- April 8 2025
- BM
Six Nigerian banks spent ₦269 billion on technology upgrades in 2024
Six major Nigerian banks spent ₦268.7 billion ($171.5 million) on IT infrastructure and tech-related services in 2024, owing largely to core banking system upgrades, underscoring how growing competition is forcing traditional lenders to increase tech spending. The banks—Guaranty Trust Holding Company (GTCO) Plc, United Bank for Africa (UBA) Plc, Zenith Bank Plc, Wema Bank Plc, Stanbic IBTC Holdings, and FCMB Group Plc—saw their combined IT spend surge by 74.5% from ₦153.8 billion ($98.2 million) in 2023, according to their latest financial statements. GTCO reported the highest IT spend with ₦88 billion ($56.8 million), followed by Zenith with ₦67.3 billion ($43 million). UBA, Stanbic, FCMB, and Wema recorded ₦48 billion ($30.5 million), ₦33.5 billion ($21.3 million), ₦26.8 billion ($17.3 million), and ₦5.55 billion ($3.6 million), respectively. Banks’ increased technology spending comes amid growing competition from fintech companies like Opay, PalmPay, and Moniepoint, which have become go-to platforms for many Nigerians after a botched currency redesign in early 2023 led to widespread cash shortages and exposed the limitations of traditional banking infrastructure. In 2024, major banks, including GTBank, Zenith, First Bank, Sterling Bank, and Access Bank, overhauled their core banking systems. 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Zenith Bank also migrated to Flexcube, developed by Finastra, replacing its legacy Phoenix system. However, the upgrades weren’t without hiccups. These technological changes led to prolonged service disruptions that impacted millions of customers. “The enhancement of core banking applications has stabilized the services of some banks,” said Ayodeji Ebo, managing director of Optimus by Afrinvest. “The increased IT expenditure has mitigated the failure rate and downtime during financial transactions.” He added that the cost of the banking software—priced in dollars—nearly doubled due to the naira devaluation. A core banking software expert who asked not to be named to speak freely told TechCabal that tier-1 banks spend at least $10 million annually on core banking software licenses and support. Still, banks see long-term benefits. Gbolahan Ologunro, portfolio manager at FBNQuest Asset Management, said the digital push is key to expanding retail customer acquisition and financial inclusion. “Improving customer experience through digital platforms would increase the appetite of those who are yet to be banked and get themselves finally included in the financial net,” he said. Nigeria’s financial inclusion rate rose to 64% in 2023, up from 56% in 2020, according to data from EFInA. The Central Bank of Nigeria expects that figure to hit 80% by 2026. The surge in IT spending is also fueling growth for IT vendors. Computer Warehouse Group (CWG) Plc, which provides managed services, IT infrastructure support, and integration to telcos and banks, saw profits soar by 428.4% to ₦3.04 billion in 2024, hitting the billion-naira mark for the first time. CWG supplies Finacle, Infosys’ core banking application, to banks. As banks continue to ramp up tech spending to stay competitive, the challenge is no longer just about upgrading legacy systems: it’s about staying relevant in a market where speed, convenience, and customer experience determine the winners.
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- April 8 2025
- BM
TechCabal Daily – No dirty business
In partnership with Lire en Français اقرأ هذا باللغة العربية Howdy? If you step into a Nigerian international airport, you’re likely to be greeted by different “free” Wi-Fi options to choose from. However, none of these Wi-Fi options really work. I’m sure you’re wondering, it’s 2025—how come these Wi-Fi networks don’t work? Hold your thoughts for a second; Frank Eleanya, our resident telecommunications reporter, has answers for you here. Insider secret: number three may shock you. We hope you’re not reading this from the airport and that your internet holds steady while you read this edition. Let’s dive right in! Kenya’s Central Bank wants banks to be honest about their climate deals 16 years later, Paga’s new act is a financial ecosystem Can Nigerian commercial banks really implement the ‘no transfer charge’ policy? Kenya is set to reshape its crypto market with a new law World Wide Web 3 Events Banking Kenya’s Central Bank wants banks to be honest about their climate deals The Central Bank of Kenya (CBK) building in Nairobi, Kenya. IMAGE | COURTESY The Central Bank of Kenya (CBK) just gave banks a ticking clock: 18 months to start publicly revealing how green—or not—their money moves really are. Think of it as a financial detox. Under new rules tied to Kenya’s Green Finance Taxonomy (KGFT), banks will need to show the environmental impact of every business and project they fund, from solar startups to fossil fuel giants. Banks make money by investing in markets, lending, and financing projects, but not all investments are equal. The move to require transparency on environmental impacts forces banks to prioritise sustainable ventures, ensuring they direct capital toward projects that contribute positively to the environment rather than supporting harmful industries. It’s a direct hit on greenwashing—the common corporate habit of slapping an eco-friendly label on dirty business. Now, banks must walk the sustainability talk or face scrutiny. From 2026, they’ll have to disclose climate risks like carbon-heavy investments and prove they’re shifting toward clean, low-carbon projects. You should care if you’re an investor, climate advocate, entrepreneur, or even just a curious citizen. The CBK deadline will force transparency in a sector that’s long hidden behind environmental, social, and governance (ESG) buzzwords. It could starve polluting industries of cash and flood climate-resilient ventures with much-needed capital. It also opens the door to a growing green bonds market, bringing in international investors hungry for real impact. Banks now have 18 months to get their act together—train risk teams, overhaul credit models, and align with global climate standards. After that, it’s game on. Kenya just raised the stakes in Africa’s climate finance game, and the world is watching. Seamless Global Payments With Fincra. Issue accounts in NGN, KES, EUR, USD & more with one integration. Send & receive funds seamlessly across borders; no more banking hassles or complex conversions. Create an account for free & go global today. Fintech 16 years later, Paga’s new act is a financial ecosystem Image Source: Wunmi Eunice/TechCabal What do you do after sixteen years of running your fintech startup in Nigeria? If you are Tayo Oviosu, Paga’s CEO, you start to build an ecosystem. Paga was initially an agency banking platform but today it’s an ecosystem of three businesses: Paga Engine, a fintech infrastructure; Paga, a Cash App-like consumer-focused fintech; and Doroki, a retail management platform. Building an ecosystem is the most sensible path for a fintech to exert control over the transactions it processes. As long as money stays within this ecosystem, the fintech can improve the customer’s experience with minimal external influence. But an ecosystem is only strategic if the fintech has achieved scale, as there’s little value in building an ecosystem that processes only a couple of thousand transactions. Without meaningful volume, the benefits of control, efficiency, and improved user experience don’t fully materialise. Paga is averaging over ₦1 trillion ($653 million) in monthly transaction volume from this ecosystem, and the business is growing at a venture scale. Last year, Paga’s ecosystem processed 124 million transactions worth ₦8.7 trillion ($5.6 billion), over 30% of its all-time transaction volume and 40% of its total processing value. African payment processors typically derive the larger share of transactions from their B2B product, and Paga is no exception. Most of the fintech’s growth is driven by Paga Engine’s customers, like Meta, Cleva, Omnibiz and Lemfi, which use the infrastructure to collect payments and offer wallets. Its consumer business is also not doing too badly. Oviosu told TechCabal’s Muktar Oladunmade that Paga, its consumer business, grew by almost 200% last year. The profitable company is raising money to charge this growth. It also plans to expand its consumer business into another market in Q2 2025. Introducing Zap by Paystack! Zap is Paystack’s first consumer-facing app designed for simple, fast and secure payments via bank transfer. Download Zap on Android and iOS → Banking Can Nigerian commercial banks really implement the ‘no transfer charge’ policy? Image Source: Wunmi Eunice/TechCabal What started as an April Fool’s Day marketing campaign—or so we thought—from Sterling Bank, a tier-2 Nigerian commercial bank, turned out to be serious business. On April 1, the bank posted on the social media platform X, “We’re doing our part by cancelling transfer fees. Let the other banks copy.” Since that post, Sterling Bank has been running a well-oiled marketing campaign, winning the hearts of many Nigerians who once enjoyed no-transfer-charge offers from rebel digital banks like Kuda—the self-proclaimed ‘bank of the free’ that was no longer free. Who Kuda thought? But the reality is, banks make billions of naira in revenue from interbank transfers, so cancelling transfer fees—no matter how small—means giving up a tidy non-interest income stream. Even digital banks that once offered free transfers have since walked it back. Interbank transactions go through a switching platform like the Nigerian Inter-Bank Settlement System (NIBSS), which charges a processing fee of ₦3.75 ($0.0024). When fintechs or banks waive that charge, it means they’re absorbing some of the cost. But big
Read More- April 7 2025
- BM
After 16 years, Paga is building a financial ecosystem of three businesses
As we head to his office on a hot Friday morning in Lagos, Tayo Oviosu, the CEO of Paga, likens himself to a duck—calm on the surface but paddling furiously underneath. A couple of days from when we meet, his fintech startup will turn 16. Paga is his life’s work and also the first word his son ever said. What started as an agency banking platform in 2009 has evolved into an ecosystem of three businesses: Paga Engine, a digital infrastructure platform for financial institutions; Paga, a consumer-focused fintech similar to Cash App; and Doroki, a retail management platform designed to serve small and medium-sized businesses. “We’ve evolved significantly since the pandemic,” Oviosu told TechCabal. “ People still think of Paga primarily as an agent network, but we’ve grown into a world-class, highly scalable, multi-currency, digital payments and financial services engine.” In 2024, Paga’s ecosystem processed 124 million transactions worth ₦8.7 trillion ($5.6 billion), over 30% of its all-time transaction volume and 40% of its total processing value. This year, the company is averaging over ₦1 trillion ($653 million) in monthly transaction volume. Most of these transactions are driven by Paga Engine, the infrastructure that allows businesses to leverage Paga’s wallets, instant payments, and collection services. Meta, Cleva, Lemfi, and Omnibiz are some of the over 200 businesses currently relying on Paga Engine. “Because we can hold funds, when money is sent to one of those wallets from any bank, the recipient gets it in under three seconds. No T+1, no T+2 settlement delays,” Oviosu said. Why build an ecosystem? Oviosu saw the need to build Paga’s ecosystem after hearing other founders describe challenges Paga had already solved internally. “Three years ago, we decided that to make it simple for a billion people to access and use money, we would have to open up all our infrastructure to other third parties and enable them to build on that infrastructure,” he said. While building a financial ecosystem is challenging and capital-intensive, requiring significant investment in licensing, staffing, and technology, it offers fintechs the best path to controlling transactions by reducing external interference and increasing their margins. When a customer shops with a business using Doroki and pays from their Paga account, the money remains within Paga’s ecosystem, resulting in lower transaction costs and a smoother, faster payment experience for the customer. “The first big lesson is that everything takes longer than you expect, especially when creating something entirely new,” Oviosu said, reflecting on his lessons from building Paga’s ecosystem. “Convincing people to pay from their phones took years. There’s always a behaviour change required, which takes time. Resilience and belief in your mission are vital because the stress of operating here is significant.” That resilience has paid off for Paga’s consumer business, which targets the “mid to upper-end market” and is growing almost 200% in active users and revenue yearly. Rather than competing for Nigeria’s mass market—largely dominated by OPay, PalmPay, and Moniepoint—Paga is positioning itself alongside neobanks like Sparkle, focusing on more affluent users. An ecosystem also provides a buffer when regulators take unexpected actions. In April 2024, Nigerian regulators banned five fintechs, including Paga, from onboarding new customers for six weeks. By establishing Doroki as a standalone business, Paga reduces its reliance on any single revenue stream, helping to safeguard the company against future regulatory disruptions. Nowadays, Paga has revamped its know-your-customer (KYC) process, relying heavily on Nigeria’s national identity number (NIN) and bank verification number (BVN) and a face match using liveliness checks from Smile ID, which Ovious said cut fraud dramatically. The fintech also verifies BVN and blacklists bad actors using an industry-wide fraud list. What does the future hold for Paga? Building on its recent growth, Paga plans to expand its consumer business into another African market in Q2 2025. The holding company is also raising capital after achieving net income profitability in 2024. “We are raising capital to drive growth because we’re not yet in a place where our profitability can drive all the growth we want,” said Oviosu, a former vice president at Travant Capital Partners, a private equity fund. “We’re cautious about growth at all costs; we prefer disciplined growth.” Last year, Oviosu told TechCabal that he would prefer an acquisition over an IPO. It’s an opinion he still holds today, but he sees Paga completing a large private equity deal before a full exit. “I still lean toward a strategic acquisition because it often aligns better with long-term strategy and reduces short-term public scrutiny. But right now, our priority is scaling,” he said.
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- April 7 2025
- BM
How to convince local HNWIs to invest in African startups, according to Marge Ntambi
African investors often champion the need for more local capital on the continent. Their argument is straightforward: local investors have on-the-ground knowledge and are better positioned to navigate local challenges than foreign investors operating from afar. It’s this belief that inspired Benue Capital, an early-stage, sector-agnostic VC firm investing in East African startups, to organise a summit educating Ugandan high-net-worth individuals on the value of Africa’s tech ecosystem. Benue Capital is also the first VC firm with Ugandan partners and LPs. “We believe that true ecosystem ownership starts with local investment. While international capital can accelerate growth, it often lacks a deep understanding of local dynamics and on-the-ground realities,” Marge Ntambi, venture partner at Benue Capital, told TechCabal. “Local high-net-worth individuals, on the other hand, bring not only capital but also strong local networks, business experience, and a real stake in the success of the ecosystem. When they invest, they’re investing in their communities, their economy, and their legacy,” she added. But convincing wealthy Africans to shift from familiar investments like real estate and brick-and-mortar businesses to tech startups isn’t easy. Startup investing comes with higher risk and longer return timelines, even though it offers the potential for outsized gains. “We push back on these myths by spotlighting companies like Asaak, which started in Uganda by financing boda boda riders and has since expanded into Latin America, acquiring a Mexican mobility startup in the process. That’s a Ugandan-born tech company solving real problems and scaling across continents. The issue isn’t whether tech works here; it’s that most local investors haven’t been in the room to witness it,” Ntambi told TechCabal. I spoke to Marge Ntambi to understand Benue Capital’s process of convincing local HNIs to invest in African startups and the decision to go after them. This interview has been edited for length and clarity. How did you initially identify the untapped potential of HNWIs within Africa, and what made you decide to pursue this path? It started with one simple observation. Every missed opportunity was someone else’s win. We saw local founders turning to international investors to fill their rounds because, outside of grants, there were few avenues to access equity financing within the local market. Meanwhile, wealthy Ugandans, many of whom regularly invest in land and property, remained on the sidelines of the tech economy. The disconnect was too glaring to ignore. There was clear capital on the table, but it wasn’t flowing into the businesses shaping the future. That’s when we realised the real challenge was awareness and trust and that mobilising local capital would require building both. What are the biggest hurdles you encounter when convincing HNWIs to invest in the tech startup space? Three key challenges stand out: lack of understanding, the fear of losing money, and discomfort with the structure of startup investing. Most HNWIs are used to tangible assets like land, buildings, or traditional businesses that they can control, value easily, and exit when needed. In contrast, tech startup investments are mostly equity-based and illiquid and come with long time horizons. That mental shift from fixed assets to future upside requires a different kind of risk appetite. Our job is to bridge that gap and show that, when done right, this kind of smart risk-taking can yield outsized returns. What misconceptions about tech investing do you most commonly have to dispel? That it’s only for Silicon Valley, that you need deep technical expertise to get involved, and that African startups don’t scale. The issue isn’t whether tech works here; it’s that most local investors haven’t been in the room to witness it. How do you educate traditional investors about the potential returns and broader impact of venture capital investments in technology? We meet them where they are by comparing venture capital to what they already know. For example, we break down how investing $100K in a promising startup is not unlike buying a plot of land. It appreciates over time, but the upside can be significantly higher if the business scales. We walk them through return data from Africa-focused deals, showing how a few successful bets in a diversified portfolio can more than make up for the losses. We also explain timelines and why venture capital requires patience but can deliver outsized returns. Ultimately, what gets them over the line is the stories and founders they could’ve backed that make it real. When we show them how companies like Asaak or SafeBoda started here and scaled regionally or even globally, it hits different. It’s no longer theory. It’s a missed opportunity they could’ve owned. Do you use case studies, success stories, or data-driven pitches to illustrate the opportunity in African tech? Data opens the door. Stories close the deal. One of the most powerful examples we showcased at our recent HNWI Summit in Kampala was SioValley Technologies, a Ugandan startup founded by a graduate of Uganda Christian University. The founder created an organic, plant-based spray that extends the shelf life of fresh produce without refrigeration, solving a very real problem for farmers, exporters, and consumers in a country where post-harvest loss is staggering. After receiving early support from Acumen, the founder was able to build a facility in Ntinda to serve exporters. Later, he brought on a co-founder, restructured operations to reduce costs, and expanded access to smallholder farmers, exporters, and retailers. The team has gone on to raise more financing, mostly from non-Ugandan investors. When we shared this story at the summit, it made local HNWIs stop and reflect: “This was a Ugandan founder, solving a Ugandan problem, and we weren’t at the table.” Are there investment vehicles or syndicate models that make it easier for HNWIs to dip their toes into tech investing? Yes, and making the entry point simple and low-risk is key. We often recommend starting with syndicates, where HNWIs can co-invest alongside more experienced angel investors. We also encourage co-investment models with VCs like us, where HNWIs benefit from our due diligence, deal sourcing, and post-investment support. This
Read More- April 7 2025
- BM
Kenya proposes first crypto bill to regulate ICOs, stablecoins, exchanges
Kenya has proposed its first regulatory framework to regulate cryptocurrencies and other digital asset services, marking a major policy shift in one of Africa’s most active crypto markets. The Virtual Asset Service Providers Bill 2025 proposes licencing rules for stablecoins, initial coin offerings (ICOs), digital wallets, crypto exchanges, and investment advisors dealing in virtual assets. If passed, the bill would create a dual regulatory framework, assigning oversight roles to the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA). Under the proposal, CBK will regulate wallet providers, stablecoin issuers, and crypto payment processors, while CMA will licence exchanges, tokenisation platforms, investment advisors, brokers, and virtual asset managers. The bill also defines and brings Initial Coin Offerings (ICOs) under regulation. Any company issuing or selling digital tokens to raise money will be required to get approval from the CMA, disclose project details, and follow rules that resemble those of Initial Public Offerings (IPOs) in the stock market. If approved, the bill aims to protect investors, especially after a string of failed and fraudulent coin offerings. It also introduces rules for tokenisation—converting real-world assets like land or artwork into digital tokens on a blockchain. Tokenisation platforms must register with the CMA and disclose how assets are valued, stored, and transferred. This could open up access to fractional investments but raises new concerns about verification and fraud. Stablecoin issuers will also face new licensing and reserve requirements, including regular audits and governance standards—an effort to minimise systemic risks as dollar-pegged tokens gain popularity in cross-border remittances and payments. Non-compliance could lead to fines ranging from KES 3 million ($23,000) to KES 20 million ($155,000), jail terms, and permanent blacklisting from the sector. The bill marks a dramatic reversal from the CBK’s 2015 stance, when it warned the public to steer clear of cryptocurrencies, citing regulatory risks. Today, Kenya has one of Africa’s highest crypto adoption rates, driven by mobile penetration and a growing appetite for digital assets. A 2023 report by Financial Sector Deeping (FSD) Africa found that nearly half (47%) of Kenyan consumers own cryptocurrency, while stablecoin volumes across Africa topped $30 million over the 12 months ending July 2023. If implemented, the legislation could boost investor confidence and attract blockchain-based innovation, but its success will depend on effective enforcement and regulators’ ability to keep pace with the rapidly evolving crypto market.
Read More- April 7 2025
- BM
Why free WiFi at Nigerian airports doesn’t work
By all modern standards, free public WiFi should be an essential amenity at any international and domestic airport. In today’s hyperconnected world, travelers expect seamless internet access to keep in touch with loved ones, handle business emails, and navigate foreign cities. Yet, in Nigeria, this expectation remains unmet. Of the country’s 32 domestic and international airports, only two—Murtala Muhammed International Airport in Lagos and Nnamdi Azikiwe International Airport in Abuja—offer any form of free WiFi. Even at those hubs, the connections are unreliable at best and non-functional at worst. Walk into either the Lagos or Abuja airport, open your device, and you might spot network names like “FREE AIRPORT WIFI FAAN/NCC” or “Glo Free WiFi.” But that’s usually where the experience ends. The network might appear strong, but click to connect and you’re met with a portal that never loads or, worse, an error message. So why, in 2025, can’t Nigerian airports get this seemingly simple service right? Broken connections: The backroom story The failure of airport WiFi in Nigeria is not due to a lack of intention— you can get quality WiFi in lounges managed by private companies within the airport— but rather a complex mix of technical, bureaucratic, and economic challenges. Firstly, infrastructure is a major issue. Many airport routers are outdated or too few to handle the volume of travellers who pass through the airports on any given day. Without proper network planning or ongoing maintenance, connections become bottlenecked or break down entirely. Even where signals are strong, backend systems often fail—authentication portals don’t load, or the routers themselves aren’t connected to the internet. Some networks broadcast service set identifiers (SSIDs) simply for optics, but they have no real bandwidth behind them. The backbone of Nigeria’s internet—terrestrial fibre and microwave links—can be unreliable, especially in non-urban areas. Even in urban areas like Lagos and Abuja, home to Nigeria’s major international airports, inequitable distribution of telecom equipment means that the internet is always fluctuating and unreliable. Combine that with frequent power cuts and rampant fibre cable vandalism, and it’s no surprise that routers often go offline or never reboot properly. Add to that a chronic lack of accountability. Unlike private ventures with customer-facing service models, public WiFi systems at airports often have no assigned contractor responsible for uptime or quality. When something breaks, it may take weeks—or never—to fix. Investors’ reluctance Free WiFi doesn’t come cheap. Laying fibre, installing access points, securing bandwidth, and maintaining uptime costs real money. But for internet service providers (ISPs), the return on that investment is murky. Free WiFi isn’t a direct revenue driver unless it’s bundled with advertising, user analytics, or other monetized services. “The airport might start initially paying, but their expectation is the service provider will find a way to make money from the service. So, the airport might pay for installation and maybe a few months of bandwidth. This leaves service providers trying to find a way to commercialize,” Ladi Okuneye, CEO of UniCloud, a local cloud infrastructure provider, told TechCabal. The most widely considered commercial model for public Wi-Fi is advertising. However, major ad platforms like Google typically won’t enter revenue-sharing agreements with service providers unless the network attracts significant traffic—often tens of thousands of users. In 2024, Nigerian airports recorded a total passenger traffic of approximately 15.68 million, comprising around 11 million domestic travelers and 4 million international travelers. Building a consistent internet user base out of travellers can take months or even years, during which the service provider must cover the full cost of bandwidth and network maintenance without generating revenue. To manage these ongoing expenses, providers may cut corners on operational costs, which often leads to a decline in service quality. Poor quality WiFi can damage a brand’s image if passengers associate it with failure. Additionally, Nigeria’s regulatory landscape is notoriously complex. ISPs may need approval from the Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Communications Commission (NCC), and even the Nigerian Airspace Management Agency (NAMA)—each with its own processes and delays. This red tape deters all but the most persistent operators. Then, there’s the challenge of data monetisation. Globally, free WiFi models often rely on user analytics and targeted advertising. But in Nigeria, data privacy regulations are still evolving, and the lack of clear enforcement makes ISPs hesitant to invest heavily in user-tracking systems that might later be deemed non-compliant. “There is also the issue of maintenance after the initial infrastructure is provided. Someone needs to be responsible and bear the cost,” Rotimi Akapo, Partner and Head of Telecommunications, Media, and Technology (TMT) practice group at Advocaat Law Practice, told TechCabal. Who’s actually in charge? Confusion persists over which government agency is truly responsible for providing internet services at Nigerian airports. While the Federal Airports Authority of Nigeria (FAAN) owns and operates the majority of airports in the country, its core mandate is focused on airport operations rather than digital infrastructure. According to a FAAN official who requested anonymity, the Nigerian Airspace Management Agency (NAMA) is technically responsible for managing internet infrastructure at airports. In reality, both agencies often rely on third-party Internet Service Providers (ISPs) to install and maintain WiFi networks. As part of the 2025 national budget, the Nigerian government has proposed allocating ₦1.5 billion to improve internet connectivity at five international airports across the country. In December 2024, NAMA’s Managing Director, Umar Ahmed Farouk, announced the restoration of WiFi service at Lagos’s Murtala Muhammed International Airport. He urged travelers to connect to the SSID “Free Airport WiFi NAMA, NCC” for complimentary internet access. However, passenger experiences have been disappointing. Many users report that the network rarely connects, and when it does, the internet is often unusable. NAMA officials did not respond to multiple requests for comment. “NAMA is responsible for managing airspace communications—not passenger-facing WiFi,” said Sindy Foster, Principal Managing Partner, Avaero Capital Partners, an aviation consultancy. “The NCC (Nigerian Communications Commission), which regulates telecommunications, may be involved in public WiFi initiatives, but it’s typically
Read More- April 7 2025
- BM
New Fund Sabou Capital to invest up to $500k in 25 African SMEs
Surrayah Ahmed, co-founder of Aduna Capital, one of Nigeria’s most active angel networks, has launched a new SME fund, Sabou Capital, to bridge investment gaps in Anglophone and Francophone Africa. The SME fund will invest between $350,000 and $500,000 in 25 late pre-seed to Series A SMEs in agriculture and agroprocessing, renewable energy and climate, supply chain, logistics, and mobility sectors. The name Sabou is derived from “Sabo,” a Hausa word meaning rebirth or renaissance, blended with a French tonation. The fund is taking a different approach from traditional venture capital firms, targeting SMEs that are primed for scale but lack structured financial support. Unlike funds focused on high-growth tech startups, Sabou, which styles itself as a micro-private equity firm, is investing in businesses that use technology to improve operations rather than being purely tech-driven. Ahmed said differences in vision at Aduna Capital—which remains active as an angel investment group in Northern Nigeria—led to the creation of Sabou Capital, with a broader focus on SMEs in secondary cities across Nigeria, Senegal, and Côte d’Ivoire. “Our team was well aligned on the ‘what’ and the ‘why,’ which many co-founders consider the most crucial, while little focus was given to the ‘how,’” said Ahmed. “This was a learning point for me as I discovered that even the scale of impact one wants to make differs from person to person.” The fund expects a modest 2-3x return on investment—closer to the 3- 5x range typical of private equity—compared to the high-risk 10x expectations of venture capital. By targeting companies that fall outside the traditional VC model, Sabou Capital will compete with private equity firms such as Aruwa Capital, Afrinvest, and Catalyst Fund. “We are more of a hybrid—looking at SMEs with growth potential, not necessarily VC-scale, but with unmet demand that can leverage funding and technical assistance to grow. Think of us more like a micro-PE,” he said. Sabou’s differentiated approach furthers an argument that most African startups don’t fit the mold of the typical venture capital model. “Because most companies on the continent are actually SMEs and do not fit into the definition of VC-backed companies,” Ahmed said. “There are a few that are VC backable, but then that will mean most investors backing the same companies without a differentiated portfolio.” The fund is also adopting a gender-lens investment approach, prioritizing funding for women entrepreneurs. “For every dollar invested in a woman, the return is 2x,” Ahmed noted. “Yet women face disproportionate barriers to funding. They often lack the networks and resources to go out and raise capital.” Ahmed, who previously struggled to access funding as an SME founder in Northern Nigeria, understands these barriers firsthand. “It wasn’t possible for me at the time to travel to Lagos for fundraising. I ended up raising from a family office in Northern Nigeria, which ultimately led to selling my company before we were ready,” he said. To support its portfolio companies, Sabou Capital will offer technical assistance to ensure businesses have strong corporate governance, financial management, and operational systems in place before deploying funding. “We provide support to make sure these businesses are investment-ready,” Ahmed said. A critical part of Sabou’s strategy is the addition of Christian Amouo, a private equity professional with deep expertise in Francophone markets, as a general partner. Amouo previously launched his fund in Cameroon, investing in four companies, three of which remain operational. While Nigeria remains a key market, the firm is diversifying risk by investing in Senegal and Côte d’Ivoire—economies with projected annual growth rates above 6% and currencies pegged to the Euro. “As Nigeria grapples with high inflation, currency devaluation, and slower growth, we decided to leverage the expertise of the founding team to diversify our risk,” Ahmed said. Sabou Capital has yet to begin formal fundraising but plans to launch a roadshow in July. With 20 startups already in its pipeline, the firm aims to shortlist two to three for its first round of investments. “The goal is to scale this model across West and Central Africa,” Ahmed said, stressing the fund’s long-term vision to turn SMEs into large enterprises and exit to larger private equity firms or strategic buyers.
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Kenya’s Central Bank sets 18-month deadline for banks to disclose climate risks
The Central Bank of Kenya (CBK) has given all commercial banks 18 months to start disclosing the environmental impact of the businesses and projects they finance. The move is part of the regulator’s efforts to clean up sustainability claims in Kenya’s banking sector and a crackdown on greenwashing—a growing concern as more banks and companies rush to brand themselves as environmentally responsible. CBK has issued Kenya Green Finance Taxonomy (KGFT), a classification system that identifies what qualifies as “green” under local and international climate standards. The new rules will require lenders to publicly disclose their exposure to climate-related risks, including investments in sectors with high greenhouse gas emissions. The idea is to move capital away from businesses that worsen the climate crisis and toward those that support low-carbon, climate-resilient investments. The 18-month transition period will be a grace window and a testing ground for all commercial banks to build internal capacity, train risk teams, and integrate climate screening into their credit assessment models. “The KGFT, which will be a live document subject to periodic updates, initially focuses on climate change mitigation and adaptation as its objectives,” the regulator said. “Other environmental objectives, such as biodiversity and related objectives, will be considered in future updates.” The announcement signals a significant shift. Climate risk will now be treated as a material financial risk, not just a reputational issue. CBK said the taxonomy is meant to give banks a clear, standard language for identifying climate-friendly investments and flagging the ones that are not. In recent years, “green” has become one of the most overused words in financial reporting. Globally, investors and regulators have grown wary of the rise in ESG-labelled products without evidence to back their bold environmental claims. The regulator said the transition period will open a window to engage with banks before a mandatory rollout in late 2026. “The transition period will also facilitate further engagement between Central Bank of Kenya and the banking industry on any changes deemed necessary to facilitate smooth implementation of KGFT,” CBK said. The new rules will likely cut the future financing of sectors like oil and gas, mining, and large-scale agribusiness. However, it could help banks win climate-conscious investors and tap into the growing market for green bonds and climate-aligned lending.
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- April 7 2025
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Next Wave: What’s holding back African securities exchanges?
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published O6 April, 2025 When Flutterwave, Africa’s fintech darling, first hinted at going public, all eyes turned to the usual suspects: New York, London, and notably not Lagos. Why is it that even the continent’s brightest stars often look outside their borders to go public? E-commerce giant Jumia and Egyptian mobility startup SWVL Holding are among African startups that pursued foreign listings, but later experienced the unforgiving nature of those markets. The belief that a thriving IPO market is the gold standard of financial maturity has long shaped how we assess Africa’s capital markets. But this lens often overlooks the continent’s unique realities—and in some cases, it stunts the creative evolution of more suitable models. So, what’s really holding back African securities exchanges? And more importantly, what futures could we be building instead? Are IPOs alone the answer? According to the African Securities Exchanges Association (ASEA), only fourteen IPOs took place across Africa in 2023, raising just $1.3 billion. That figure pales compared to emerging economies like India, which saw 57 IPOs raising over $7 billion in the same period. The Nigerian Stock Exchange (NGX) has listed only a few new companies in the past decade. Over at the Nairobi Securities Exchange (NSE), the bourse has suffered an IPO drought, with Safaricom being the last significant listing 17 years ago. The inactivity at NSE is despite major tech success stories in Kenya. Although the Johannesburg Stock Exchange (JSE) is Africa’s most prominent, it has seen more delistings than listings in recent years. In the past two years alone, the JSE had around 12 delistings, with just three new listings. Next Wave continues after this ad. StroWallet lets your customers pay you directly. Access USD Virtual Cards, Virtual Accounts, ATM Cards, POS terminals, and Bill Payment APIs to manage your finances and grow your business with ease. Sign up here! It doesn’t mean the exchanges are dormant; more innovation from regulators, telcos, and fintech could spur interest, just like mobile money revolutionised banking on the continent. African companies, particularly in tech and high-growth sectors, are opting for alternative capital. Private equity, venture capital, and acquisitions could offer local firms more scalable and reliable options. The African Private Equity and Venture Capital Association (AVCA) data show that over 450 private capital deals were signed in 2023, totaling $7.2 billion in disclosed value. These investments include early-stage startups and mature companies, many of which now prefer to stay private or exit through M&A rather than IPOs. There are several examples to consider. Andela, the tech talent accelerator that started in Nigeria, opted for a US-based structure and raised over $180 million before hitting unicorn status. Yoco, the South African fintech company, raised $83 million in its Series C round and continues to expand privately. The capital markets are not dormant in many ways—they’re just evolving beyond their traditional forms. Over 30 exchanges! Like other sectors, fragmentation is another critical factor limiting the role of African exchanges. With over 30 independent stock exchanges across the continent, capital and expertise are stretched. From Lagos to Johannesburg, Nairobi to Casablanca, African exchanges have limited liquidity, small investor bases, and an unfriendly regulatory climate. The lack of integration of major bourses has created barriers to scale and discouraged foreign and regional investment. However, efforts to reverse some of this damage are gaining momentum. The ASEA and African Development Bank-backed African Exchanges Linkage Project (AELP) is pushing for cross-border trading between key exchanges, including South Africa, Kenya, Nigeria, Morocco, and Egypt. The project will enable investors in one market to buy securities listed in another. In East Africa, the East African Community (EAC) Capital Markets Infrastructure Project is implementing a unified trading and clearing platform that will cover all the member countries. It could create a harmonized market of over 185 million people if successful. Francophone West Africa offers a living example of what exchange integration could look like. Abidjan-based Bourse Regionale des Valeurs Mobilieres (BRVM) serves eight countries. Despite the challenges that individual economies like Burkina Faso, Mali, or Niger face, the platform has created efficiencies of scale and outperformed other exchanges. In 2023, BRVM surpassed its Anglophone counterparts, with its composite index– a weighted equity index that tracks the performance of the largest listed companies– rising by 13.5%. Capital markets could follow suit as more regional economic blocs pursue monetary and fiscal integration. Tech as a leapfrog mechanism The next generation of African exchanges may not look like traditional trading floors. They might be mobile-first, blockchain-enabled, and run on AI-powered models. Platforms like Chipper Cash, Hisa, Bamboo, and Trove already give retail investors access to U.S. stocks from African soil. What if the same tech stack also enabled fractional ownership of local enterprises? In 2024, Nigeria’s Trove began piloting fractional trading of local stocks–allowing users to invest with as little as 500 naira ($0.50). Micro-investing could open the doors to millions of small investors currently shut out of the capital market. In Kenya, for instance, the government’s M-Akiba allowed ordinary citizens to buy government securities through mobile money platform M-Pesa, raising over KES1 billion from first-time investors. Such platforms prove that with the right tech and user experience, participation in securities markets can be democratized. Tokenised securities, smart contracts, and mobile KYC can bypass the red tape that bogs down IPO processes. It could allow local SMEs and startups to raise funds without needing full-fledged listings, bringing liquidity and trust to underserved sectors. Blockchain technology could also reshape the infrastructure of African markets. In South Africa, firms like Revix are offering tokenized investment products. If applied to local equity or debt markets, blockchain could
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- April 7 2025
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TechCabal Daily – Kuiper chases Starlink
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! In 2019, Jeff Bezos’ Amazon launched Project Kuiper to use a large satellite constellation to provide low-latency broadband connectivity to millions of users worldwide. However, the project remained silent for most of the years that followed. Now, under its granted Federal Communications Commission (FCC) licence, Amazon is required to launch and operate at least half of its satellites by July 2026. With the speed of Hermes, the team is rolling out prototype satellites to expedite the process. With Google’s Taara also breathing down on Elon Musk’s Starlink, perhaps consumers—especially in Africa—will soon become dizzy from the array of options. But in Musk’s words, not ours, “competition leads to a better outcome for consumers.” We agree, Musk. We agree. Umba to pay $21,600 in compensation for “unfairly” firing an ex-employee Kuiper keeps the pressure on Starlink Mafab’s 5G plans stall again World Wide Web 3 Events Startups Umba to pay $21,600 in compensation for “unfairly” firing an ex-employee Umba Team/Image Source: AppsAfrica On March 28, a Kenyan court ruled that Umba, a digital bank, must pay KES 2.88 million ($21,600) for unfairly firing its former head of growth during her probation period. The court ruled that Umba didn’t follow due process—even during probation. There were allegedly no written evaluations, no formal warning, and the dismissal was delivered via WhatsApp. Previously, we saw an ex-employee win an unfair termination case against another Kenyan startup, Marketforce. With Umba, the message is the same: Kenyan law is clear—probation doesn’t cancel out the need for fair treatment. Phasing out employees, just like hiring them, should be handled with more care. If we know anything by now, it’s that Kenyans are litigious. Therefore, startups should be careful in how they manage exits and employee disputes. Startups operate in high-pressure environments. Roles shift quickly, targets evolve, and sometimes hires just don’t work out. But without clear internal processes, even well-meant decisions can end up in court. That’s the first lesson here: documentation and communication of clear expectations for new hires will save companies from legal headaches. Startups should not avoid hiring out of fear of legal risk. Instead, they need to protect themselves by doing the basics right. It doesn’t take much to stay compliant, but it does take consistency. As this case shows, skipping the formalities can be more costly than doing things by the book. Employees are turning their contracts page by page to spot loopholes, so it is important that employers honour these agreements down to the minutest detail. For example, if a startup mandates severance pay for employees it transitions out of the company, simply not honouring that agreement can be damaging—both legally and reputationally. With the stories about unfair termination coming out of Kenya, employees are learning their rights. Startups, on the other hand, should invest in proper HR processes, document performance thoroughly, and seek legal advice when necessary to avoid costly missteps. Seamless Global Payments With Fincra. Issue accounts in NGN, KES, EUR, USD & more with one integration. Send & receive funds seamlessly across borders; no more banking hassles or complex conversions. Create an account for free & go global today. Internet Will Jeff Bezos’ Kuiper have the South African market that Elon Musk nicely buttered? Amazon’s Project Kuiper/Image Source: Amazon We can wager a few pennies that South Africa is one of those non-Starlink markets that keeps billionaire Elon Musk restless. Okay, maybe not restless—but his intense lobbying and soft fallout with friends in high places (looking at you, President Cyril Ramaphosa) suggest there’s more than casual interest. For months, Musk has pushed hard to bring Starlink to his birth country. But a law requiring 30% local black ownership for foreign companies has been a thorn in his side—bad enough that he publicly played the race card. Still, South Africans want Starlink badly. Since July 2024, they have used the ISP’s roaming service by piggybacking off neighbouring countries. Despite regulators calling it illegal—and Starlink itself threatening twice to cut users off—this hasn’t stopped people. While there’s no official data, some estimates peg South African roaming users at several thousands. That’s in comparison with Kenya’s 19,146 users, where Starlink is licenced and has been operating for over a year. For a market where the service technically doesn’t exist, this is huge. Yet even as Musk pushes uphill, fellow billionaire Jeff Bezos is making his own quiet entry. Amazon’s Project Kuiper, a rival satellite internet venture, is launching its first 27 satellites on April 9. And here’s the kicker: Kuiper has already partnered with Vodacom, South Africa’s second-largest telecom operator, for local rollout. Where Musk has met resistance, Bezos seems to be moving in with less friction and a well-placed ally. Project Kuiper may be late to the party, but South Africa’s appetite for fast, reliable internet is no longer up for debate. Do we have a potential battle of billionaire tech CEOs on our hands? Yes, we do. Introducing Zap by Paystack! Zap is Paystack’s first consumer-facing app designed for simple, fast and secure payments via bank transfer. Download Zap on Android and iOS → Telecoms Mafab’s 5G plans stall again Image Credit: Airtel Mafab Communications, one of Nigeria’s 5G licence holders since 2021, has missed yet another self-imposed deadline to launch services by Q1 2025. Despite securing a $273.6 million licence in 2021 and promising to launch services in Abuja and Kano, Mafab has not deployed a single operational site. With no operational site despite promising 102, the telecom upstart’s repeated delays—stretching back to 2022 including a public launch with no service follow-through—have left Nigeria’s 5G market dominated by telecom giants MTN and Airtel. MTN and Airtel have seized the 5G market. MTN has rolled out 5G services in at least 13 cities and Airtel is expanding in urban centres, including Kano. With both incumbents offering fixed wireless broadband and mobile 5G services, Mafab’s window for differentiation is closing rapidly. Yet, Mafab’s repeated failure to meet
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