Competition in the clouds: AWS will now accept naira payments, shaking up local cloud players
Amazon Web Services (AWS), the global cloud leader powering many Nigerian startups and commercial banks, will now accept payments in Naira, alongside seven other local currencies for European customers. Since many Nigerian companies host their services in AWS’s European region due to geographical proximity, this move could significantly lower their cloud costs. This move comes at a crucial time when homegrown cloud providers have been gaining ground by offering local pricing as an alternative to AWS and Azure. In a statement on Monday, AWS explained that this shift will help customers avoid foreign exchange costs and payment friction. “With payments in their local currencies, customers can avoid foreign exchange costs associated with making foreign currency payments,” the company said. “This also removes payment friction for customers in countries where local regulations put limits on the foreign currency amount a customer can access.” This shift is significant for Nigerian businesses, as the naira’s devaluation and macroeconomic pressures have caused cloud costs—often priced in US dollars—to more than double since 2023. By allowing payments in naira, AWS is offering Nigerian companies a smoother and more affordable option for cloud services, addressing one of the key pain points that have driven Nigerian businesses toward local cloud providers. AWS’ move will shift the competitive landscape in Nigeria’s cloud services market. Homegrown cloud providers such as Nobus, Layer3, and Okra’s recently launched Nebula have spent much of 2024 positioning themselves as affordable, local alternatives to AWS and Microsoft’s Azure. Many of these local players emphasized their competitive edge at a time when FX liquidity and volatility meant USD-denominated pricing could push costs up 2-3x in a week. Some even held talks with government agencies at the state and federal level, positioning themselves as potential partners to reduce Nigeria’s reliance on USD-denominated services. The messaging was clear: patronizing local cloud providers is not just a cost-effective option but a way to support Nigeria’s economic resilience. AWS’s decision to accept naira payments comes in response to the growing appeal of local cloud providers in Nigeria. In January 2023, AWS launched its AWS Local Zones facility in Lagos to reduce latency and improve performance for Nigerian businesses—often an important factor since many Nigerian companies host their services in AWS’s European region due to geographical proximity. By offering a new payment option alongside this infrastructure, AWS can solidify its foothold in the Nigerian market, especially as local providers continue to present an attractive, economically aligned alternative. By lowering the barrier for Nigerian companies to pay for cloud services in their local currency, AWS has given itself an edge, but the growing local alternatives may still present a challenge. It’s not just about price anymore—it’s about local relevance and helping businesses navigate the complexities of Nigeria’s economic environment.
Read MoreTop 10 African tech and business podcasts you should check out in 2025
It’s 2025 and the podcasting world is booming, with over 4.19 million registered podcasts globally and more than 2.69 million on Apple alone. Podcasts have become the go-to platform for insightful conversations, expert advice, and fresh perspectives. The tech and business podcasting space is growing rapidly, offering a wealth of information at your fingertips. Whether you’re an aspiring entrepreneur, a tech enthusiast, or just someone hungry for knowledge, we’ve curated the top 10 podcasts you need to listen to in 2025. 1. Afrobility Looking to stay informed on the fast-evolving African tech and business landscape? Afrobility is your perfect companion. Hosted by Olumide Ogunsanwo and Bankole Makanju, this podcast discusses the opportunities and challenges shaping Africa’s digital ecosystem. With expert analysis on startups, investment trends, and market shifts, Afrobility is essential for entrepreneurs, investors, and anyone passionate about Africa’s growth. Episodes: 60 — 90 minutes Category: Business and Technology 2. Investec Focus Radio SA For sharp, bite-sized insights into the South African economy, market trends, and finance, Investec Focus Radio SA delivers. This podcast provides a nuanced take on local and global financial developments, backed by the expertise of Investec’s financial professionals. It’s a must-listen for anyone looking to stay ahead of the curve in finance. Episodes: 20 — 40 minutes Category: Finance and Business 3. African Tech Roundup If you’re looking for stories and strategies shaping Africa’s tech scene, African Tech Roundup should be on your radar. Hosted by Andile Masuku, it brings you engaging interviews with pioneers, innovators, and disruptors from across the continent. This podcast focuses on Africa’s digital transformation, making it a must-listen for tech enthusiasts and entrepreneurs. Episodes: 45 — 60 minutes Category: Technology and Business 4. African Business Stories For those interested in female leadership and innovation, African Business Stories is a standout podcast. It is hosted by Akaego Okoye and highlights inspiring conversations with African women entrepreneurs and leaders across various industries. If you’re curious about women’s powerful contributions to Africa’s business landscape, this podcast offers invaluable lessons and insights. Episodes: 30 — 50 minutes Category: Business and Entrepreneurship 5. The Open Africa Podcast If you’re fascinated by the intersection of tech, startups, and banking in Africa, The Open Africa Podcast is a perfect listen. Hosted by Laolu, Furo, and Nosa, this show mixes insightful commentary with humor, creating an engaging way to learn about Africa’s startup ecosystem. It’s fun, informative, and designed to keep you updated on the continent’s evolving landscape. Episodes: 40 — 60 minutes Category: Technology 6. Pure Digital Passion Pure Digital Passion is a podcast worth checking out for anyone in the tech and digital marketing space. Hosted by Moses Kemibaro, one of Kenya’s leading digital marketers, it covers digital innovation, marketing trends, and Africa’s ever-expanding tech ecosystem. It’s perfect for tech enthusiasts and marketing professionals. Episodes: 40 — 60 minutes Category: Technology 7. Founders Connect Founders Connect is an essential podcast for aspiring entrepreneurs. Hosted by Peace Itimi, it features interviews with successful founders who share their journeys—highlighting their triumphs, struggles, and the lessons learned along the way. Whether you’re just starting out or looking for guidance, Founders Connect offers invaluable insights to help you navigate the entrepreneurial world. Episodes: 30 — 60 minutes Category: Technology and Entrepreneurship 8. Labari Media Podcast Labari Media Podcast is perfect for tech enthusiasts focused on fintech, e-commerce, mobile payments, and AI in Ghana and across Africa. Through expert interviews with innovators and entrepreneurs, this podcast offers a comprehensive view of the African tech ecosystem. If you’re passionate about the future of fintech, Labari Media is your go-to. Episodes: 15 — 35 minutes Category: Technology and Business 9. Techpoint Africa Podcast Exploring Africa’s dynamic tech scene, Tech Point Africa Podcast brings you in-depth discussions on innovation, startups, and the major trends shaping the continent. Whether you’re a tech enthusiast, entrepreneur, or investor, this podcast is packed with insights that will keep you on the pulse of Africa’s rapidly evolving tech ecosystem. Episodes: 30 — 55 minutes Category: Technology 10. The Disrupt Africa Podcast If you’re interested in Africa’s startup ecosystem, Disrupt Africa Podcast is a must-listen. Featuring interviews with thought leaders, founders, and entrepreneurs, this show uncovers the stories of those making a significant impact in Africa’s tech industry. It’s a fantastic resource for anyone wanting to understand the challenges and triumphs of building a startup in Africa. Episodes: 20 — 40 minutes Category: Technology
Read MoreLemfi raises $53 million Series B round, acquires European firm
Lemfi, a remittance startup serving African immigrants across 22 countries, has raised $53 million in a Series B round to support its expansion into Europe through the acquisition of a European firm. The round was led by Highland Europe, a London-based growth-stage investment firm that backs startups with more than €10 million in annualized revenues, and with follow-on investment from existing investors Endeavor Catalyst, Left Lane Capital, Palm Drive Capital, and Y Combinator. This round means the startup has received $85 million in funding since it was founded in 2019 by Ridwan Olalere and Rian Cochran. Lemfi’s expansion into Europe came off the back of a partnership with Modulr, but its acquisition of an unnamed Republic of Ireland-based company will allow it to begin its European operations independently from next month. The startup makes money from transaction fees and foreign exchange spreads across the countries it is present in. The funding will allow Lemfi to acquire more licenses and partnerships as it expands its offerings to include localised services for customers. Lemfi is set to launch a card for customers in the US, the UK and Canada. It will also hire staff as it continues to grow rapidly. Lemfi is now processing $1 billion in monthly payment volume, a significant jump from 2023 when it processed $2 billion in annual transaction volume. The startup has also doubled users, revenue, and transactions over the past two years. Olalere credited the growth to strong adoption in the Asian corridor, which rakes in $160 million in monthly TPV and is growing 30% month-on-month since it launched last year. After expanding into the US in 2023, the startup entered large remittance markets like China, India, and Pakistan in 2024. It entered these markets by poaching C-suite executives from domestic companies like Terrapay, DeliveryHero, and OPay. LemFi Hires Ex OPay COO, Allen Qu to lead China Expansion. LemFi raises $33 million to bring free remittance payments for global migrants
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Sterling Bank raises staff salaries by 7%, but staff expectations fall short
Sterling Bank, a tier-2 Nigerian commercial bank with a market capitalization of ₦174.76 billion, has raised salaries for its over 3,000 employees to help them cope with rising living costs and inflation, sources familiar with the matter confirmed. The salary adjustment, said to be around 7%, was communicated in an internal memo in early January 2025. This move continues a trend among Nigerian banks to review compensation in response to economic pressures on consumer spending. In August 2024, Sterling Bank introduced a cost-of-living adjustment (COLA) stipend, paying ₦75,000 to employees from executive trainee to assistant banking officer levels. It remains unclear if this stipend will continue alongside the new salary structure. While the precise figures are not publicly disclosed, three people confirmed the adjustments are based on employees’ grade levels. Sterling operates a salary banding system with increases typically ranging from 7% to 10%, and recent adjustments have moved many employees to the top of their respective bands. For instance, executive trainees (ETs), previously earning ₦327,000 monthly, will now take home ₦351,000. Senior executives (junior roles above ETs) on a ₦500,000 salary will see their pay rise to ₦527,000. To manage pay increases without promoting employees to higher ranks, Sterling Bank uses a tiered salary structure that includes internal “notches” within each grade level, allowing for raises without formal promotions, according to sources familiar with the bank’s compensation policies. “Instead of moving employees up a grade during an economic downturn, companies may shift them to the higher band within their current grade,” said Chibuzo Ihentuge-Eric, an HR professional. “It’s a sideways adjustment that reflects market conditions.” Sterling Bank did not respond to a request for comments. Despite the salary increase, some employees were disappointed, expecting a larger raise in line with the 20-30% increases seen at other banks. “Considering inflation and the state of the economy, this feels underwhelming,” said one employee who requested anonymity. In late 2024, Union Bank raised salaries by 40%, and GTBank followed suit with a 40% increase. These recent raises are linked to talent retention, a concern in an industry marked by high employee turnover and frequent poaching. Research shows competitive salaries are crucial in reducing employee attrition in Nigeria’s banking industry. Sterling Bank’s profit after tax for the period ending September 2024 was ₦27.4 billion, a 67.07% increase year-on-year. The bank is projecting ₦121.8 billion in gross earnings for the first quarter of 2025. The bank’s personnel expenses reached ₦22.6 billion as of September 2024, a 38.65% increase from the previous year. If the new salary adjustments raise expenses by the typical 10%, the bank’s wage bill would be around ₦24.86 billion. Despite this, Sterling’s wage bill remains one of the lowest among its peers. For comparison, Union Bank reported ₦34 billion in personnel expenses, Fidelity Bank ₦43.6 billion, and FCMB ₦56.5 billion.
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👨🏿🚀TechCabal Daily – Riding the regulatory wave
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning 2024 was a tough year for early-stage African startups, with funding declining sharply and competition for capital intensifying. But 2025 could be different. We’ve spoken to our friends at top VC firms who predict an uptick in venture funding and new opportunities for startups that have sustainable growth practices and market-focused products. These VCs also say that cash management and business fundamentals will be crucial for early-stage startups to thrive in 2025. Here’s why. Nigerian drivers want the government to regulate the gig economy NGX helped the Nigerian government and corporates raise $7.85 billion in 2024 What’s in Kenya’s crypto bill? World Wide Web 3 Events Ride-hailing Nigerian drivers want the government to regulate the gig economy GIF Source: Nairametrics Nigerian gig drivers, under the Amalgamated Union of App-Based Transport Workers of Nigeria (AUATWON), are pushing for a federal regulatory framework to bring fairness to the industry. While their demands are not immediately clear, we can suggest from antecedents that the union is trying to secure better pay for its members, reduce multiple taxations, and improve drivers’ working conditions. In 2023, the union asked ride-hailing apps to increase fares by 200% to provide relief for drivers. To date, it has been fighting in one form or another for continuous fare increases, and reduced commissions charged by ride-hailing apps. It’s not the first time the drivers are lobbying for federal involvement. Since the start of 2024, the union has asked the federal government at least three times to become more involved in the oversight of the sector. Compared to fintech, which is one of the heavily regulated industries, the ride-hailing sector has been poorly regulated. Labour laws were not created with the sector in mind. For example, in most government employment, you’re guaranteed the minimum wage pay. In some other countries like parts of the US, ride-hailing companies pay a minimum wage and offer other benefits. While gig drivers in Nigeria typically earn above the minimum wage—which was the attraction point in the first place—there have been debates about how sustainable the gig economy model will be. Location-based apps like Bolt benefit from network effects. The more drivers sign up and come online in a particular area, the fewer passengers to go around in an otherwise shrinking market where affording Bolt rides is a luxury. Yet, if the demands of AUATWON are met, it could tip the scales of the power dynamic between gig drivers and their employers, who, over the years, have tried to strong-arm these drivers to negotiate favourable working conditions to protect their profits. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Economy NGX helped the Nigerian government and corporates raise $7.85 billion in 2024 GIF Source: Tenor The Nigerian Stock Exchange (NGX) may be IPO-starved, but the bourse has remained relevant in helping businesses and governments raise money. According to NGX filings, the stock market recorded ₦12.17 trillion ($7.85 billion) in trading volume for corporate listings and FGN bonds in 2024. Corporate listings, including bonds and memorandum listings, led the charge with ₦6.2 trillion ($4 billion), surpassing the ₦5.95 trillion ($3.84 billion) generated from FGN bonds. Companies such as Transcorp Power, which listed ₦1.8 trillion ($1.16 billion) worth of shares, and VFD Group, which raised ₦12.5 billion ($8 million), were among the notable contributors. These corporate listings show that more companies are turning to the capital market to raise money. On the other hand, FGN bonds attracted investment, with Pension Fund Administrators (PFAs) favouring them for their stability, despite inflation impacting returns in other sectors. In 2024, the NGX saw three companies—Transcorp Power, Aradel, and Haldane McCall—listed by introduction. The last IPO on the NGX was VFD Group in 2023. Despite the absence of a true IPO, the NGX had a remarkable run in 2024. Compared to the previous year, the bourse reached ₦3.968 trillion ($2.55 billion) in trading volume, effectively tripling that number last year. However, the high trading volume is thanks to tier-1 and tier-2 banks turning to the capital market to raise money following the Central Bank’s recapitalisation directive. The Debt Management Office (DMO) also actively listed bonds on the bourse. While an IPO is generally seen as a sign that companies trust the market to raise capital and that investors are willing to buy shares, the large deal flows in the capital market also show growing investor confidence. Nigeria’s bourse, the fourth-largest in Africa, also acquired a 5% stake in the Ethiopia Stock Exchange (ESX) which launched on January 10. The high deal flow and pan-African support to other bourses show the maturity of the NGX. And with Tizeti set to become the first startup to go public on the exchange, the IPO starvation will soon phase out. Crypto/Regulation What’s in Kenya’s crypto bill Image Source: TechCabal/Timi Odueso After years of resistance, Kenya introduced a new bill aimed at regulating cryptocurrencies and virtual asset companies like crypto exchanges on January 10. Like every other crypto bill on the continent, Kenya’s bill advocates protecting the user through financial literacy. The rapid adoption of crypto in Africa is outpacing user education, leaving many susceptible to fraud and scams in the virtual asset market. To curb this, a section of Kenya’s bill emphasises public awareness campaigns to ensure that users can safely interact with virtual assets. The bill also mandates blockchain and crypto startups to test out their applications in a regulated sandbox before launching them to the public. This will help minimise risk to users and the financial systems. Although Kenya’s crypto bill provides strong provisions for consumer protection, it is only second to Nigeria’s crypto bill which requires VASPs to set up local offices. The bill’s provisions on taxation are similar to South Africa’s and Nigeria’s crypto bills. However,
Read MoreHow African tech companies can transform their communications in 2025
This article was contributed to TechCabal by Bemi Idowu. 2024 was another eventful year for Africa’s tech ecosystem. Over the 12 months, the continent minted two new unicorns, witnessed the expansion of 5G connectivity, and embraced the integration of Artificial Intelligence into key sectors such as agriculture and education. As a keen observer of the ecosystem and a strong advocate for innovation, it was inspiring to see the continued development and success of solutions tailored to African realities. As a public relations and communications professional, I am particularly interested in how these developments and successes are framed to ensure the continued success of all involved. Too often, framing the conversations is seen as merely an exercise in driving visibility and little else. Public relations – the process of shaping effective perceptions of people, products, and services – can influence every stage of the sales funnel—building awareness, nurturing interest, fostering decision-making, and driving action. It can ensure that people don’t just hear about your product and service but also understand and trust it enough to choose it over alternatives consistently. Emphasis on stronger brand identities and differentiated narratives In an increasingly crowded and competitive landscape, we have reached a tipping point where perception has become a key factor in how customers make their choices. A beneficial perception can be the deciding factor, especially with products and services with undifferentiated products. Studies have also shown that brand trust is a crucial factor for most consumers when making purchasing decisions. 75% of B2B buyers consider brand a significant factor in purchase decisions. Take, for instance, the Apple iPhone and Samsung Galaxy smartphones. Both product lines offer high-performance processors, advanced cameras, sleek designs, and similar price points in their flagship models. Yet, the iPhone is often perceived as “premium” by many users. This stems from Apple’s narrative around its ecosystem of products, its software experience, prestige, and other factors. For African tech companies looking to establish or maintain their leadership in the marketplace, Apple and Samsung’s example offers valuable lessons on the importance of a strong brand identity, a differentiated narrative, and consistency in execution. We need to see more of this in our ecosystem. Amplify the opportunity, not the problem Another key issue is the ideology of ‘leading with the problem.’ In other contexts where the perception tends to be that everything is fine, a ‘lead with the problem’ narrative makes a lot of sense. It is an effective way to highlight gaps in the market that would otherwise have been overlooked. However, in an African context where the tendency is not to assume that all is well, hingeing your narrative on yet another thing that is not working as it should doesn’t work the same way. This is not to say problems should be ignored or not given due attention. The point is that where we place the spotlight in the narrative makes all the difference. While opportunity-focused narratives draw attention to strengths and possibilities, problem-focused narratives undermine what is possible at the expense of short-term gains. Opportunities are more attractive. An opportunity-focused narrative also encourages optimism and a proactive mindset and is more likely to attract aspirational stakeholders, such as investors and partners. The narrative around Africa’s problems is saturated as it stands and I am particularly eager for more balance on that front. PR is not just for fundraising and product announcements In 2025, I have a dream that public relations will be considered more widely as an integral part of business operations for African tech companies. It’s not just a tick-box exercise for when you’ve raised money or have a new product or service to shout about. Some responsibility for the state of affairs falls on PR professionals and we have to own the corner we’ve boxed ourselves into. However, we all know that there is more to PR than funding and product announcements. Public relations and communications are about shaping the most beneficial perceptions of people, products, and services, as well as creating narratives that inspire confidence, drive loyalty, and set organisations apart in a competitive marketplace. In the year ahead, I hope that African tech companies will rethink their approach to communications – not just as a tool for visibility but as a driver of sustainable growth and global competitiveness. The potential to reshape how the world views Africa’s contributions to innovation and the value of having the most beneficial narratives around African innovation is immense, and it’s time we stepped boldly into that narrative. ________ Olugbeminiyi (Bemi) Idowu is the founder and managing director of Talking Drum Communications, a public relations and communications consultancy that empowers organisations innovating in Africa to effectively connect with their target audiences by crafting and sharing impactful stories that underpin accelerated growth, increased profitability, and ongoing success.
Read MoreFocus on cash management in 2025, VC firms tell early-stage portfolio startups
Partners at early-stage African VC firms are advising their portfolio startups to focus on business fundamentals like sustainable growth and efficient cash management while building products that solve real market problems as they expect venture funding to increase in 2025. 2024 was tough for early-stage African startups as they were hit hardest by the funding downturn. Only 345 early-stage startups raised between $100,000 and $1 million—a 31.5% drop from 2023, according to The Big Deal, a database tracking African startup funding. Growth-stage startups faced a milder impact, with the number raising over $1 million, dropping by just 10%. These startups captured the largest share of funding, leaving 345 early-stage startups with only $242 million. As funding declines and increasingly concentrates among the largest startups, smaller players face growing competition for a shrinking pool of capital. But, with the Trump presidency set to pressure the US Fed to cut interest rates in 2025, international investors may seek out high-growth investment classes, translating to more funding for early-stage startups. “I expect less aid and a shift toward a more commercial relationship (from the US), which could lead to increased U.S. VC activity in Africa,” said Matt Davis, the co-CEO of Renew Capital, Africa’s most active early-stage firm in 2024. “This transition would be a welcome change.” If funding improves, opportunities like growth-stage funding, IPOs, and strategic M&A could increase. However, cautious of the growth at all-cost strategies and inflated valuations of the zero-interest-rate phenomenon (ZIRP) era, they are advising startups to stick with the strategy that helped them navigate last year’s funding downturn. “We’re telling startups what we told them last year. Stick to fundamentals—recurring revenue, margins, and sustainable progressive growth,” said Olu Oyinsan, the managing partner of Oui Capital. He added that his firm told startups to monitor customer acquisition costs, predicting scarce capital in 2025. Dotun Olowoporoku, managing partner of Venture Platforms, however, anticipates “a more favourable investment climate,” marked by increased growth-stage funding, a revival of the IPO market, the return of international investors, and a rise in mergers and acquisitions. Olowoporoku advised his firm’s startups to maintain a runway of 18-24 months, invest in core product development and customer retention, and strengthen governance and compliance frameworks while developing clear paths to profitability in 2025. Davis, the co-CEO of Renew Capital, has told portfolio startups to focus on building products the market loves and a strong company. “Founders at the pre-seed and seed stage must be involved in every aspect of their business. Weak company-building—not weak products—is often the cause of startup failures,” he said. Prolific Nigerian VC firm Ventures Platform casts a wider net across Africa Will the funding downturn continue in 2025? According to the Big Deal, venture funding for African startups fell from $4.7 billion in 2022 to $2.2 billion in 2024. Olowoporoku expects a reversal of this downward trend in 2025. He based his prediction on 2024’s mega rounds like MNT-Halan and Moniepoint which suggested a shift towards larger deal sizes for startups with positive unit economics and sustainable business models, and expected lower rates in developed markets and increased investor appetite in Africa from international investors. “While we may see fewer early-stage deals, I expect the average ticket size to increase significantly, particularly for Series B and above rounds,” Olowoporoku said. “This will be driven by growth-stage investors who raised significant Africa-focused funds in 2022-2024 but were cautious in deployment.” Oyinsan, however, expects the downturn to continue in 2025. “Capital will continue to be largely concentrated with the 20% of companies that have demonstrated sustainable growth or those with new business models,” he said. After learning in Ethiopia, Renew Capital expands across Africa A rise in ‘blended’ capital for early-stage startups Early-stage startups will likely have to raise “blended capital” funding as they face challenges in raising traditional venture capital, said Yewande Odumosu, general partner at HoaQ, Africa’s biggest startup investment community of angel investors. She added that founders will increasingly rely on a mix of financing options, including convertible notes, grants, and venture capital, to sustain and grow their businesses in 2025. Debt will also make a comeback this year, according to Oyinsan, given the reduced appetite for early-stage funding on the continent. The share of debt funding fell by 8% year-on-year in 2024. Will climate and fintech startups continue to receive the most funding among early-stage startups? This was the one question all partners agreed on: climate tech and fintech startups will continue to receive the most funding on the continent, they all told TechCabal. While unanimous on the top two, the partners also recommended emerging sectors expected to grow significantly. Oyinsan believes there might be a “significant uptick” in investment in media and entertainment, but fintech and climate will continue to dominate funding. “I would like to see climate tech establish itself as a strong commercial business case this year, though,” he said. While fintech—including cryptocurrencies, blockchain, and stablecoins—and climate tech will continue to attract attention, Davis told TechCabal that artificial intelligence startups will also receive a lot of funding in 2025. Healthtech, particularly with the rise of telemedicine and digital health infrastructure, artificial intelligence, and machine learning applications focused on African-specific use cases, and enterprise software solutions targeting SMEs were the sectors that Olowoporoku recommended. Early-stage startups, constant support: Oui Capital’s thinking behind investing in Africa
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👨🏿🚀TechCabal Daily – Africa welcomes 30th stock exchange
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning From navigating inflation to chasing financial goals, young Nigerians are turning to fintech apps to make their money work harder. These fintech apps are becoming the go-to tools for a generation rewriting the rules of money management. Curious about which ones are making the cut? Start your Monday smarter, dig into the fintech favourites reshaping personal finance in Nigeria. Ethiopia’s first stock exchange is live How Meta’s moderation policy affects Africa Egypt to increase minimum wage Stat of the Week: What’s the biggest raise of 2024? World Wide Web 3 Opportunities Social Media How Meta’s moderation policy affects Africa GIF Source: Tenor Meta is replacing professional fact-checking and human content moderation on its social media platforms with Community Notes—the same system introduced by X in 2023. In Africa, this move could have three damaging effects: it will put content moderators and outsourcing firms out of jobs, fuel misinformation during critical election periods, and undermine fact-checking organisations like PesaCheck, which rely on Meta’s financial support. Some critics like Prospect Magazine and The Guardian argue that the move is politically motivated. They claim Zuckerberg is aligning Meta with Trump-era policies to curry favour with Republicans ahead of Trump’s return. His recent removal of diversity, equity, and inclusion (DEI) initiatives has further fueled backlash. Others believe the move is a cost-cutting strategy to save money on human moderation. Whatever the case, Community Notes is not the way to go. Many users may lack a nuanced understanding of Africa’s diverse languages, cultures, and political landscapes, creating fertile ground for the spread of harmful content. There are nine upcoming major 2025 elections across the continent, where unchecked misinformation could confuse voters and undermine democratic processes. Also, effective Community Notes rely on widespread digital literacy and access, which are not uniformly distributed across Africa. Zuckerberg has yet to clarify how Meta’s version of Community Notes will work but stated it would be similar to X’s—raising concerns, as X remains a leading source of misinformation despite adopting the system after mass layoffs in 2023. The jury is still out on whether Community Notes are effective or not. The European Commission, which has been investigating the system since 2023, has yet to reach a final decision. An independent study by the University of Luxembourg found that Community Notes can reduce the spread of misinformation by 61.4%. The report, however, warned that the system is often too slow to catch damaging posts in the early hours after they are published. Meta’s shift could redefine content moderation—for better or worse—but whether it will protect African democracies or leave them vulnerable remains to be seen. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Economy Africa welcomes 30th stock exchange with Ethiopia Image Source: ESX Ethiopia officially launched its bourse last Friday, as Africa’s 30th stock exchange. This historic moment comes after four years of discussions, but tough challenges lie ahead. The Ethiopian Stock Exchange (ESX) listed only Wegagen Bank, a tier-2 bank with 65.7 million birr ($521,000) in assets, despite initial speculation that suggested more participation. The country’s largest telco, Ethio Telecom, which reportedly planned to sell 100 million shares for 30 billion birr ($238 million) was not mentioned. This raises fresh questions about African stock markets’ ability to attract big backers and companies. In 2024, South Africa’s resurgent Johannesburg Stock Exchange (JSE), saw only four IPOs. Egypt’s stock market saw one IPO with United Bank after three years. Nigeria’s bourse, although instrumental in helping banks raise money for recapitalisation, saw no IPO. And Kenya’s Nairobi Securities Exchange (NSE) has been starved of an IPO for six years. Low investor participation, low trading volumes, and limited listings have slowed the growth of African bourses. This has not inspired the confidence of companies operating in the continent, with some of them choosing to cross-list on foreign exchanges instead. We’ve seen this with Africa-focused e-commerce company, Jumia listing on the New York Stock Exchange. Others have chosen to stay local but opted to hedge their bases. Nation Media Group, a Kenyan media conglomerate, has cross-listed on Rwandan, Tanzanian, and Ugandan bourses. Yet, cross-listing brings with it regulatory complexities, requiring companies to comply with multiple sets of rules. If anything, there is an opportunity for Ethiopia to attract big foreign players that want to cross-list on its bourse. One of these examples is Safaricom. Ethiopia needs better liquidity and it can do this by building investor confidence. But the country’s macroeconomic challenges remain a key blocker. If the exchangeprovides a pro-business environment and a clear but compelling regulatory stance for big foreign players to come in, it can help create a ripe market for long-term investors. As a by-product, it will also attract more local participation from an already educated private sector. Economy Egypt to increase minimum wage GIF Source: IMGFlip Egyptians are having a great start to the year. The Egyptian government is preparing to raise the minimum wage for civil servants and workers at state-owned enterprises. Civil servants will be paid a minimum wage of about EGP7,000($138.60), up from the previous EGP6,000, when the salary increase is approved. People familiar with the conversation expect the new minimum wage to be implemented in March 2025. This is the second minimum wage increase in two years. In February 2024, Egypt raised its minimum wage to 6,000 EGP ($194). Private sector companies followed suit, raising their minimum wage from 3,500 EGP ($69) to 6,000 EGP ($194). The pay raise is Egypt’s latest attempt to address the effects of a taxing two-year economic crisis that has driven up consumer prices and left officials requesting about $10 billion from a rescue package led by the International Monetary Fund. The IMF signed an $8 billion loan deal with the government in 2024, with the
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A founder’s personal assets as collateral for failure: Lessons from China’s startup ecosystem
Next Wave: A founder’s personal assets as collateral for failure: Lessons from China’s startup ecosystem. Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published January 12, 2025 This week, the Financial Times reported a compelling story that shines a harsh light on China’s struggling startup ecosystem. Here’s the issue: in China, if a VC-backed startup fails, investors can invoke redemption rights to claw back their investments by seizing the founders’ personal assets—homes, bank accounts, or other valuables. While redemption rights have existed for years, their enforcement has escalated recently, leaving many founders millions in debt. These founders can even be added to China’s debtor blacklist, a part of the credit system. Once blacklisted, individuals are banned from travelling, booking hotels, and using China’s high-speed trains. The combination of financial risk and government surveillance amplifies the personal cost of entrepreneurial failure. Policies like these create a high-risk environment that discourages risk-taking and stifles innovation. The focus on avoiding failure, rather than nurturing groundbreaking ideas, has created a significant barrier for new startups, especially in emerging sectors. According to China’s Ministry of Industry and Information Technology, the number of new tech startups declined by over 20% between 2022 and 2023. Next Wave continues after this ad. Join millions of Nigerians earning 20% interest on their savings with zero risk. Trusted by 35 million users and 1.2 million businesses, PalmPay empowers your money to do more. Start saving today! Could Africa face the same fate? While China’s model may not directly translate to Africa, the potential dangers of similar clauses in African countries are worth considering. Fintech startups, often viewed as high-risk ventures with the potential to drive financial inclusion, could be impacted. Founders already face challenges such as limited access to capital and redemption rights could create unmanageable risks. It could put much-needed economic transformation in jeopardy. In sectors like agritech, where founders are working to provide food security solutions, a system that ties personal assets would likely be disastrous. The high-risk nature of startups in Africa demands creative problem-solving, and fear of financial ruin could deter entrepreneurs from innovative ideas and towards safer ventures with lower long-term potential. Differing cultural views of failure Cultural differences shape how failure is perceived across global startup ecosystems. In the West, especially in the U.S. and some African nations, failure is often seen as a learning opportunity—a stepping stone to future success. Founders who stumble can usually bounce back without the fear of losing their personal assets. That said, Western and African ecosystems are not without flaws. In some cases, the rapid growth and inflated valuations in these regions can encourage reckless experimentation. The “fail fast” mentality may normalise high-profile collapses without addressing critical issues such as sustainability, ethics, and responsible governance. The impact of fear on the startup ecosystem Fear now dominates the Chinese startup ecosystem. This fear is not just personal for entrepreneurs but systemic—it discourages risk-taking and pushes founders toward safer bets rather than innovative ones. This fear extends to investors, who, in turn, avoid risky sectors and instead prioritize short-term returns. In emerging markets like Africa, the fear of failure is even more entrenched due to systemic challenges. A lack of robust financial ecosystems, weak regulatory environments, and a fear of government overreach prevent entrepreneurs from experimenting with truly disruptive ideas. Investors and governments are cautious, prioritizing low-risk sectors over high-impact ventures that could transform economies. This fear-driven environment exacerbates inequality and discourages global competitiveness. Instead of nurturing the next Alibaba or PayPal, the startup ecosystem can become bogged down by the weight of societal and psychological barriers. In Africa and the West, VC models have limited recourse when a startup fails. Founders are rarely held personally liable for company debt. If a startup does have valuable assets—such as intellectual property or equipment—VCs may attempt to liquidate these to recover some of their investment. In some cases, founders may restructure their debt or convert it into equity in a new venture. This more forgiving approach encourages innovation, as entrepreneurs can learn from their failures and attempt again without the looming fear of personal ruin. That said, there is a valid reason why VC firms in China are so focused on recouping their investments. In high-risk sectors like fintech and healthcare, a startup’s failure can have dire societal consequences. A failed healthcare startup can disrupt access to critical treatments or compromise patient data. Similarly, a fintech collapse could erode trust in digital financial systems, leaving users vulnerable to fraud and loss. Thus, redemption rights in such sectors reflect the societal impact of failure. However, this same logic does not necessarily apply to all industries. Policies that encourage innovation and growth should focus on responsible failure, not punishment. Entrepreneurship is inherently risky, and policies should reflect that reality. China’s redemption rights create an environment of fear and control, which stifles the very innovation needed for long-term growth. In contrast, in Africa and the West, entrepreneurs benefit from a culture that encourages learning from failure, which fosters a more resilient and innovative ecosystem. A more balanced approach—one that promotes accountability but shields entrepreneurs from financial ruin—would be a better model for emerging markets like Africa. This way, founders are encouraged to innovate without the constant fear of losing everything they’ve worked for. Kenn Abuya – Senior Reporter Feel free to email kenn[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. 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Read MoreMeta’s fact-checking pivot may fuel disinformation and threaten hundreds of jobs in Africa
Meta’s decision to replace its longstanding fact-checking model with community notes on Instagram, Facebook, and Threads will significantly impact content moderation companies, including Pesacheck and business outsourcing firms. It could mean job losses for hundreds of contractors in Kenya, Nigeria, Egypt, and South Africa, and potentially affect capacity to combat misinformation, at least three civil rights activists, managers at business outsourcing firms and media professionals told TechCabal on Wednesday. The decision to drop fact-checking is also a huge blow to Africa, where misinformation thrives. In Kenya, WhatsApp, Facebook, and Instagram have million of users who face unchecked exposure to manipulative content without fact-checking. Governments across the content have weaponized disinformation for over a decade, which could be a crisis soon, Emmanuel Chenze, the COO at African Uncensored, told TechCabal. “Tanzania has elections this year, Uganda next year, and Kenya is coming right after that in 2027,” Chenze said. “Think of the mess that social media was in 2017 when we didn’t have any of the fact-checking initiatives that exist now. Those Real Raila videos, remember them? We had Cambridge Analytica here running all manner of psyops, and there was no machinery to counter them.” Cambridge Analytica’s psyops, doctored videos like “Real Raila,” and algorithmic amplification of propaganda. Fact-checking initiatives helped counter this mess, Chenze said. The decision to stop the current moderation model was announced on January 7 and was in response to claims that the fact-checking program, launched in 2016 “too often became a tool to censor.” This shift could result in job losses for African content moderators who monitor Meta’s platforms for harmful content. It may also translate to financial losses for fact-checking firms. “We’ve seen this approach work on X—where they empower their community to decide when posts are potentially misleading and need more context,” Meta, which has over 3 billion social media users across its platforms, said on Wednesday. “People across a diverse range of perspectives decide what sort of context is helpful for other users to see.” Adopting community notes will impact Meta’s financial relationships with content moderation partners. While the company has worked with third-party fact-checkers to address misinformation, it has not disclosed the financial details of these partnerships. “There are other implications as well, like fact-checking organizations, especially in Africa, losing a major source of funding and not being able to do the work they have been doing this last few years,” Chenze added. His organisation, African Uncensored, has been involved in fact-checking in Kenya. Firms like PesaCheck may struggle to sustain operations, which could limit their ability to address harmful content and safeguard public discourse. PesaCheck’s 2023 funding was led by Meta at 43%, followed by Tiktok, which contributed 18%. In 2022, Meta contributed 53.4% of PesaCheck’s total funding. PesaCheck did not respond to requests for comments on this story. Meta did not immediately respond to request for comments. The social media giant also funds fact-checkers like U.K.’s Full Fact, which received $461,000 in 2023, making it a key contributor. Meta has over 100 fact-checking partnerships globally, meaning it is spending totals tens of millions of dollars annually. Fact-checkers employ trained moderators who are key in addressing nuanced issues. They risk losing their jobs as Meta pivots to a user-driven system, a Nairobi-based media company owner who wished not to be named so he could speak freely told TechCabal. Content will depend on organic reach or paid promotions, which Meta heavily filters for anything political. It’s a grim outlook for a region already battling manipulation, Chenze argued. “There’s also the priority ranking the algorithm gave content from these organisations and their platforms,” Chenze stated. “That’s now gone, and they’ll either have to rely on organic reach or pay up Meta to be promoted. And even for such promotions, the content will be subjected to Meta’s restrictions.” Although the community notes system will first launch in the U.S., Meta’s content moderation has had mixed results in Africa with multiple legal actions. Over 180 ex-moderators claim they flagged violent content for little pay, without psychological support from their employers. Despite severing ties with business outsourcing firms Sama and Majorel in Kenya in 2023—both of which confirmed they were exiting content moderation—Meta relies on them for AI labeling. PesaCheck and Africa Check, both non-profits with offices in Kenya, fact-check information published online and on social media platforms. Adopting community notes will impact Meta’s financial relationships with content moderation partners; while the company has worked with third-party fact-checkers to address misinformation, it has not disclosed the financial details of these partnerships. Before halting content moderation, Sama disclosed the practice accounted for less than 4% of its business. Sama now specialises in AI data labelling for tech giants like Microsoft, Meta and Walmart. This helps social media companies flag harmful content online. Sama and Majorel have been criticised for worker treatment and compensation. 184 ex-Sama content moderators sued Sama for unfair dismissal and claimed that the outsourcing firm failed to protect them from the psychological toll of flagging violent content. Kenya is pursuing a law to hold outsourcing firms liable for employee claims. Meta has also been sued over content moderation lapses that allegedly fueled ethnic violence in Ethiopia. The petitioners, represented by Mercy Mutemi of Nzili and Sumbi Advocates, want a ban on harmful content recommendations and a $1.6 billion victim compensation fund from Meta. The shift to community notes mirrors X’s 2023 approach and appears more like a political overture to the incoming Trump administration than a strategic policy change. Meta’s changes are limited to the U.S., leaving the European Union’s stricter regulatory environment untouched. Under the 2023 Digital Services Act, platforms like Facebook must address illegal content or risk fines of up to 6% of global revenue. The European Commission, which has been investigating X’s community notes system since late 2023, said it is closely monitoring Meta’s compliance. Meta plans to phase in community notes in the U.S. over the coming months and has promised updates to the system throughout the year.
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