. 5G connections also make up a small percentage (about 4%) of mobile internet connections in Africa. According to the GSM Association (GSMA), 3G represented 57% of mobile connections in Africa, 4G was at 16% and 2G represented 26%. 4G connections have since grown to account for a fifth of mobile connections in sub-Saharan Africa, still far short of the global average of 55%. The data is unequivocal: there is a lot of room for improvement in the adoption of fourth-generation internet networks, and the opportunity for this will remain for some time. GSMA expects 3G to remain at 57% by 2025 while 4G will grow to 26%. 5G will only begin to dent the network connection makeup by connecting 4% of mobile internet users in Africa from 2026. One can look at this and shrug at the embarrassing growth rate prophesied for 5G in Africa. Or we can accept that and seek to make this 4% count. Since fixed broadband internet and mobile broadband have a long way to go, telecom firms rushing to roll out 5G services have come under some criticism. I have also argued separately that rather than rushing to deploy costly untested consumer 5G, we could invest in understudying 5G in other markets. I wrote: “Without any first-mover advantage to be gained, (and since Africa is sadly not contributing meaningfully to the development of 5G technology) we might avoid costly first-mover pitfalls by taking time to understudy 5G in other markets instead.” I have now taken my own medicine and undertaken a snapshot of what I find interesting about the 5G market in other countries and that I believe deserve more attention from decision-makers and policy heads. If 4G has a long way to go to serve consumers fully, why should 5G also not target consumers, or what should it focus on instead? The answer in one sentence is: Focus on private 5G networks. Partner Message Join hundreds of African tech entrepreneurs, investors, media and ecosystem stakeholders at Africa’s biggest tech gathering in Morocco! Register now The China/South Korea example After deploying commercial 5G networks in 2019, by the end of 2020, South Korea was one of the most advanced countries with respect to 5G adoption. It had 11.8 million 5G subscriptions out of a population of 52 million people. At the time, the country’s three operators had deployed 166,250 5G base stations, which is the equivalent of 19% of the country’s 870,000 4G base stations. But if you only look at the consumer growth of 5G you may miss something else. South Korea was the first country to launch commercial 5G, but in 2018, months before telcos in South Korea launched commercial 5G, the country’s government assembled 19 companies, including SK Telecom Co, Samsung Electronics Co, Microsoft Korea Inc., Ericsson-LG and Siemens Korea, to explore ways 5G technology could help the Asian country’s manufacturing sector. This 5G “Smart Factory” Alliance is part of the government’s broader plan to create 30,000 smart factories and 10 smart industrial zones by 2022 to upgrade the South Korean manufacturing industry’s competitiveness, Yonhap News Agency reported. In China, which leads the world in 5G deployments, the Ministry of Industry and Information Technology released a report titled, “Ten Typical Application Scenarios and Five Key Industry Practices of 5G + Industrial Internet”. From China’s standpoint, a key use-case for 5G technology is to “accelerate the process of China’s new industrialisation, and inject new momentum into China’s economic development,” according to Hebei-headquartered Forlink Embedded, a telecoms equipment manufacturer in Hebei province, China. 5G adoption in China (pop. 1.4 billion) and South Korea (pop.52 million) continues to rise. but there’s more to the story than the number of people using 5G networks. | Infographic: Ayomide Agbaje — TechCabal Insights. GSMA cites several examples of how this policy works in practice. One case study (find details in from p.27 of this report) shows how ZTE Corporation, Midea Group, and Gree use 5G mobile transmission, edge computing, and positioning capabilities to develop automated guided vehicles (AGVs) with autonomous navigation to “raise logistics turnover efficiency, reduce site space usage, and lower manpower costs and paper costs significantly”. The Wall Street Journal explained Chinese industry’s embrace of 5G-led automation thus: “China is racing ahead in building the infrastructure of 5G networks, but it is inside factories, coal mines, shipyards and warehouses where the technology is really taking off.” <!– “70 percent of bank customers, who visit the banks, are there to
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👨🏿🚀 TechCabal Daily – Raining gold
Lire en français Read this email in French. 8 MAY, 2023 IN PARTNERSHIP WITH Good morning It’s time again for you to judge us. If you’ve been reading TC Daily for a while, please let us know what we’re doing well, and how we can improve. We know surveys can be hectic, but if you fill this one, you stand a chance to win a $50 gift card. In today’s edition Zimbabwe’s gold currency launches today Mozambique gets 5G Rain launches voice services TC Insights: Africa’s costly remittance flow The World Wide Web3 Report: The State of Tech in Africa Opportunities ZIMBABWE’S GOLD-BACKED DIGITAL CURRENCY LAUNCHES TODAY Zimbabwe is moving forward with the launch of its gold-backed digital currency. ICYMI: In April, Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), announced plans to introduce a gold-backed digital currency to be used as legal tender in the country. The digital currency is set to complement the Mosi-oa-Tunya, fiat gold coins, which the country launched in 2022. With it, the country hopes to have more citizens buy into its gold industry and fight its currency devaluation and inflation which jumped to 285% in 2022. The first phase: Last Thursday, the RBZ outlined plans for the implementation of the currency. In the first phase, which launches today, May 8, the tokens will be issued only for investment purposes and available through banks. The bank has invited Zimbabwean citizens and businesses to subscribe to the token. Applications for the tokens must be for a minimum of $10 for individuals and $5,000 for financial institutions. In the second phase—launch to be announced at a later date—users can hold the tokens in digital wallets and use them for peer-to-peer and other commercial transactions. WORK WITH MONIEPOINT At Moniepoint, we’re creating the best workplace for global talent using the 4M framework- Meaning, Membership, Mastery and Money. This isn’t an ad designed to convince you to join us, but it has all the reasons why you should. Watch it here. This is partner content. MOZAMBIQUE GETS 5G More African countries are getting 5G. East Africa’s Mozambique is the latest to get the fifth-generation network, with Vodacom last week announcing its launch. The service will be available at selected sites in Maputo, Matola; the central area of Nampula; downtown Nacala, Munhava, Maquinino, and Chipanga neighbourhoods; Beira; and Tete. The telco’s CEO, Nuno Quelhas, stated that 5G would help improve the quality of life and promote the growth of the youthful population. “5G would help to expand financial inclusion in Mozambique, as the aim is to cover 75% of the adult Mozambican population by 2025 and make payments through M-Pesa available anywhere in the country,” he added. With the launch, Vodacom beats Tmcel, which announced in 2022 that it would fast-track the launch of 5G in the country after an initial trial run. 5G coverage in Africa: So far, at least a dozen African countries, including the Big Four—South Africa, Nigeria, Egypt and Kenya—have launched 5G commercially while many more, including Ghana and Uganda, are reportedly running trials across their respective countries. RAIN LAUNCHES VOICE SERVICES IN SOUTH AFRICA Two months after announcing its plans to expand into voice, South African telecoms Rain has finally pulled off said plans. Last week, the telecom launched its voice service in the country. Running on 4G technology, Rain’s offering will offer high-definition voice calls, data and SMS throughout the country. “After acquiring spectrum in the 2022 auction, Rain is overlaying its existing 4G network with a new layer that provides for more comprehensive reach,” the statement continued. Fighting a duopoly: Rain joins MTN and Vodacom who have both dominated South Africa’s voice scene with 31% and 42% of the market share respectively. With other competitors Telkom at 15% and Cell-C at 12%, Rain has its work cut out for it in fighting for a share of South Africa’s voice market. The telecoms, however, believes that its offerings will garner it some customers. “The convergence of a home and mobile voice and data offerings in one affordable plan is an innovation we are confident will appeal to South Africans. We recognise that our customers have family members, so with rainOne we are catering not only for their need to access the internet from home, but also outside on their mobile devices,” said Rain CEO Brandon Leigh in the launch statement. TC INSIGHTS: AFRICA’S COSTLY REMITTANCE FLOW Africans in diaspora play a crucial role in their home country’s economy through remittance inflows. In 2021, sub-Saharan Africa had a 14% increase in remittances, reaching $49 billion and surpassing Foreign Direct Investment (FDI) and Overseas Development Assistance (ODA) as a source of external financing. For example, Nigeria, with an estimated migrant population of 800,000 primarily in the UK (220,000), and the US (375,000) as of 2021, recorded the highest remittance inflows on the continent. Despite this significant growth, the cost of remittances to Africa remains the highest in the world, with an average cost of 7.8%, compared to the global average of 6%. While sub-Saharan Africa received $48 billion from overseas in 2018, a significant portion of $3.3 billion was lost in fees. This high cost creates a major challenge for African businesses and individuals who rely on remittances for important bills and investment. Traditional offline services such as banks, Western Union, and MoneyGram dominate the remittances sector, leaving little room for competition and innovation. These traditional offline services have a combined market share of 50% of remittances in three-quarters of countries in sub-Saharan Africa. However, the shift to digital payment channels could significantly reduce the cost of remittances, offering a cheaper and more accessible option. In 2020, sub-Saharan Africa’s share of international remittances sent and received via mobile devices was 80%, highlighting the potential for digital channels to transform the remittances sector. The lack of clear regulatory frameworks that support the growth of the remittance industry in Africa is a major challenge for businesses and consumers across countries in the region. This creates challenges
Read MoreKenya’s government proposes new bill to tax content creators
The Government of Kenya has proposed multiple amendments to the Finance Bill for 2023. The proposals aim to expand the tax base for the government, which has been having revenue issues that have forced it to at some point, delay the salaries of its employees. One of the proposals in the Bill is the taxation of payments made to digital creators. Content creation has grown over the years, and creators earn a living through sponsored content, digital campaigns, or ad revenue from platforms such as YouTube, Tiktok and Facebook. Under the current taxation regime defined by the Income Tax Act (ITA), certain digital payments made are subject to withholding tax, while others may not fall under the provisions of the ITA. Payments made by taxpayers to digital content creators will be subject to a 15% withholding tax rate, according to the new proposed legislation. At the same time, the definition of digital content monetization has been expanded to include various types of content and services. For instance, digital content monetization now means offering payment for entertainment, social, literal, artistic, educational or any other material electronically through any medium or channel. This includes various forms such as advertisement on websites, social media platforms or similar networks by partnering with brands including endorsements from sellers of such brands. Sponsorship also falls under this definition, where a brand owner pays a content creator for content creation and promotion. The amendment also proposes affiliate marketing to remit the new tax, where a content creator earns a commission whenever the audience of the creator clicks on the product displayed. The government further wants to tax subscription services where the audience pays a periodic fee to access the content and support content creators. The bill also mentions creators who use membership programs for exclusive content, crowdfunding for raising funds for specific goals, and licensing content such as photographs or music to other businesses or individuals for use in their own projects should pay tax. The tax proposal mentions merchandise sales where physical goods and services are sold featuring a logo, brand, or catchphrase to the audience of the content creator. The proposed withholding tax rate of 15% for payments made to digital content creators is significantly higher than the usual rate of 5% for professional services. This could lead to an effective tax rate of over 30% for creators and may generate ongoing income tax credits since the withholding tax rate assumes a profit margin of 50%. The provision covers not only services but also goods and could potentially affect minors who are content creators. The responsibility for tax registration of minors or their guardians is unclear currently. The bill has also clarified about digital assets that will also be taxed. They are assets that exist in digital form and can be exchanged electronically, such as cryptocurrencies, non-fungible tokens (NFTs), and other types of tokens that provide a digital representation of value. This was not explained explicitly when the first draft of the bill was shared. Those who own a platform or assist in transferring digital assets will need to deduct a Digital Asset Tax (DAT) of 3% from the gross fair market value received or expected to be received at the point of transfer or exchange. The deduction must be remitted within 24 hours. If approved by President William Ruto, these new taxes will beceome effective from September 1.
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Google Voice and two other legal phone number generator apps usable in Ghana
Are you visiting Ghana from the USA and don’t want to give out your primary USA number outside the country, maybe for privacy reasons? You can generate a second one with these phone number generator apps. There are several free phone number generator apps available. And the majority of them can generate both USA and Canadian numbers legally. These apps can be used to make and receive calls, send and receive texts, and keep your personal and business calls separate. In this article, we will discuss 3 popular apps that provide free phone numbers. 1. Google Voice phone number generator Google Voice is an online phone number generator service that allows you to make and receive calls, send and receive text messages, and forward calls to other phone numbers. It offers users a free phone number that can be used for both personal and business purposes. To use the Google Voice app for a free phone number, you first need to download the Google Voice app on your mobile device from the App Store or Google Play Store. Once you have installed the app, you will need to create a Google account if you don’t already have one. Once you have signed in to your Google account, you can select a phone number from the list of available numbers. You can choose a number from any area code you prefer, and Google will provide you with a list of numbers to choose from. After selecting a phone number, you can use the Google Voice app to make and receive calls and send and receive text messages. The app also provides a voicemail service that allows you to listen to your messages and transcribe them into text. 2. TextNow phone number generator app TextNow is a phone number generator app that allows users to make and receive calls, send and receive texts, and customize their voicemail greetings. It also offers a feature called ‘Call Forwarding,’ which enables users to forward calls to another phone number. One of the unique features of TextNow is that it provides users with the option of choosing a phone number from a list of available numbers or creating a custom number. The app is available for download on both Android and iOS devices. To use TextNow, you need to sign up for a free account by providing your name, email address, and password. After signing up, you can choose a phone number from the list of available numbers or create a custom number. The app also allows users to earn credits by completing offers, watching videos, or inviting friends, which can be used to make international calls. 3. Sideline phone number generator app Sideline is another phone number generator app that is designed for business owners and entrepreneurs who want to keep their personal and business calls separate. The app provides users with a second phone number that can be used for business purposes, such as marketing, sales, or customer service. It offers features such as voicemail, call forwarding, and auto-reply messages. One of the unique features of Sideline is that it allows users to customize their voicemail greetings for different contacts or groups. For example, you can have a different voicemail greeting for clients, colleagues, and friends. The app also provides users with a web-based dashboard that allows them to manage their calls and messages from their computer. To use Sideline, you need to download the app on your Android or iOS device and sign up for a free account. After signing up, you can choose a phone number from a list of available numbers or transfer an existing number to the app. The app offers a free trial for 7 days, after which you need to subscribe to a paid plan to continue using the app. Final thoughts As you can see, there are free and legal phone number generator apps available. And they provide users with a range of features such as voicemail, call forwarding, and text messaging. These apps can be useful for legal personal or business purposes. However, you need to note that most of these apps generate USA or Canadian numbers and will usually require you to have an existing USA or Canadian phone number before you can proceed to generate one off their platform.
Read MoreFingo App hopes to recapture neobanking gap left by NCBA Loop in Kenya
Ecobank Kenya has announced a new neobank service, Fingo App. The lender, which is part of Ecobank Group, aims to fill the gap left by the rebranding of NCBA Loop, a digital bank by NCBA that previously allowed customers to send money to mobile wallets for free. This free service made it an attractive option for bargain-hunting young Kenyans but is no longer available. Loop is also perhaps the only digital bank that attracted a number of young users in a market where other similar products failed to gain traction. The Fingo App has collaboratively been developed by Ecobank and Fingo Africa, a Kenyan fintech firm that was launched back in 2020. At the start of 2023, Fingo Africa received a licence from the Central Bank of Kenya (CBK) for online banking services. Fingo Africa has also had notable backing from investors and is said to be over $10 million in valuation. Fingo App’s launch in Kenya makes sense in that the youth are always looking for a financial platform they can use with affordable charges. Fingo promises to offer more than that because users can be onboarded on the platform in a timely manner, which also adds another benefit to potential customers because they are not required to walk into a physical banking hall to open an account. “Opening a bank account can be a lengthy process taking anywhere from two days to two weeks in some countries. Moreover, it may require multiple face-to-face interactions and the submission of physical paper documents. Often, consumers also face a steep fee when sending money to friends, loved ones, or businesses, in addition to other charges, just to keep their account active,” says Fingo Africa in a statement seen by TechCabal. Customers, both on Android and iOS can set up their Fingo App account in under five minutes. The account will then see them access a bunch of services, such as sending money to mobile money wallets (M-PESA, for this case), pay bills through paybill and till numbers. Users can also send money to other Fingo App users for free, which is perhaps its biggest selling point. “We are proud to support the deployment of the Fingo App, a game-changer in digital finance in Africa that brings many young people into the mainstream financial sector and caters to their needs and preferences. By simplifying access to finance, it overcomes the entrenched issues that have often acted as barriers to entry for young Africans. I want to thank our partner, Fingo, for driving such innovation that is aligned with one of our core missions to drive financial inclusion across the continent,” said Jeremy Awori, CEO, Ecobank Group. Fingo App further simplifies savings by automating recurring transfers towards specific goals, simplifies payment collection with payment links, enables receipt of funds via QR code, and offers a cash reward for signing up. Since Fingo Africa targets the youth in the continent, it has plans in the pipeline to launch in 32 other countries where Ecobank is also present. It is not clear how Fingo App will address low financial literacy, especially for the youth, although it now has robust resources such as access to digital infrastructure by Ecobank. Fingo App has also successfully navigated regulatory barriers after it acquired the licence for its local operations from the CBK, which has been stringent to fintechs. There are challenges with building trust with customers who may be skeptical of digital-only banks and concerns around data privacy and security (it is yet to ensure that financial data that goes through the Fingo App systems is encrypted). Fingo App will need to address these challenges to establish themselves as viable and sustainable digital bank, especially for people who are looking out for NCBA Loop replacement.
Read MoreDoes AltSchool Africa’s crowdfunding campaign breach investment rules?
AltSchool’s $3 million crowdfunding campaign, has raised concerns about the legality of such alternative funding avenues. We reported last week that AltSchool Africa, the US-based ed-tech startup was offering equity to members of its “community” for as low as $500. In the LinkedIn post, which featured a 4-minute video, Adewale Yusuf, CEO of AltSchool Africa, said his firm had partnered with Fast Forward, a US-based venture studio and Hoaq, an angel syndicate to allow AltSchool students and community, to invest in the company. According to Yusuf, the company decided to open up part of the round to “communities”—including AltSchool Africa students. But the decision to let students and an undefined community invest in the Delaware-registered company raises the question of whether AltSchool Africa is in violation of United States Securities and Exchange Commission (SEC) rules. But AltSchool Africa’s chief, says the move to raise capital from its community is perfectly legal. “It’s a valid option globally”, he told TechCabal. Per rule 506 of the US SEC’s Regulation D, private companies cannot solicit funding publicly. “Under Rule 506(b), a “safe harbour” under Section 4(a)(2) of the Securities Act, a company can be assured it is within the Section 4(a)(2) exemption by satisfying certain requirements, including the following: The company cannot use general solicitation or advertising to market the securities. The company may sell its securities to an unlimited number of ’accredited investors’ and up to 35 other purchasers,” the rule reads in part. On his part, Yusuf says raising money is not the primary goal for the crowdfund, “We did not do this to raise, but to get our community to be part of it,” Yusuf told TechCabal via text echoing what he also said in the video message posted on LinkedIn. “We’re a community-oriented organisation, and we always keep it that way. We want our students and supporters to own a fraction of us,” he said in the video. Startups in Africa and globally, are struggling to raise money from investors as investing outfits pull back on writing cheques to tech companies. In Africa, the result has been a decline in how much funding tech firms disclosed in the first three months of 2023. In April for example, less than $130 million was disclosed by tech startups, representing a 350% decline when compared to April 2022, data from Africa, The Big Deal shows. While Yusuf describes his latest fundraising as giving their community the opportunity to own part of the company, that AltSchool Africa is adopting a crowdfund to raise all or part of $3 million, is only part of a trend where founders use alternative capital raising structures in an attempt to find cash to run their businesses. But the rules about crowdfunding are complicated. In May 2022, the US Financial Industry Regulatory Authority (FINRA) fined Wefunder and StartEngine Capital $1.4 million and $350,000 respectively, in part for, “ improperly sent emails to hundreds of thousands of investors recommending and soliciting investments being offered on its portal in violation of a rule that prohibits such solicitations; included misleading communications on its funding portal website.” Generally speaking, companies that engage in general solicitation or advertising to promote their securities offering can sell securities only to investors who are accredited. But to qualify as an accredited investor, an individual must meet certain income or net worth thresholds (have a net worth of over $1 million or an income of more than $200,000), or have certain professional certifications, designations, or other credentials. But there is an exception to the SEC’s rule 506(c). In 2012, former US President, Barack Obama signed the Jumpstart Our Business Startups Act (JOBS Act) into law. The new law created Regulation CF and Regulation A+ as two exemptions to the SEC’s restrictions on private companies soliciting investment from the public. Because of these amendments, for example, startups that opt to offer their shares under Regulation CF instead of a traditional 506(c) offering may raise up to $5 million from non-accredited investors. Regulation crowdfunding is also subject to conditions. For example, while general solicitation is permitted upon filing a Form C with the SEC, there are rules which guide how the offering is advertised, according to Bill Clark, CEO and founder of MicroVentures, a US venture capital firm. For example, issuers are not allowed to advertise the terms of the offering, including the nature and price of the securities. Some information about AltSchool Africa’s deal terms is publicly available on the Hoaq link in Yusuf’s post. AltSchool Africa doesn’t specify who should not invest or the criterion it will apply to decide who it takes money from or under what rule it is running this crowdfunding campaign. The post calling for investors simply invites them to either complete a form on Sydecar, a deal execution platform. Or commit to investing $500 or multiples of $500 through this form, managed by Hoaq, an African angel investor community. TechCabal is unable to independently establish if additional checks are imposed on would-be investors who indicate their willingness to invest. As such the question about the legal standing of AltSchool Africa’s latest attempt at fundraising is still up in the air. Editors note:Comments attributed in error have been removed.
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