Can Bosun Tijani’s fibre optic plan bridge Nigeria’s digital divide?
Nigeria’s Communications, Innovation, and Digital Economy Minister, Bosun Tijani, has spent his first year becoming a key figure in the telecom industry. He envisions a world where every Nigerian can access high-speed internet via fibre-optic cables. We examine the progress and challenges towards achieving that vision. Niger, Nigeria’s largest state by landmass, borders six other states and the Republic of Benin. It also hosts a crucial 3,500-kilometre fibre optic cable network, owned by multiple operators and is the 6th largest fibre network that supports high-speed internet across Nigeria. Despite this, Niger State’s 6.7 million residents, most of whom live on less than $6 a day, get no high-speed internet from the fibre infrastructure under their feet. According to Suleiman Isah, Niger State’s Commissioner for Science and Technology, internet access in the state is provided by less than 400 telecom masts that serve the vast region. That there is so much high-capacity fibre underfoot and yet no high-speed for Niger state residents highlights the complexity of Bosun Tijani’s challenge to provide internet connectivity by fibre to millions of Nigerians outside major cities like Lagos and Abuja. Nigeria has 79,212.4 kilometres of fibre optic cables installed, predominantly serving urban centres like Lagos, Abuja, and the Federal Capital Territory. Most of that is intrastate fibre—last-mile delivery to end users. Only 35,000km of it is backbone fibre, a network of fibre cables that draw high-speed internet from the various international submarine cables that serve Nigeria. Nigeria has eight cables, seven of which terminate in Lagos State. These cables include Nigeria Cameroon Submarine Cable (NCSCS), the SAT-3/WACS, MainOne, Glo 1, West Africa Cable System (WACS), African Coast to Europe (ACE), the Equiano cable owned by Google and the most recent of them, 2Africa owned by META. Besides 2Africa, which landed in both Lagos and Akwa Ibom; every one of these cables terminates only in Lagos. The backbone network then distributes these cables across Nigeria. While states like Lagos and Abuja are well served by strong backbone and last-mile delivery, states with the majority of citizens in the lower income range, such as Niger, Sokoto, Ebonyi, Kebbi, and Jigawa, remain underserved, primarily due to lower average revenue per user (ARPU) figures compared to urban areas, which discourage investment by private sector players uncertain about the returns on those investments. While the business case for bringing fibre connectivity to major cities is clear, depending on private companies to connect states where the business case is weak has created a divide that the government believes is stifling the growth and development of its rural areas and Nigeria’s economic potential. The proposed solution is a national fibre backbone that connects every state with the expectation that fast internet access will lead to increased productivity and economic outcomes. This has been a thesis of Nigeria’s digital leaders since Omobola Johnson assumed the Minister of Communication Technology role in 2011, and making it a reality is a critical part of Bosun Tijani’s agenda. He envisions adding 90,000km of fibre backbone to bring Nigeria’s total backbone network to 125,000km, making it the third longest in Africa, after South Africa and Egypt. “Everyone knows that if you raise the quality of connectivity in any country, you raise the GDP. The projection in Africa is that you get almost a 2.5% contribution to the GDP for a 10% increase in connectivity,” he told TechCabal in Abuja. His ministry’s strategic blueprint, released in October 2023, focuses on enhancing connectivity for public institutions across all 774 local governments. “Improved quantity and quality of connectivity will create short and long-term opportunities by stimulating a more vibrant digital ecosystem,” Tijani said in a post on X, marking his first year as a minister. The fibre rollout aims to boost internet penetration by 70% by 2025 and achieve 80% coverage for underserved populations by 2027. The Strategic Blueprint also targets a 300-500% investment increase by the end of 2027. Tijani describes these goals as “building the backbone of the digital economy.” Bridging the connectivity gap demands politicking and actively courting friendships with state officials, a slow process in a government where every leader has separate objectives and agendas. In the past year, Tijani has found few friends willing to make the changes in approach that his plan will demand. Some governors, such as Hope Uzodinma in Imo, have been receptive. But there is still much work to do to get more buy-in. Suleiman Isah became Niger’s Commissioner for Science and Technology in August 2023 after a career in IT security at the Federal Inland Revenue Service. According to him, the state has actively tried to attract operators by lowering right-of-way fees, which gives companies the right to lay fibre cables, to ₦145 per metre for the past six years. They haven’t achieved as much success as he would want. Other states, facing revenue challenges, are reluctant to give up the revenue from right-of-way fees linked to infrastructure projects. Many states do not feel fee waivers translate to increased internet connectivity, and telcos have expressed reluctance to lay fibre cables in new markets without lower fees as an incentive. Besides, even when fees are lowered or waived, improved connectivity doesn’t always follow. In March 2024, Niger State waived right-of-way fees for one operator while offering incentives to other telcos. Yet, Isah told operators at a breakfast meeting organised by the Association of Telecommunication Operators of Nigeria (ATCON) in July 2024, “We don’t have any broadband presence, the highest presence we have is fibre to tower.” These tensions and mismatch of expectations frequently result in states denying telecom operators access to deploy infrastructure. In this fee conflict, it is the people who suffer. Across Nigeria, 97 communities — villages and local governments home to about 28 million people—lack internet access entirely, according to a spokesperson for the Nigerian Communications Commission (NCC). Only 39% of the population currently resides within 5 kilometres of a fibre network, with Lagos state having a high of 85% and Jigawa with a low of 12%,
Read MoreRising fuel costs push Nigerian commercial drivers to early CNG adoption
When we think about early adopters—brave people who often pay a premium in price and risk trying new products—of new technologies, commercial drivers may not readily come to mind. Yet, drivers in major cities like Lagos, Abuja, Ibadan, and Benin are becoming early adopters of vehicles powered by compressed natural gas (CNG). While CNG is better for the climate than petrol, these drivers aren’t switching because of environmental concerns. Instead, cost is the top-of-mind consideration as fuel prices reach record highs in Nigeria. CNG vehicles, which run on gas typically stored in the car’s boot, are cheaper than their petrol-powered relatives. While a litre of fuel costs between ₦877 and ₦1,200, a cubic meter of gas is about ₦235. While many drivers are skeptical about the safety of CNG vehicles, cost considerations are muting those worries. “With ₦5,000 worth of gas, I can take a round trip from Lagos to Ibadan,” said Olasukanmi, a driver on a waitlist to repurpose his car with the CNG kit at Nigerian Independent Petroleum Company (Nipco), an oil and gas company that has been offering CNG conversion services for over five years. “At the current fuel price, such a journey will cost me at least ₦30,000.” Yet the switch to CNG is expensive. Depending on the car and engine, it costs between ₦750,000 and ₦2.5 million to convert petrol-powered cars to CNG-compatible ones. “The prices are high because importing the accessories is expensive,” said Joseph, an engineer at Autogig, another CNG conversion center in Gbagada, Lagos. Stakeholders in the oil and gas sector have asked the government to make the kits duty-free, according to a 2019 report by Nigerian Independent Petroleum Company (Nipco), an oil and gas company that has been offering CNG conversion services for over five years. The import duties are still in place, and kits have become more expensive due to the devaluation of the naira. The cost of CNG kits, which ranged between ₦200,000 and ₦300,000 nearly five years ago, has more than tripled. The federal government is funding conversions for public transport drivers in Lagos, Benin, Ibadan, and Abuja. The government also offers a 50% discount on the conversion kit and installment payment plan to ride-hailing drivers. Ride-hailing company Bolt said the government has offered 100 vehicle slots to interested drivers. “[Nine] vehicles have been successfully converted, and 17 vehicles have been scheduled for conversion,” a Bolt spokesperson told TechCabal. Bolt is encouraging drivers to convert their vehicles to CNG to save costs, an unsurprising move since recent fuel price increases have worsened driver dissatisfaction with the business model. Those drivers have long demanded fare increases, citing increasing maintenance costs and commissions for ride-hailing companies. Drivers can save money in other ways when they switch to CNG. Its lower hydrocarbon levels make it healthier for the car engine and petrol. “You may not need to service your car engine in three months,” Adeshina Owolabi, a mechanic at a Mobil Station at Ilupeju, Lagos, one of the few CNG gas stations in Nigeria. The gospel of CNG’s cost benefits continues to spread among commercial drivers, but it is too early to tell if it will become mainstream. Since 2012, news of drivers turning to CNG has spiked in response to a surge in fuel prices. The upfront installation cost was a barrier to adoption for many commercial drivers at the time, and the economic situation has only worsened, so the financial hurdle remains. The government financing of the upfront cost may make it mainstream among commercial drivers. However, this renewed interest may also be another fad that will fade when drivers who cannot afford the conversion fees adjust their fares to the new fuel prices.
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👨🏿🚀 TechCabal Daily – In banking, it’s out with the old
In partnership with Lire en Français اقرأ هذا باللغة العربية TGIF! With just 12 days and a few tickets left, Moonshot is now offering 30% off all tickets! Now is the perfect time to be a part of the conversation about Africa’s digital landscape and treat yourself to two amazing days of gaining valuable insights from industry experts, networking with potential partners and investors, and being a part of the groundbreaking innovations shaping the African digital economy. Don’t miss out on this incredible opportunity! The clock is ticking! Get tickets here. Zenith Bank to complete banking platform migration in October Next Narrative Africa and HEVA Fund to back African filmmakers with $40 million Multichoice & NBCUniversal make additional Showmax investment The World Wide Web3 Opportunities Banking Zenith Bank to complete banking platform migration in October A Zenith Bank Office | Image Source: Zenith Bank What do you do when you’re the third biggest bank in Nigeria by assets, and your online banking services suffer because of a banking platform switch? You stop the migration process and continue only when everything is right. That’s what Zenith Bank did when a glitch in its data migration process disrupted online banking services leaving customers unable to access their accounts. The bank will finalise the switch in October after resolving the problems. Zenith is changing from Phoenix, a core banking software it previously used to Oracle’s Flexcube. Switching from one banking platform to another is a difficult process that can get messy due to the huge amount of data housed on banking platforms. The bank will also need to revalidate all the data it migrated to prevent human errors and check the functionality of the new banking platform before it can finalise the process. Anything can go wrong in these stages and might have caused Zenith to pause its migration. This is the third banking platform switch that we are reporting in a month, a trend that has seen Sterling Bank and GTBank switch their banking platforms for varying reasons. While GTBank’s banking platform change went smoothly, Sterling’s left customers unable to access banking services. Switching banking platforms happens for different reasons and while customers should not feel the change except for an improvement in banking services, Zenith’s 33 million customers were unable to use online banking services for weeks. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Funding Next Narrative Fund to splash $40 million on African FIlmmakers Image Source: TechCabal Next Narrative Africa, a Nigerian media production company and Kenyan-based investment firm HEVA Fund have launched a $40 million fund to invest in African films with budgets between $1 and $5 million. The fund, Next Narrative Africa Fund, targeting a first close in Q1 2025 and a final close by the end of Q4 2025, will provide equity investments in some projects while offering grants for others. Access to funding is a crucial challenge for Africa’s indie filmmakers, and while Netflix and Amazon Prime’s investment in African content is useful, it can hardly close the gap. Equity financing could provide a solution. In 2023, the success of the “Black Book,” a film produced by several recognisable names in Nigeria’s tech ecosystem, showed what’s possible in film investing. Startup investing often requires a time horizon of seven to ten years, but movies—which offer more modest returns—can return money to investors in under three years. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Funding MultiChoice & NBCUniversal invest further $164 million into Showmax Image Source: MultiChoice Showmax’s pursuit of African streaming dominance has received a $164 million boost from parent companies MultiChoice and NBCUniversal. It brings the total amount invested in Showmax to $284 million. In a trading update on the Johannesburg Stock Exchange (JSE) on Thursday morning, MultiChoice said the latest investment will finance Showmax’s operating expenses and working budget. MultiChoice and NBCUniversal contributed according to their 70% and 30% shareholding respectively. In November 2023, MultiChoice-owned Showmax surpassed Netflix’s subscriber count on the continent, with 2.3 million to Netflix’s 1.8 million. To gain more ground, Showmax will continue its investment into content and technology. Its long term goal is $1 billion in revenue in five years, trading profit breakeven by 2027, a 25% EBITDA margin (Earnings Before Interest, Taxes, Depreciation, and Amortisation), and 20% free cash flow margins. Introducing Pay with Pocket on Paystack Checkout Paystack merchants in Nigeria can now accept payments from PocketApp’s 2 million+ customers. Learn more → Insights Funding Tracker Image Source: Stephen Agwaibor/TechCabal Insights This week, Ghanaian cleantech Kofa secured $5m via an SPV from the Shell Foundation through its Transforming Energy Access (TEA) platform. (September 24) Here are other deals for the week: Kwiks, an HRtech startup based in Morocco, raised $827k in funding from Azur Innovation Management (AIM). (September 23) Nigerian ed-tech startup Tespire secured an undisclosed amount of pre-seed funding. The investors were not named. (September 25) Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. Before you go, our State of Tech in Africa H1 2024 Report is out. Click this link to download it. CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $65,317 + 3.01% + 10.14% Ether $2,646 + 2.05% + 7.15% Sui $1.71 + 0.24%% + 104.12% Solana $156.92 + 5.91% + 7.15% * Data as of 06:02 AM WAT, September 27, 2024. Opportunities Here’s an exciting opportunity for crypto innovators! Quidax in partnership with TC Battlefield has launched an exclusive award category to
Read MoreExclusive: Zenith Bank to finalise switch of core banking platform in October
Zenith Bank, a Tier-1 Nigerian bank with a market capitalisation of ₦1.19 trillion, will finalise the migration of its core banking platform in October after a glitch in the process disrupted online banking services and left customers unable to access their accounts. The bank, which previously used Phoenix, a software developed by London-based Finastra, is migrating to Oracle’s Flexcube. At least eight Nigerian banks use Flexcube. Two people familiar with the matter claimed Zenith Bank is switching platforms because Phoenix could no longer meet its growing technological and customisation needs. Zenith Bank did not respond to a request for comments. For banks, switching their core banking software is a significant change that requires transferring large amounts of data. The volume of data and the unique features of each system make this step particularly complex, increasing the risk of disruptions. Data migration also requires extra steps like revalidation to prevent human errors and functionality checks to ensure accuracy. One person with banking platform migrating experience told TechCabal that an error during this stage typically causes glitches and might have led to Zenith pausing its migration plans. “If you can solve data migration, then the rest [of the migration process] is straightforward,” one banking software engineer told TechCabal. Zenith Bank is part of a growing list of Nigerian banks changing their core banking platform. While some migrations, like GTBank’s switch to Finacle, have gone smoothly, others, such as Sterling Bank’s move to a custom-built platform, left customers unable to access banking services.
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LASU new updates on modalities of the online LACACA for 2024/2025 intakes
Lagos State University (LASU) has announced the commencement of the Online Central Admissions Clearance (LACACA) for newly admitted full-time undergraduate students for the 2024/2025 academic session. All admitted candidates are required to participate in the clearance process through the LASU LACACA 2024 platform, which will begin on Friday, 27th September 2024. Key information on LASU LACACA 2024 The LASU LACACA 2024 operation is a mandatory online admissions clearance exercise conducted through the LASU Central Admissions Clearance Application (LACACA). This initiative is part of LASU’s ongoing efforts to streamline the registration process for newly admitted students and eliminate the need for in-person submissions. Admitted students must complete the clearance process to confirm their admission status. Successful candidates will receive their matriculation numbers after completing the LASU LACACA 2024 process. However, candidates who fail to complete the clearance or are unsuccessful in their clearance attempt will be deemed to have forfeited their provisional admission. Steps to complete LASU LACACA 2024 To ensure a smooth clearance process, follow these steps: Make required payments: Before beginning the online clearance, candidates must pay the following: Acceptance fee Medical fee Clearance fee All payments must be made through the LASU e-payment portal, as the LASU LACACA 2024 operation is handled by LASU Consult Limited. Log in to LASU LACACA portal: After making the necessary payments, visit [www.lasu.edu.ng/consult] to log in using your JAMB registration number and admission details. Upload required documents: You will be prompted to verify details and upload scanned copies of your admission letter, O-level results, birth certificate, and other necessary credentials. Double-check the documents for clarity and accuracy. See in full: Confirm your basic personal information. Verify your disability status. Upload your O’Level scratch card information. Provide a copy of your original birth certificate. Submit your original UTME results. Include your original JAMB admission letter. Upload a scanned version of your signature. Complete the application by checking the “I Agree” box and clicking Submit. At this stage, your admission clearance will progress to 20%, and the documents will be reviewed by university officials. Candidates should monitor the status of their admission clearance, as necessary corrections may arise from the uploaded documents. If you require any corrections, you must pay for them through the LASU payment portal at https://www.lasu.edu.ng/epayment. Submit and await verification: Once all documents are uploaded and payments confirmed, the LASU admissions office will verify your submission. Once clearance reaches 100%, successful candidates can print their LASU Admission Clearance Certificate for the 2024/2025 academic year. Successful students will also assigned matriculation numbers, marking the final stage of their admission clearance. Important deadlines notes Start date: Friday, 27th September 2024 Unsuccessful Clearances: Students unable to successfully complete the LASU LACACA 2024 process will lose their provisional admission offers. Conclusion All newly admitted candidates are urged to promptly complete the LASU LACACA 2024 process to secure their matriculation numbers and avoid forfeiting their admission. By following the outlined steps and ensuring that all payments and documents are correctly submitted, students can expect a smooth clearance process.
Read MoreStarlink introduces $30 residential plan after Safaricom’s speed increase
Starlink has introduced a cheaper kit and a $30.87 monthly residential plan in Kenya three days after Safaricom increased its fibre internet speeds to compete with the Elon Musk-owned satellite internet service. The Starlink Mini will cost $208.38 (KES27,000), with a maximum speed of up to 100mbps, which could attract price-sensitive customers. In July 2023, Starlink launched in Kenya with the KES45,000 ($347.25) kit. Starlink’s residential Lite plan will intensify competition for subscribers nationwide, as users opt for cheaper and faster internet. In August, Starlink introduced a $15 monthly kit rental plan. On Monday, Safaricom, Kenya’s biggest ISP, upgraded its internet speeds to respond to Starlink’s growing popularity. The 10Mbps package was increased to 15 Mbps at KES 3,000 ($23), while customers on the 20mbps plan upgraded to 30Mbps. The telco also doubled the speeds for 40Mbps users and increased fivefold the 100Mbps package. It also introduced the 1Gbps package at KES 20,000 ($155) for heavy internet users. Safaricom has also been pressuring the Communication Authority of Kenya (CA) to block satellite ISPs like Starlink, highlighting the threat to the firm’s dominance in Kenya’s broadband market. Safaricom, which plans to launch a satellite internet service, has a firm grip on the data market, with a 36.7% market share. It has 14,000km of fibre optic cable connecting about 400,000 customers.
Read MoreNew fund backs African Filmmakers with $40 million
Next Narrative Africa, a Nigerian media production company, and HEVA Fund, a Kenyan-based investment firm, have launched a fund for African filmmakers. The $40 million Next Narrative Africa Fund will invest in movies with budgets between $1 and 5 million per project, taking equity in some movies it funds. In other cases, it will simply provide grants. It will raise and deploy $40 million over the next four years and is targeting a first close in Q1 2025 and a final close by the end of Q4 2025, with initial investments expected in the same year. The Next Narrative Africa Fund offers a new avenue for investment as interest grows in Africa’s film and audiovisual industry. Nigeria’s Nollywood and South Africa’s film industries have dominated headlines, topped box office charts, and yielded significant returns to investors, with some Nollywood investors reporting 3x returns. Major players like Netflix have invested about $178 million in film content production on the continent since 2016. The Next Narrative Africa Fund will invest in commercially viable projects with global appeal that are produced primarily in Africa. These projects will focus on themes like gender/racial equity, democracy/governance, climate, health, and inclusive economic growth. “Africans on the continent and in the diaspora have always been at the forefront of shaping global culture. We’re excited to support creatives who aspire to not only entertain but also inspire and usher in a new narrative about Africa and people of African descent,” said Akunna Cook, CEO and Founder of Next Africa Narrative Africa. The fund will be guided by an advisory board consisting of entertainment executives, filmmakers, film distributors and experts in narrative change, such as Darcy Heusel, Neon, Areej Noor of Statement Films, Dominic Buchanan of Home Team and Chin Okeke of Misan Partners. It will also make investments into the wider film & TV ecosystem including infrastructure.
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👨🏿🚀TechCabal Daily – The Blame Game
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy salary day! We are officially 13 days to the most crucial event in Africa’s digital landscape. Moonshot by TechCabal invites you to join this extraordinary gathering, uniting the brightest minds in Africa’s tech ecosystem for two unforgettable days of valuable insights, strategic networking, and remarkable experiences as we delve into the theme, “Building for the World.” Join industry leaders and like-minded individuals at Moonshot 2024 as we look into the future of African tech. Save a seat at Moonshot using the discount code MSVIP and get 20% off tickets. Get tickets here. Logistics and payments hiccups throttle Botswana’s e-commerce ambitions Look at the money printer and not food prices for Nigeria’s inflation Kenya in talks with Abu Dhabi for $1.5 billion loan The World Wide Web3 Opportunities E-commerce Logistics and payments hiccups throttle Botswana’s e-commerce ambitions Image Source: TechCabal Logistics and payment challenges are the two prominent challenges facing e-commerce in Botswana, According to startup founders, logistics and payment are the two prominent challenges facing e-commerce in Botswana. In the past year, at least five e-commerce startups have closed shop after COVID-19 briefly offered hope that e-commerce would catch on. In 2020, e-commerce reached fever with the government launching a National E-Commerce Strategy and a national marketplace called BW Reka. The national strategy feels like a relic from the past and BW Reka is now offline. Ephraim analyses some of the reasons e-commerce is struggling: “The best way to handle logistics [in Botswana] is to have an in-house fleet because courier companies would be too expensive,” said Phumulani Makgetho, co-founder of e-commerce startup Vaisa. “But having your fleet that can deliver nationwide is another challenge on its own.” Payments are another challenge. Botswana does not have a local gateway and startups have to rely on mostly South African solutions. Yet, all is not lost and the people in the arena are thinking through these challenges. Read about it here. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Economy Look at the money printer and not food prices for Nigeria’s inflation CBN Governor Yemi Cardoso There are two ways to view Nigeria’s inflation: through the eyes of a structuralist or a monetarist. The structuralists believe that since food prices constitute about 55% of the Consumer Price Index, the measure of inflation, and Nigeria’s notoriously low credit penetration (14%) render the effects of interest rate increases inefficient, inflation is driven by issues like poor crop yields, crumbling infrastructure, and rampant insecurity. Monetarists, however, believe that Nigeria’s history of recklessly printing money is the driver of inflation. In eight years, the money supply tripled as the CBN financed government spending. When the liquidity of an economy increases that rapidly, too much money chases too few goods. This leads to an increase in the price of goods as the law of demand and supply kicks in. Evidence tells us that the right way to look at the cause of Nigeria’s inflation is through the lens of a monetarist. Structural issues are not unique to Nigeria; most African countries also face insecurity, low crop yields, and infrastructure bottlenecks, but the growth of the money supply is unique to Nigeria. Under Emefiele, a structuralist approach was used to bring down inflation but it led to some of the highest inflation rates ever recorded. And it seems that we are still on the same path. In just one year of Yemi Cardoso’s tenure as the current central bank governor, the money supply has doubled. The current strategy of raising interest rates to curb inflation has proven ineffective, as the devaluation of the naira has deterred foreign investors, demand for the dollar remains high, and the money supply continues to grow. The central bank must coordinate with fiscal authorities to rein in deficit financing and implement fiscal rules that limit excessive liquidity injections into the economy. Until monetary policy gets its house in order, we can expect Nigeria’s inflation to remain stubborn. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Economy Kenya in talks with Abu Dhabi for $1.5 billion loan Image Source: Arab News In June, Kenya tried to plug a $3.7 billion hole in its budget by imposing a raft of taxes, including a tax on bread and other everyday items. The taxes, which would have brought in $2.7 billion, were dropped after week-long deadly protests. On September 10, the country’s Treasury Secretary announced that the government’s budget deficit had increased to KES767 billion ($5.95 billion) up from $3.7 billion. The widening budget deficit has put pressure on Kenya’s public finances, which are already strained by debt repayments, pending bills, and expenditure carryovers from the previous fiscal year. Although the government has promised to reduce budget spending by nearly 2% to KES3.87 trillion ($29.9 billion) in the new fiscal year, it still needs to fill its budget deficit. To do this, the East African country is now in talks with Abu Dhabi for a $1.5 billion loan to help bridge its budget deficit. Talks of the loan deal are still in the preliminary stages and details remain unclear. People familiar with the conversation say the loan will carry an interest rate of about 8.2%. Talks of the $1.5 billion loan package come as Kenya aims to break away from costly commercial debt. The country awaits a delayed $600 million disbursement from the International Monetary Fund. The IMF delayed funding after Kenya failed to meet up with
Read MoreLogistics and payments hiccups throttling Botswana’s e-commerce ambitions
At least five e-commerce startups in Botswana have closed since 2023, with founders citing fractured payments as the leading cause of the shutdowns. Artify Botswana, an online marketplace for visual art, closed shop in early 2024, citing an inability to meet its overhead costs. Artify Botswana found that buyers would visit the site but complete the transaction offline. Because the platform had a commission model, it missed significant revenue due to the offline transactions. “We implemented secure payment systems and verified seller features on the artist profiles to enhance trust,” said co-founder Nonofo Thamage. “[But] the heavy reliance on traditional payment methods such as cash-on-delivery continue to hinder the scalability of e-commerce in Botswana.” According to data from the 2023 Botswana Economy Society report, e-commerce generates over 89% of digital revenues in Botswana. However, e-commerce penetration in the country is still very low, with UN Trade and Development putting it at 5%. South Africa, in comparison, has a penetration rate of 49%. The low uptake of e-commerce and the aforementioned logistics and payment challenges have made it difficult for e-commerce startups to succeed. For other startups like Vaisa, last-mile delivery logistics proved to be a headache. Botswana is a small country in terms of population but relatively big in terms of size. As economic activity is mainly focused in and around the capital city of Gaborone, e-commerce startups looking to service customers beyond Gaborone became stuck. “The best way to handle logistics [in Botswana] is to have an in-house fleet because courier companies would be too expensive,” said Phumulani Makgetho, co-founder of Vaisa. “But having your fleet that can deliver nationwide is another challenge on its own.” In 2021, the Botswana government, in partnership with the UN Trade and Development (UNCTAD), launched the National E-Commerce Strategy. However, three years later, the strategy has failed to bear fruit, and BW Reka, a national e-commerce marketplace launched as part of the strategy, is now defunct. The Ministry of Investments, trade, and Industry did not immediately respond to a request for comments. Addressing the challenges impeding the e-commerce sector in Botswana will require a combined effort from the private and public sectors. “Developing warehousing, distribution, and last-mile delivery systems to reduce operational costs and improve customer experience would make e-commerce more appealing to both businesses and consumers,” said Tavonga Muchuchuti, founder of defunct startup BuyBDub. There is also a need for policies and regulations akin to open banking in fintech, making it easier for e-commerce startups to build e-commerce solutions. According to founders, some of these policies can include government investment in payment infrastructure and logistics, streamlining customs procedures to support export-focused e-commerce platforms, and requiring stringent inventory management like standardized SKUs. Collaboration would go a long way in turning e-commerce’s fortunes in Botswana. With only a population of 2.4 million, Botswana startups must consolidate efforts to address e-commerce challenges, said one founder who preferred anonymity to speak freely. To address the logistics challenge, startups are partnering with local courier companies to move their goods. On the payments front, the government has announced that it is working to implement a national payments switch, which will pave the way for the building of local gateways.
Read MoreSafaricom chair defends $800mn health contract amid conflict of interest fears
The chair of Safaricom, Adil Khawaja, has defended the telco’s involvement in an $800 million government contract to digitise the country’s health systems. This is even as opposition politicians alleged a conflict of interest over his law firm Dentons HHM’s role in the deal. Safaricom, Kenya’s most profitable public company, has spent much of this week promoting the Integrated Healthcare Technology System (IHTS) that it won in a consortium. The Safaricom-led consortium includes Konvergenz Network Solutions and Apeiro Limited, a firm linked to Indian businessman Gautam Adani through an Abu Dhabi-based Holdco. While Khawaja maintains that the project was conceived before he became Safaricom’s board chair, critics and opposition politicians have pointed at his law firm’s representation of Konvergenz and his close relationship with President William Ruto as a potential conflict of interest. “We gave some preliminary advice to Konvergenz. They are a big technology firm that has done many successful large projects. This project was started by former President Uhuru Kenyatta and it is only now that we are seeing its implementation,” Khawaja told Daily Nation, a local daily. Safaricom, which owns a 22.56% stake in the consortium, will provide network support for the project, while Apeiro Limited (59.55%) and Konvergenz (17.89%) will develop the platform. The system will link all health facilities in the country and store medical data. Dentons HHM is also Adani Group’s lawyer in a high court case challenging the Indian conglomerate’s bid for big-ticket projects including the 30-year Jomo Kenyatta International Airport (JKIA) concession and construction of high-voltage transmission lines. Khawaja said his law firm has over 10 years of experience in public-private partnerships (PPPs) which the Kenyan government has resorted to as mounting public debt cut spending on health, new roads, power lines, railways and airports. However, critics have questioned the opacity of the PPP process, arguing that such projects should be subjected to a competitive process. On Sunday, Safaricom CEO, Peter Ndegwa, also defended the project, saying it will help the country strengthen its health systems. This was even as critics questioned the track record of Apeiro Limited and Konvergenz Network Solutions in handling such projects. “We see technology as a tool for empowerment and transformation. This initiative represents a significant step in advancing our ambitions as a purpose-led technology company,” Ndegwa said in a statement.
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