- September 15 2023
President Tinubu nominates Yemi Cardoso as Nigeria’s Central Bank Governor
President Bola Tinubu has nominated his former aide, Yemi Cardoso to head Nigeria’s Central bank. President Bola Tinubu has nominated Olayemi Michael Cardoso as the next governor of Nigeria’s Central Bank. His nomination comes exactly four months after the president’s suspension of former Central Bank Governor Godwin Emefiele. Cardoso’s appointment will need to be ratified by the Senate. Four deputy governors, Mrs. Emem Nnana Usoro; Mr. Muhammad Sani Abdullahi Dattijo; Mr. Philip Ikeazor and Dr. Bala M. Bello were also appointed to the leadership of the Central Bank, also pending Senate approval. Cardoso—who will be leading the nation’s apex bank for the next five years upon confirmation—was the former chairman of Citibank Nigeria with over 30 years of experience, having sat on the boards of Nigerian subsidiaries of Texaco and Chevron and chaired the committee of EFInA, a financial sector development organisation supported by the Bill and Melinda Gates foundation. Cardoso’s major test is the Monetary Policy Committee (MPC) which convenes in two weeks where a decision will be made to maintain or raise interest rates in response to mounting inflation. Two months ago, the apex bank elected to raise interest rates by 25 basis points. This came after the board members disagreed on the best policy to control inflation in a cash-strapped economy. With Nigeria’s inflation driven by food and transport prices, as well as a significant arbitrage at the FX market, the new CBN governor already has work on his hands.The next MPC meeting comes with much expectation that the Central Bank would hike their rates at least to 20%, according to experts.
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- September 15 2023
Software glitch leaves thousands of SA grant recipients in the dark
At the beginning of September, a software glitch caused grant recipients in South Africa to not have access to their funds. The reason has now been unveiled as an ongoing battle between the contracted system providers. On Wednesday, members of the South African parliament’s Portfolio Committee on Social Development were briefed about a software glitch at the beginning of September. The glitch, which left thousands of grant recipients in limbo was caused by an ongoing issue between provider Postbank and its subcontractor, Electronic Connect. According to Groundup, on July 31, Electronic Connect threatened to suspend the service by midnight unless its invoices were settled by Postbank. The company told Postbank it was owed R1.9 million for May and R1.7 million for June. From July onward, it also wanted to be paid 10 cents per payment authorisation, in accordance with the agreement between Postbank and Electronic Connect. Following the threat, Postbank approached the high court, stating that it could not pay the outstanding invoices because of ongoing investigations into Postbank and that the National Treasury had not approved the agreement between the two companies because it did not comply with public procurement protocols. Postbank requested the court allow it to make the backlog of payments amidst the investigations and to order Electronic Connect to continue providing the “payment switch” software, a request which was granted on August 2. Postbank also settled the pending invoices. Afterwards, the entity (Postbank), which is a subsidiary of the Post Office, appointed a new provider for the payment switch, although Electronic Connect still runs the core banking platform. The migration to the payment switch of the new provider caused the glitch which on September 4 left thousands of old age grant recipients unable to access their R2 080 grant on their SASSA/Postbank cards. GroundUp reports that the “glitch” was caused by inadequate testing on the new payment system. The system reportedly handles about 20 million transactions a month and traffic peaks on grant payment days at the start of each month. According to government data, 29 million people in South Africa receive monthly grants, representing about 47% of the population. 18 million South Africans receive state welfare grants, with another 11 million relying on the state’s R350 grant. About 35% of the grant recipients, around 6.3 million people, receive their money through the online system, which pays the money into their SASSA/Postbank cards. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
OneLiquidity comes out of stealth
Image Source: OneLiquidity OneLiquidity, a SaaS startup, has come out of stealth to provide businesses with technology infrastructure and liquidity. After operating in stealth for a year, OneLiquidity, a startup that offers technology, liquidity, and licensing services for businesses through APIs, has launched its platform at an event in Lagos. Founded by Munachi Ogueke, the startup provides liquidity in crypto and fiat and bespoke technology to businesses. Startups can delegate their technology, liquidity, and compliance needs to OneLiquidity and focus on innovating, acquiring customers, and scaling their business. Ebenezer Ghanney, the CEO of WeWire, shared that the startup “completely transformed the way we manage our crypto assets.” In fireside chats at the launch event, Emmanuel Babalola, the director of fiat businesses for the Middle East and Africa at Binance, Dickson Nsofor, the CEO and founder of Korapay, and Wole Ayodele, the CEO of Fincra, all spoke about the history of Africa’s fintech landscape and how the ecosystem had matured for SaaS startups like OneLiquidity to gain market share. “Crypto has become a huge part of the fintech industry. Not just globally but particularly in Nigeria today. All of this innovation that has been happening shows that there is still more to come,” said Ayodele. Babalola also shared that Binance controls the majority of the crypto market in Africa. In Nsofor’s fireside chat, he shared his experiences as a three-time founder and how consistency helped him overcome the failures of those businesses and launch KoraPay. “Once you’re ready to just keep failing forward, you’ll learn something and just keep going,” he said.
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- September 15 2023
Livecopper announces investment from Moa Holdings to scale e-commerce product
E-commerce startup, Livecopper, has received an equity investment from Moa Holdings, founded by Yuppiechef co-founders Andrew Smith and Shane Dryde. South African e-commerce startup Livecopper, whose flagship product is an e-commerce platform for industry professionals to source building fixtures, has announced an undisclosed equity funding round from Moa Holdings. The funding will be used to accelerate growth and expand Livecopper’s product offerings. Moa Holdings was founded by e-commerce startup Yuppiechef co-founders Andrew Smith and Shane Dryden and will hold a 20% stake in Livecopper. Yuppiechef was acquired by Mr Price in March 2021 for R470 million (~$25 million). “We are excited to invest in Livecopper and to partner with its talented team,” said Andrew Smith. “Livecopper is a well-established company with a strong reputation for quality and customer service. We believe that Livecopper has the potential to be a major player in the building fixtures industry, and we are committed to helping the company achieve its full potential.” For Livecopper, managing director Alf Allingham stated that the deal will allow the company to leverage the expertise of Smith and Dryden in the e-commerce and retail sectors. “They have a proven track record of success in the e-commerce and retail sectors, and they share our commitment to customer service and quality. We are excited to work with them to grow Livecopper and to meet the needs of our customers.” Livecopper was founded in 2012 by Allingham and Andrew Davies. The company provides a one-stop e-commerce platform for industry professionals to source building fixtures, including lighting, plumbing, and sanitaryware. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
Driven by food prices, Nigeria’s headline inflation hits 25% in August
Data from Nigeria’s Bureau of Statistics show that Nigeria’s headline inflation hit 25% in August, representing a 1.17% increase from July. Food prices drove the uptick. Data from Nigeria’s Bureau of Statistics showed that headline inflation for August hit 25.08%. This is a 1.72% increase from July’s inflation figure, which was 24%, hitting an 18-year high. Nigeria’s inflation rate has stayed above 20% all year, as the headline inflation rate was 5.27% higher than the rate recorded in August 2022. Food, beverages drive inflation August’s inflation was again driven by an increase in the prices of food and nonalcoholic beverages as food inflation for the month also climbed to 29.34%. According to the NBS, “The rise in food inflation on a year-on-year basis was caused by increases in prices of Oil and fat, bread and cereals, fish, fruit, meat, vegetables and potatoes, yam and other tubers, vegetable, milk, cheese and eggs.” Kogi, Lagos and Bayelsa had the fightest food inflation figures while Kogi, Lagos and Rivers suffered all-items inflation at the sub-national level. Housing, water, electricity and gas also contributed to rising prices. At the same time, transportation was the fourth biggest driver of inflation, as the effect of fuel subsidy removal continues to be felt by individuals. Last month, at the Central Bank’s monetary policy committee (MPC) meeting, the bank elected to raise interest rates by 25 basis points. This came after disagreement on the best policy to control inflation and the apex bank’s role in stabilizing the economy. Already, there is a lot of apprehension as another MPC committee meeting draws close in two weeks, as to what policy the committee would adopt to stem the growing inflation. Today’s inflation data suggests the need to arrest food inflation as the government’s policy is unclear. The government has proposed a commodity board but it has thus proven ineffective in curbing food inflation. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
Exclusive: Flutterwave’s Olugbenga Agboola speaks on FW 3.0, IPO plans, and upgrading Barter
While GB was unclear about a timeline for an IPO for Flutterwave, he said the company’s current goal is digital market expansion. At the Kauffman Fellows event held in Nairobi this week, TechCabal spoke with Olugbenga Agboola, the CEO of Flutterwave. This publication shared several questions for him, including the state of its products, such as Barter and Send app, and we are posting them here verbatim to fully understand what the company has been up to and what it has planned for the coming days. You talked about Flutterwave 3.0 a few years ago, which included several business segments. How is Flutterwave structured today, and what are your business segments? GB: Flutterwave 3.0 was our evolution into a suite of products that would solve actual problems for consumers, Small and Medium Businesses (SMBs) and companies in Africa. We are looking at problems and basically identifying solutions. For example, when we launched the Send app, a remittance product, we made sending money anywhere in the world easier. But that is one problem but we also launched Swap. Swap is already in Nigeria and helps an average Nigerian who wants to swap currencies, from Naira to dollar, to be able to do so directly. READ MORE: Breaking: Backed by CBN, Flutterwave’s new product Swap wants to solve Nigeria’s FX problems And that’s our business. We help the average African business, both SMBs and enterprises or global corporations, to scale. 3.0 is when we structured the company into a suite of products where we can aggressively solve problems facing Africans in the African market. What markets/countries does Flutterwave currently operate in? And what are your key markets? GB: So, in Kenya, we are a tech platform. We have partners in Kenya that we process payments with, like Uber. We have seen an opportunity in Kenya and are scaling here. Our scaling is in line with regulations and all the required processes. Our primary markets are Nigeria, South Africa, Egypt and Kenya. Our strategic markets are Rwanda, Ghana, Cameroon, Cote d’Ivoire and Senegal. What is your fastest-growing business segment and country at the moment? GB: Literally everything is growing very fast. Send app is growing at over 100%, and our portfolio of business is growing massively. So we have been growing massively YoY now. Barter is Flutterwave’s consumer-facing product focused on remittances, but you’re pushing a separate international payments app with a sleek design and faster payouts. Is Flutterwave going to deprecate Barter? Well, we used to have a product called Barter. However, currently, it is in an upgrade phase. We want to build a new product to make Barter even more efficient, so we are working on that. How is Flutterwave Send performing? And what growth metrics can you share? Send app is growing at over 100 percent. Literally. It has been around, and we launched a new corridor from India to Africa and vice versa. READ MORE: Flutterwave partners with IndusInd Bank to expand its remittance product into India Flutterwave plans to list on the stock market. Considering the market momentum in recent weeks, what signal will you consider before finalizing your IPO plans? Ballpark on the same? GB: When it is time, we will let you know for sure. Currently, we focus on customers, revenue, experience, and digital market expansion. Flutterwave dismissed the allegations of fraud in Kenya, yet overall, statements from the regulator show the company faces a somewhat hostile environment in the country. How much progress has Flutterwave made to strengthen its relationship with the anti-graft agency and the CBK? GB: The said issues have been addressed, even the ARA (Assets and Recovery Agency) issue, which is good. This is just proof of the proper governance within the company. ARA would not have found us free of every charge if we didn’t have a great infrastructure. We also scaling the team here with Leon Kiptum ( SVP of East Africa) here in Kenya. We are scaling the company and bringing the right people on board, and we are doing everything to scale and grow. Congrats on receiving the name approval in Kenya from the CBK. GB: Yes, it is a step towards getting the licence. The first step is getting name approval, and that has been done, which is a very massive step. So very very soon, we should be having a licence. TC: Bosun Tijani, the Nigerian minister, is a prominent name in the Nigerian/African tech industry. How important is his ministerial selection to Flutterwave and the Nigerian tech industry? GB: Bosun’s appointment is amazing for Nigeria and the tech ecosystem. He has the experience and has walked the walk. On the government side, building policies is the best thing that can happen in Nigeria, and the country is very lucky to have Bosun. And I am very proud to have someone who has worked with us before. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
One billion streams for Afrobeats
This article was contributed to TechCabal by Bonface Orucho via bird story agency. Rema’s achievement of reaching a billion streams stands as a powerful testament to the global influence of Afrobeats worldwide. It also hints at a far larger and more dynamic African music scene. In a meteoric rise since its August 2022 release, Rema’s music collaboration, “Calm Down”, featuring Selena Gomez, now has the distinction of being the first-ever joint music effort led by an African artist to amass a billion streams on Spotify, according to the streamer. “Rema, one of Nigeria’s fastest-rising stars, is joining the Billions Club”, Spotify announced on its news site, For the Record. The site also recognised Rema “as one of the top 10 most-streamed Afrobeats artists on the platform”. Earlier in the year, CKay’s solo track, “Love Nwantiti”, achieved a similar feat in the solo track category. Rema owes much to the colossal support from the global diaspora with Spotify’s statement revealing that the US, India, Mexico, Brazil, and the UK are at the forefront of “Calm Down” downloads, swelling the streaming numbers for the collaboration. The achievements underscore the ever-increasing allure of Afrobeats and of African music in general. “It’s clear that the genre is making a significant impact and gaining substantial influence on the global music stage,” Victor Okpala, Spotify’s artist and label partnerships manager for West Africa, said about Afrobeats. With over 13 billion streams on Spotify in 2022 alone, Afrobeats’ rise has been scorching, with a staggering 550% surge in streams between 2017 and 2022. Early indicators already suggest that 2022’s numbers might be eclipsed. A surge in streaming platforms that make global audiences more accessible to African artists, along with the power of social media has fuelled the growth of the music industry in Africa. This industry is enjoying unprecedented traction, with Afrobeats luminaries headlining global events, delivering performances that rewrite the record books. As Christine Osazuwa, a Nigerian strategy lead at Shoobs, a music and events tech startup, pointed out, the current technological surge has merely amplified a potential that has long dwelled on the continent—and was evident in a thriving local scene long before bursting onto the world stage. “Before Burna Boy sold out stadiums, his anthems rocked the dance floors at Nigerian weddings in DC and Atlanta. His videos were exchanged through WhatsApp messages. He was hailed as the G.O.A.T. long before he graced the stage of Madison Square Garden,” she explained. “This entire ecosystem thrived despite lower budgets, modest press coverage, smaller DSPs, and often formidable adversity, all because the lifeblood is community,” she added. With ‘Calm Down’ gaining even more traction on platforms like YouTube, where streaming views are currently soaring at 629 million, there’s much more to anticipate from this 23-year-old prodigy. “This is a blessing. It’s not just a monumental victory for me, my team, and family; it’s a triumph for the culture,” Rema shared in a statement. “I’m genuinely elated, and I’m tremendously proud of my fans for rediscovering the song and introducing it to others,” he said. Spotify’s top 10 exported Afrobeats artist list also includes Burna Boy, Tems, Ckay, Wizkid, Fireboy DML, Ayra Starr, Libianca, Omah Lay, and Oxlade. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
Eskom warns of worse loadshedding in 2024
South Africa’s electricity utility Eskom has stated that loadshedding is projected to be worse than it has ever been over the next 52-week period. According to Eskom’s Week 36 system status report, the South African power utility projects that over the next 52-week period, rolling blackouts, known as loadshedding, will be much worse than it has ever been. Power generation is not expected to meet demand over the next 52 weeks. (Image source: Eskom) The report states that electricity generation capabilities will fail to meet the demand for all 52 weeks, the first time in the 15 years of loadshedding that this will happen. The projection comes at a time when South Africa’s high-ranking officials have been promising less loadshedding in the coming months. In a cabinet reshuffle in May, President Cyril Ramaphosa created a ministry of electricity to deal with the country’s power woes. Last month, Ramaphosa stated that the work of the ministry would ensure that loadshedding was a thing of the past by 2024. “Energy has been a great drawback to us, but we are working on it, and we are certain that by 2024, the energy crisis will be over,” he said. Deputy President Paul Mashatile and minister in the presidency Khumbudzo Ntshavheni have also reiterated the head of state’s words over the last month. But this most recent Eskom report shows that South Africa will have to deal with blackouts at least for the next year. According to data by the South African Reserve Bank (SARB), loadshedding costs the South African economy R900 million (~$47 million) a day and is also expected to detract two percentage points from the country’s overall economic growth this year. Furthermore, the SARB also states that load-shedding may add 0.5 percentage points to headline inflation in 2023. This is a result of the high operating costs of running diesel generators being passed to consumers, and higher rates of wastage and spoilage, especially along food value chains, lead to possible goods shortages. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 15 2023
Nigeria will partner with India to drive digital economy growth
Nigeria’s National Information Technology Development Agency (NITDA) met with India’s National Institute of Electronics and Information Technology (NIELIT) in a strategic move to drive the digital economy of both countries. The Director-General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa, met with M.M. Tripathi, the Director-General of India’s National Institute of Electronics and Information Technology (NIELIT), on the sidelines of the G20 Summit. The meeting was aimed at fostering a deeper understanding of the Indian digital economy and exploring avenues for knowledge sharing and collaboration. The discussions covered topics ranging from digital skills development to cybersecurity and innovation. According to a statement seen by TechCabal, Inuwa—who represented Nigeria’s minister of communications, innovation, and digital economy, Bosun Tijani—underscored the importance of leveraging India’s vast expertise in digital technologies to bolster Nigeria’s digital economy. In his campaign manifesto, President Bola Tinubu promised to create one million digital jobs for Nigerians in the first two years of his government. Nigeria hopes that borrowing from India’s playbook will help achieve this goal. Leaders from both Nigeria and India emphasised that this partnership is not only about bilateral cooperation but also about contributing to the broader global digital ecosystem. The thinking is that by joining forces, the two countries can accelerate their respective digital transformations while also playing a more influential role in shaping the global tech space. The Nigerian delegation also paid a working visit to the headquarters of the National Association of Software and Service Companies (NASSCOM). Inuwa spoke about the government’s initiatives to support tech innovation and foster a vibrant startup ecosystem in Nigeria and the need for international partnerships to accelerate Nigeria’s progress in the digital space. Shivendra Singh, vice president, global trade development, who received the Nigerian delegation, acknowledged Nigeria’s growing influence in Africa’s tech ecosystem and expressed a willingness to facilitate collaboration and knowledge exchange between Nigerian and Indian tech companies. Both countries will be building an execution plan on the identified areas of cooperation, which include skills development, technology transfer, and business partnership. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Your favourite tech startup wants to go public; it may make everyone involved unbelievably liquid
After two years of relative inactivity, startups are gearing up to test the public markets again. Here’s what lies ahead for Africa’s IPO hopefuls. When tech firms raise huge sums at the Series C stage, it typically starts an 18-month countdown to an initial public offering (IPO). An IPO or Initial Public Offering is when a privately owned company offers a portion of its equity to public market investors on a stock exchange. Listing on a stock exchange, a.k.a going public, is considered the hallmark of mature companies. Regardless of where it is domiciled or operates, a business is considered ready for a public market when it can show tangible market value and meet the financial standards of whatever exchange it chooses. The business will need to find a lead investment bank to underwrite, i.e., vouch for the company’s credibility and help it find buyers. “Is the leadership team strong enough to stand up to the public markets?” Asks Aarish Shah, the founder of EmergeOne, a London-based firm that helps startups organize their finances from seed through exit. A company that adds or shakes up its C-Suite is a telltale sign that it is preparing for an IPO. Hiring new top officers, especially in finance, legal and operations, signifies that a business is preparing for the big leagues. Eghosa Omoigui, the managing general partner of EchoVC Partners, also agrees with Shah. He said that a strong team, strong financials, [and] solid processes across the company to ensure repeatability of operating performance and forecasts are crucial pieces of IPO preparation. The IPO begins before the IPO Companies have to clean up their accounting to prepare for the intense scrutiny of public markets, but even that isn’t enough. “A good business exit happens when the company is bought, not sold,” says Victor Basta, founder and chief executive of DAI Magister, a boutique investment bank. Preparing for an exit involves sowing the seeds early in the minds of potential investors. Managers of a business preparing for an IPO intentionally cultivate an image and push communications that subtly reinforce the value of the business. Surely, you can think of at least one African tech company doing this right now, yes? “It’s about using investor relations to build quality relationships for equity analyst coverage,” said Omoigui. This narrative building also helps secure a respected investment bank to serve as lead underwriter and the face of the IPO sales process in the obscure walls of high finance—a lead underwriter—typically an investment bank—vets and vouches for the IPO company. Underwriters privately contact institutional investors and family offices and invite them to bid on the available IPO shares. At this point, the contours of an initial per-share price are determined. Unicorns used to equal IPOs Typically, unicorn status means companies are ready to go public. But in the current climate, founders stay private for longer, even as future funding sources for both VCs and startups dry up. The scrutiny and the unforgiving nature of valuations on the public markets inform the hesitation. Grocery delivery giant Instacart will go public this month at an estimated valuation of $9 billion, a significant discount on its $39 billion valuation on the private markets two years ago. African companies valued at around $2-3 billion will be wary of similar haircuts. Jumia enjoyed a fantastic IPO, offering its shares for $14.60 before experiencing a 200% share price increase in the first few hours of trading; today, the company’s shares trade for $2.87. The fintech startup Stripe has delayed its long-awaited IPO to an unspecified future as its valuation sank by almost half from a high of $95 billion. Arm Holdings Plc, a semiconductor firm, cut its valuation by $15 billion, lower than what market watchers expected before its expected IPO. Despite possible valuation cuts, a successful IPO can be financially life-changing for everyone involved, especially for underwriters who charge fees and take a share of gross proceeds. According to PwC, underwriters in the US may charge anywhere between 4.1% to 7% of IPO proceeds. Underpricing, a strategy where the issuing company sells shares below its initial offering price to attract investors, can take another 10% to 15% of IPO gains. The greater the value of the IPO, the less gross proceeds will be charged. This excludes lawyer fees, auditor fees, investor relations fees, etc. Besides this, the listing fee (paid directly to the stock exchange) for companies with smaller capitalisation, i.e., below $2 billion—where most African tech startups fall in—is between $55,000 and $75,000, depending on the total shares outstanding. Larger companies typically list on the Nasdaq Global Market or Nasdaq Global Select Market and pay between $175,000 and $320,000 as entry fees. There are tools and tax instruments that can make it cheaper, but generally, launching and completing an IPO today is a considerable expense. Only the well-funded can afford IPOs. If you have some free time, here’s a PwC IPO cost calculator to play with. But back to the story. The spectre of cheap IPOs While 2021 was the year startups attained high valuations due to low-interest rates-fuelled risk-taking, successive years have seen a fall back to earth with businesses priced more reasonably as investors looked to similar but publicly listed companies to guide perspectives on private valuations. Given how little we know about the revenue of Africa’s most funded startups, it would be a pleasant surprise for highly valued African tech companies that successfully debut publicly not to be repriced in line with the overall trend in falling valuations. But it’s not all bad news to seek an IPO in a lower valuation market or be repriced lower during the IPO process. Arm’s expected IPO was oversubscribed, but it only happened after Softbank, which owns most of Arm, repriced its stake lower as book building began. What is more important is how the business performs once it is listed. On the eve of a possible global recession, it is one thing to list on a public exchange, but, as David Messan
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