Scaling a startup in an unstable economy
This article was contributed to TechCabal by Norebase, a startup that helps entrepreneurs to start businesses and expand into other markets in a transparent, fast, and efficient way. In recent years, Africa has faced significant economic instability due to a confluence of challenges. High inflation, currency volatility, supply chain disruptions, and insecurity have made the business environment difficult to navigate. The unstable economic conditions agitate the core challenges faced by startups seeking to scale. Compared to last year, the first half of 2023 saw a 54% dip in VC funding for Nigerian tech companies. Without adaptive strategies, these growing businesses risk being derailed or discouraged altogether by the unpredictability. This article will explore how startups in Africa can formulate adaptive solutions to the problems of scaling within unstable economies by drawing from real-world examples and expert recommendations. The goal is to provide a roadmap for startups seeking to successfully expand their reach and deepen their solutions despite economic volatility. 1. Use adaptive marketing and growth hacks a. Demand generation over lead generation Focus marketing efforts on generating real demand and sales from existing customers and interested prospects rather than just acquiring new leads that may not convert due to economic pressures. Marketing tactics such as email drip campaigns, community building, and webinars are low-cost ways of educating, nurturing, and retaining customers in a marketing funnel. For instance, if you were building a conversion funnel for a SaaS solution, a monthly webinar can act as a growth lever that demonstrates your understanding of the subject matter while giving you a chance to get real-time insights from your prospects. Each webinar can end with a call-to-action that drives customers into a curated community (on WhatsApp, Telegram, or Slack) where you nurture them with interesting and witty content that addresses their pain points. Finally, you can use an email drip campaign to retain customers and cross-sell products—65% of a company’s revenue comes from existing customers, highlighting the importance of cross-selling in retaining and growing business from current clients. b. Cost-effective digital experiments Leverage low-cost content marketing and SEO. Using AI, anyone can build a comprehensive SEO campaign that drives qualified traffic to a source. Motivate existing users to invite others by incentivizing referrals, and building social proof via social media challenges that leverage user-generated content. Leverage automations to respond nimbly to unfolding economic and customer behavior signals with customised, dynamic journeys at scale. In simpler terms, use relevant APIs and AIs. 2. Hedge against economic uncertainties a. Hedge against economic uncertainties Keep a portion of assets in stable foreign currencies to protect against currency devaluation. Saving funds in a US corporate bank account is an important contingency measure that will protect you from the unpredictable effects of the floating naira. b. Incorporate in relatively stable economies Target countries with steady GDP growth, low inflation, stable currencies, developed financial systems, consistent regulations, and minimal political unrest. Prioritise markets like the US, UK, Canada, Kenya, Rwanda and South Africa. By all means, avoid incorporating in very volatile markets. 3. Cut down on costs a. Review all expenses and look for areas to reduce spending Renegotiate contracts and rates with vendors and suppliers. Reduce office space if remote work is feasible. Freeze hiring for non-critical roles. Delay new projects and capital expenditures. b. Automate as much as possible Look for opportunities to automate manual processes using software and tools. This could include HR tasks, customer service, bookkeeping, social media marketing, etc. Automation increases efficiency and reduces labour costs. But provide training to employees to work alongside these new technologies. c. Retain staff Avoid layoffs if possible, as hiring and training new employees later is costly. Consider temporarily reducing hours or pay rather than terminating jobs. Support employees by clearly communicating about the business challenges. Keep staff motivated with development opportunities and recognition. Losing key staff now means losing invaluable expertise and company knowledge. Conclusion Scaling a startup in a volatile market is not as simple as this article has rendered it. However, if you’re like me and failure is not an option, then you should adopt the lean startup mindset. In no time, you will find yourself piercing through the noise and growing against all economic and financial odds. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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What we know about Naspers interim CEO, Ervin Tu
Ervin Tu has been announced as the interim CEO of Naspers and Prosus following the resignation of Bob van Dijk, the chief executive of both entities. On Monday, September 18, Naspers, Africa’s largest company by market capitalisation, and its subsidiary Prosus, Europe’s largest consumer internet company, announced that CEO Bob van Dijk would leave the company. Van Dijk had been CEO of Naspers for ten years and CEO of subsidiary Prosus for four years. He will be succeeded by the group’s chief investment officer, Ervin Tu. Tu received an undergraduate degree in Bachelor of Arts in Economics from Dartmouth College in 1997 and an MBA from MIT Sloan School of Management in 2004. Following his MBA, he joined Goldman Sachs, and in 2014, he eventually became managing director in the technology banking group, focused on M&A deals. Tu joined SoftBank as a managing partner at the SoftBank Vision Fund in 2016. There, he was part of the team that led investments in Uber and Bytedance, among others, across technology sectors, including transportation, logistics, delivery, next-gen media, and sustainability. His time at SoftBank also saw him co-leading M&A and corporate finance for SoftBank Group International. In June 2021, Tu joined Naspers and Prosus as the group chief investment officer based in San Francisco, California. In the newly created position, Tu led investments across the Prosus and Naspers group, reporting to now-former CEO Bob van Dijk. In his role at Naspers/Prosus, Tu has most prominently overseen the group’s handling of its stake in Chinese technology company Tencent. Naspers initially bought its Tencent stake in 2001 and currently holds, through Prosus, a 26% stake in the company worth $112 billion. This stake is more than Naspers and Prosus’ entire market capitalisations. Since mid-2022, Prosus has been selling off its Tencent stake, then 29%, to finance an open-ended share buyback program intended to bridge the gap between its market value and the value of its assets. Tu has also overseen the share swap deal between Naspers and Prosus. In May 2021, Naspers announced a share swap deal with Prosus to reduce the discount between the asset value of the companies and their market capitalisation. The deal, successfully completed in August 2021, reduced Naspers’ stake in Prosus to 56.92% and gave Prosus an approximately 49% share in its parent company. In March, Tu also oversaw the termination of the Naspers Foundry, which was South Africa’s most prominent venture capital fund. The R1.4 billion fund (~$73 million), launched in October 2019, was an early investor in some of the country’s most prominent startups, including Sweepsouth, Planet42, and Naked Insurance. Only half of the fund had been invested in twelve startups when it was shut down. Regarding M&A deals at Naspers/Prosus, Tu led the team that completed the acquisition of the developer-knowledge-sharing platform Stack Overflow in June 2021. Other acquisitions deals in Tu’s time at the group include the online learning platform Goodhabitz also in June 2021, iFood and Delivery Hero in August 2022, Udemy in August 2021, and Skillsoft, a portfolio company of Prosus’s acquisition of Codeacademy in December 2021. Under Tu, Prosus also divested from the Russian social media platform VK in March 2022, writing off its 27% stake following the country’s invasion of Ukraine and selling a stake in fintech platform PayU to Rapyd for $610 million. As the new CEO of Naspers, Tu’s role will encompass continuing the group’s strategic goals, which remain unchanged despite the abrupt change in management. This will include bringing the company’s consolidated e-commerce portfolio to profitability while maintaining growth and leading capital allocation across the Group. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Next Wave: A modern retail wave is building up across Africa
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 17 September 2023 Smallscale modern retail in Africa will not completely replace open markets in Lagos, souks in Cairo, or storied markets like Karatina in central Kenya. But a subtle shift that can become a major marker of African retail is underway. Warning. Long read ahead. Please find a comfy seat, some coffee and relaxing music. It’s Sunday after all! The more I read the news, interact with people, and think through how urban food systems are organised, the more I realise how much Africa’s retail scene needs to defragment. Defragmentation means support for scale and efficiency. It also means that retail is then organised in a less chaotic manner. But it does not necessarily mean complete defragmentation à la the mall and retail industry structure of America. Japan has a high density of neighbourhood shops, but it also boasts one of Asia’s strongest modern retail markets, with everything from à la carte malls to specialty luxury shopping outlets. In many African countries, retail is beginning to take the same contours, but cheaper, of course. Consultancies, enthusiastic entrepreneurs, freshly minted marketing executives and the big shots of African retail have expected or prophesied the coming of modern retail to Africa’s consumption habits. The consequent impact of an Africa with more modern retail is not a new conversation. What is clear after every round of discussion on modern retail in Africa is that the continent remains a tough place to run retail businesses, declining incomes are a challenge, and, as a result, the open market remains the strongest competitor. It is true that the open market will remain a competitor for the foreseeable future. It is among other things, a cultural relic. It is also an economic mainstay that packs more economic punch than appearances suggest. But alongside the open market, African neighbourhoods are seeing the rise of modern retail channels. Branded multi-store retailers and single-store supermarkets are popping up all over towns, cities and villages. Most are just bigger versions of the regular convenience stores, and even the big malls are small compared to peers in developed countries. But I believe we are in the early stages of a modern retail boom, and the wave is slowly building up. The first stages of a wave Ripples on the Lifjord lake in in Øksnes, Norway. Photo by Blue Elf via Wikimedia Commons When a light breeze blows across a smooth lake or ocean expanse, it creates small ripples that are called capillary waves. These ripples are the first stage of wave generation. As the ripples get larger, the wind is better able to “grip” it in a self-sustaining cycle that creates even bigger waves. These waves can become stronger the longer they travel over the ocean. Then they become groundswells—the type of waves that ocean surfers love because they are even spaced and powerful enough to ride. That initial capillary wave action is where Africa’s modern retail is at in several countries. Excluding South Africa, this wave of modern retail across Africa looks just like how any other wave does, i.e. it is undulating, and not a smooth upswell across the continent. But it is definitely there and building up. Because Next Wave is a pan-African business and tech commentary and not a country-by-country level research paper, our discussion will remain at the continental macro-level. I will leave you, the reader, to do the country analysis. If however, a lot of readers indicate a strong demand for country-by-country examples, I might be persuaded to highlight a few countries in a subsequent essay. Partner Content: Africhange’s commitment to delivering seamless remittance experiences for Africans Loosely speaking the economics of retail is driven by aggregation. B2B, B2C, B2B2C ecommerce companies try to aggregate shoppers either directly or through retail points. FMCG manufacturers aggregate through distributors. And even savvy street corner shops try to aggregate the best and most recurring daily shoppers. The fewer the points that tie demand together into an efficient logistics chain, the better for manufacturers and sellers. Consumers however want convenience and worry about pricing. In our continent, with low purchasing power, low consumerism and high unemployment, a disjointed last-mile for consumer goods emerged to serve two needs. Get stuff to people in small packets, and create low-wage jobs. The result is aggregation upstream at the manufacturing level. And heavy fragmentation at the distribution level. Consumer goods makers, for example, can simply rely on large distribution operations in key locations. The distributors (digital or non-digital) move the goods downwards through whatever works—wholesalers, sales staff or road hawkers. This aggregation of chaos has somehow worked long enough that everyone has learned to respect the African traditional retail market. And with good reason. FMCG players see no need to do the work (and face the economic consequence) of organising a consolidated retail market, and hence supply chain. Distributors are too busy moving goods at tiny margins and small commissions, and the capital requirements to build modern retail consolidation do not square with the economic realities in many African countries. There is simply little incentive to create formal modern retail and risk disturbing the waters of consumer trade too much. But like I said, modern retail (with African characteristics) is happening anyway. It is not even across the continent. And it comes in different colours. Modern retail in Africa is local and neo urbanist Japan is one of the world’s largest retail markets with a strong large modern retailing sector with huge malls and millions of square feet of luxury shopping centers. But it is also host to exciting street markets and smaller modern retail outlets (both chain supermarkets and single store outlets). Japan’s konbini are small supermarkets that are open 24 hours every day of the week. They are a cultural and consumer staple in the Asian nation and play an important role in Japan’s retail market. In many areas, Japan and African countries are poles
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Naspers CEO Bob Van Dijk resigns effective immediately
Naspers, the largest African company by market capitalisation, has announced that CEO Bob van Dijk will leave his position effective immediately. Van Dijk will assume a consultancy role until 30 September 2024 to assist with transitioning into new management. Naspers CEO Bob van Dijk has resigned from the helm of Africa’s largest company by market capitalisation after ten years. Van Dijk will also step down as CEO of Prosus, a subsidiary of Naspers focused on making tech investments across the globe and whose portfolio companies include Udemy, Stack overflow, Tencent, SimilarWeb and SkillsSoft. Van Dijk and Naspers did not share any reason for the sudden departure. “The Boards of Prosus and Naspers want to thank Bob for his leadership over a full decade,” said Koos Bekker, Naspers chair this morning. “During this time, substantial businesses were established in Classifieds, Food Delivery and Payments, while we also entered several new fields. We appreciate Bob’s contributions and wish him much success with his future career.” Van Dijk became CEO of Naspers in 2014, succeeding Koos Bekker. He was named CEO of Prosus in 2019 after the company went public. “He established the group as a leading global consumer internet company, creating significant value for shareholders. The boards sincerely thank Bob for his leadership and contribution,” Naspers and Prosus added. New management In the interim, Van Dijk will be succeeded by the group’s Chief Investment Officer Ervin Tu. Tu is credited with bringing the company’s consolidated e-commerce portfolio to profitability while maintaining growth and leading capital allocation across the Group. On the markets, despite an early rally of Naspers stock following the news, the stock price is down 1% on the Johannesburg Stock Exchange. Prosus, whose primary listing is on the Amsterdam Stock Exchange, also saw similar fortunes and was down less than a percentage following the announcement. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Breaking: Gates Foundation funds 29 healthcare supply chain startups
i3, a pan-African initiative funded by the Gates Foundation, is giving 29 startups operating in Africa’s healthcare supply chain equity-free funding. Investing in Innovation Africa (i3), a pan-African initiative for start-ups in the healthcare supply chain, has announced its second cohort of 29 companies across 21 countries. The cohort includes startups that are building online pharmacies and telemedicine firms, inventory management services for pharmacies, clinics, and hospitals, supply chain data analytics, product protection, and product visibility solutions. Selected startups will receive a $50,000 grant and introductions to potential customers in industry, donor agencies, and governments. “As countries and global health institutions work to expand access to priority products, we face an urgent need to leverage solutions across the public and private sectors to improve health outcomes and strengthen local health systems,” said Kieran Daly, the director of global health agencies and funds at the Bill and Melinda Gates Foundation. Startups will also receive investment readiness support from CcHub for west Africa, Startupbootcamp AfriTech for southern Africa, IMPACT Lab for north and francophone Africa, and Villgro Africa for east Africa. The cohort is funded by the Bill & Melinda Gates Foundation and sponsored by Cencora, Merck Sharpe & Dohme, Microsoft, and Chemonics. The first i3 cohort was launched in 2022 following the release of Salient Advisory’s published Market Intelligence Report and is coordinated by Salient Advisory, Southbridge A&I and the Solina Centre for Research and Development. “From market intelligence, we could see the activity of health tech startups in the ecosystem and building on that, we wanted to support them to scale because we believe that data and innovation will power the healthcare supply chain of the future,” Somto Keluo-Udeke, a senior consultant at Salient Advisory, told TechCabal. The cohort accepted both early-stage and growth-stage startups but only considered startups solving problems in Africa with African founders present on the continent. “For early-stage (startups), they have a minimum viable product, are already generating revenue and have a strong plan to scale and sustain growth. For growth stage (startups), a more well-defined product, revenue model, sales, and operations,” Keluo-Udeke said. Source: Salient Market Intelligence Report 2022 Across Africa, the supply of healthcare remains highly fragmented, which in turn affects the quality and price of medicine. Some African countries pay as much as 30 times more than the United States and the United Kingdom for medicine. While startups have significantly improved the availability and quality of medicine, the problem of high prices remains unsolved. Keluo-Udeke told TechCabal that to remedy this, the cohort only included startups that operate with “a data-driven distribution or digital-driven distribution of health products in their model.” Another problem i3 wanted to solve with this cohort was the exclusion of African women from funding. In the African healthtech sector, black women founders have raised only 9% ($21.6 million) of all-time funding. “We have a focus on women-led companies and had a target of 33% of women-led companies in this year’s cohort, and we were able to exceed it. Another segment we focused on was francophone Africa because it tends to get overlooked,” Keluo-Udeke said. Meet the i3 2023 cohort Afia Group Limited Aimcare Health Bena Care BioCertica Chari Pharma CheckUps Medical Chefaa Dawa Mkononi Drugstore Nigeria Famasi Limited Field Intelligence, Inc. GICMED Grinta Healthtracka Kapsule Medical Diagnostech Medpharma Alliance International Limited Octosoft Technologies Limited Pharmarun Pharmaserv Health Project Nigeria Limited Reductiona SASA Health Limited Tech Care For All Eastern Africa Technovera – Pelebox Smart Lockers Tibu Health UltraTeb Waspito WellaHealth Welo
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👨🏿🚀 TechCabal Daily- TikTok’s $379 million hiccup
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning! Someone quit his job over the weekend. Nigeria’s central bank governor, Godwin Emefiele, has resigned from his job at the apex bank. Yemi Cardoso, a man who could have been vice president of Nigeria in 2015, has been nominated to take Emefiele’s place. Here is all you need to know about him. In today’s edition Tiktok to pay $379 million fine MPESA to integrate Apple Pay soon Fact-checking African elections with AI The World Wide Web3 Event: Moonshot Conference Job opportuinities Social Media Tiktok to pay $379 million fine Image source: Zikoko Memes TikTok, the popular video-sharing platform, has been fined $379 million for not protecting children’s data according to the strict requirements of the European Union’s General Data Protection Regulation (GDPR). But that’s not all—TikTok has been given three months to revamp its data processing practices and make sure that they meet the GDPR standards. ICYMI: Concerns about privacy and child safety on social media platforms have been ringing alarm bells both within the public and among regulators. Notably, the UK’s Information Commissioner’s Office previously slapped TikTok with a $15.7 million fine for mishandling children’s data. Months ago, Meta-owned Instagram was also fined $431.9 million for data protection violations involving children. How did TikTok fall short? One of the risky things found out about TikTok was that TikTok allowed child accounts to be “paired” with unverified non-child users through the “Family Pairing” feature, without confirming whether the user was indeed the child’s parent or guardian. Another thing is the default account settings allowed anyone, both within and outside TikTok, to view content posted by underage users. TikTok failed to implement adequate technical and organizational measures to address this. Zoom out: The investigation didn’t reveal any breaches in TikTok’s age verification methods, a topic that had sparked disagreements with various regional regulators in the past.However, that and the ardent protective measures for young users of social media platforma continue to be an issue of concern globally. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Fintech MPESA to integrate Apple Pay Image source: Zikoko Memes Kenyan mobile money provider Safaricom is working on a partnership with Apple Inc. to integrate MPESA. Soon, users will have a shiny new option to send and receive funds across the globe. ICYMI:Back in 2018, M-Pesa executed a similar move by integrating with the American payment platform PayPal, enabling customers to deposit funds from M-PESA into the American payment system. Likewise, users had the option to transfer funds from PayPal into their M-PESA accounts. So when will Apple Pay happen? As of now, there are no specific details available regarding the current state of development. Interestingly, it was the Kenyan president who disclosed this upcoming partnership during his address at the ongoing US-African Business Roundtable just last week. Zoom out: While the news of Safaricom’s partnership with Apple Inc. is undoubtedly exciting, it’s essential to recognize that other forward-thinking payment providers like Nala had already embraced the international payment system months before. Recently, Nigeria-based payment processor Interswitch made headlines by announcing its integration with Apple Pay competitor Google Pay. Amplify your startup growth Be Bold. Be Heard. Be Funded. Pitch your startup on a global stage at this year’s MEST Africa Challenge to unlock the next stage of your startup’s growth. Apply by 9th October 2023. Apply today! #MAC2023 #UnlockYourPotential TC Insights Fact-checking African elections with AI As of 2022, there were 384 million social media users in Africa, making social media an easy way to access news and information for Africans. Yet this comes with its risks. The easy accessibility of information means fake news can spread widely, making it hard for internet users to trust what they consume online. According to a survey conducted by The University of Sheffield, almost half of African media consumers are increasingly exposed to misinformation every day. With multiple elections scheduled to be held across different African countries, there has been an increase in fake news across diverse social media platforms. While fact-checking plays a key role in fixing this, there are not enough human fact-checkers on the continent to keep pace with serving the public with verified claims, given the massive and high-speed flow of political misinformation during elections. Image Source: TC Insights Automated fact-checking (AFC) could help reduce the spread of online misinformation with tools driven by artificial intelligence like Storyzy, Emergent, Full Fact, Twitter Trails, Lazy Truth, ClaimReview, Factstream, etc. With a growing use around the world, adopting them can assist local fact-checkers in the processes of identifying or verifying fake news and information in real-time, and retrieving relevant evidence to debunk misleading claims as they arise. Abideen Olasupo, the founder of Nigeria-based FactCheckElections, believes the adoption of automated fact-checking in tackling election misinformation is still in its early stages in Africa, as there is a long way to go before the approach becomes widespread. “One challenge is the limited access to technology and the internet in many African countries, which makes it difficult to reach a wide audience with fact-checking information,” he told TechCabal. “Another is the limited funding for fact-checking platforms, which can make it difficult for them to scale their operations.” Meanwhile, automated fact-checking may not accurately detect misinformation spread through visual content and complicated claims. Adesola Ikulajolu, the fact-check lead at RoundCheck, said the limitation of automated fact-checking is when verifying certain misinformation that can only be done via human verifications like phone calls and emails. “This is because automation can only work perfectly to the degree to which it has been programmed,” he told TechCabal. Ikulajolu recommends that for automated fact-checking to be fully adopted for elections in Africa, there should be a deliberate coalition of fact-checkers to provide verified information and authoritative data
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Nigeria’s next CBN governor Yemi Cardoso could have been Vice President in 2015
President TInubu has nominated Yemi Cardoso as Nigeria’s next CBN governor. Cardoso’s political affiliation raises questions about CBN’s independence. Yesterday, President Bola Tinubu nominated Yemi Cardoso to head Nigeria’s Central Bank. Cardoso will be the 11th CBN governor if successfully confirmed by the Senate. He will succeed Godwin Emefiele, whose suspension and dramatic removal still raise legal questions. The nomination of the 66-year-old banker will revive the argument on whether bankers or economists make for better Central Bank governors. While Cardoso is a banker—he served as Chairman of Citibank—some of Nigeria’s more celebrated CBN governors have been economists. The primary test for Nigeria’s next CBN governor is price stability. In six years, the CBN has done poorly at controlling inflation, with last month’s inflation numbers reaching an 18-year high. Godwin Emefiele suggested that greedy middlemen were the drivers of high prices. His time as governor was notable for expanding loans to the federal government, CBN-funded agricultural schemes, and artificially pegged exchange rates. Many of the policies Emefiele pursued in his time as governor seemed to have the nod of President Buhari, calling the bank’s independence into question. Emefiele was also criticised for a short-lived attempt to run for the Presidency while he was CBN governor. Observers have similar concerns about his successor, Cardoso. A partisan CBN governor? In 2015, Cardoso was one of three names considered as Vice President to Muhammadu Buhari. “I was asked to submit three names, Yemi Cardoso, Wale Edun, and Yemi Osinbajo, but I told them if I submit three names, they would play a game, they might make it four and pick the fourth one. I gave them one name and that was Osinbajo,” Tinubu explained in the buildup to the 2023 elections. The new CBN governor is a long-term associate of Tinubu; he was appointed Lagos State’s Commissioner for Budget and Economic Planning in 1999 but did not complete his tenure as Commissioner because he won the Michael Romer Memorial Scholarship. Some political experts claimed that Cardoso would have been nominated as deputy governor of Lagos following Senator Bucknor Akerele’s exit if he had not taken up the scholarship. Instead, Femi Pedro became deputy governor. Despite questions about partisanship, Cardoso’s accomplished career with Citibank and Citizens International Bank and his academic and professional accomplishments will give some hope that he may make a good CBN governor. But like Wale Edun, who was appointed finance minister, he may have to shake off claims that his appointment is a continuation of Tinubu’s emerging pattern of placing his old allies in strategic teams. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read MorePresident Tinubu nominates Yemi Cardoso as Nigeria’s Central Bank Governor
President Bola Tinubu has nominated his former aide, Yemi Cardoso to head Nigeria’s Central bank. President Bola Tinubu has nominated Olayemi Michael Cardoso as the next governor of Nigeria’s Central Bank. His nomination comes exactly four months after the president’s suspension of former Central Bank Governor Godwin Emefiele. Cardoso’s appointment will need to be ratified by the Senate. Four deputy governors, Mrs. Emem Nnana Usoro; Mr. Muhammad Sani Abdullahi Dattijo; Mr. Philip Ikeazor and Dr. Bala M. Bello were also appointed to the leadership of the Central Bank, also pending Senate approval. Cardoso—who will be leading the nation’s apex bank for the next five years upon confirmation—was the former chairman of Citibank Nigeria with over 30 years of experience, having sat on the boards of Nigerian subsidiaries of Texaco and Chevron and chaired the committee of EFInA, a financial sector development organisation supported by the Bill and Melinda Gates foundation. Cardoso’s major test is the Monetary Policy Committee (MPC) which convenes in two weeks where a decision will be made to maintain or raise interest rates in response to mounting inflation. Two months ago, the apex bank elected to raise interest rates by 25 basis points. This came after the board members disagreed on the best policy to control inflation in a cash-strapped economy. With Nigeria’s inflation driven by food and transport prices, as well as a significant arbitrage at the FX market, the new CBN governor already has work on his hands.The next MPC meeting comes with much expectation that the Central Bank would hike their rates at least to 20%, according to experts.
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Software glitch leaves thousands of SA grant recipients in the dark
At the beginning of September, a software glitch caused grant recipients in South Africa to not have access to their funds. The reason has now been unveiled as an ongoing battle between the contracted system providers. On Wednesday, members of the South African parliament’s Portfolio Committee on Social Development were briefed about a software glitch at the beginning of September. The glitch, which left thousands of grant recipients in limbo was caused by an ongoing issue between provider Postbank and its subcontractor, Electronic Connect. According to Groundup, on July 31, Electronic Connect threatened to suspend the service by midnight unless its invoices were settled by Postbank. The company told Postbank it was owed R1.9 million for May and R1.7 million for June. From July onward, it also wanted to be paid 10 cents per payment authorisation, in accordance with the agreement between Postbank and Electronic Connect. Following the threat, Postbank approached the high court, stating that it could not pay the outstanding invoices because of ongoing investigations into Postbank and that the National Treasury had not approved the agreement between the two companies because it did not comply with public procurement protocols. Postbank requested the court allow it to make the backlog of payments amidst the investigations and to order Electronic Connect to continue providing the “payment switch” software, a request which was granted on August 2. Postbank also settled the pending invoices. Afterwards, the entity (Postbank), which is a subsidiary of the Post Office, appointed a new provider for the payment switch, although Electronic Connect still runs the core banking platform. The migration to the payment switch of the new provider caused the glitch which on September 4 left thousands of old age grant recipients unable to access their R2 080 grant on their SASSA/Postbank cards. GroundUp reports that the “glitch” was caused by inadequate testing on the new payment system. The system reportedly handles about 20 million transactions a month and traffic peaks on grant payment days at the start of each month. According to government data, 29 million people in South Africa receive monthly grants, representing about 47% of the population. 18 million South Africans receive state welfare grants, with another 11 million relying on the state’s R350 grant. About 35% of the grant recipients, around 6.3 million people, receive their money through the online system, which pays the money into their SASSA/Postbank cards. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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OneLiquidity comes out of stealth
Image Source: OneLiquidity OneLiquidity, a SaaS startup, has come out of stealth to provide businesses with technology infrastructure and liquidity. After operating in stealth for a year, OneLiquidity, a startup that offers technology, liquidity, and licensing services for businesses through APIs, has launched its platform at an event in Lagos. Founded by Munachi Ogueke, the startup provides liquidity in crypto and fiat and bespoke technology to businesses. Startups can delegate their technology, liquidity, and compliance needs to OneLiquidity and focus on innovating, acquiring customers, and scaling their business. Ebenezer Ghanney, the CEO of WeWire, shared that the startup “completely transformed the way we manage our crypto assets.” In fireside chats at the launch event, Emmanuel Babalola, the director of fiat businesses for the Middle East and Africa at Binance, Dickson Nsofor, the CEO and founder of Korapay, and Wole Ayodele, the CEO of Fincra, all spoke about the history of Africa’s fintech landscape and how the ecosystem had matured for SaaS startups like OneLiquidity to gain market share. “Crypto has become a huge part of the fintech industry. Not just globally but particularly in Nigeria today. All of this innovation that has been happening shows that there is still more to come,” said Ayodele. Babalola also shared that Binance controls the majority of the crypto market in Africa. In Nsofor’s fireside chat, he shared his experiences as a three-time founder and how consistency helped him overcome the failures of those businesses and launch KoraPay. “Once you’re ready to just keep failing forward, you’ll learn something and just keep going,” he said.
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