Experts predict CBN will raise interest rates ahead of MPC meeting
The Central Bank of Nigeria (CBN) will likely raise interest rates to tame at this week’s MPC meeting. The CBN’s Monetary Policy Committee (MPC) will hold its next meeting on September 24-25 to deliberate on interest rates. Experts who spoke to TechCabal predict that surging prices may force the apex bank to raise the Monetary Policy Rate (MPR) from 18.75% to 20%. Mayowa Badejo, a partner at 213 Capital Ltd, predicts that the CBN will raise the MPR to 20%. “I said 20% because I see inflation going higher till the end of the year coupled with the forex crisis. Already, I believe the current inflation is hugely discounted anyway. By the time fiscal spending and palliatives start, inflation will skyrocket and investors will demand for higher returns on investments,” he told TechCabal. Central Banks usually raise interest rates as a means to control inflation. Per Bloomberg, the MPC has raised rates by 700 basis points since May 2022. Yet, inflation has not slowed. While a few industry watchers believe a higher interest rate may not solve the problem, the acting CBN governor, Folashodun Shonubi, disagrees. At the last MPC meeting where interest rates were hiked by 25 basis points, Shonubi said the bank is concerned with hiking the interest rates, reducing liquidity, and curtailing inflation. The rising inflation rate is a worrying concern Oise Ajayi, the head of investment research at Achoria asset management, said a hike of the interest rates was imminent since the Central Bank governor had publicly admitted it. He said the rate was hiked by 25 basis at the last meeting due to a slower rate of inflation. “Now that the inflation rate is 24%, at the very minimum, the basis point would be hiked between 25-50 basis points and above ,” he told TechCabal. Samuel Oyekanmi, a research analyst, begged to disagree. He said the CBN would continue to maintain a cautious hawkish approach towards its monetary policy, which means that they would not likely raise above 50 basis points and could consider maintaining rates depending on what Q2’23 Gross Domestic Product (GDP) figures indicate. Nonetheless, he believes the rising inflation rate is a phenomenon that would not abate. “The rising rate of inflation does not look like something that will slow in the short term, considering the continuous impact of fuel subsidy removal, exchange rate unification and other inflationary policies,” he told TechCabal.
Read MoreAfricArena and FMO Ventures to host a series of events to support Africa’s tech ecosystem
AfricArena and FMO, the Dutch Entrepreneurial Development Bank, have announced that they are extending their partnership through the FMO Ventures Programme to support Africa’s fast-growing tech ecosystem. FMO Ventures Programme is extending its partnership with AfricArena to support the following events from August 2023 to December 2024: the AfricArena VC Unconference, the AfricArena Founders’ Bootcamp, the AfricArena Learning Expedition, and the AfricArena Summit. This comes after an initial year of partnering in 2022 on AfricArena’s Tour across the continent. The FMO Ventures Programme is supported by the FMO, the Dutch Entrepreneurial Development Bank, a leading impact investor that supports sustainable private sector growth in frontier and growth markets. The FMO ventures programme is a €200 million ($217 million) investment programme that supports early-stage, tech-enabled startups in Africa and the European neighbourhood. The programme also provides technical assistance to help startups improve their business operations and invest in inclusive business models, with a focus on fintech, energy access, and agriTech, and invests in direct investments and generic funds. According to FMO Ventures’ programme manager, Marieke Roestenberg, this is a “thrilling time for investors to be looking at Africa as an investment destination, as many of the continent’s tech startups are coming forward with investment-worthy innovative solutions for global challenges”. AfricArena is a platform that connects African startups with investors and partners. It was launched in 2017 and has helped its community raise over $500 million. The platform consists of a series of events, including an investor unconference, a founders’ boot camp, and a summit. “We are very excited about this expanded partnership which supports the ecosystem development of AfricArena through its well-known events across Africa,” said AfricArena CEO Christophe Viarnaud, in a statement seen by TechCabal. “This partnership will contribute significantly to the development of the African VC industry through its VC unconferences, and the development of open source investment tools for the African tech industry, with the support of the Digital Collective Africa, a community for investors.” Per a Statista report, Africa has over 640 technology hubs, forming the essential foundation of its swiftly expanding tech landscape. This ecosystem has become a magnet for investment, drawing both local and global investors, including angel investors, venture capitalists, venture funds, corporate funds, development finance institutions, and startups in what Africa’s tech ecosystem has to offer. “Our partnership with AfricArena is a good fit with FMO Ventures Programme’s broader strategy to support the development of entrepreneurial tech ecosystems across Africa. By bringing together tech startups, corporations, angel investors, venture capitalists and other institutional investors we aim to foster co-investment and collaboration that benefits the underserved on the African continent,” Roestenberg concluded.
Read MoreHow crypto gaming in Africa can reach its full potential
Moonshot by TechCabal is the conference that will bring together Africa’s tech ecosystem in person to network, collaborate, share insights and celebrate innovation. Join us in Lagos on October 11 and 12. In this article built around the conference, Ganiu Oloruntade writes that crypto gaming in Africa has immense potential for growth and adoption, but game developers must prioritise improving the gaming experience. Like the rest of the world, the African gaming space fell in love with crypto. In Africa, gaming is often viewed as a sign of unproductivity, but crypto came with the promise of helping players get rewarded while playing. The 2021 crypto bull run saw play-to-earn (P2E) games—blockchain-based video games that allow players to earn crypto or non-fungible tokens (NFTs)—dominate the global gaming market, and Africa hasn’t been an exemption. In September 2022, Metaverse Magna (MVM), an African gaming community incubated by the Nigerian crypto startup Nestcoin, raised $3.2 million in funding. But in the past year, the global crypto industry has taken a beating, with prices crashing and startups struggling. The buzz around GameFi, which merges the best parts of gaming and decentralised finance, has dwindled. According to a recent report, GameFi adoption is down over 30% since October 2022. MVM’s creator, Nestcoin, which held investor funds in the collapsed FTX, had to lay off staff last year. Hence, the big question on the minds of African crypto gamers and players in the space is what lies ahead for crypto gaming on the continent. “The truth is, although there is still significant value in the market, the level of enthusiasm is not as high as it was before. The past year has been challenging for everyone, with projects laying off employees and shutting down. The signs are clear: it is tough out here,” Tony Emeka, co-founder of CrytoTvPlus, a cryptocurrency and blockchain-focused media firm, told TechCabal. Despite the current challenges, some are still bullish on crypto gaming in Africa. In this piece, Binance noted that with the combination of Africa’s increasing tech-savvy young people in the gaming industry and the increasing adoption of digital currencies and blockchain technology, Africa is set to lead the blockchain gaming revolution. The problem with crypto gaming in Africa Venn Oputa, co-founder of the NFT collection Afrobubble, said crypto gaming in Africa is struggling due to various factors, including the overall poor state of crypto gaming globally and the slow adoption of cryptocurrencies on the continent. “There’s a huge potentially large future in it. But at the moment, due to the present situation and market conditions, it’s largely nonexistent,” he told TechCabal. While mobile gaming is on the rise in Africa, thanks to the increase in the number of smartphone users, the continent is yet to hit the highest levels of crypto adoption. According to a report by Newzoo and Carry1st, the number of gamers in sub-Saharan Africa rose to 186 million in 2021, while a total of 5.9 million gamers own cryptocurrencies across Africa and the Middle East. Oputa further said that many game developers focus too much on monetary benefits rather than providing an enjoyable gaming experience. To improve this situation, game developers should prioritise creating exciting games and then integrate cryptocurrency features as an added bonus. He told TechCabal, “The thinking should be, how do I integrate crypto transactions or crypto elements or blockchain-based elements that also amplify the experience of this game?” Chike Okonkwo, the co-founder of Gamic, a community for gamers, creators, and blockchain enthusiasts, shared a similar view about the need to improve the gaming experience. He added that now is the best time for gamers to be intentional about playing crypto games and learning from experienced individuals in the field who can guide them. “Because during the bull season, it’s difficult to track who really knows what crypto is talking about. It’s difficult to track who really understands and knows the right games to play,” he told TechCabal. What lies ahead? The crypto-gaming revolution is here to stay, and Africa can’t afford to be left out. According to a report by markets and intelligence firm Grand View Research, the global blockchain gaming market is expected to be worth $300 billion by 2030. Last month, Google Play updated its policy to allow video game publishers to reward gamers with NFTs. Emeka believes that the crypto gaming industry in Africa has a lot of potential, though there are significant obstacles. “Power and internet connection are major challenges. If anyone could find a way to overcome these hurdles, they will capture a good piece of the market. Developers should consider creating games that don’t require an internet connection while playing, allowing players to accumulate points which can be synchronised with the game’s server online to collect real crypto,” he told TechCabal. Okonkwo said that, going forward, there will be a lot of strategic partnerships between traditional game developers and crypto players, although it comes with regulatory concerns. “We all know that the moment the big dogs begin to come in, they come with regulation because regulators understand the traditional space well unlike emerging technologies like blockchain and AI. So, stakeholders mustn’t stay on the sidelines and be ready to engage regulators,” he said. Did you enjoy this article? Then click this link to get your tickets to Moonshot, and check out our fast-growing list of speakers coming to the conference!
Read MoreBREAKING: BRICS nations to form study group to monitor AI
BRICS member countries have agreed to form an “AI study group” to establish and monitor AI governance frameworks. Chinese President Xi Jinping has announced plans by BRICS nations to form an “AI study group” to monitor the technology’s development and advancement. Jinping said this at the second day of the BRICS summit currently taking place in Johannesburg, South Africa. “We need to develop AI governance frameworks so as to make the technologies more secure, reliable, controllable and equitable,” said Jinping. He added that the group’s formation timeline would be communicated in due time, with China pledging to set up a China-BRICS science and innovation incubation park to accelerate AI cooperation among member countries. Just over a week ago, the US banned US firms’ investment into quantum computing, advanced chips and artificial intelligence sectors in China to ensure the Chinese military does not benefit from American technology and capital. The ban is expected to take effect next year but has limited support from the country’s allies. With AI expected to be the leading technology of the next decade, debates about how it will impact diplomatic relations have been raging on. With most AI innovation coming from the global north, it will be interesting to see how the BRICS study group reigns in leading AI companies like Google and Microsoft to abide by the call to make their innovations “secure, reliable, controllable, and equitable”. Additionally, the study group’s role in helping catalyse AI innovation within the BRICS member countries would be one to look out for as more details about the project are shared.
Read MoreWill AI take our jobs, or simply create new ones?
Moonshot by TechCabal is the conference that will bring together Africa’s tech ecosystem in person to network, collaborate, share insights and celebrate innovation. Join us in Lagos on October 11 and 12. In this article built around the conference, Mariam Muhammad reports on how generative AI is reshaping the job market, while also creating new opportunities Generative artificial intelligence (AI) tools like ChatGPT and other related AI have created a mix of excitement and worry among professionals, mainly because these tools can potentially handle many routine tasks that workers perform regularly across different jobs. Amidst the fear and excitement of AI bringing an unavoidable change to the job market, a question that needs to be asked is: what new jobs might it create? A changing job market According to a report by investment bank Goldman Sachs, the advent of advanced AI systems will significantly influence global employment markets. The changes in work patterns driven by these advancements could potentially automate up to 300 million full-time jobs. Just like any controversial subject, there will be people who are for and against AI. Gitonga Bretton, who works as an AI developer for a telecom company, stated that the job market isn’t limited to a fixed number of positions redistributed annually, and that technological progress and new developments enable the creation of more job opportunities. While AI might replace some obsolete roles, it will also foster creativity and the pursuit of fulfilling jobs. “I believe we don’t have a finite number of jobs that we share every year. As long as tech comes up and development comes in, we are able to come up with more jobs like those on AI. For instance, prompt engineering didn’t used to be a career. Now, it’s a career. So you can see artificial intelligence will, of course, replace some of the jobs that are redundant, but that means it gives us the ability to be more creative and do jobs that fulfil us as human beings,” Bretton told TechCabal. Kyle Balmer describes himself as a prompt entrepreneur. In his job, he leverages new exciting AI technologies to start and grow businesses. He believes that AI itself isn’t going to kill jobs; rather, it’s the individuals who harness it that will gain a competitive edge. Using web designers as an example, Balmer stated that “web designers are at risk now because AI tools can do their jobs faster and cheaper. So smart web designers are learning to use these AI tools to increase output and quality. What this means is that the smart web designers will succeed even more, but mediocre web designers will be eliminated from the workforce,” he said, on a chat with TechCabal. Bashir Ibrahim, a lead software engineer, sees the change as “deploying more tools to get things done easier and faster”. Although human intervention is still necessary to ensure that AI tools are used in a safe and effective manner, Ibrahim believes that, in the future, AI tools will be able to learn and improve on their own, to the point where they can correct their own errors and debug themselves. In-demand skills for the AI age As AI is changing the job market, most roles—including writing, marketing, and programming—now require prompts to work. In essence, the quality of the output of these roles depends on the quality of the prompts input. This development has seen the role of prompt engineers become increasingly popular as it creates a path for people to transition from what they already know to what is in demand. Prompt engineering, which entails creating precise and well-crafted instructions or questions to guide language models in producing a desired output, is a skill ChatGPT’s Sam Altman describes as an “amazingly high-leverage skill”. A skill like prompt engineering might not be the number one job of the future, but it sure is one of the 97 million new jobs the World Economic Forum estimates will emerge by 2025, to enable humans and machines work together. Balmer sees prompt engineering as “how we talk to AI”, and thinks it’s essential that every individual learns how to communicate with AI. He uses the advent of the internet to describe how AI is reshaping the job market; and just as adapting to internet technology was imperative for success, embracing AI is now a choice between stagnation and advancement. “I think of it like the early days of the internet. The introduction of the internet changed how we interact with the world. The people who learned to use internet technology first thrived, leaving behind people and industries that did not evolve. Eventually, everyone had to learn to use the internet—modern life is impossible without it. AI will be the same. It’s now a choice whether to ignore the new AI technology and hope it goes away or embrace it and stay ahead of the game,” Balmer told TechCabal. According to Ibrahim, AI-driven creativity is important. He highlights robotics engineering, natural language processing, and cybersecurity as skills that are important in today’s job market. Balmer agrees that these skills are essential for the future of work, and also adds that data analysis, automation, machine learning, natural language processing, computer vision, predictive analytics, cybersecurity, personalisation, AI ethics and governance are all important skills that AI makes in demand in today’s job market. Adapting to the changing job market On the bright side, soft skills are not only crucial for human-AI collaboration but also demonstrate AI’s limitations. And for Balmer, soft skills like “communication, public speaking, emotional intelligence and leadership” are part of the skills humans should harness to help them stay relevant in the current job market. Lifelong learning is also important for individuals to keep up with the changes in the job market, and Ibrahim holds the view that while AI can be a valuable aid to humans, its inability to replicate emotional intelligence prevents complete replacement. He also acknowledges that AI tools are not 100% accurate and require human interference. So to stay relevant,
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Best Internet services in Lagos, Nigeria 2023
We live in a time where technology and connectivity are becoming increasingly integral to daily life, and having a reliable and fast internet connection is essential for various online activities, such as gaming, downloading, and streaming content. Here, we’ll be giving a breakdown of our top internet services providers in Lagos, Nigeria (ISP) and how they’re doing based on the aforementioned factors. MTN’s Internet services in Lagos Among the major internet service providers in the region, MTN has gained attention for its connectivity options. Let’s delve into how MTN’s internet speed in Lagos performs in these key aspects. 1. Gaming performance For avid gamers in Lagos, a stable and low-latency internet connection is crucial to ensure seamless online gaming experiences. MTN has been striving and largely thriving in addressing this need by offering different data plans tailored for gaming enthusiasts. In general, MTN’s 4G and recent 5G introduction, provides competitive speeds, contributing to reduced lag and smoother gameplay. This is especially evident in multiplayer games where split-second reactions matter. However, it’s recommended to opt for higher-tier data plans to ensure consistently high speeds during peak gaming hours. 2. Downloading efficiency Downloading large files, software updates, or even streaming high-definition content requires a dependable internet connection with swift download speeds. MTN’s 4G and 5G network in Lagos typically delivers commendable download speeds, allowing users to efficiently acquire content. From personal experience, users have reported download speeds ranging from 10 to 50 Mbps, depending on the data plan and network congestion. This range is sufficient for most regular users and even those who engage in frequent heavy-duty downloading activities. 3. Streaming quality The demand for streaming content has skyrocketed, and MTN’s internet speed in Lagos meets the expectations of most streaming enthusiasts. Whether you’re watching videos on YouTube, enjoying shows on Netflix, or participating in live streaming platforms, the 4G and 5G network offers consistent speeds that can handle high-definition streaming without excessive buffering. Users can expect smooth playback and minimal interruptions, even during peak usage hours. Factors influencing MTN internet speed It’s important to note that internet speeds can be influenced by various factors beyond the control of the service provider. Network congestion, signal strength, and the device being used are among the variables that can impact the experience. Additionally, while MTN’s network coverage is extensive, some remote areas in Lagos might experience slightly lower speeds or reduced coverage. Starlink Internet services in Lagos Starlink, Elon Musk’s satellite internet service provided by SpaceX, has emerged as a potential game-changer in addressing internet connectivity issues, even in remote and underserved areas like Lagos, Nigeria. Let’s take a closer look at how Starlink’s internet speed fares in Lagos, considering its performance for gaming, downloading, and streaming, while also highlighting its setbacks. 1. Gaming Performance Online gaming demands low latency and stable internet connections to ensure smooth gameplay and quick responses. Starlink’s promise of low latency is an attractive feature for gamers in Lagos. Initial user reports suggest that Starlink’s latency can range from 10mbps to 61.5mbps, making it comparable to traditional cable internet services. This level of latency is suitable for most online games, ensuring that players can enjoy a lag-free experience. 2. Downloading When you can download stuff fast, it adds to your pleasurable online experience. Starlink’s internet speeds in Lagos reportedly range from 50 Mbps to 150 Mbps, depending on the user’s location and network congestion. This speed range allows for relatively quick downloads, enhancing the overall user experience. 3. Streaming Streaming high-definition content on platforms like Netflix, YouTube, or Twitch requires a stable and fast internet connection. Starlink’s speed capabilities are well-suited for streaming, with users reporting consistent streaming quality even during peak hours. The provided speeds are typically more than sufficient to support seamless streaming without buffering or quality degradation. Streaming #Bundesliga live using Starlink (no interruption) is one sweet feeling I can’t explain. Don’t believe the lies you were told about Starlink, it’s the best internet service anywhere available in Nigeria. pic.twitter.com/yUzswfituS — Tola Joseph Fadugbagbe (@connectwithtola) May 5, 2023 Setbacks While Starlink shows great promise, there are certain setbacks to consider. The most notable one is the cost. Starlink’s initial setup costs, including the purchase of a satellite dish and modem, can be relatively high for users in Lagos, making it less accessible to those with limited financial resources. Additionally, the satellite dish requires a clear view of the sky, which could pose challenges in urban areas with tall buildings and crowded infrastructure. Furthermore, while Starlink’s speeds are impressive, they can vary based on several factors, including the user’s location, weather conditions, and network congestion. Heavy rain or other adverse weather conditions can impact the satellite’s signal strength, leading to potential drops in speed and connectivity. Glo internet services in Lagos Another prominent player in the Nigerian telecommunications market is Glo. Let’s delve into Glo’s internet speed performance/services in Lagos, focusing on its suitability for gaming, downloading, and streaming activities. 1. Gaming Glo offers various data plans that seem to have differing speeds, but its performance for gaming has been the subject of mixed reviews. Some users report consistent and acceptable latency levels, especially during off-peak hours. However, during peak times, users have experienced occasional spikes in latency, leading to disruptions in online gameplay. 2. Downloading Glo’s internet speed for downloading content seems largely dependent on the plan selected by the user. Premium plans tend to offer higher download speeds, enabling users to swiftly acquire large files, software updates, and media content. However, like many service providers, Glo’s advertised speeds may not always be achievable due to network congestion and other factors. Users often experience varying download speeds, with some reporting satisfactory rates while a lot more others encounter slower-than-expected performance. 3. Streaming Streaming media content, whether it’s video or music, requires a stable connection to avoid buffering and interruptions. Glo offers dedicated plans optimised for streaming, promising seamless playback of high-definition content. In practice, users have reported mixed results. While some have enjoyed uninterrupted streaming
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👨🏿🚀TechCabal Daily – Hustlers hustle Kenya’s Huslter Fund
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Nigeria now has two tech-focused ministers: Bosun Tijani, the minister for communications and digital economy, and Uche Nnaji, the minister of innovation, science and technology. While most of Nigeria’s tech ecosystem knows about Tijani and his work at accelerator CcHub, not many know about Nnaji whose ministry is focused on implementing policies created by Tijani’s. Here’s what we know so far. In today’s edition Hustlers hustle Kenya’s Hustler Fund Zimbabwe’s internet slows again Moniepoint acquires Kopo Kopo inDrive launches in Lesotho The World Wide Web3 Event: NTICE Expo 2023 Opportunities Funding Kenya’s Hustler Fund racks up 29% of bad loans President William Ruto of Kenya A lot of hustlers are not paying back their loans on time. The Kenyan government launched the KES50 billion ($346 million) Hustler Fund in November 2022 to give loans to small Kenyan businesses that don’t have access to credit through traditional means. So far, KES33 billion ($228 million) has been lent out, and there is an outstanding loan of KES10.2 billion ($70.5 million). An outstanding loan? Yes, and according to the repayment schedule, 29% of that, about KES3 billion ($20.7 million) are being considered non-performing loans. Even though these loans come with a friendlier interest rate (8%) compared to traditional loans from banks, the Hustler Fund is racking up more non-performing loans (NPL) than those fancy regular banks, cooperatives (SACCOS), and even microfinance banks. To put it in perspective, those typical banks, microfinance banks, and cooperatives like SACCOS have non-performing loans (NPL) rates of 14.5%, 23%, and 8.86%, respectively, while the Hustler Fund’s NPL rate is flying higher at 29%. How will the government get its money back? The Kenyan government has linked the Hustler Fund to existing funds that also support the economically disadvantaged so that defaulters will not get access to more funds until they improve their credit scores. It also introduced credit scoring in February to reduce the rate at which people default on loans from the Hustler Fund. The bad loans will not go away completely, as is typical of any credit business, however, the quality of the Hustler Fund loan book has been improving. 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. Internet Zimbabwe’s internet slows ahead of elections Image source: Zikoko Memes Zimbabwe’s online highways are currently stuck in traffic. Zimbabweans are suffering sluggish internet just ahead of the country’s national elections on Wednesday. This online traffic is affecting the customers of the top internet players like NetOne, Econet, TelOne, and Liquid. How bad is it? Per Netblocks, users have been experiencing downtimes on platforms like Instagram, Twitter, YouTube and Facebook. Additionally, some Econet users say that they are unable to access Whatsapp. Sounds familiar? The Zimbabwean government has a history of limiting internet access during important national events. It throttled the internet in 2020 ahead of planned protests and in 2019 during national demonstrations against increasing fuel prices. More recently, in February last year, internet speeds significantly slowed down during a national demonstration by the Citizens Coalition For Change, one of the leading opposition parties in the country. Many people were unable to live stream the demonstrations. In March, something similar happened during more opposition demonstrations. Netblocks confirmed that the disruptions were not due to congestion as claimed by government sources. M&As Moniepoint gets a nod to acquire Kopo Kopo Image Source: Zikoko Memes Moniepoint is expanding to East Africa. Nigerian fintech platform, Moniepoint, has been granted approval by Kenya’s regulatory body, the Competition Authority of Kenya (CAK), to acquire payments firm Kopo Kopo. The proposed transaction will see Moniepoint Inc. acquire all shares of Kopo Kopo. How much? While the transaction value for this acquisition is yet to be disclosed, the CAK oversees competition-related matters for transactions exceeding Ksh1 billion ($7 million), which means that the acquisition was the same or exceeded this amount. Unconditional approval: The Kenyan Authority granted unconditional approval to Moniepoint’s acquisition based on two key considerations namely. First, the authority’s assessment suggests that the transaction is unlikely to negatively impact competition in the market for digital credit. Second, the transaction will not elicit negative public interest concerns. In an email to TechCabal, Moniepoint said, “We have been vocal about our interest in Kenya as part of our mission to provide financial happiness for people across Africa. This regulatory approval is a milestone in that process and one that we are delighted about.” Kopo Kopo? Before its acquisition by Moniepoint, Kopo Kopo was valued at about $10 million as of 2015 when it raised $2.1 million in Series B funding in 2015. The credit and payment startup offers similar tools to businesses just like Moniepoint but in Kenya. Kopo Kopo’s partnership with M-PESA allowed for mass adoption of digital payments by small businesses in Kenya. Mobility inDrive launches in Lesotho Image Source: inDrive inDrive is making a turn to Lesotho. This week, the ride-hailing platform has announced its expansion to Lesotho. This is part of inDrive’s expansion plan into southern Africa. inDrive will charge drivers zero commission in the first six months of its operation in Lesotho, allowing them to keep all of their earnings. Unlike other ride-hailing platforms which determine fare prices by a set algorithm, inDrive allows drivers and passengers to set their prices. Passengers can suggest a fare, while drivers may accept, decline, or make a counteroffer without any penalties. The decision on whether to proceed with a ride can be made by considering the fare amount, car type, estimated arrival time, and driver ratings. Drivers can select profitable and convenient requests. According to Vincent Lilani, the company’s business development representative, “We believe that this method offers a sound solution to many current challenges in the Southern African ride-hailing market.” Zoom Out: inDrive’s move
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Ahead of Wednesday’s general elections, Zimbabweans are experiencing internet disruption
Zimbabweans are experiencing throttled internet ahead of the country’s national elections on Wednesday. According to data from the internet connectivity monitoring platform Netblocks, internet service has been throttled in Zimbabwe on the eve of the country’s general elections. The degradation has affected customers of leading internet service providers including NetOne, Econet, TelOne and Liquid. According to data by Netblocks, there are significant disruptions to internet services across Zimbabwe’s internet service providers. (Image source: Netblocks) “We are facing a system challenge and we are working towards restoring normalcy. Any inconvenience caused is sincerely regretted,” Econet told its customers. Zimbabwe holds its general election tomorrow where current president Emerson Mnangagwa of the ZANU-PF is seeking a second term. Mnangagwa ascended to power in 2017 following the removal by coup of former president, Robert Mugabe. Netblocks data show that on Netone, for example, users have been experiencing downtimes on platforms such as Instagram, Twitter, YouTube and Facebook. Additionally, the reachability of some platforms on Econet and Econet is as low as 30%. The data is further corroborated by users of some providers, who have been complaining of degraded service on social media including not being able to access Whatsapp. According to Felicia Anthonio, campaign manager of #KeepItOn, an initiative by the non-profit organisation Access Now, the Zimbabwean government has a recorded history of shutting off events during important national events. “We are urging the government not to repeat its past habits and allow the people of Zimbabwe unfettered access to the internet to allow them to actively participate and ensure the process is transparent and fair,” she told NewzRoom Africa. In February last year, Netblocks also reported significant internet throttling during a national demonstration by the Citizens Coalition For Change (CCC), one of the leading opposition parties in the country. The incident impacted multiple operators and limited users’ ability to live stream the events of the day. In March, a new series of disruptions were registered amid further opposition demonstrations. Netblocks metrics confirmed that the disruptions occurred at the backbone which served each operator, and not at the cell towers due to congestion as claimed by government sources. Other times when the Zimbabwean government has throttled internet include in 2020 ahead of planned protests and in 2019 during national demonstrations about increasing fuel prices.
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Did the naira scarcity improve adoption of digital payments in Nigeria?
Unresolved challenges threaten to limit Nigerian digital payments growth. Nigerian payments companies fantasize about the death of cash. It’s on everybody’s pitch. We got the first glimpse of this post-cash Nigerian universe in the first and second quarters of 2020 when Covid-19 shut down much of the world’s physical economy triggering an electronic payments boom in many countries, including Nigeria. While much of society has since adjusted and even returned to normalcy post-pandemic, digital payments have remained. And in countries such as Nigeria, physical cash and digital payments exist side-by-side. Then in November 2022, the West African country got another glimpse into a world without physical cash. When the Central Bank of Nigeria announced the double whammy of a rushed currency redesign and tighter regulations on mobile money agents, some folks anticipated that the restrictions would push more consumers into the digital payments bubble. But when the regulator struggled to mint and circulate a decent amount of the redesigned currency before a needless January 31 deadline, it threw the country into a frenzy not seen since the days of the EndSARS protests. Just weeks before the presidential election, the scarcity and the hoarding of cash saw people break into ATMs, go naked in bank halls and cry their hearts out as the nation descended into chaos. Naturally, electronic payments should have witnessed an impressive uptick, many assumed. But data from Q1 show a different trend. In an economy where a majority of consumer transactions are settled in cash, when an obnoxious cash scarcity hit, instead of a digital payments boom, we witnessed a significant pullback. Within the first two months of the cash scarcity, digital payments in Nigeria plummeted dipping by 7.5% in January, and further declined by 5.12% the next month, according to transaction value data from the Nigerian Inter-Bank Settlement Scheme (NIBSS). However, the payments value recovered quickly the next month (March) — reaching a record high of ₦48.3 trillion with a transaction volume of 1.18 billion (another record peak) — before plummeting consecutively in April and June. Interestingly though, while the amount of money Nigerians sent overall declined at the height of the cash scarcity, more people flocked to digital payments during the same period. After recording an initial 3.4% dip in January, payments volume witnessed an uptick till March when the intensity of the cash crunch reduced. Now, interpreting the data, which is available on the NIBSS Industry Database online, is a little challenging partly because NIBSS hasn’t issued any public statement explaining these payment trends. On the one hand, historical data suggests the payment declines in early 2023 are not really unusual. Instead, they are fairly consistent with previous years. With its memorable holidays and the influx of fun international travelers, December is the peak month for payments in Nigeria, and each year since 2018, transaction activity tends to surge compared to the trailing eleven months. Equally consistent, transaction values tend to decline in both January and February as Nigerian households adjust to the new year after the holidays. The year 2020 would have been the odd year, but the lockdowns didn’t start until late March 2020. So technically, nothing unusual happened this year. Yet we know for a fact that Q1 2023 was different, especially with all the progress recorded since 2020. If a large chunk of payments happens in cash, why didn’t the scarcity of the physical naira trigger a bump in digital spending? Why did electronic transactions decline for two straight months despite the ubiquity of payment services? Also worth sharing that out of the five months recorded by NIBSS so far, digital payments reported declines in three. Again, interpreting the data is not straightforward, but we have a few good guesses. Macroeconomic realities The first answer is economics. After a festive December, Nigerians tend to cut back overall spending in January and February. But the cash scarcity had an outsized impact this time, according to the National Bureau of Statistics (NBS). The economy plummeted at least 3.11% compared to the previous year and the previous quarter. Yemi Kale, the former head of NBS, predicted the slump, explaining that around 54% of the Nigerian economy is cash-based. In particular, the informal economy, where the average Nigerian works and shops, represents half of GDP, and 90% of transactions are settled in cash. But economics alone doesn’t answer the question. Agency banking restrictions and higher mobile agent transfer fees Ahead of the deadline to switch to the redesigned Naira, the CBN placed restrictions on mobile money agents, effectively blocking agents from carrying out completing larger volumes of payments. But as the cash scarcity hit harder and banks became unreliable for withdrawals, agents took advantage of the situation. They handled more payments, NIBSS data showed, but they also raised prices to incredible proportions in different parts of the country. This trend discouraged people from transacting larger sums. Mobile agency firms are still grappling with how to control the army of 1 million agents loosely under their control. Digital platform instability Platform stability was a major focus ahead of the cash scarcity and mobile money restrictions. Everybody anticipated this. The signs were on the wall. In the run-up to the cash crunch, Nigerians reported several network outages by major banks that caused embarrassing transaction failure rates. It only got worse when cash disappeared from the ATMs. Too many bank apps continued to underperform with weak infrastructure and clunky apps that were unusable for long hours of the day. During the height of the crisis, bank customers complained they were unable to log into some of their fintech apps, while others reported high transaction failure rates. And as the frustration grew, it exploded with customers breaking down emotionally at banking halls while other folks forced their way into banks, damaging ATMs and other infrastructure. Startup funding decline Nigerian startups typically don’t let an opportunity or useful crisis go to waste. During the pandemic, payments companies threw their weight behind e-commerce or online storefronts. When traditional banks
Read MoreHow attending Viva Technology and CES inspired the launch of Congo Business Summit
Noel K. Tshiani is the managing director of Congo Business Summit, a flagship conference and expo planned for October 12-13, 2023, in Kinshasa. The summit is organised by Congo Business Network, an organisation that works with startups, corporations, and governments in the Democratic Republic of Congo and abroad. Driven by an unwavering commitment to innovation, he champions and propels the nation’s startup and tech ecosystems, passionately aware of their potential to revolutionise the country’s economic landscape. In the ever-changing realm of technology and innovation, I have been privileged to witness the colossal gatherings at Viva Technology (VivaTech) and the Consumer Electronics Show (CES). These experiences were not only informative, but transformative. They provided a bird’s eye view of the seismic shifts in the global technology ecosystem. From my four visits to VivaTech, beginning in May 2019, and my two trips to CES in January 2022 and earlier this year, I harvested rich insights and observations that planted the seeds for the upcoming Congo Business Summit. A global technology playground Both VivaTech and CES are like global carnivals for tech enthusiasts. Thousands of startups, established companies, investors, and journalists gather to showcase their latest innovations. Every nation with a technology story to tell makes sure it has a presence. The diversity of people attending these events is a testament to the universality of the role technology plays in our lives, whether in China, South Korea, France, Canada, or the United States. Each of these countries is eager to make its mark as a major technology titan, determined to shine a spotlight on startups and connect them with potential investors, business partners and journalists. Real solutions for real challenges One aspect that was particularly evident at CES was the focus on innovations that address real-world problems. Rather than chasing hypothetical scenarios, the technology on display offers solutions to real challenges that people face every day. This is innovation with a heart and a purpose. Networking as the heartbeat of progress Beyond the exhibitions and demonstrations, the myriad of networking and relationship-building side events stood out. The tech world thrives on collaboration, partnerships, and collective brainstorming, and these events are the perfect avenues to foster those connections. Startups are the pioneers of Africa’s innovation engine Drawing inspiration from these mammoth tech conclaves, I envisioned the creation of Congo Business Summit. But why the emphasis on startups, you might ask? Startups, in their essence, embody agility, resilience, and a fresh perspective. These startups are the unsung heroes, operating on shoestring budgets yet fortified with groundbreaking visions, unwavering determination, and a fervent passion that is hard to match. In contexts like Africa, where challenges are many but so are opportunities, startups can be the game-changers that will drive the next wave of innovation. In sectors such as fintech, we have seen how startups in Nigeria, Kenya, and South Africa have democratised financial access, granting many their first banking experiences. Edtech startups have broken educational barriers, ensuring that learning is not limited by geography. Agritech ventures promise food security and sustainable farming solutions, while medtech initiatives bring healthcare closer and make it more accessible. Moreover, insurtech and regtech startups simplify complex processes, ensuring that people do not just have access to services, but understand them too. These startups are not just businesses; they are the pulse of innovation, often seeing potential where traditional corporations see challenges. Innovation’s renaissance is upon us In essence, Congo Business Summit is more than an event. It is a clarion call for Africa to recognise, support and amplify the startups that are working tirelessly to create a prosperous future. As we have seen in places like Europe and North America, technology and startups are not just about apps and gadgets; they are about improving lives, driving development, and setting the stage for a prosperous future for millions of men and women, whether in Paris, London, Montreal, New York, or San Francisco. African nations, teeming with young, vibrant populations, have a unique opportunity. By nurturing startups and fostering innovation, we are not only building businesses, we are building a brighter future for an entire continent. The question is, are we ready to seize this opportunity to drive innovation in the heart of Africa at Congo Business Summit this October, when startups, investors, and government officials will meet at Pullman Kinshasa to discuss business?
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