TechCabal Daily – Hackers steal $17 million from Uganda’s central bank

In partnership with Lire en Français اقرأ هذا باللغة العربية TGIF! Today’s edition is a bit longer than usual. We won’t elongate it further with a long lede. The only thing we’ll ask for here is that you share TC Daily online, and respond to this and future editions with your thoughts. Let’s dive in.  Namibia orders Starlink to cease operations Ugandan Central Bank suffers $17 million hack Stanbic Bank Kenya loses $678,500 tax appeal Paystack introduces pay-by-account feature Funding Tracker World Wide Web 3 Job openings Internet Namibia orders Starlink to cease operations GIF Source: SNL When Elon Musk-owned Starlink announced its intention to expand into Namibia in 2023, it was great news for citizens. Economists and experts wrote lengthy papers addressing how the satellite ISP brought much-needed fresh air into the telco market with the promise of high-speed internet. In June 2024, the company applied for an operating licence in the Southern African country. Unfortunately, a significant setback occurred yesterday, as Starlink received an order to suspend its operations in the country. “The public is hereby advised not to purchase Starlink terminal equipment or subscribe to its services, as such activities are illegal,” Namibia’s communications regulator said in a statement. Starlink has been operating “illegally” in the country in the last 13 months. Users bought Starlink kits from resellers like Paratus Group and subscribed to roaming services from neighbouring countries like Zimbabwe.  With the new restriction, Starlink, whose licence application has been under review, will stop selling or distributing its hardware kits in Namibia. Namibia, a nation of 2.6 million people, still struggles with broadband penetration. About 1.33 million Namibians have internet access, but only 30% of the population can access the 3G network.  Namibia’s average download speeds stand at 58.31 megabytes per second (Mbps) while upload speeds are 10.07 Mbps. Starlink offers up to 150 Mbps. While Namibia’s mobile internet market has many players, it is a duopoly controlled by MTC and the state-owned Telecom Namibia, which have not met the internet demands of the country’s youthful population. Starlink sees an opportunity to upend the duopoly. But first, it has to tackle this setback and move quickly in its negotiation with the regulator. Elon Musk met with Namibia’s president Nangolo Mbumba in September. The country is also undergoing its most contested presidential election yet which could see its first female president assume leadership by March 2025. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Cybersecurity Ugandan Central Bank suffers $17 million hack Image Source: Bank of Uganda Africa’s tech ecosystem has been rocked by a series of cyberattacks this year, from the Ethiopian bank hack to Nigerian fintech and bank frauds. Even central banks have not been immune.  In the latest attack, hackers, yesterday, stole UGX62 billion ($16.8 million) from the Bank of Uganda (BoU).  A group of Asia-based hackers code-named “Waste” accessed the central bank’s IT systems and illicitly transferred the funds in early November, according to local media reports. The hacker group sent parts of the money back to Japan and the UK.  Several employees of the bank claim that the hack was an inside job. The situation bears a striking resemblance to a recent ₦40 billion ($23.7 million) fraud committed by an employee at a major Nigerian bank. That employee diverted funds for two years unnoticed. This resulted in the firing of more than 120 employees, with the bank accusing them of laxity in carrying out their duties. Uganda’s central bank may likely follow the same route, firing those responsible within the company and sacking them. The bank is questioning several of its employees and the Ministry of Finance.  While the Central Bank claims it is recovering the lost funds, the episode continues an uptick in cyber attacks in Uganda since COVID-19. In 2022, Uganda lost approximately UGX 15 billion ($4 million) due to cyber-related incidents, with financial institutions being primary targets. A hack on Uganda’s central bank reflects poorly on the state of cybersecurity in the East African country. The incident also continues a broader cycle of cybersecurity threats across the continent. As one founder noted, “Bad actors are often highly intelligent individuals. Banks must stay ahead by continually updating their technology and security measures.” Get Fincra’s Embedded Finance and BaaS Report 2024 for FREE Fincra in collaboration with The Paypers have released the Embedded Finance and Banking-as-a-Service Report 2024. This report examines the key challenges and innovative solutions defining the future of seamless cross-border payments and remittances across the continent, among other topics, with key experts.  Get this valuable, free resource today! Regulation Stanbic Bank Kenya loses $678,500 withholding tax appeal Image: Banking Insights Stanbic Bank Kenya, the country’s seventh-largest commercial bank by asset base, has been locked in tax fights with the Kenya Revenue Authority (KRA). On November 3, the bank won a KES 450.27 million ($3.5 million) tax claim against the taxman over excise duty charges, but it could not replicate that victory in another withholding tax claim. Stanbic Kenya lost a tax appeal for KES88.4 million ($678,500) levied against it by the KRA. After the taxman conducted a tax audit on Stanbic Kenya from November 2021 to December 2022, it found that the bank owed arrears taxes for payments made to international card companies—Visa, MasterCard, and UnionPay—and failed to collect and remit withholding taxes to the government. Stanbic used these card payment providers to facilitate cashless transactions for merchants, offering services such as payment clearing, settlement, and access to the card networks’ systems. The KRA argued these payments were subject to withholding tax because they qualified as royalties for using the card networks’ trademarks and logos, as well as their management services to access their payment systems. Since the income was obtained from transactions initiated from Kenya,