- June 20 2023
As 7-day ultimatum ends, Uber and Bolt drivers consider another strike
Ride hailing drivers under Uber and Bolt end their strike today. It has not produced a major win but it has brought more meetings. How long patience do the drivers have ? Today, ride-hailing drivers under the Amalgamated Union of App-based Transport Workers of Nigeria (AUATWON) are considering another strike. AUATWON’s members went on strike on June 7 and made a list of demands to ride-hailing companies. Among those demands is that the companies should increase base fares for passengers. While Bolt, Uber and LagRide have raised base fares, the drivers say the new prices still do not cover their running costs. The National treasurer for the Union, Comrade Jolaiya Moses, told TechCabal, “The app companies have not done anything as regards what we asked them for. We are supposed to embark on an indefinite strike if nothing is done about it.” Two other AUATWON sources also told TechCabal this morning that as the ultimatum ends, the best they have gotten is a commitment between the ministry and labor and ride-hailing companies to meet and engage drivers. But that meeting has now been postponed till next week. One source said, “Now, that meeting has been postponed till next week Monday, the result of the meeting will determine our next line of action,” Chairman of the media and publicity committee of the Union, Comrade Jossy Olawale said in a call with TechCabal, this morning. Understanding drivers demands Drivers and the ride-hailing companies they work for have been at odds in the last two years. Rising inflation in Nigeria, a lack of benefits to drivers, and constant price cuts by companies to attract customers have made driving barely profitable. In response, the drivers have asked the companies to reduce their 20% commission. They also asked ride-hailing companies to increase fares by a minimum of 200% and an end to the deactivation of drivers who refuse to work due to the low fares and attendant unprofitability. The union is also seeking the recognition of AUATWON as the representative body for their interests. The National treasurer for the Union, Comrade Jolaiya Moses, summarises it perfectly, “Drivers can’t cope with the current pricing; we are selling below the cost price. The best way to increase drivers profit will be to reduce the exorbitant commission imposed on drivers by application companies.” The drivers are right to be worried. As meetings get postponed and ride-hailing companies stonewall the union, the general sense is that any sort of progress will be slow. Ultimately, the decision on another strike will be made soon. Until then, the struggle continues. What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
Read More- June 20 2023
How innovation and tech startups can boost Africa’s development
Noel K. Tshiani is the founder of Congo Business Network. In this opinion piece for TechCabal, he discusses how innovation can boost development in Africa in sectors ranging from fintech to agritech. Last week, I was in Paris to participate in Viva Technology, the largest tech and startup event in Europe. What struck me the most was the remarkable presence of African delegations, including those from Senegal, Tunisia, Côte d’Ivoire, and South Africa. This solidifies my belief that African economies have the potential to develop at an accelerated pace by embracing innovation, supporting tech startups, and leveraging international media coverage. In this opinion piece, I shed light on why prioritising these aspects is crucial and discuss the sectors where these innovations can have the most significant impact on Africa’s economic development, job creation, and social progress. Unlocking Africa’s potential Africa is a continent brimming with untapped potential and entrepreneurial spirit. By placing a strong emphasis on innovation and technology, African economies can leapfrog traditional development paths and propel themselves forward. Prioritising innovation entails nurturing a vibrant startup ecosystem, providing essential support services, facilitating access to funding and business partnerships, and amplifying the visibility of startups in international media. Supporting tech startups Tech startups are the engines of innovation and economic growth in today’s leading economies whether in Asia, America, or Europe. By assisting African tech startups to find investors and business partners, governments can create an enabling environment that nurtures these budding enterprises. Investment and collaboration with international partners can bring valuable expertise, capital, and market access, amplifying the impact of African entrepreneurs. It’s imperative to establish streamlined processes, favourable regulations, and incentives that attract investment while also providing mentorship, networking opportunities, and technical assistance to foster their growth. International media coverage To position Africa as a hub of innovation, regular media coverage in international media is indispensable. Positive stories that highlight African startups, their groundbreaking solutions, and their potential to transform industries can attract global attention and further drive investment and partnerships. A vibrant startup ecosystem and success stories should be regularly showcased to dispel misconceptions about the continent and showcase Africa’s technological progress. Impactful sectors for Africa’s future Several sectors hold immense potential for economic development, job creation, and social progress in Africa as indicated below. 1. Fintech and mobile banking Africa has already experienced significant success in mobile banking, with mobile money solutions like M-Pesa revolutionising financial services. Continued innovation in fintech can enhance access to banking, microfinance, insurance, and investment opportunities, driving financial inclusion and economic empowerment. 2. Agriculture and agritech Agriculture remains the backbone of the majority of economies in Africa. By leveraging technology, data analytics, and smart farming techniques, African farmers can boost productivity, reduce post-harvest losses, access markets efficiently, and enhance the entire agricultural value chain. 3. Renewable energy Africa has abundant renewable energy resources, and leveraging these can address energy poverty, drive sustainable economic development, and mitigate climate change. Innovative solutions in solar, wind, and hydroelectric power can provide affordable and reliable energy access to underserved communities, while also creating job opportunities for the youth. 4. Healthcare and telemedicine Innovative health technologies and telemedicine solutions can revolutionise healthcare delivery in Africa, particularly in remote areas with limited access to healthcare facilities. By leveraging mobile devices, data analytics, and artificial intelligence, healthcare services can be made more accessible, affordable, and efficient, ultimately improving health outcomes. In conclusion, Africa’s economic development, job creation, and social progress are intricately linked to prioritising innovation, assisting tech startups in finding investors and business partners, and getting regular international media coverage. By embracing these aspects and focusing on sectors such as fintech, agriculture, renewable energy, and healthcare, African economies can unleash their immense potential especially in French-speaking countries. It is through such concerted efforts that Africa will truly position itself as a global powerhouse of innovation, while driving sustainable development and improving the lives of its people. As the continent continues to develop, we will see even more innovative solutions that address the challenges facing Africans and help to build a better future for the continent.
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- June 20 2023
Roam Motors, BasiGo have a long way edge out diesel buses in Nairobi
Roam Motors and BasiGo run Kenya’s electric motoring space. Both offer electric buses for public transport, but their operations are based on different business models. Electric buses are becoming a common sight in Nairobi. These buses are primarily offered by two companies, Roam and BasiGo, who have been at the forefront of popularising electric vehicles in the country. Starting with these buses, Kenya is attempting to match the strides made by developing nations, such as the U.K., which plans to replace petrol or diesel-powered vehicles with electric ones by 2030. The U.K.’s approach is different because it targets private vehicle owners and has received government backing of more than £1 billion in vehicle charging infrastructure and hundreds of millions of pounds in grant schemes to steer motorists to electric vehicles. On the other hand, Kenya is focused on electric public transportation by small companies and launching electric mobility tariffs to make ownership as affordable as possible. All about reducing carbon emissions Jit Bhattacharya, the CEO of BasiGo, and Albin Wilson, the chief product and strategy officer of Roam Motors, shared their insights on the benefits, challenges, and future of electric motoring in Kenya with TechCabal. Their responses shed light on the advantages of electric vehicles (EVs) in the Kenyan context. A key point highlighted by Bhattacharya and Wilson is the importance of transitioning away from imported petroleum fuels. Like many other African countries, Kenya heavily relies on imported fossil fuels for transportation, which strains the economy and contributes to environmental pollution and climate change. Kenya seeks to reduce its dependence on imported petroleum products for vehicles by shifting to EVs. “The greatest benefit of e-mobility in Kenya is the shifting away from dependence on imported petroleum fuels and instead using domestically produced renewable electricity to power our transport,” Bhattacharya says. “Replacing a single diesel bus in Nairobi with an electric one avoids the consumption of 20,000 litres of imported diesel fuel per year and replaces it with 50 MWh of renewable electricity produced in Kenya. It further eliminates the toxic air pollution from diesel tailpipe emission and reduces CO2 emissions by 50 tonnes per year.” Wilson highlighted other benefits, such as less noise and reduced operational expenses. “Any user of our vehicles (motorcycles) lowers operational expenses by 76%, and their fleets have less noise and reduced emissions,” he said. Why electric buses and not electric cars? Vehicles are not cheap in Kenya, and electric vehicles attract an even higher price tag. Besides, people who can afford them have mentioned high maintenance costs and fuel prices. TechCabal wanted to understand if this was one of the issues facing electric motoring in Kenya and why it is the best approach to start with electrifying mass transit vehicles. “The key challenge to electric vehicles in Kenya is the high upfront cost. To directly address this challenge, BasiGo designed our Pay-As-You-Drive financing model,” Bhattacharya said. “One of BasiGo’s main values is to make the benefits of electric mobility accessible to all people. Most people in Kenya cannot afford private passenger cars. A recent study by the government found that 80% of people rely on a bus or walking every day to get to and from work and other activities. We are focused on electric buses to bring the benefits of electric vehicles accessible to the mass market.” Are the electric buses in Nairobi enough? According to Bhattacharya BasiGo’s current fleet in Nairobi consists of 17 BYD K6 model electric buses. These 25-seat buses have a driving range of 250 kilometres and can be recharged in two hours. A BasiGo bus. Source: BasiGo In contrast, the Roam Rapid by Roam Motors, which plies the same routes in Nairobi, has a larger battery and an additional range of up to 360 kilometres. Its passenger carrying capacity is also bigger at 77 passengers. However, the bus has been designed for the bus rapid transit (BRT) system, and according to Wilson, only one unit runs operations in Nairobi. He, however, stated that additional Roam Rapid buses will be added as soon as Kenya finishes setting up the BRT infrastructure. Overall, these are very few buses for a city where Matatu operators manage hundreds of petrol or diesel-powered buses, and it is not often that passengers can ride in one. How much do electric buses cost in Kenya? Matatu operators and bus owners are the key customers of both BasiGo and Roam. BasiGo, in this case, offers them an electric alternative to diesel buses through the Pay-As-You-Drive financing model. Currently, BasiGo has electric buses deployed with six separate Nairobi operators. BasiGo’s financing model is quite straightforward. Owners can purchase the electric bus without the expensive battery for a similar upfront cost to a diesel bus. They then pay for the battery through a Pay-As-You-Drive subscription, including leasing the battery, free charging at BasiGo’s charging stations, and free service and maintenance. The upfront price for a K6 electric bus is KES 5 million ($35,600), with a Pay-As-You-Drive subscription of KES 20 ($0.14) per kilometre. Roam will not adopt a Pay-As-You-Drive model. However, it will target bus operators Matatu operators with larger fleets in a business-to-business model. Device financing will be offered to interested SACCOs, with perks such as maintenance and charging infrastructure being offered by the company. These buses are scheduled to launch before the end of 2023. While the buses offer more amenities such as access to charging ports, better legroom and free Wi-Fi, passengers pay the same fare as diesel-powered buses. Internet speeds by @BasiGoKenya x @SuperMetro_Ke pic.twitter.com/2HOwIcqTmn — Kenn Abuya (@AbuyasLife) May 29, 2023 BasiGo buses are equipped with free WiFi that maxes out at 5Mbps The competition and expansion plans In terms of competition, the buses’ main competitors in the electric motoring space in Kenya are the diesel buses manufactured by foreign companies like Isuzu, Mitsubishi, Hino, Mercedes, and Hino. Roam’s Wilson believes that gas-powered buses are their biggest rivals. He adds that any other company trying to enter the Kenyan market will not be
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- June 20 2023
TechCabal Daily – Airtel launches 5G in Nigeria
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Here’s your reminder that you can win Showmax subscriptions, merch, shopping vouchers and more if you refer TC Daily to your network. All you have to do is share the unique link in the referral section of this newsletter. In today’s edition Airtel Nigeria launches 5G CBN relaxes limits on dom accounts Glade loses $214,000 to hackers France to help SA battle cybercrime The World Wide Web3 Event: The Moonshot Conference Opportunities Telecoms Airtel Nigeria launches 5G Airtel Nigeria has joined the 5G gang. Airtel has launched its 5G network in four states in Nigeria—Lagos, Ogun, Abuja, and Rivers states, per Nairametrics. The network operator is the third-largest in the country, following MTN and Globacom. It bought the 5G spectrum and additional spectrum for its 4G in January from the Nigerian Communications Commission (NCC) for $316.7 million. Image source: Giphy What does this mean? According to Airtel, 5G is 20–30 times faster than 4G. So, Airtel’s customers, about 27.1% of Nigeria’s population, can download HD movies, and 4K videos in just a few mere seconds. And gamers can play high graphic games with much less lagging. At least theoretically. Late to the party? Airtel is joining the race towards 5G network deployment in Nigeria, months after MTN and Mafab Communications did. Both Mafab and MTN announced that they had purchased theirs in February last year. In September of that same year, MTN commercially launched its 5G service. Mafab Communications launched its own in January. MTN, on the other hand, has reportedly rolled out 588 5G sites and brought the 5G network to 5G-enabled smartphones. 5G-enabled phones? Yes, not all phones or iPhones can tap into the 5G spectrum. You can find out if your phone can by checking its mobile data settings. Moniepoint ranked 2nd fastest-growing African company Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. Economy Nigeria’s central bank relaxes limits on domiciliary accounts Image source: Zikoko Memes If your wallet is feeling a little funny, it’s probably because it has heard the news. The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs) to allow customers to withdraw or transfer up to $10,000 every single day! Per Techpoint, it has also removed the restrictions on deposits into domiciliary accounts. There are strings attached: With all of these changes are coming more responsibilities for banks. For example, the CBN requires banks to provide returns containing the purpose of the transaction. A wind of change: It’s just one of the many changes that have been swirling around like a tornado ever since President Bola Ahmed Tinubu took the stage. The government has floated the naira and reintroduced the “Willing Buyer, Willing Seller” model at the I&E Window. This will allow banks to sell dollars at any price a customer is willing to buy, just like the Bureau de Change does. Outside banking, Tinubu’s government has also pulled the plug on fuel subsidies, sending the price of fuel soaring. Cybercrime Nigerian fintech, Glade, loses $214,000 to hackers Glade has joined the list of Nigerian financial service providers that have had a not-so-merry encounter with hackers. This time, $214,000 was lost. According to insiders familiar with the matter, the breach happened sometime in 2022, and the perpetrator of the sneaky act was a former company employee who is currently on the run. Glade Co-founders Victor Liyi and Temitope Hundeyin How did it happen? The company’s CEO, Liyi Victor, confirmed the breach and stated that the perpetrators hacked the company’s backend infrastructure and made away with the funds. The case has since been reported to law enforcement agencies. A leadership challenge? The startup also bade farewell to its co-founder, Temitope Hundeyin, who left the company after the breach happened. Hundeyin voiced her frustration with being sidelined in the management of the business. In response, Victor defended his decision to part ways with Hundeyin, highlighting the company’s need to adopt leaner operations as the rationale behind his choice. Despite Victor’s assertions, a current employee who asked to remain anonymous revealed, “Liyi runs Glade all by himself. He answers to no one and even gets into brawls with investors.” A series of hacks: Last month, crypto startup, Patricia, lost a whopping $2 million to hackers in 2021. There were also reports of a hack at another Nigerian bank, Globus. Other companies hacked include MTN’s MoMo, and fintech unicorn Flutterwave. Cybersecurity France aids South Africa in battling cybercrime Image source: YungNolly South Africa and France have partnered to improve the Special Investigation Unit’s (SIU) ability to investigate and address cybercrime effectively. Justice Minister Ronald Lamola and French Minister for Europe and foreign affairs, Catherine Colonna, signed the partnership on Monday. Measures taken: The agreement sets the stage for the establishment of an anti-corruption academy in Tshwane, which will address the requirements of the SIU, as well as law enforcement and anti-corruption agencies within the Southern African Development Community (SADC), both in Commonwealth and non-Commonwealth nations. Zoom out: South Africa leads the continent in the number of cybersecurity threats identified in the country, according to INTERPOL’s 2022 African Cyberthreat Assessment Report. In 2022, the country had 230 million threat detections in total. In second place was Morocco at 71 million. By joining forces, the partnership is expected to enhance South Africa’s skills and capabilities in dealing with cybercrime within the country. Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $26,951 + 1.99% + 0.33% Ether $1,731 + 0.38% – 4.67% BNB $242 – 0.38% – 21.87% Solana $16.04 + 3.30% – 20.85% * Data as of 05:25 AM WAT, June 20, 2023. The UK’s crypto and stablecoins law has been approved by the House of Lords. CoinDesk reports that the Financial Services and Markets Bill which stands to recognise crypto as a
Read More- June 19 2023
Inside Haul247: The Nigerian logistics startup offering “Airbnb for trucks”
Haul247, a Nigerian end-to-end logistics platform connecting businesses to haulage and warehousing assets, is reimagining the logistics space through its Airbnb-for-trucks model. Here’s how the startup is paving its own way in the logistics space. “247” is a popular slang that means constant availability of a thing throughout the entire day, all seven days of the week. In the context of business, It emphasizes the idea of unceasing efficiency, productivity and effectiveness. These are some of the qualities that Haul247 prides itself in, according to Sehinde Afolayan, the CEO of the logistics startup. “For logistics, generally, there is no idle time,” he says. During a conversation with TechCabal, Afolayan shares the inside story of Haul247—which he believes has the potential to become the Nigerian equivalent of Airbnb for trucks—and what makes them stand out from established players in the field like Lori and Kobo360. In the past few years, the Nigerian logistics startup ecosystem has grown tremendously, with the advent of food delivery startups like Jumiafoods and last-mile delivery services like Gokada as well as end-to-end logistics platforms like Lori, Kobo360 and now Haul247. These startups are breaking the barriers of inadequate road networks, traffic congestion, and limited warehousing facilities and making logistics more seamless for businesses. Haul247 offers large companies the opportunity to book trucks and warehouses for their logistics needs across multiple Nigerian geolocations. According to Haul247’s CEO, they chose to work with large FMCG multinationals such as Unilever, PZ, etc due to their possession of a global vendor registration licence, which allows Haul247 to not only capture a huge market share in Nigeria but to also establish a presence in other countries. However, Haul247 has plans to make its services available to smaller businesses in the future. According to Afolayan, Haul247’s secondary distribution feature—a warehousing offering for businesses—sets it apart from pioneers like Lori and Kobo360. Many FMCG manufacturers in Nigeria primarily operate from a single manufacturing hub, with a significant portion of their production activities concentrated in Lagos. From there, their products are distributed to various cities throughout Nigeria. But to Afolayan and Haul247, this system is flawed. “We felt that kind of arrangement was not efficient because there were a lot of externalities as a result of the distance. Unilever, for example, is sending a product from Agbara to Maiduguri—more than 1000km distance—and they can’t possibly guarantee the actual time that the product will get there because there are a lot of externalities as a result of the distance. Why can’t we just manage all your distribution centers in all these regions and all you have to do is ship to the distribution centers in those regions?” Afolayan said, explaining Haul247’s solution to this issue. Haul247 acts as an intermediary between different warehouse owners across the country and companies looking to store and distribute their products. As an intermediary, Haul247 does not own any warehouses or trucks. “We don’t own anything, we just ensure that the supply and demand are efficient,” Afolayan told TechCabal. “Companies just have to request for a truck or a warehouse via our website, give its specifications; area, location, size, and then we pick it up from there.” Haul247’s proprietary software enables individuals, enterprises, manufacturers, and FMCGs to book logistics or warehousing services. The software takes an order request from a shipper, attaches a quote, and then matches the request with the most suitable truck and warehouse for efficient fulfillment. Additionally, the system allows shippers to track the status of their goods until they reach their destination. Generating revenue and expansion plans Haul247 generates revenue through the commission they earn from leasing out warehouses to companies. Per a statement seen by TechCabal, Haul247 has over 1,000 trucks on its platform and about 200 warehouses covering over 151,000 square meters of space across various locations in Nigeria. Buoyed by a recent $3 million seed round—a mix of equity financing from Alitheia Capital through its Umunthu Fund in partnership with Goodwell and a $ 1 million debt capital—Afolayan told TechCabal that Haul247 is looking to scale and is setting its sights on expansion into Ghana and Uganda. “We want to grow in a sustainable way,” said Afolayan, remarking that they have learned valuable lessons from pioneers in the space. “We are really very concerned about growth that cannot be sustained, we want to grow at a level that can be sustained while giving a very strong service to our customers,” he said. “We don’t want to grow in a way that we are not now focusing on the unit economics or on the value that we’re creating.” Challenges abound but Haul247 is optimistic for the future According to Afolayan, lack of talent has been the greatest challenge for the logistics startup. “Talent is the biggest threat to us, especially tech talents. It is always very tough to get them, you have to be mindful of keeping them,” he said. Afolayan also cites the irregularities of some stakeholders—such as truck drivers and warehouse owners—within the logistics ecosystem as a huge barrier to Haul247’s operations. “We have experienced multiple pushbacks from truck drivers- who are a moving part of Haul247’s business model,” he said. “Some of these drivers do not keep up to appointment and usually disappoint.” To curb this challenge, Afolayan says Haul247 organises sensitization programmes to teach warehouse owners how to make the best use of their warehouses. Haul247 also incentivizes drivers, organises regular phone call checkups, and imposes a driving time limit to ensure driver safety. Despite challenges and a market dominated by powerful competitors, Haul247 is optimistic for the future. “Expect a unicorn in the coming years,” the Haul247 CEO remarked. “Expect a company that is genuinely run by seasoned entrepreneurs that understand how to run a business. We are not going to be all over the place in terms of growth pattern, we will be steady and we will keep growing.” What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
Read More- June 19 2023
Nigerian fintech, Glade, loses $214,000 to internal hack
This Techstars-backed startup joins the list of fintechs that have suffered losses from breaches to their technology. Techstars-backed fintech startup, Glade, was the victim of a breach that led to the loss of $214,000. The company’s CEO, Liyi Victor, confirmed the breach to TechCabal but did not comment on how much was lost. Liyi said that the perpetrators hacked the company’s backend infrastructure and made away with the funds. The case has been reported to law enforcement agencies. Glade’s hack is the latest in the series of hacks that Nigerian financial service providers have suffered in the past year. Last month, in a story first reported by TechCabal, the crypto startup Patricia lost $2 million to hackers in 2021. The company said this week that it would arraign the hackers to court soon. There were also reports of a hack at another Nigerian bank, Globus. The long list of companies hacked also includes MTN’s MoMo and Flutterwave. Glade was part of the Techstars Toronto spring program in 2022, where it graduated alongside six African startups and raised $435,000 on demo day. TechCabal asked Techstars if it knew of the breach, but it appears the accelerator had been kept out of the loop. Sources close to the situation also told TechCabal that the breach at Glade happened in 2022 and involved a former employee. The company also shared that the ex-employee is on the run. Beyond the hack, the company’s co-founder, Temitope Hundeyin, has also left the company. A contentious co-founder’s exit Temitope Hundeyin, Glade’s ex-co-founder, told TechCabal that she was sidelined in the running of the business. “Victor Liyi, the CEO, oversees investors, partnerships, and corporate governance.” Hundeyin left the company after the breach. Liyi pushed back against the claims and told TechCabal that he fired Hundeyin because Glade needed to run leaner operations. He also denied the claim that he makes all the decisions at Glade. “[We have] a management team responsible for the day-to-day running of the company, and some independent advisors that provide objective oversight of the management team.” But five sources who have worked with Glade disagree with Liyi. One current employee who asked to remain anonymous told TechCabal, “Liyi runs Glade all by himself. He answers to no one and even gets into brawls with investors.” What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
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- June 19 2023
Next Wave: How to flip Africa’s depressing trajectory
Cet article est aussi disponible en français <!– In partnership with –> <!— –> The short answer is to fix the political leadership. The long answer (for African/Africa-facing entrepreneurs) is what we’re more concerned about. It is a conversation we should all be having, that is, if you are not already. As the population and youth unemployment grow side by side and disposable incomes fall, Africa’s need for stable, visionary and effective political leadership at all levels has never been more acute. But Next Wave is not a very political economy newsletter. We’ll leave that for others. Instead, let’s focus on what the broad technical features of what building a business despite the dreariness might look like. Why is this important? If you’re reading this you are very likely interested in Africa’s technology and venture capital ecosystem. You have likely also read a few of the rosy projections of a soon-coming $180 billion or so digital economy. By the same token, if you’ve had your finger on the pulse of African streets, you will likely also have felt the dreary chill in household consumer expenditure as household incomes come under pressure across middle-class and low-income market segments in Africa. Not too long ago, if you mentioned emerging markets as an investment destination, some African countries would feature prominently. Today, not so much. A few African countries still make emerging market lists, but only politely. Some of the then-exciting economies in Africa have reversed growth trends and fallen (or are on the road to) frontier market status or less. Today, Southeast Asian countries like Indonesia, and Bangladesh, and emerging markets in Eastern Europe and Latin America command more attention. Occasionally even more than even South Africa (when it is not sacrificing trade agreements on the altar of foreign policy). There is a lot the governments can do. Unfortunately, the political theatre we see across the continent does not inspire much hope. Africa’s political elite do not seem capable of consistently linking their policies (in practice and posture) to economic improvement. On the other hand, if you run any form of enterprise you can choose to do one of three things. Resign yourself to the flow like dead fish. Align yourself with the political wind. Arm yourself with the knowledge that seats here are limited and the competition do not make any claims to innocence or gentlemanly dealing. Fight to maintain your “clean hands” AND embrace cold pragmatism. If you choose options 1 and 2, you can close this email and move on with your life. If you however pick option 3, you will have to add a few tools to your armoury. A lot of what follows is probably familiar to you. But it bears repeating. Partner Content: Infinix brings all-round fast charge technology to the NOTE 30 Pro The face in the mirror is not the fairest of all. Or even rated in the “Fairests of All” Let’s start with the latest McKinsey report “Reimagining economic growth in Africa: Turning diversity into opportunity”. One point it makes abundantly clear is that we have to acknowledge our economic and social underperformance if it will make any meaningful step forward and away from it. Compare this most recent report with this hopeful one (also from McKinsey) in 2010 and this in 2017, and the reality of how much we have failed just hits you in the face. One of the most unfortunate truisms today is that: Africa is still very poor. And Africans (collectively) are doing little to get out of the status quo. Individually, a lot of the people are brilliant. But collectively, the African destiny seems resigned to the ebbs and flows of global events. Like rising or falling commodity prices, a war in Ukraine, overhyped neo-colonial enemies that are useful for domestic political deflection or directly attacking countrymen or residents who have more or less melanin (depending on what part of the continent you are on). In the few occasional pockets of brilliance, it appears that prosperity for African economies may develop along regional or intercontinental corridors. Some of the investment inflows and inter-country relationships we see appear to be toeing this line. If you’ve been paying attention, you will notice that a Gulf-to-North-African-to-Indian-Ocean corridor is developing, increasingly driven by investment from Gulf countries like the UAE and Dubai-headquartered business concerns. The UAE, for example, is the fourth-largest investor globally into Africa—after China, Europe and the United States. Some of that investment even finds its way into stable but smaller economies like Rwanda who may not be on the coast, but are hitting some of the notes GCC investors want to hear. China is often the focus in conversations about non-Western investment (and business relationships) in Africa, but the eastern flank of Africa has always had its unique connections with Asia. These age-old relationships are being refined as Asian firms and investors from Singapore, for example, test Africa’s commercial waters. Even the Japanese are shaking off some of the decades-old reticence and looking beyond Tokyo into Africa. Granted, a lot of it is directed at finding and pocketing their slice of the African pie. But we already know that the world does not run on altruism, unfortunately. Irrespective of the ultimate motivation, the direction of interest of some of this investment also contains ingredients and signals investors and entrepreneurs who want to build a thriving business should pay attention to. To see and properly capture these opportunities, both governments and private sector players in Africa will need to… Stop fantasising about GDP growth Looking back 10 years, per capita consumption in Africa’s largest 3 economies is mostly stagnant. Chart by Tomisin Bamidele, TC Insights. Source: Trading Economics Depending on your market, you may need to pay attention to an entirely different set of economic indicators. While GDP indicators are useful macro snapshots, you will quickly realise that income and per-capita consumption spending habits are better indicators. This is not to excuse lackluster economic growth of course. It is
Read More- June 19 2023
SA government planning on holding onto Telkom stake
The South African government is planning to hold onto its stake in telecommunications company Telkom despite the tabling of above-market-value offers from bidders. According to reporting by the Sunday Times, the South African government has no plans of selling its stake in mobile network operator Telkom. The government currently holds a 40.5% stake in the company. Numerous sources tell Sunday Times that minister of communications and digital technologies Mondli Gungubele is opposed to the government reducing its stake, stating Telkom was still a strategic entity helping South Africa leverage connectivity on the African continent. He further voiced his opposition to any deal that would see the government rallying behind any prospective majority shareholder. Telkom currently has an offer from investment consortium AfriFund, led by former Telkom CEO Sipho Maseko and, its international partner, Axian Telecoms of Madagascar, in the form of R46 a share for a 35% stake in the company. Although the company’s shares were trading at R33 at market close on Friday, the Telkom board believes the offer is too small as it believes the telco has a lot of intrinsic value to be unlocked. Telkom CEO Serame Taukobong states that the company will not be entertaining offers below R60 per share. Contrary to the government’s stance, Taukobong is open to a transaction for Telkom, stating that “the market says we see an appetite for a transaction for Telkom but it has to be at a credible price” and that Telkom is “open to any conversations and any partnerships but will not compromise on the Telkom value position — whatever value has to be reflected on what we think the Telkom price should be at”. Additionally, the consortium seems to have the support of the Public Investment Corporation, which owns 14.1% of Telkom, and now the decision with regard to the government stake rests with the cabinet. Telkom recorded a 76.6% dip in headline earning per share (HEPS)—from 575.3 cents to 134.6 cents—according to its latest annual financial results, with the company blaming inflationary pressures and load shedding for the dip.
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- June 19 2023
TechCabal Daily – Heritage Bank denies $83 million fraud
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning It’s a new week and we’ve got a new survey for you. How has our storytelling been this year? Is there more you think TechCabal—not TC Daily—should be doing? Let the team know here. In today’s edition Heritage bank denies $83 million fraud Kenya greenlights its smart city Meta appeals Kenyan judgement TC Insights: What’s next for cleantech? The World Wide Web3 Event: Africa Tech Summit London Job openings Crime Heritage Bank denies $83 million fraud More African banks are suffering fraud. This time, Nigeria-based bank, Heritage Bank, is at the centre. Last week, reports surfaced that ₦49 billion ($83 million) had been stolen from the bank’s accounts. A Heritage Bank branch An inside job: Sources close to the bank revealed that a member of the bank’s IT department head “Akin” allegedly diverted the money into private accounts across six commercial banks. The sources also allege that the perpetrator conducted several counts of insider fraud. On Friday, in an email to TechCabal, the bank denied all allegations, labelling the claims wrong and defamatory. In a statement signed by the bank’s corporate community manager, Ozena Utulu, the bank notes that the accusations are a “fictitious narrative”. Layoffs and restructuring: The bank, however, revealed that it’s creating a long-term sustainability plan that will involve restructuring and layoffs. Customers aren’t swayed, though. Several report struggling with poor customer service, delayed transfers, inability to move depositor funds, and failure of the bank’s apps. At least two customers confirmed this to TechCabal. One notes that he had been unable to withdraw his funds from Heritage Bank for the last seven days, while another claims that the bank’s “network issues” have made it difficult for her to withdraw funds. Zoom out: Meanwhile, another Nigerian bank, Globus Bank, last week revealed that it suffered a hack in 2022 in which hackers took advantage of a USSD glitch to withdraw over ₦1.75 billion ($2.9 million) in customer funds. The bank has reportedly recovered ₦817 million ($1.3 million) of the funds, but over ₦962 million ($1.6 million) remain unrecoverable. Moniepoint ranked 2nd fastest-growing African company Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. IoT Kenya greenlights smart city The land is green in Kenya…or at least it will be greener. Last week, in presenting the country’s budget for the 2023/2024 financial year, the country allocated Ksh15.1 billion ($109.6 billion) to fund its smart city Konza Technopolis. An illustration of Konza Technopolis What’s Konza Technopolis? Konza Technopolis—formerly called Konza Tech City—is a sustainable and futuristic city under construction on Nairobi’s outskirts. The city was first announced in 2008, almost 13 years ago, as part of Vision 2030, a government-led development blueprint with the stated aim of turning Kenya into a “middle-income country providing a high-quality life to all its citizens by the year 2030.” Unfortunately, successive governments have failed to kick off Kenya’s tech city. Since his election, however, President William Ruto has renewed the country’s zeal towards ICT. The city has also been receiving support from South Korea, which is also developing KAIST in collaboration with the Kenyan government. A breakdown: Of the amount, about Ksh4.8 billion ($35 million) has been allocated to the Horizontal Infrastructure Phase I at Konza City, Ksh 1.2 billion ($8.7 million) for the Konza data centre and smart city facilities, and Ksh 5.7 billion ($41.38 million) for the construction of Kenya Advanced Institute of Science and Technology (KAIST) at Konza Technopolis. Big Tech Meta appeals Kenyan judgement Image source: GIPHY Meta, like mercy, is saying no. What’s happening? On June 2, Kenya’s Employment and Labour Court ruled that Meta and its content moderation partner Sama would have to complete their contracts with all Kenyan content moderators. Throughout the year, content moderators have been in a legal battle with Meta and Sama after the big tech company dissolved its partnership with Sama over workplace harassment claims Sama received in 2022. Earlier this year, over 180 content moderators went to court to prevent Meta and Sama from firing them, and on June 2, the court ruled in favour of the content moderators. No jobs for moderators: Now, Meta is appealing the decision. In an email to TechCabal, the company states that the ruling is “confusing and contradictory” as Sama has exited the content moderation business and has no work for the content moderators. The big tech will also argue that the content moderators are not employees of Meta. Sama, which the court described as an “agent for Meta,” told TechCabal that the ruling was confusing. The company laid off the moderators in January 2023 after its contract with Meta had expired. The ruling now means that despite having no existing contract with Meta, it must keep the moderators employed. Zoom out: In the email to TC, Meta also states that it cares deeply about the health of its content moderators and has invested in providing for their needs, a contradictory statement given that Meta has been accused of poor treatment of content creators in Germany and other countries. In 2020, in the US, the company paid $52 million as compensation for moderators who suffered PTSD from the work they did. Experience Viva Technology Tune in to Europe’s biggest Startup and Business event here. TC Insights What’s next for cleantech? Africa’s energy demand is projected to double by 2040. Yet, according to a report by PwC, only 9% of the energy it generated in 2021 came from clean energy sources. While North Africa has the largest clean energy capacity on the continent, Central Africa’s capacity is set to almost double, given its 15,201MW worth of under-construction projects. Image source: Ayomide Agbaje/TechCabal Cleantech has the potential to scale the decelerating economic growth of Africa. So, there is a pressing need for African countries to expand their energy supply and prioritise their
Read More- June 17 2023
Nigeria’s unified FX rate will change how startups report revenue
For startups that operate in Nigeria and report their revenue to investors in US dollars, the recent unification of exchange rates in Nigeria might be a new hurdle. On Wednesday, the Central Bank of Nigeria (CBN) confirmed Nigeria’s move to a unified exchange rate. The unification immediately caused the Naira to lose 36% of its value and drop to a record low of $1/₦750. While the markets reacted positively to the announcement, Nigerian startups were not as enthused. For startups that raised capital in foreign currencies and reported revenues to investors in USD, a unified FX rate might be a new hurdle. Before now, many startups reported revenues using Nigeria’s official exchange rate of $1/₦462. It means that while $1 million in revenue two months ago was around ₦462 million, today it is ₦656 million. That increase (₦196 per dollar) is significant for startups that gain revenue in Naira. Although it was a common practice to report revenue using the official rates, some startups reported at the parallel rate (₦750). Startups that reported revenue to their investors using the former official exchange rate would be the most affected by the single rate. Nnamdi Ifechi-Fred, a digital economy analyst, told TechCabal that he thinks that startups that reported revenue at the official rate, would see “something change for them.” Some startup founders who spoke to TechCabal said that despite these changes, they will not be hurrying to the drawing board to rewrite their revenue targets for the year. For startups that had been reporting revenue in Naira before the unification, not much has changed. “We have been reporting our revenue in Naira for over two years. We didn’t agree on targets with investors based on dollars or euros,” said Romain Poirot-Lellig, the CEO of Kwik Nigeria, a mobility startup. “For me, it is important that when reporting, you are as close as possible to the local economy.” Adedeji Olowe, founder of Lendsqr, a lending SaaS fintech, told TechCabal that a unified FX rate will affect the previous valuation of startups and could “make them go very bad”. “I think things will cross-correct down the line because startups are still raising money. In truth, there is nothing startups can do about this,” he added. The multiple rates also dampened investor confidence because it was difficult for investors to repatriate their profits. Nigeria’s international bonds surged after rumours of a unified rate on Monday. Olowe told TechCabal that the unification of the FX rate could improve investor confidence. “If things continue this way, two things could happen: the FX could get better and investment could become easier for everybody.” Poirot-Lellig told TechCabal that the unified FX rate could be a good thing for businesses in the long run because it brings stability to the market. “The key thing when growing a business is operating in a predictable environment as much as possible. If you know that you will be able to access foreign currency regularly, then you can adapt your financial and economic planning accordingly.” Although the multiple rate system caused confusion for startups, it had its advantages. By reporting operating expenses at the official exchange rate and converting dollars at the parallel rate, startups could benefit from the multiple rates. For Mathew Saunders, head of investments at Future Africa, a venture capital firm, the unification of the FX rate “is an important step towards enhanced financial transparency for Nigerian startups, particularly when reporting to investors.” He added that while this measure could momentarily affect operational costs for most startups, it will ultimately benefit the ecosystem by cultivating an environment marked by more trust and clarity. For many Nigerian startups, the shift to a unified FX rate necessitates a reevaluation of their approach to making money. As founders navigate the changing landscape, they will need to find innovative solutions and create strategies to ensure continued growth and success in the face of evolving economic policies. Ultimately, the impact of this exchange rate unification on Nigerian startups remains to be seen, but it undoubtedly presents both challenges and opportunities for the tech ecosystem.
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