Trust and partnerships key to unlocking the next level of Africa’s e-commerce
To unlock the next stage of growth in Africa’s e-commerce sector, issues like fragmented payments, lack of trust for digital platforms, and regulatory bottlenecks must be addressed. This was the major takeaway from a panel discussion at Moonshot by TechCabal on Thursday. According to recent data, the African e-commerce market is projected to reach $75 billion from 478 million consumers by 2025. Despite the growth, e-commerce penetration on the continent is currently at less than 40%, showing the potential for further growth. ` Addressing the trust deficit is a key step: e-commerce platforms must bridge the gap between consumers and traders. “If there is a trust deficit, the e-commerce provider has to address it because trust determines the success of any transaction,” said Sunil Natraj, CEO of Jumia Nigeria. According to Natraj, to ensure trust, e-commerce platforms have to ensure that they keep the service promises that they make to consumers. Partnerships between industry players are also essential to unlock the growth opportunities in Africa’s e-commerce sector. Tappi, a Nigerian e-commerce company that helps small businesses onboard onto the internet, partnered with telcos in West Africa to leverage their distribution channels. “Scaling is based on distribution and instead of trying to reinvent the wheel, you can utilise the reach of existing players to get to your target market,” said Kenfield Griffith CEO of Tappi. The company has also explored partnerships with banks to extend credit financing to SMES. While partnerships are important in unlocking the next level of e-commerce in Africa, startups must prioritise building a good product for customers. Because of the highly customised nature of e-commerce businesses, identifying synergies with potential partners can end up being a distraction away from a company’s core mission. “Consider partnerships only after figuring out the market,” said Anu Adedoyin Adasolum, CEO of Sabi. “Being able to scale through referrals should be a prelude to any partnership.” The market potential for e-commerce in Africa is vast, but so are the hurdles to be overcome before that growth can be realised. Navigating the route to that growth will take a collective effort to address issues of lack of trust, less-than-ideal infrastructure and tough regulatory and compliance frameworks across the continent.
Read MoreEnergy and AI are the future of commerce, experts say at Moonshot
To capitalise on growing opportunities in global trade, Africa needs to focus on opportunities like energy transition and artificial intelligence, Anu Adasolum, CEO of Sabi, a startup that builds digital tools that enable trade, said at Moonshot by TechCabal on Wednesday. Demand for sustainability is surging due to rising consumer awareness, stringent regulations, and a growing emphasis on environmental responsibility. Africa is well-placed to plug into these evolving dynamics. “We have the minerals and the agricultural commodities. [We need] flows and solutions that enable businesses to plug into this demand,” Adasolum said in a fireside chat with Mudiaga Mowoe, CEO of Matta, a marketplace where manufacturers can source chemicals and other raw materials. Artificial intelligence also presents an opportunity to rethink the way we solve problems in the value chain of commerce. “One of the biggest problems you have when dealing with the informal sector is communication and engagement. AI bridges this gap,” Adasolum said. Businesses do not have to change their fundamental technology to integrate AI into their processes. In communication, there are AI bots that customers can interact with on WhatsApp, a communication platform many already use. AI can be overlaid with familiar technologies to make subcomponents of the process like placing orders and tracking supply more efficient. The technology also provides a standardization that can improve traceability—transparency in how goods and services are sourced. “With AI, our data structures can be a lot more flexible.” By exploring these opportunities, the continent has the potential to not only catch up but lead the way in the global trade value chain. logy can be overlaid on familiar communication technologies to make subcomponents of the process like placing orders and tracking supply more efficient. The technology also provides a standardization that can improve traceability—transparency in how goods and services are sourced. “With AI, our data structures can be a lot more flexible,” By exploring these opportunities, the continent has the potential to not only catch up but lead the way in the global commerce value chain.
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👨🏿🚀TechCabal Daily – AI for Africa, by Africa
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday! It’s Day 2 of Moonshot by TechCabal and we’re still buzzing from yesterday’s explosive kick-off! 4,000 visitors from across the globe joined us at the Eko Convention Centre where we had an awesome experience discussing AI, cross-border payments, cleantech, and lots more. Our lineup for day 2 is the reason you absolutely need to be here. Sunil Natraj, CEO of Jumia Nigeria, Tosin Eniolorunda, CEO of Moniepoint, and creators Layi Wasabi and Fisayo Fosudo will discuss commerce, the creator economy, and building companies that last. Remember to come along with your conference tags so you can check-in without hassle. We’ve also outlined the program schedule so you can plan around it. We kick off at 9 AM GMT. See you soon! AI conversations dominate Moonshot day one Africa’s payments market has a technology problem Carbon credit financing can boost clean energy funding in Africa The World Wide Web3 Opportunities AI AI conversations dominate Moonshot day one Image Source: TechCabal Day one of Moonshot was filled with conversations around AI. From TED-style AI talks to product demos and panel sessions, AI was on the lips of almost every speaker—at least on the main stage. Even Nigeria’s tech minister, Bosun Tijani, joined the conversation. “We would have failed our people and the future generations if we sleep on artificial intelligence because these are a set of technologies that will control what you think, how you think, and how you do everything,” Bosun Tijani said during a fireside chat. After the Minister’s fireside chat, Bayo Adekunmbi, a professional with over 22 years of experience in AI, gave a powerful TED talk on how Africa can export the next generation of AI talent. In an age where global companies are falling over one another to secure AI talents, Africa may be the biggest winner. Bayo’s argument has also been echoed by different AI professionals we have spoken with in the past including Nigeria’s tech minister. Although data has been the biggest challenge in AI adoption on the continent, other challenges, like digital literacy also hinder the application of the technology. However, panellists at this session think there might be a way out—using voice data. This workaround is currently being employed by startups across the continent. Startups now employ agents to gather audio recordings from users. While the continent continues to find ways to fill its AI data deficit, Yemi Keri, CEO of Heckerbella believes it is the responsibility of you and me to upload and contribute data for AI systems. How? By talking about your culture and languages on social media. Imagine a LinkedIn post talking about your state of origin and culture! Overall, we had an enjoyable time learning about how AI is shaping personal and business interactions. Tomorrow, the creative economy takes centre stage and we’ll be having creators like Layi Wasabi, Editi Effiong, and Jade Osiberu. See you around! Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Fintech Africa’s payments market has a technology problem Moyo Sodipo, co-founder/COO Busha, Benjamin Dada, publisher at BenDada.com (Moderator), and Guy Stiebel, VP Product Cedar Money/Image Source: TechCabal Cross-border payments are evolving in Africa. Every day, there is a different pitch from startups springing up, introducing one way or the other for people to send and receive money across borders. Stablecoins; virtual wallets; or using API integrations to make a difference. Coupled with the growing digital commerce activity on the continent, simplifying cross-border payments is the next bit finance players must crack. While we’ve come a long way since the days of Hawala and slow wires, high costs, limited coverage, and complexities with fiat currency conversions still exist. Tighter regulatory oversight and enhanced due diligence have rightly been made part and parcel of moving high-value transactions in and out of borders for any reason. During a Moonshot panel on Wednesday, experts in the payments ecosystem argued that it is not the regulatory hurdles in Africa, but limited technology to build solutions that allow faster data exchange during these payments, that will slow the development of better cross-border solutions. “Fintech is what happens when financial systems fail. Cross-border payments, historically, have been plagued by inefficiencies, and that’s where technology companies see a chance to make a difference,” said Guy Stiebel, VP Product of B2B cross-border payments fintech Cedar Money. On the other hand, “old school” traditional banking players seem slow to catch on to what is trending in cross-border payments, but they might hold the key for this development that we seek. There is an opportunity in a hybrid approach that combines fintechs’ agility and tech solutions with traditional banks’ reliability and regulatory knowledge. During the Builders Summit that happened in May, fintech operator and investor Iyin Aboyeji noted, “If the government’s business is your business, they’ll never shut you down. The government also has to make money from what you’re doing.” Banks have better relationships with regulators because they make the government money. Fintechs arguably have better technology. When fintechs and cross-border payments players start building in ways to align government interests—and that will likely involve traditional finance players—it will reduce regulatory pushback. Experts remain optimistic that more innovations will happen, despite regulatory dynamics on the continent. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Cleantech Carbon credit financing can boost clean energy funding in Africa Image Source: TechCabal With cleantech startups poised for explosive growth, carbon credit financing could be a game-changer for
Read MoreAfrican startups and tech media must find a common ground in reporting
African startups and the tech media must find a way to coexist. In a fiery panel discussion at Moonshot by TechCabal on Wednesday in Lagos, founders and media specialists presented conflicting reasons why the relationship has been frosty. The African tech ecosystem has grown in the past decade, so has the media that covers them. Homegrown publications like TechCabal have expanded, covering the industry with authority, integrity, and accuracy. While TechCabal’s journalism has won applause in the ecosystem, some of its work has put it on a collision course with a section of stakeholders. Oo Nwoye, founder and director at TechCircle, said that media publications have failed to differentiate between bad actors and the rest of the ecosystem. “If one bad apple commits fraud, they write it like all founders are fraudsters,” Nwoye said. Over the past year, stories covering startups like Dash, Brass, Ponatshego and Hohm Energy have rocked the ecosystem, exposing the behind-the-scenes of tech startups’ operations and failures. TechCabal’s editor-in-chief Olumuyiwa Olowogboyega said that completeness and fairness of coverage are what the media aims for. “If we are going to call anyone’s reputation into question, we make sure that we have our facts straight,” he said. Olowogboyega said founders have to understand that accurate media coverage contributes to that ecosystem growth, and there has to be a way to work with founders around the issue. In their reporting, journalists usually reach out to founders for the “right of response” to get their side of the story. In a perfect work, founders can use the right of reply opportunity to chronicle their version of events, but according to Jessica Hope, founder of PR firm Wimbart, most founders do not take advantage of this opportunity. “If you do not make your version of events clear, you create an information vacuum which can be filled by assumptions from readers,” Hope said. As Africa’s tech ecosystem continues to grow, the stories which are covered by the media have to be of substance. This will require tech journalists to ask hard questions and for founders to provide insights into the challenges and opportunities of building in Africa.
Read MoreAfrican startups advised to adopt “cautious” fundraising strategies
African startups should adopt a cautious approach to fundraising in the current climate. That was the consensus of fintech players who spoke during a fireside chat on “Innovating in Payments and Tech” at Moonshot by TechCabal on Wednesday. The session included Francis Nwoboshi, CCO Sochitel Group; Wole Ayodele, CEO Fincra; Ahunna Ogunedo, an investment manager with 54 Collective; and Vivian Mbene, COO, The Tonic Technologies. “Startups should start by raising a very small amount of money to help them properly understand their solution,” said Ogunedo. This approach, she said, allows African startups to validate their ideas before seeking larger rounds of funding, potentially putting them in a better position for long-term success and avoiding the pressure of expectation that comes from raising a large round. The discussion also touched on various aspects of fintech innovation, from blockchain adoption to regulatory frameworks and strategies for startup expansion. As Ayodele noted, “Every transfer you’re making today to a driver, someone at a fast food restaurant, a delivery person, to an open account, or a wallet, is a case for fintech.” He added that fintech had encroached into high-risk spaces like retail and consumer lending which traditional banks shy away from, which he says is a testament to how fintech has become a positive disruptor. Blockchain technology, in particular, was highlighted for its potential to improve trust. “With blockchain adoption, it improves security and transparency. I know in Nigeria, we tend to suspect anything and everyone. We say ‘shine your eyes’ or ‘no gree for anybody’,” explained Vivian, emphasizing how blockchain could eliminate those fears for financial transactions. On regulation, Ahunna noted that approaches across the continent vary, with some countries adopting a risk-based approach and others preferring a bank-led model. “For fintechs, the first thing is to identify how the regulatory landscape in your market works, whether bank-led or risk-led.” According to her, fintech operators need not have an antagonistic mindset toward regulators but should work in lockstep with them and stay up to date with the latest compliance standards. For startups looking to expand, the panel emphasized the importance of strategic partnerships. As Francis noted, “If you want to go fast, go alone, but if you want to go far, go together. So one of the things I would recommend for a startup is if you must expand and you must go to new markets, do your research and find partnerships that could help you leapfrog certain processes and stages.” The panelists also spoke on financial inclusion. While progress has been made, they agreed that more needs to be done, with building trust and combating fraud identified as crucial steps in accelerating financial inclusion. Collaboration between banks and fintechs was seen as a key driver of innovation. “Collaboration is a win-win situation for everybody,” said Vivian. As fintech continues to grow in Africa, regulators and players must continue to collaborate to ensure there’s a level playing field rooted in a foundation of trust, which would ultimately breed innovation.
Read MoreAfrica’s AI ambitions stunted by data scarcity
When you ask ChatGPT for something of African origin, it often gives a scant and less nuanced answer. Sometimes you get a made-up answer. This is in part because AI models are trained on little datasets from Africa. To address this data deficit, African countries must curate their datasets and make them accessible online, according to panelists at Moonshot by TechCabal on Wednesday. While most Africans leverage already built large language models (LLMs) from global organizations, those LLMs are trained on little data from Africa—for instance, only 2% of world healthcare data is from Africa. This is partly attributable to the lack of documentation for some cultures and languages. Uploading African data online comes with challenges. There is a lack of documentation for some African languages. Uploading the datasets online can also be expensive for Africans who struggle with poverty and the cost of living crisis. The biggest challenge perhaps might be Africa’s widespread digital literacy challenges. Bayo Adekanmbi, Founder, of Data Science Nigeria proposes workarounds including using voice-to-text to document data. Some African startups like Intron Health, a Nigerian AI company are already leveraging this. Intron Health allows doctors to professionals enter medical records by converting speech into text. To collect voice data, startups across Africa are employing agents to gather audio recordings. However, capturing voice data in African contexts presents unique challenges, as many Africans incorporate pidgin or Yoruba into their speech patterns. To accommodate this, Bayo Adekanmbi suggests that startups consider code-switching in their AI models. To achieve outsized documentation of African languages and culture, Lavina Ramkisson, AI Board, GSMA, believes that global partnerships in infrastructure and skill are needed. Olumide Okubadejo, Head of Product at Sabi, agrees that public and private partnerships are a great way to improve data collection to improve AI adoption on the continent.
Read MoreGrowing Africa’s digital economy requires more than policy
With Africa’s digital economy projected to reach $180 billion by 2025, African governments are racing to implement policies that encourage innovation and provide guardrails that ensure fair use of the technology. Sandboxes, startup acts, and other policies have been developed across the continents to enable more innovations, but policymakers on a panel discussion at Moonshot by TechCabal on Wednesday, say there is a need for additional steps to fully capitalize on the potential of the digital economy. “In the way that love is not enough [for a relationship to grow], policies are not enough for the digital economy,” said Victoria Manya who moderated the discussion which featured Kashifu Abdullahi, the director general of Nigeria’s National Information Technology Development Agency (NITDA), Dr Augustina Odame, CEO of Ghana Chamber of Technology, and Marine Kane, Director of Innovation at the Ministry of Digital Transformation in Mauritania. The digital economy needs more infrastructure The infrastructural deficit makes founders spend funding on resources that would be cheaper if availed by the government, according to Dr. Odame. “It’s a bit difficult to justify entrepreneurs spending huge sums of money to source critical things like data when there’s certain data that sits with government agencies that could easily be cleaned,” Augusta said. Instead of building this market infrastructure from scratch, businesses can optimise their limited funds to fine-tune their products or do other important things. Odame acknowledged that certain infrastructural needs, such as broadband and electricity, may be beyond the capabilities of governments alone. She advocated for partnerships with the private sector and development partners to leverage their resources and create investment vehicles. “We’ve seen a lot of private-public sector partnerships go south, but we need it. It’s a key way that we are going to finance some of this huge capital infrastructure necessary for development.” Even with existing infrastructure, leaks remain prevalent in sectors like broadband and electricity. This often leads to unnecessary expenditures, such as repeated repairs of poles and infrastructure. For example, Ghana’s telecommunication sector reported losses of over $6 million due to fiber cuts in the first half of this year. For the digital economy to grow, measures that prevent redundant investments and promote a more efficient allocation of resources should be put in place. The digital economy also needs to look within While Africa is brimming with innovative startups, not all the countries have the characteristics necessary for long-term success. Infrastructure is a vital component of economic growth, but it’s equally important to focus on the capabilities of the businesses driving the digital economy. Manley talked about how Sierra Leone is equipping innovators with the skills necessary to attract and effectively utilize investments. ”We set up Tech City, to train tech operators in business development, financial management, and other things on how to run a business to make them market-ready.” Governments across Africa are also extending similar trainings to citizens especially ICT trainings on key skills that make them employable locally and internationally. In Nigeria for instance, NITDA organizes ICT trainings. It also supports the Ministry of Communications, Innovation and Digital Economy’s Three Million Technical Talent programme (3MTT). “According to the World Bank by 2030 there will be 85 million talent deficit, which, if left unaddressed, could lead to $8.5 trillion dollars in unrealized annual value,” Abdullahi said. “Looking at our young population, we can harness that population and position ourselves to become the global talent factory to bridge this gap deficit.“ No one should be left behind Manley emphasized the importance of supporting marginalized groups, such as the disabled and women, in acquiring skills and accessing funding for their ideas. He also acknowledged that other groups may face similar challenges and require additional attention. “When we are identifying exclusion in terms of the digital economy, we’re talking about things like lack of access to connectivity,” he said. Stakeholders need to identify other forms of marginalisation and figure out a way to collaboratively address them. While policy plays a crucial role, it alone cannot create the digital economy Africa envisions. Moonshot ideas and collective commitment are essential to bridge the gap between vision and implementation and shape the future of tech on the continent.
Read MoreExperts optimistic about Africa’s payments market despite regulatory hurdles
Scaling cross-border payments solutions in Africa is difficult due to complex regulatory frameworks , high fees, and settlement delays. These problems have slowed trade on the continent, panelists said at Moonshot by TechCabal in Lagos. The complexity of cross-border payments is not just a financial or legal issue—it’s a technological one, the panelists said. Each transaction involves integrating various payment technologies at different stages. Payments are not just fund transfers; they include data exchanges. For instance, participants must validate amounts, confirm the parties’ identity, and ensure the transaction’s authenticity in seconds. Scaling this process across borders brings complications. “We can define cross-border payments as moving money between countries. These payments typically flow through the U.S. dollar system, but the infrastructure underpinning it is decades old, relying on outdated messaging systems from decades ago,” said Guy Stiebel, VP of Product at Cedar Money. “The inefficiencies and friction in this process are what make it so difficult.” Regulation has become an even greater challenge for payment solutions startups because they must comply across multiple jurisdictions. “Fintechs have to keep up with changing regulations in every market they operate in. The regulatory landscape is constantly evolving, so maintaining a close relationship with regulators is crucial,” said Moyo Sodipo, co-founder and COO of Busha. Cross-border services are not easy to build Creating cross-border payment products that can operate effortlessly across different markets is no small feat. Fintechs must build a consistent product that adapts to local requirements. For instance, onboarding a business in Nigeria is different from South Africa or Kenya, yet the product must remain cohesive. The challenge lies in designing for multiple markets without fragmenting the user experience. Stiebel said achieving this consistency in a shifting regulatory environment is no easy task. “Clients expect a reliable experience regardless of the regulatory hurdles. Building a product that withstands these shifts while maintaining user trust is incredibly difficult,” he said. Despite these challenges, fintechs want to fix cross-border payment gaps because of the potential in the market. Over 40 million Africans live abroad and send money back home regularly. They need faster and more affordable platforms, an opportunity that fintech wants to capitalise on. “Fintech is what happens when financial systems fail. Cross-border payments, historically, have been plagued by inefficiencies, and that’s where technology companies see a chance to make a difference,” said Stiebel.
Read MoreFund managers call for regulations to unlock Africa’s carbon credit financing
With cleantech startups poised for explosive growth, carbon credit financing could be a game-changer for the sector. Vladimir Dugin, a senior partner at E3 Capital, a pan-African venture firm, said at Moonshot by TechCabal in Lagos that African policymakers must establish clear regulations to drive the adoption of carbon credit financing. Panelists noted that the lack of laws and data is slowing the uptake of carbon credit funding on the continent. While Africa has witnessed an increase in carbon credit financing, gaps persist which must be addressed. “Carbon credits help businesses subsidise capex in the long run, providing an opportunity for marginal gains,” said Michael Olaitan, co-founder of renewable energy startup Powernow. The global carbon credit market is valued at around $909 billion. In Africa, the carbon credit market is projected to reach $82 billion. Organisations like the Africa Carbon Markets Initiative (ACMI) aim to produce 300m carbon credits annually, potentially unlocking at least $6 billion in revenue and creating 30 million jobs by 2030. Chidalu Onyenso, CEO of Earthbond, cautioned that startups should not rely on carbon credits initiatives as their sole funding source despite the potential. ”Blended financing is key in ensuring that startups do not put their eggs in one basket,” Onyenso said. As Africa looks to tap into the carbon credit financing market, fund managers and founders believe the continent needs to develop a regulatory framework and avail data to investors.
Read MoreNigeria’s tech minister Bosun Tijani says AI will transform Nigeria into “an economic powerhouse”
Bosun Tijani, Nigeria’s Minister of Communications, Innovation and Digital Economy, said artificial intelligence (AI) can transform the country into an economic powerhouse. “We would have failed our people and the future generation if we sleep on artificial intelligence because these are a set of technologies that will control what you think, how you think, and how you do everything,” he said during a fireside chat with Tomiwa Aladekomo, CEO Big Cabal Media at Moonshot by TechCabal on Wednesday in Lagos. One of the biggest criticisms the minister has faced in his first year in office has come from the ministry’s artificial intelligence efforts. In August 2024, the ministry released the first draft of the national AI strategy and recently launched an AI collective backed by $1.5 million in funding. However, critics say Nigeria’s AI ambitions are premature, citing existing infrastructure problems. Bosun Tijani disagrees. “The reality is that if you’re going to be visionary about it, there’s absolutely no way you focus on weaker problems,” Tijani said about public opinions deriding the government for ignoring problems like electricity and education. The minister believes that there is an economic opportunity for Nigeria to digitise the data that large language models (LLMs) require to function. AI tools do not currently possess a lot of context on Africa and that gap can be filled by Nigerians. “It’s a business opportunity that continents like Africa should be leading,” Tijani said. He also thinks that the AI push from his ministry is future-proofing Nigerians ahead of the artificial intelligence age. Tijani has his mind set on how technology can improve Nigeria and for anyone who cares to listen, he believes that there are five pillars that his ministry can build its foundation on. The first pillar of the ministry’s strategic plan is talent and the ministry wants to invest in the “foundational set of talents that can drive progress,” referencing the ambitious Three Million Technical Talents (3MTT) programme that aims to create a pipeline of human capital and make Nigeria a “net exporter of talent.” “If technology is to truly help drive growth in Nigeria, the government must invest in talent very early,” he said. Another pillar of that agenda is laying the infrastructure for Nigeria’s digital economy. “Without connectivity, there’s no digital technologies that can truly scale,” he said. The ministry plans to lay an additional 90,000km of fibre backbone to bring Nigeria’s total backbone network to 125,000km. The third pillar of that agenda is policy. “Our policies should be pro-innovation and not just be there for revenues,” he said. But perhaps the best way to think about Tijani’s thirty-minute session is what he wants his legacy to be. The minister told over 3,000 founders, business leaders, innovators, venture capitalists, and regulators that he wants to be remembered as the minister who built platforms. He sees platforms through a three-pronged approach where he wants to increase Nigeria’s backbone fibre network; introduce a GEO system in Nigeria and transform how the government uses technology.
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