- August 16 2023
Kenyan Assembly receives petition to ban TikTok
Kenya’s National Assembly considers a petition to ban TikTok. The petition, submitted by Bob Ndolo, CEO of Bridget Connect Consultancy, cites inadequate regulation and concerns about explicit content. Kenya’s National Assembly is considering a petition to ban the social media platform, TikTok. Bob Ndolo, CEO of the digital consulting firm Bridget Connect Consultancy, submitted the petition to the assembly. According to Ndolo, the country’s Communications Authority has failed to regulate the social media platform, which he claims is promoting violence, explicit sexual content, hate speech, and offensive behaviour among the youth. The news has been received with mixed reactions from Kenyans. The assembly is considering the petition but has suggested that a complete ban may be impossible due to the growing socioeconomic significance of the platform among young people. [ad] In his petition, Ndolo says that the lack of regulation and the app’s addictive nature could cause a decline in academic performance and a rise in mental health issues among Kenya’s young people. He also referenced the scrutiny the company is facing in the U.S., where the company has been fined for illegally collecting data and accused of sharing a significant amount of data on its users, including information about their devices, locations, and browsing history, with third-party companies without users’ consent. The news has sparked mixed reactions in Kenya. On one side of the fence, some stand with Ndolo, the petitioner referencing a trend of Kenyan TikTokers, making sexual videos on TikTok lives at night. “Switch to LIVE videos (from 10 pm onwards) and you’ll see children, men, and women exposing themselves,” one Kenyan tweeted. Meanwhile, there’s another camp that believes the assembly might be chasing shadows. They think that instead, the government should redirect its energy to advocating for the ban of pornography sites like the Pornhub ban in Kenya or just focus on salvaging the economy. “They can’t ban corruption but are so concerned about an app that some folks are depending on as their source of income. They should prioritize reviving industries, creating jobs for the youth, and locking up those corrupt leaders. It’s an absolute garbage of an idea,” argues Miruthi, another Kenyan. Then there’s Samuel Ochanji, who waves off the TikTok ban petition as a futile exercise. According to him, even if it’s outlawed, Kenyans will just leapfrog the restrictions using VPNs. Ndolo’s petition was heard about two weeks after Kenya’s ICT Cabinet Secretary Eliud Owalo promised to work with the National Assembly to regulate night TikTok live sessions that have been flagged for airing immoral content. Ndolo also reportedly hinted at a plan to amend the Computer Misuse and Cyber Crimes Act to protect Kenyans from pornographic content shared on TikTok. However, Majority Leader Kimani Ichung’wah has suggested that a complete ban on TikTok would result in thousands of young Kenyans losing their livelihoods. The World Population Review (WPR) shows that 27 percent of the Kenyan population of 54,027,487 is on TikTok, and many of them are creators, publishing entertaining content for direct or indirect financial gain or selling their products and services online. Minority Leader Opiyo Wandayi explained that banning the app would be a step backwards in an increasingly digital age. The assembly seems to be leaning towards heavily regulating the platform instead. Kirinyaga Woman Representative Jane Njeri said, “I use [TikTok] to impact the children. Young people on the platform are making a living, and we cannot entirely do away with the content. Perhaps what we can prioritize is the regulation of social media platforms, including TikTok.” The Kikuyu MP has advised Ndolo to petition instead for the regulation of the platform, including the age limit and the content. He has also suggested fines for anyone who shares explicit content. In Kenya, there are mixed reactions to the news. While some side with the petitioner, Ndolo. “When you switch to LIVE videos (from 10 pm onwards), you’ll see Kenyan children, men/women exposing themselves.” Others think the assembly is barking up the wrong tree. “They can’t ban corruption but are so concerned about an app that some folks depend on as their source of income. They should prioritize reviving industries, creating jobs for the youth, and locking up those corrupt leaders. It’s an absolute garbage of an idea.” Another Kenyan, Samuel Ochanji, says the petition to ban TikTok is an exercise in futility as Kenyans will still access the app via VPN.
Read More
- August 16 2023
TechCabal Daily – Kenya probes TikTok
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Kenyan lawmakers are probing TikTok. A private citizen “Bob Ndolo” reportedly petitioned the lawmakers to look into the social media platform because it’s “a threat to the cultural and religious values of Kenya”. Ndolo told lawmakers that if TikTok is not banned in Kenya, it could lead to a decline in academic performance, and mental health issues amongst youth. Kenya’s Public Petitions Committee will now review the issue and report back in 60 days. In today’s edition Telecom Egypt records $217 million profit Jumia records lowest losses in 4 years CBK increases Airtel Money’s limits MTN wants to sell 30% of its fintech arm The World Wide Web3 Event: The Moonshot Conference Opportunities Telecom Telecom Egypt records $217 million profit in H1 2023 Image Source: Capacity Media. Telecom Egypt has released its financial report for H1 2023. The company recorded a net profit of E£6.7 billion ($217 million) in H1 of 2023, a growth driven by its 75% year-on-year growth in wholesale revenue and strong retail performance. The financial results: Per the report, Telecom Egypt’s total revenue grew to E£28.1 billion ($909 million), a 38% growth compared to H1 2022. There was also an increase in its customer base across the board. It reached 12.6 million mobile customers during this period—a 7% year-on-year growth. The number of fixed voice subscribers and fixed-broadband internet customers increased by 5% and 8% respectively. The company’s EBITDA for the first half of the year reached E£11.96 billion (~$387 million), marking a significant 48% increase from the previous year’s E£8.06 billion ($278 million). The company also achieved a high margin of 42.5%, compared to the previous margin of 39.5%, which was attributed to an improved revenue mix. ICYMI: In May,Egypt sold a 9.5% stake in Telecom Egypt for $121.6 million as part of a move to raise revenue from privatising state-owned firms to meet a series of foreign debt obligations. Until the recent sale, the government held 80% of the Egyptian Stock Exchange-listed company, with the rest in free float. Zoom out: Telecom Egypt owns 45% of Vodafone Egypt, the largest mobile network operator in Egypt by active subscribers, with a 42% market share in the mobile carrier space. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. E-commerce Jumia records lowest losses in 4 years GIF source: HelloGiggles Jumia is still on a long road to profitability. The company’s Q2 financial report shows a reduction in losses—the lowest reported in four years. Its operating losses slowed to $23.3 million thanks to a massive reduction in sales and advertising expenses. While Jumia spent $22.2 million on advertising in Q2 2022, it spent only $5.8 million in Q2 2023. Its general and administrative expenses and technology expenses were also lower compared to Q2 2022. The company said, “Usage performance continued to be affected by the difficult operating environment with record levels of inflation impacting consumers’ spend as well as sellers’ ability to source goods.” Hit with a blow: Jumia was affected by worsening macroeconomic conditions in Nigeria, one of its biggest markets. Nigeria’s inflation rate has remained above 20% throughout the year, driven by high food prices. Critical but complex reforms such as the removal of fuel subsidies continue to put a strain on the purchasing power of consumers. Yet, the struggles go beyond Nigeria.Ghana’s inflation rate also hit 43%, while Egypt’s rose to around 35%. Across all of Jumia’s markets, the average inflation rate is 14%, and currency depreciation in nine of its ten markets shows the difficulty of its goal of moving towards profitability. Zoom Out: Overall, the task of figuring out profitability during one of the worst economic periods hangs heavily on the company’s neck. Late last year, it overhauled its board, and co-CEOs Jeremy Hodara and Sacha Poignonnec stepped down as the company renewed its focus on profitability. Discover Trends with Smile Identity Download the Smile ID State of KYC in Africa Report on the latest trends in identity verification across Africa, highlighting the power of biometric verification and document verification in combating fraud. It is a must-read for any business looking to acquire users across Africa and keep up with fraud trends. Fintech CBK increases Airtel Money transaction limit GIF Source: 4GIFs Yesterday, the CBK granted Airtel Money approval to increase its transaction limits. This follows Monday’s announcement where M-PESA was allowed to increase its transaction limits from KES150,000 ($1,043) to KES500,000 ($3,477) per day. Now, Airtel Money has joined the approval list. Its customers can now hold up to KES500,000 ($3,477) in their wallets, and conduct transactions of the same amount daily. Similar to M-PESA, the limit per transaction for Airtel Money will be KES150,000 ($1,043) which will allow customers to conduct multiple transactions up to the daily limit of KES500,000 ($3,477). Airtel Money states that the increase will “provide them with the flexibility to conduct larger transactions and manage their finances more effectively”. Zoom out: Both Airtel Money and M-PESA are popular in Kenya. However, M-PESA remains a dominant force with a market share of 96.5% in the mobile money space. Airtel Money comes second with a modest 3.4%. Fintech MTN wants to sell 30% of its fintech arm MTN is up for sale. If you read yesterday’s newsletter you’d know that Mastercard agreed to buy a minority stake in MTN’s fintech arm. Now, the telecom has announced that it is looking for more investors to buy as much as 30% of its fintech segment. They are particularly on the lookout for strategic investors. Image source: YungNollywood Strategic investors? Yes. This means that investors have to bring more than just money to the table. For example, Mastercard has an international payment infrastructure that MTN needs to facilitate cross-border payment. In 2021, the payment processor partnered with MTN’s MoMo
Read More- August 15 2023
The long road to building sustainable food systems in Africa
Food is expensive in many African countries and not enough for everyone. It has caused political revolutions in Egypt, Sudan, and Tunisia. And it was the inspiration for the 1985 hit, ‘We Are the World,’ courtesy of Lionel Richie and Michael Jackson. Yet the problem is far from being solved. Technology companies are stepping into the ring of entities duelling with this problem, and they have a chance to show that aggregating smallholder farmers with technology and farming support can make a dent. South Africans spend a third of their income on food. In 2021 Egyptian families reportedly spent up to 45% of their monthly expenditure on food. In Kenya the figure rises to 46.7%, Cameroonian families spend 45.6%, and in Algeria, food gobbles 42.5% of monthly expenditure. In Nigeria, Africa’s most populated country, 56% of every naira earned is spent on food. It is an unlikely problem given that Africans are more likely to work on a farm than any other job. In 2020, almost 44% of Africans were employed in the agriculture sector, according to Statista. Other sources put the figure much higher. Despite the agricultural sector providing work for more people than any other sector, 37 African countries (out of 54) face “hunger levels that are ‘Stressed’ or higher,” per the 2022 Global Hunger Index, an annual report from Concern Worldwide and Welthungerhilfe. For many decades, the hunger problem negatively defined Africa in Western media. A lot of that negative coverage has been reduced on the back of local and global criticism over the portrayal of Africa as a hungry continent. Fewer Africans are hungry relatively speaking and in absolute terms. However, while the number of people starving has reduced, the number of people who are one shock away from hunger has increased. In the last months of 2022, more than two-thirds (70%) of people most affected by the global food crises lived in just three East African countries—Ethiopia, Kenya, and Somalia. Persistent insecurity in Africa’s backyards does more to undermine local and international aid efforts to improve agriculture and deliver help to affected populations, together with drier-than-normal weather the violence forces farmers to allow fertile fields to lie fallow or give up harvests. Russia’s invasion of Ukraine is a pain African countries could do without. But the bigger effect of the unfortunate war has been a cut in aid from Europe that supported hunger alleviation programs. Still, local conflict is a more pressing challenge to building up Africa’s fragile agricultural ecosystems. Usually, the people who suffer the most are smallholder farmers in places affected by both a changing climate and violence. They usually depend on the food they produce to feed their families and sell the excess to earn some money. When they cannot go to their farms, everyone suffers. From a big-picture perspective, things seem to be getting better—marginally and slowly. Farming practices have improved ever so slightly due to land reforms in some African countries. And more modern farming approaches are taking root. Showing that some of the problems facing efforts to provide sufficient food for Africans are more solvable than stopping gunfights. Importantly Africa’s growing class of tech entrepreneurs who typically focus on digital payment technologies are finding the opportunity to solve these problems attractive. Take ThriveAgric for example, a Nigerian startup that combines financing with market access support for smallholder farmers. In the last 3 years, Thrive Agric has built a network of 500,000 farmers that it supports with financing for farm inputs. The company has also entered partnerships with commodity boards to help it find markets for the farmers they support. Earlier this year, Thrive Agric announced that it had hit a milestone of $100 million in credit lent to farmers in its network. Thrive Agric is not paid back in cash. It loans against expected crop yield, works with the farmers to improve yield and manage farming operations and sells the harvest to a network of off-takers. Profits are shared with farmers, Oshone Anavhe, Thrive Agric’s VP of operations explained. This creates an interesting model that effectively aggregates smallholder farmers and lends Thrive Agric the scale of a commercial player—albeit with more people employed. It was not always a smooth ride for Thrive Agric. It originally began life as a crowdfunding platform that funded farmers and split 80% of profits between farmers and subscribers and kept 20% for itself. But Covid-19 pandemic restrictions changed that and almost sank the startup before it managed a turnaround and opted to pursue a model that relied on institutional funding instead of flighty short-term loans from multiple subscribers. The untold story of how ThriveAgric survived a turbulent 2020 The firm has since raised money from Nigeria’s central and commercial banks, Ventures Platform, the World Food Program, and USAID. Startups like Thrive Agric may be key to resolving one of the big problems facing agriculture across the continent. Which is that most of Africa’s farms are too small to produce much more than the farmer’s family will eat for the farming season. Aggregating these smallholder farms with technology and input support is one way to derive some of the efficiencies of large farms without actually owning a large farm. South Africa, the continent’s leading agricultural producer, is a model of agricultural efficiency for the rest of the continent. It has both the largest agricultural land on the continent—96 million hectares—and the largest concentration of commercial farmers at 32,000. Between 5,000 to 7,000 of these farmers produce four-fifths of the country’s agricultural produce, according to the US International Trade Administration. Agricultural production in South Africa is complemented by a strong agro–processing industry that represents 18% of the manufacturing output of South Africa yearly. Processing raw produce from South African farms is second only to auto-manufacturing in terms of gross value added. The country’s agricultural sector more than doubled in value and volume since 1994. It is one of the bright spots in South Africa’s economy despite the broader economic woes and even through Covid–19. “At
Read More- August 15 2023
Driven by food prices, Nigeria’s headline inflation hits 24% in July
Data from Nigeria’s Bureau of Statistics show that Nigeria’s headline inflation hit 24% in July. Data from Nigeria’s Bureau of Statistics showed that headline inflation for July hit a high of 24.08%. It is an 18-year-high after last June’s inflation figure reached 222.79%–Nigeria’s inflation rate has stayed above 20% all year. According to the NBS, prices rose 2.9% month-on-month. July’s inflation was again driven primarily by an increase in the prices of food and nonalcoholic beverages as food inflation for the month also climbed to a worrying 26.98%. 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, potatoes, yam ad other tubers.” Kogi, Lagos and Bayelsa had the highest food inflation figures. Housing, water, electricity and gas also contributed to rising prices, while transportation was the fourth biggest driver of inflation, showing the effect of removing fuel subsidies. While fuel subsidy removal did not impact June’s figures much, its effect is now being felt in consumer prices. While Nigeria’s Central Bank has so far focused on stabilizing the exchange rate under the Bola Tinubu administration, it has continued to do a poor job of keeping inflation under control. In last month’s MPC meeting, the bank elected to raise interest rates by 25 basis points. It followed Godwin Emefiele’s decision to raise interest rates twice before he was suspended as CBN governor. Today’s inflation data again highlights the need for the Central Bank to prioritise policies to bring inflation under control. So far, increases in interest rates have not worked. Additionally, despite the Federal Government’s announcement of a plan to arrest food inflation, it is unclear when those plans will be rolled out. Forming a commodity board is at the heart of the government’s intervention plans, but history suggests that commodity boards are ineffective and instead encourage corruption.
Read More- August 15 2023
How Congo Business Summit can help Kenyan startups expand to Kinshasa
Noel K. Tshiani is the managing director of Congo Business Summit, a flagship conference and expo organised by Congo Business Network. The network works with startups, corporations, and government officials in the Democratic Republic of Congo and abroad. With a profound dedication to innovation, the organisation is passionate about nurturing and advancing the country’s startup and tech ecosystems, recognising the transformative impact they can have on the country’s economy. There is no better time than now to draw attention to the underexplored opportunities for Kenyan tech startups in the Democratic Republic of Congo (DRC). Set to take place at Pullman Kinshasa Grand Hotel from October 12 to 13, 2023, Congo Business Summit is the largest gathering of startups, innovation leaders, and investors in the DRC. It provides an unparalleled environment for engaging discussions, strategic networking, and fostering partnerships. The event will feature exhibitions, panels, and workshops on topics related to startups, entrepreneurship, investments, and technology. And it promises significant media visibility and direct access to investors for participating startups from Kinshasa, Lubumbashi, Goma, and Matadi. The DRC, a vast country with a population of over 100 million people, has been experiencing steady economic growth and digital transformation. As a result, an abundant and untapped landscape ripe with opportunities awaits Kenyan tech startups eager to explore new markets and drive unprecedented growth. The DRC’s strategic location, bordering nine countries, offers an additional potential consumer base of around 250 million people – a prospect too significant for any ambitious startup in Nairobi to overlook. For years, the narrative about Congo-Kinshasa has been dominated by its natural resources, valued at nearly $24 trillion. However, this perspective significantly underestimates the vast business opportunities that the country presents beyond just the mining sector, especially for tech startups ready to dive into international expansion. The DRC’s youthful and large population, reasonable labour costs, and massive consumer market provide a wealth of opportunities for growth and scale. That is why Kenyan tech startups need look no further than their homegrown success stories for inspiration. Equity Bank, as a prime for example, expanded into the Democratic Republic of Congo and has since merged with Banque Commerciale du Congo. The bank has since achieved remarkable success, with more than one million customers. Innovative startups in Kenya in sectors such as fintech, edtech, agritech, insurtech, and medtech can find a dynamic and receptive market in the DRC. The country’s technology infrastructure is constantly improving and there is a growing demand for innovative solutions to everyday challenges, from financial inclusion to access to quality education, healthcare, and sustainable agriculture. Congo Business Summit, with its diverse representation of various sectors, provides a unique platform for Kenyan tech startups to connect with Congolese counterparts, potential business partners, and government decision-makers. It is a rare opportunity to gain first-hand knowledge and insights into conducting business in the DRC, navigating regulatory requirements, understanding consumer behaviour, and forging business partnerships. Kenyan tech startups should approach the DRC market not only as an opportunity for business growth, but also as a chance to contribute to the socio-economic development of both countries. By introducing innovative solutions and services, Kenyan tech startups can help to address key challenges, create jobs, improve living standards, and promote mutual prosperity. The DRC is ready and open for business, and for Kenyan tech startups looking to grow and expand, the opportunities are limitless. As we look forward to the upcoming Congo Business Summit in October, I encourage Kenyan tech startups to explore the untapped potential in the DRC. Kenyan entrepreneurs can in fact break new ground, disrupt industries, create value, and drive sustainable development across borders. The future is here, and it is full of promise in the heart of Africa: the Democratic Republic of Congo.
Read More- August 15 2023
After M-PESA, Airtel Money increases wallet limit to $3,400
Airtel Money has received approval to increase mobile money limits to KES 500,000 ($3,400). Customers will also transact up to KES 500,000 daily, up from KES 300,000 ($2085). Yesterday, Safaricom announced it had made some adjustments to its M-PESA wallet, reporting a limit increase from KES 300,000 ($2,085) to KES 500,000 (a little over $3,400). The company further shared that the daily transaction threshold had also been raised to KES 500,000 from its previous mark of KES 300,000. Today, Airtel Money has joined this conversation, matching the higher limits after receiving approval from the Central Bank of Kenya (CBK). This means that Airtel Kenya’s mobile money users can now hold up to half a million Kenyan shillings within their wallets and conduct transactions of the same amount daily. However, just like M-PESA, the limit per transaction will remain limited at KES 150,000 ($1,043). Anne Kinuthia-Otieno, Airtel Money’s managing director, said the company was “elated about the CBK’s decision as this change will significantly empower our customers and partners by providing them with the flexibility to conduct larger transactions and manage their finances more effectively.” Expanding the daily transaction cap will likely bring advantages to a diverse customer base, including governmental entities and other stakeholders. In terms of market share, Airtel Money is no match to market leader M-PESA. As of March 2023, M-PESA commanded a market share of 96.5% in the mobile money space. Airtel Money came in second position with a modest 3.4%, trailed by Telkom Kenya’s T-Kash with just 0.1%. The central bank of Kenya and other agencies have been trying to level the playing field in the mobile money sector. Yet, these efforts have not been favourable to smaller companies. M-PESA stands as a dominant force in Kenya’s payment services landscape. While Safaricom has denied its dominance, M-PESA still captures most payment service avenues. These avenues have been made interoperable in recent times. However, the biggest boost could stem from agency interoperability. This development could empower customers to use Airtel Money and T-Kash more by tapping into M-PESA’s extensive agency network. This has been partially accomplished; M-PESA’s tills and pay bill numbers have achieved interoperability with Airtel Money and T-Kash, yet this has not yielded significant shifts in creating a level playing field for other contenders. Conversations have also surfaced about the potential opening of M-PESA’s agency network to its competitors, potentially expediting other participants’ growth. However, this development has not been formally announced, possibly due to delays. Considering the substantial resources invested in its development, Safaricom might be hesitant to share its network, especially with entities that did not contribute to its growth.
Read More- August 15 2023
Jumia Q2 2023 report: Active customers decline by 1 million as company slows losses
Jumia’s Q2 financial report shows a reduction in losses as the company continues to talk about the importance of “progress towards profit.” Its operating losses slowed to $23.3 million in Q2 2023, the lowest reported in four years, thanks to a massive reduction in sales and advertising expenses. While Jumia spent $22.2 million on advertising in Q2 2022, it spent only $5.8 million in Q2 2023. Its general and administrative expenses also reduced because of layoffs earlier in the year, while technology expenses were also lower compared to Q2 2022. Despite these positives, Jumia was affected by worsening macroeconomic conditions in Nigeria, one of its biggest markets. That resulted in revenues of $48.5m for the quarter, down from $57.3m in Q2 2022 and a lower order volume of 6.5 million vs 10.3 in Q2 2022. Its active customers also reduced by 1 million, with 2.4 customers in Q2 2023. Gross Merchandise Value, the value of all goods sold on the Jumia platform, also fell to $202 million. The company said, “Usage performance continued to be affected by the difficult operating environment with record levels of inflation impacting consumers’ spend as well as sellers’ ability to source goods.” Nigeria’s inflation rate has remained above 20% throughout the year, driven by high food prices. Critical but complex reforms such as the removal of fuel subsidies continue to put a strain on the purchasing power of consumers. Yet, the struggles go beyond Nigeria. Ghana’s inflation rate also hit 43%, while Egypt’s rose to around 35%. Across all of Jumia’s markets, the average inflation rate is 14%, and currency depreciation in nine of its ten markets shows the difficulty of its goal of moving towards profitability. Moving away from being the everything app? In 2021, Jumia began a critical move towards delivering grocery and everyday items. With the tagline “your every day delivered,” the company slowed its focus on high-ticket items, believing that groceries and food would improve stickiness. But that strategic shift has been reversed. The company said, “JumiaPay app services, combined with the FMCG category, which includes grocery products, accounted for 45% of the decline of items sold and 32% of GMV decrease during the quarter. In contrast, we are encouraged by the early signs of growth in some of the priority categories, such as Appliances, where our efforts to rebuild supply are paying off.” As a result of this strategic shift, the company’s average order value reached $31, an 18% improvement year-over-year. Yet, declining orders overall meant that this increase in order value was insufficient to improve Gross Merchandise Value. The introduction of Buy Now Pay Later (BNPL) services through third parties may be enough to boost order volume, with Jumia planning to roll it out in Egypt, a market already at ease with BNPL. Overall, Jumia has the unenviable task of figuring out profitability during one of the worst economic periods and doesn’t have an unlimited timeline. As of June 30, 2023, the company had a liquidity position of $166.3 million, comprised of $61.0 million of cash and cash equivalents and $105.3 million of term deposits and other financial assets.
Read More- August 15 2023
State-owned Telecom Egypt reports $217 million in profits for H1 2023
Telecom Egypt reported a net profit of EGP 6.7 billion ($217 million) in the first half of this year. The company’s total revenues grew to EGP 28.1 billion ($909 million), a 38% growth compared to the same period of the previous year. Telecom Egypt recorded a net profit of EGP 6.7 billion ($217 million) in the first half of this year, according to its latest financial report. The company’s revenue also grew 38% year-on-year to hit EGP 28.1bn ($909 million), fueled by the 75% year-on-year growth in wholesale revenue and strong retail performance. Per the report, the state-owned telco increased its customer base across the board, reaching 12.6 million mobile customers—a 7% year-on-year growth. The number of fixed voice subscribers and fixed-broadband internet customers increased by 5% and 8%, respectively. Telecom’s Egypt EBITDA in H1 reached EGP 11.96 billion ($387 million), surging 48% year-on-year from EGP 8.06 billion ($278 million) and recording a high margin of 42.5% from 39.5% on the enhanced revenue mix. Mohamed Nasr, the company’s CEO, noted that he is keen to execute its plans to become “a regional data hub” while growing all other aspects of the business. “We have a great opportunity to continue leading the data market and expand our mobile business. As such, we will leave no stone unturned to continue enhancing our customer-centric strategy, seek opportunities to maximize the monetisation of our infrastructure, and increase the returns for our shareholders,” he said in a statement. Telecom Egypt owns 45% of Vodafone Egypt, the largest mobile network operator in Egypt by active subscribers, with a 42% market share in the mobile carrier space. Vodacom Group, the South African subsidiary of London-listed Vodafone owns 55% of the company. In May, Egypt’s government sold 8% of its stake in Telecom Egypt as part of a move to raise revenue from privatising state-owned firms to meet a series of foreign debt obligations. Until the recent sale, the government held 80% of the Egyptian Stock Exchange-listed company, with the rest in free float.
Read More
- August 15 2023
Morgan Stanley commends Tinubu’s reforms, and calls for more momentum
American advisory group, Morgan Stanley, hails Tinubu over steps taken to reposition Africa’s biggest economy on track for economic recovery. Morgan Stanley, the American investment management services company in its recent advisory report titled “Tales From the Emerging World: Nigeria’s New Dawn?” released yesterday, commended President Bola Tinubu for major reforms taken to reposition Africa’s biggest economy on track for recovery. While Tinubu’s the removal of fuel subsidies have led to higher fuel prices, the advisory company deemed it a necessary evil. “The removal of subsidies is likely to prove painful in the near term, especially as it will likely erode consumer confidence, send inflation higher, and hurt consumption,” the report said. “We believe Tinubu’s actions could potentially mark a turning point and deliver medium-term growth which will spur the emergence of a mass consumer market in one of the fastest growing populations in the world.” The report opened with a comparison of the consequences of policies made by the prior administration and the potential opportunities offered by the promise of change as a new president takes control. Under Nigeria’s former president, Buhari, Nigeria managed an annual GDP growth of 1.4%. Buhari’s refusal to remove fuel subsidy cost the country $9.7 billion in 2022. Furthermore, during Buhari’s tenure, the average Nigerian saw their annual income shrink by nearly one-third, from $3,222 to $2,200—one of the steepest declines recorded by any country over that time span. Morgan Stanley advised the new administration to enact bold and sound policies, such as Mobile banking and investment in education to unleash its human capital potential.The advisory firm asserts that Nigeria’s burgeoning youthful population will serve as an advantage for telecom operators that offer mobile money solutions. More than half of the Nigerians have no bank accounts. While more than 85% of the adult population in the country have a mobile phone, only about 10% have mobile-money accounts, showing an attractive investment opportunity in mobile money banking in the coming years. While there was a mass exodus of Nigerians in the Buhari led administration, Morgan Stanley is placing a bet on Nigeria’s human capital potential—the country’s greatest asset, taking into consideration its huge population. It has asked the government to increase investments in education and skill development. “We would urge the new administration to focus on investments in educational outcomes and skill development, everything from improving too-low literacy rates to prioritizing STEM fields,” the report read. “Bridging the gap in outcomes between the North and South of the country will be key, but we can think of no better use for the $10 billion in annual savings from fuel subsidies.” While the advisory lauds Tinubu’s reforms, it believes more can be done. “The reforms are a positive step but more needs to be done to ensure momentum is not lost. Tinubu and his team of technocrats have a unique opportunity to free up the economy and attract foreign investors looking for sustained growth,” the report concluded.
Read More- August 15 2023
How tech founders are now thinking about pre-seed fund raising
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, Joseph Olaoluwa explains how founders are rethinking their fundraise strategies at pre-seed. In today’s world of fundraising, one thing is apparent: pre-seed rounds are taking longer to close. This was the subject of a tweet Odunayo Eweniyi, co-founder of Piggyvest, made on microblogging app X, (formerly identified as Twitter) earlier this month. When asked to buttress her point further, she said, “Anecdotally $500K used to close in a matter of weeks. Just saw a (good) deal still open, it’s been months.” Ope Onaboye, CEO of Renda, a logistics startup, says that investors are looking at the financial discipline of the founders and due diligence. For Onaboye, who is currently rounding off a pre-seed round for his startup, an understanding of unit economics is key. Onaboye said, for first-time founders, capital efficiency and cash flow is king, hence the supposed difficulty in these raises. “First-time founders are used to the fact that ‘I will come up with a product. I will raise money and hopefully, that money I am raising will be spent on marketing and hiring. I would not [have to] think about my cost of acquisition. I wouldn’t [have to] think about my customer lifetime value against the cost of acquisition. I will use the money to run campaigns and ask for more money,” Onaboye tells TechCabal on a call. But, he explains, it is no longer business as usual. Like founders, like investors Founders are not the only ones going through the funding challenge; the situation is not so rosy either for investors raising funds from limited partners’ (LPs). Raising money is hard, so it’s only natural to require 10x returns from startups when these rounds are completed, especially in a space where VC funding fell to $961 million in Q2 2023, from $1.26 billion in Q2 2022, per this TechCabal Insights report. Marketing director of ride-sharing app, MyCoPilot, Emmanuel Nwanja, tells TechCabal that the mobility startup is keen on bootstrapping. “Not everyone that gives you money is fit for your vision,” he says. In a world where investors are seeking 10x returns of their cheques to a startup, Nwanja believes bootstrapping is more sustainable. As an early-stage startup, MyCoPilot is one of the ride-sharing startups seeking to take the market share from Uber and Bolt. Its model involves connecting Nigerians travelling or commuting to car owners, thereby effectively sharing rides. Only in its second month, Nwanja reveals that they have 2,000 users and are seeking to expand operations across Nigeria. The big question is, how does an early-stage startup depend on bootstrapping alone to actually meet potential and future users’ needs? Sooner or later, MyCoPilot would have to go to the market seeking investments or VC funding. Nwanja says the team is very careful and doesn’t want to be under pressure to return higher yields to an investor. Onaboye strongly believes no pre-seed startup can escape the now-increased scrutiny associated with raising pre-seed funds. According to him, lots of things were asked of him during his pre-seed raise, even down to personal references and past activities. Onaboye is not a new founder. Renda is his third business, but he tells TechCabal that he still went through the process of landing investors. That process consisted of over 30 pitch decks and closed 6 investors—all VCs, no angels. “It was a learning curve for me because I have never raised funds prior. My previous business has had to operate without raises. It can only be easier for a founder who has built a million-dollar business previously,” Onaboye says about his own experience. Rethinking funding For Onaboye, first-time founders need to rethink their business models to move from revenue making to profitability. According to him, it has not been easy for African VCs to raise funds. He attributes this story to the fact that there are few tech startups success stories on the continent. After the unicorns of Flutterwave, Paystack, Moniepoint and Wave, how many other success stories are there, and how many tech startups make it to Series B? he wonders. With a nascent tech ecosystem in Africa and Nigeria, Onaboye explains that this is why the pre-seed journey can be tricky. Nwanja also expressed worry that there are not so many African VCs taking a bet on tech startups. And the very few ones that do look to the fintech sector. Aaron Fu, an investor at DCG Expeditions, is bullish on fintech. He strongly believes that payments is the bedrock of any successful financial ecosystem. Building a business vs raising funds Ultimately, there is a difference between building a business and raising funds. Being a great founder doesn’t mean one knows how to raise capital. At the heart of raising capital is the act of storytelling, and not many founders can tell their stories well. “Raising funds is like sales. It is selling yourself and your business. So you must know how to sell your story to investors. Sell the big picture of where you are going so investors can know what they are buying into,” Onaboye says. Did you enjoy this article? Then click this link to register for Moonshot and check out our fast-growing list of speakers coming to the conference!
Read More