Kenya cuts key benchmark rate to 12%
The Central Bank of Kenya (CBK) has cut the key lending rate by 75 basis points to 12% as inflation cools for the second consecutive month. It is the second rate cut since April 2020 and the lowest since the onset of the COVID-19 pandemic. “Overall inflation is expected to remain below the mid-point of the target range in the near term, supported by lower food inflation owing to improved supply from the ongoing harvests, a stable exchange rate, and stable fuel prices,” the Monetary Policy Committee (MPC) said on Tuesday. Lower lending rates could reduce borrowing costs, making it cheaper for businesses to access credit for expansion and hone their operations. Business owners had previously expressed frustration at the CBK about the high cost of credit. “It’s evident the private sector is strangled and are not accessing credit. Simply put, businesses are not growing, reflecting a bad business environment. A drastic drop in CBR would have been impactful,” one business owner said, arguing for even lower rates. Kenya’s inflation fell to 3.6% in September from 4.4% in August, staying below the government’s target of 5%. Food inflation dropped to 5.1%, driven by lower vegetable prices. Fuel inflation decreased to 1.1%, and non-food, non-fuel inflation eased to 3.4%. The Kenyan shilling has also been stable over the last eight months. “Exports were 14.4 percent higher in the first eight months of 2024, compared to a similar period in 2023,” the MPC said. Kenya’s gross domestic product (GDP) grew by 4.6% in Q2 2024, down from 5.6% in the same period in 2023, reflecting a broad slowdown across sectors. As a result, the committee has revised the 2024 growth forecast to 5.1% from 5.4%. However, strong services, agricultural performance, and higher exports are expected to support growth, though risks remain from potential geopolitical tensions.
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Where to get huge discounts on gadgets & more from Nov 2024
As 2024 draws to a close, the biggest shopping seasons of the year approaches too. Several local and global e-commerce platforms will be slashing prices on top gadgets and home appliances. So if you are one of those hunting for huge gadgets discounts in 2024. Here’s where to look for great deals: Where to shop locally for huge discounts on gadgets and appliances Jumia Jumia is known for offering massive year-end discounts called Black Friday. Judging from their antecedents, you could get an iPhone 16 this year for as low as ₦500. As the year wraps up, they will be offering deals on a wide range of home appliances. Customers can also expect up to 50% off on smartphones, smart TVs, and laptops. You can expect the Jumia Black Friday to start anytime from November. KongaKonga’s end of year sales is usually tagged “Yakata” and it is always a shopper’s delight. Their huge gadgets and appliances discounts usually ensures that buyers can grab high-end gadgets at lower prices. Home appliance lovers should expect deep price cuts on washing machines, refrigerators, and air conditioners. Expect Yakata sales to start anytime from November. Slot If you’re looking for a reliable local option, Slot is a solid choice. Slot focuses heavily on tech products, making it a great place for gadget lovers. Expect to find from minor to huge discounts in the 2024 end of year sales on gadgets like phones, tablets, and laptops. What to expect Expect significant markdowns on various high-demand gadgets and home appliances, including: Smart TVs: Up to 40% off Refrigerators: Price cuts ranging from 20-35% Washing machines: Discounts of 15-30% Mobile Phones: Huge gadgets discount 2024 promotions could cut costs by up to 50% Tips for shopping smart To make the most of these deals: Set a budget: Stick to a price range to avoid overspending. Compare prices: Check multiple platforms to find the best deal. Act fast: Popular items tend to sell out quickly.’ Where to shop international for huge discounts Whether it’s electronics or household items, global platforms usually offer huge gadgets discounts. Here’s how to grab these deals from abroad. Where to shop AmazonAmazon’s Black Friday and Cyber Monday sales attract global shoppers, and Nigerians are no exception. This year, their huge gadgets discount 2024 campaign promises huge savings. Expect price drops on phones, laptops, and smart home devices. The Amazon fire tablet is a device to watch out for. It could sell for as low as $20 during sales. AliExpressKnown for its affordability, AliExpress is a go-to for budget-conscious buyers. As 2024 comes to a close, they’ll be offering huge gadgets discount promotions on electronics and household appliances. The platform ships to Nigeria and other African countries, making it easy to access these deals. eBayeBay is another platform where you can take advantage of end-of-year sales. With global sellers, you can find both new and used gadgets. Look out for tags to spot the best offers on smartphones, tablets, and gaming consoles. WalmartWalmart is increasingly becoming a favourite for Africans shopping internationally. With its year-end sales, Walmart offers large discounts on home appliances and gadgets. This is an excellent place to shop for refrigerators, microwaves, and smart TVs during their annual sales event. What to expect Look out for amazing deals on: Smartphones: Discounts up to 50% on flagship models Laptops: Price cuts of 30% or more on top brands Kitchen Appliances: Up to 35% off microwaves and blenders Headphones and Speakers: Save up to 40% How to maximise savings Use shipping consolidators: To reduce costs, use services that combine multiple purchases into one shipment. Track sales: Keep an eye on price drops and flash sales. Also watch out for coupon codes for extra discounts. Check import costs: Be mindful of customs duties on electronics. Final thoughts The end of the year presents an excellent opportunity for you to upgrade your home appliances and gadgets. With the huge gadgets discount deals that will be available on local and global e-commerce platforms between November and December, there has never been a better time to shop smarter.
Read MoreKenyan parliament pushes for Safaricom, M-PESA split
Kenyan lawmakers have revived the 2022 Information and Communications (Amendment) Bill, which seeks to split Safaricom, the country’s biggest telco from M-PESA its mobile money unit. A previous bid to change the law faltered after only two lawmakers backed it. Regulators and lawmakers have pressured Safaricom to split its business and create two separate entities to reduce its market dominance and allow more scrutiny. If the bill passes, Safaricom will be forced to split M-PESA into a standalone unit, a move the telco has always opposed. M-PESA, Kenya’s largest payment platform, had 31.3 million active users from March 2023 to March 2024, processing over $312 billion (KES40.2 trillion) in transactions during this period. “In addition to operating a telecommunications system or providing telecommunication services, a person may engage in any other business provided that such person shall legally split or separate the telecommunications business from such other businesses,” says the bill. Safaricom has maintained that separating its mobile money business would add no value to shareholders, resisting calls for a split. Unlike its peers, MTN and Airtel Africa, which have hived off their mobile money operations, Safaricom has argued that its integration with M-PESA is a strategic advantage. In 2021, Airtel Money was separated from its telecom and has since become the fastest-growing division. South Africa’s MTN Group also made a similar move, closing a $5.2 billion deal with Mastercard afterward. The Central Bank of Kenya (CBK) currently regulates M-PESA, while the Communications Authority of Kenya (CA) regulates the telco arm. The central bank has been pushing for a complete separation to enhance its oversight of M-PESA transactions. In May, Peter Ndegwa, Safaricom CEO, told journalists that the company will set up a Holdco in 2025 with divisions of its various business lines. Under the new organisation structure, M-PESA, which accounts for nearly half of the telco’s revenues, will be a subsidiary in the same business as data, voice, and messaging. “You’ve seen what Airtel and MTN have done. Have they gotten better valuations? Probably not. Have they raised more money? Yes, probably. Do we need more money? No, we don’t,” Ndegwa said in May. Safaricom has also argued that it could face a huge tax liability if a split occurs. It said a $582 million (KES 75 billion) tax bill would be more than KES52.48 billion in net profit in 2023.
Read MoreNCC backtracks on claim that Starlink didn’t get approval for price hike
The Nigerian Communications Commission (NCC) has withdrawn and reversed its earlier statement claiming it didn’t approve Starlink’s recent price hike. In a Tuesday morning statement, the NCC earlier claimed it would sanction the Satelite ISP for failing to get regulatory approval before upping its subscription prices. “We were surprised that the company jumped the gun by announcing price changes after filing a request to the Commission seeking approval for a price adjustment for which the Commission was yet to communicate a decision,” the regulator said in a statement earlier today. Starlink doubled the base subscription rate price to ₦75,000 ($48) per month last week. The company also increased the prices of its kits by 34% from ₦440,000 to ₦590,000. “Kindly note this press statement was issued in error. It is hereby withdrawn. If published, kindly bring it down,” the NCC wrote in a second mail to media publications. Despite the price hike, Starlink remains Nigeria’s only major satellite internet provider, offering a potentially vital alternative to traditional terrestrial internet services. This increase comes amid soaring inflation in Nigeria, which has strained the cost of living for many Nigerians. The Nigerian Communications Act 2003 (NCA), under Section 108 holds the authority to regulate telecom tariffs. The Act stipulates that NCC licensees cannot charge for services without prior approval of their tariff rates and charges. This has been a major bone of contention between the regulator and the mobile network operators who have seen their prices remain static for over eleven years. The NCC has consistently shrugged off suggestions that it should review the price of tariffs.
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👨🏿🚀TechCabal Daily – The Moonshot goal for tech in Africa
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Moonshot by TechCabal, the most important tech gathering in Africa, is now only 1 day away. Put it in your plans to be in Nigeria this week to be a part of the important discussions about Africa’s tech ecosystem. We’re bringing together some of the strongest thinkers, doers, and funders in African tech together to share knowledge, network, and shape the future of African tech. There’s an incredible lineup of speakers, interactive workshops, masterclasses, and content tracks including climate tech and cleantech, emerging tech, big tech, creative economy, digital commerce, and more. Here’s the schedule. You don’t want to miss any part of it. There’s still a chance to join us tomorrow at Eko Convention Centre, Lagos, Nigeria. Get seated. Moonshot is what Lagos is to Africa’s tech ecosystem Local cloud takes off in Nigeria South Africa to change law blocking Starlink’s entry The World Wide Web3 Opportunities Moonshot Moonshot is what Lagos is to Africa’s tech ecosystem Moonshot by TechCabal “Lagosians love food,” I told my colleague Muktar Oladunmade, and it truly encapsulates the thriving food delivery business, which seemingly is faring better than other African metropolises. Startups like Chowdeck are using technology to cater to the diverse tastes of thousands of residents and visitors. Unlike Nairobi, where a few players dominate food delivery, Lagos boasts at least five options catering to different tastes and preferences, reflecting the city’s rich culinary culture. In the fintech space, the energy is palpable. Notable startups dominate, tackling solutions like peer-to-peer (P2P) transfers and consumer-to-business (C2B) payments while attracting significant investments from venture capitalists (VCs). Lagos has carved its unique path in Africa’s tech ecosystem. On Wednesday, the city hosts the most significant tech event this calendar year—Moonshot by TechCabal. The event will bring together founders and investors from across the continent. A platform for thought leaders, VCs, founders, and policymakers to meet, exchange ideas, and debate the future of Africa’s startup scene. VCs will seek to deepen their understanding of the market and connect with promising startups as the continent pushes the next wave of innovations. Policymakers at the second edition of the annual event will gain a critical understanding of the opportunities and challenges facing local African startups. Don’t miss out! You still have a chance to get your ticket here. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Startups Local cloud takes off in Nigeria Image Source: TechCabal On October 7, Okra joined a growing list of homegrown cloud providers in Nigeria providing local cloud alternatives to startups. Since the year began, many Nigerian startups have switched to local alternatives—Layer3 and Nobus—due to the high cost of servicing foreign options like Microsoft Azure and AWS. Since Nigeria devalued the naira, prices of foreign cloud alternatives have shot through the roof. A $1000 cloud service that would have cost ₦458,000 ($280) in early 2023 now costs about ₦1.52 million ($940). More Nigerian startups are also signing up for local cloud providers, in part due to the flexibility of naira payments—a crucial selling point for these companies looking to reduce USD exposure. While hosting data locally allows for better services through improved latency for these companies, local cloud providers might also be preparing to become the biggest beneficiaries of a new bill that will mandate companies in the country to have their data domiciled in Nigeria. Previously, companies’ data was often domiciled in the headquarters of Amazon Web Services (AWS) or Google Cloud. But a new bill could change that, according to two people familiar with the details. However, provisions of the new bill require more investments in hyperscale data centres across the country. Nigeria currently has about 14 data centres nationwide, yet that number could increase as more investments go into data centres across the country. MTN Nigeria said it will complete work on a second data centre in Lagos by December 2024. CitiData plans to build six data centres in Lagos and Ogun in the next two years. With Nigeria’s data centre market projected to reach $578.1 million by 2029, the question remains: what percentage of this market can homegrown cloud providers capture? Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Regulation South Africa to change law blocking Starlink’s entry Solly Malatsi, South Africa’s Minister of Communications/Image Source: ITWeb South Africa plans to change a law requiring foreign telcos to reserve 30% of company ownership for locals, said Solly Malatsi, the minister of digital communications. If that change goes ahead, it will allow Starlink to launch in the country after a month of lobbying. Malatsi said on October 4 that he would issue a policy direction offering an alternative to the 30% local ownership rule in the communication industry. In September, Starlink CEO Elon Musk met with President Cyril Ramaphosa at the UN General Assembly, where he expressed interest in expanding to the South African market. It also continues a trend where Musk and senior SpaceX executives lobby high-ranking government officials in the southern Africa region. The move will allow foreign telcos to operate in Africa’s most advanced market, allowing more competition, which could bring down broadband costs. Introducing Pay with Pocket on Paystack Checkout Paystack merchants in Nigeria can now accept payments from PocketApp’s 2 million+ customers. Learn more → CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $62,555 – 1.64% + 14.80% Ether $2,422.37.64 – 2.60% + 5.66% Sui $2.09 +
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Squid Game 2 announcements and watch peculiarities
Netflix’s Squid Game 2 is set to for release on 26 December 2024. The hit South Korean series, which shook the entertainment world in 2021, will once again draw viewers into its twisted, high-stakes games of survival. The upcoming season is expected to continue the show’s mix of psychological tension, social commentary, and dystopian thrills. The new trailer has already sparked intrigue, teasing what’s to come in the highly anticipated sequel. Watch latest trailer here: Squid Game Season 2 Trailer. A global phenomenon returns Season 1 of Squid Game became a cultural sensation, breaking viewership records for Netflix. Audiences worldwide connected with its gripping narrative and sharp critique of class struggles. With over 142 million households watching the first season, expectations for the next chapter are enormous. Squid Game season 2 is set to pick up where the shocking finale left off, with new characters, more dangerous games, and deeper exploration of the societal issues that made the show a breakout success. Key highlights of Season 2 The latest season promises to build on the intensity of its predecessor. Fans can look forward to: New deadly games: These games are touted to feature even more inventive and perilous challenges, heightening the stakes for the contestants. Character revelations: With unfinished storylines, the second season may delve into the backgrounds of key figures, unearthing their motivations and pasts. Heightened drama: The return of Gi-hun, the protagonist of season 1, guarantees a thrilling continuation of his journey through the ruthless game system. Tech, streaming, and cultural impact of Squid Game 2 release in 2024 Squid Game also signifies a shift in global entertainment consumption. Netflix continues to use advanced technology, such as AI-powered content recommendations and data-driven localisation, to push international shows into mainstream success. Key innovations include: Personalised content delivery: Viewers receive tailored recommendations based on their watching habits, which propelled Squid Game’s global reach. Multilingual accessibility: Netflix’s use of high-quality dubbing and subtitles brings the series to diverse audiences. Final thoughts on Squid Game 2 release in 2024 With its return just after Christmas, Squid Game season 2 will likely dominate end-of-year viewing. As Netflix continues to expand its catalogue of international content, Squid Game remains a cornerstone of the platform’s global strategy—one that continues to captivate audiences across borders.
Read MoreOkra joins local cloud providers providing affordable alternatives to AWS and Azure
Okra, an open-banking startup in Nigeria, has launched Nebula, a cloud infrastructure product. It joins a growing list of homegrown cloud providers like Nobus and Layer3 that market themselves as affordable alternatives to global cloud giants Azure and AWS. “For too long, Africa has leaned on imported solutions, paying premiums for software and services,” wrote Fara Ashiru, the company CEO, on LinkedIn, mentioning the company’s ability to receive naira payments. Like its local competitors, Nobus, Galaxy, and Layer3, Nebula will allow customers to pay cloud costs in local currency, a crucial selling point when companies are reducing USD exposure. Currency devaluation in Nigeria and increasingly tough macroeconomic conditions are driving technological changes from Nigeria’s biggest companies. In July, TechCabal reported that five local cloud companies were in talks with state and federal government institutions to become their cloud providers of choice. Those companies hoped to argue that the 2019 National Cloud Computing Policy mandates government agencies to use local cloud service providers. Some of those companies considered forming a consortium. For Okra, joining the cloud business will expand revenue streams, according to a TechCabal report from July when the service was still under development. Starting out as an open banking business, Okra has discontinued at least three of its original products, suggesting a softness in demand. While the financials of the open banking companies remain unknown, at least one investor questioned the market size. The push for patronage for homegrown cloud providers comes as cloud costs have more than doubled in the past year, thanks to the naira devaluation. Most Nigerian companies host their data on AWS, Microsoft Azure, and Google Cloud, and the costs are charged in dollars. Local providers aren’t just positioning themselves as cheaper alternatives, but also argue that patronising them will reduce the country’s forex burdens. With this launch, the startup joins a list of local cloud service providers—Nobus and Layer3—that have continued to grow as the depreciation of the naira against the dollar drives founders away from international service providers like AWS and Azure.
Read MoreAfrican startups and investors need better communication to stop funding drought
A new report from Wimbart shows that African startups and investors are misaligned on how to communicate startup progress, complicating further fundraising efforts for startups. While African startups have increased the frequency with which they report metrics to their investors, Wimbart’s Investor report shows that the information provided still lacks enough context for investors to understand their business. This needs to change if Africa’s funding drop is to be reversed, as 88% of investors said they rely on information from investor reports when making future investment decisions, emphasising that the quality of reporting plays a crucial role in their judgement of a startup. “It allows us to build enough data on the health of the company and enables us to cross-analyse with our own (due diligence) for follow-up investments,” an investor shared about startup reporting in the report. The findings come as investors ask questions about how African startups operate and their likely returns in light of tough economic conditions across the continent. Over two-thirds of investors said they intensified their focus on portfolio startups’ reporting in the last 18 months, with a third attributing this to concerns about financial stability and sustainability. According to the report—in its second year—founders and investors agree on the importance of reporting but differ on the type of information that should be shared, suggesting a need for clearer communication to align expectations. Startup founders, who often have multiple firms and angel investors on their cap tables, believe that a standardised approach to reporting should be introduced and argue that investors fail to ask for critical metrics like customer acquisition cost (CAC), lifetime value (LTV), customer retention rate, churn rate, and fraud mitigation, which are essential for understanding the business’s long-term viability. “I’d like them to ask for less—we send them plenty and they are just lazy, asking for it in different forms,” a founder said about investors. This communication gap can be traced to a lack of trust, with some founders fearing that investors might share confidential information about their startups as several venture capital firms have invested in competing startups. “Investors have to put together a list of requirements for startups straight away, but they should ideally have some standardisation because (founders) with eight or ten investors don’t want to do different reports,” Jessica Hope, the CEO of Wimbart, told TechCabal. Investors also agree that a standard approach to reporting will help solve the reporting problem. However, a standard approach to reporting could overlook the nuances within Africa’s diverse tech ecosystem. The challenges and opportunities for fintechs in Accra differ from those in Abidjan, showing the need for flexibility in reporting that accommodates local market dynamics. “I think there are certain standard metrics that are useful when capturing the health of company. It’s up to investors to collaborate to put together a standardised template that has nuance. It should be like an 80-20 rule, with 20% of the standard allowing for market peculiarities,” Hope said. Kola Aina, the general partner of Ventures Platform, which has more than fifty African portfolio startups, said that open and consistent communication is key to “building mutual understanding, aligning expectations, and driving effective collaboration.” Over 70% of the startups and investors surveyed were in the pre-seed and seed stages, highlighting the youth of Africa’s startup ecosystem. Notably, no investors were beyond Series B, and less than 5% of the startups surveyed have reached that stage. Wimbart, a 10-year-old public relations firm, has been a key player in Africa’s tech ecosystem, supporting startups like Moove and M-KOPA and investors like Ventures Platform to communicate effectively with journalists and the public.
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👨🏿🚀TechCabal Daily – Nigeria’s AI dream gets $1.5 million richer
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Welcome to Moonshot week! Moonshot by TechCabal, the most important tech gathering in Africa, is now only 2 days away. Put it in your plans to be in Lagos, Nigeria this week to be a part of the important conversations about Africa’s tech ecosystem. Here’s the best part—attending with friends and colleagues makes the experience even more powerful. Share insights, build ideas together, and expand your network as a team! It’s an experience that’s even better enjoyed when shared. Get seated. Nigeria gets additional $1.5 million AI fund What does a digital nomad visa mean for Kenya? Fidelity Bank records ₦200.8 billion ($125.5 million) pre-tax profits The World Wide Web3 Opportunities AI Nigeria gets additional $1.5 million AI fund Bosun Tijani, Nigeria’s Minister of Communications, Innovation, and Digital Economy When Bosun Tijani, Nigeria’s tech minister launched the National AI strategy, people criticised it. They saw the strategy—which provided a framework for the development and implementation of AI systems in the country—as putting the cart before the horse. Critics highlighted the absence of crucial infrastructure—electricity and compute—needed to support the growth of AI. Given the country’s cost-of-living crisis, many Nigerians also found it difficult to justify pursuing any ambition beyond stabilising the country’s economy. Yet, the minister’s argument has been simple: there is no better time to ride on the wave of emerging technologies like AI to address the nation’s problem. “We know our limitations, but we have clarity in terms of what we can do with AI and how to go about it. We may not have the compute, but we have young people that can be trained to build global AI solutions,” Bosun Tijani told TechCabal in an interview last month. The Minister has gone on to launch Nigeria’s first Multilingual Large Language Model (LLM), alongside the National AI Strategy. In September, Bosun Tijani was once again criticised after he announced that the ministry had received its first tranche of investment for the AI research and development fund. It was a ₦100 million ($61,500) donation from Google. The money will just be enough to purchase two Nvidia GPUs which usually costs between $30,000 and $40,000. Bosun Tijani, at the time, said people failed to realise that the government was in talks for more funds. One of those funds is an additional $1.5 million from Luminate group. The funds which will be launched today is the latest move by the government to bolster AI development in the country. The government also plans to launch an AI collective this week as well as a National Artificial Intelligence Trust. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Regulation What does a digital nomad visa mean for Kenya? Image Source: News Central TV Kenya is having quite the year. Its drawn-out protests, debt defaults, and members of parliament railing into Deputy President Rigathi Gachagua as they call for his impeachment are some of the obvious highlights of the year. Yet, the country is finding ways to win. On Thursday, Kenya amended its citizenship and immigration regulations to introduce a Digital Nomad Visa. This visa targets individuals who work remotely for foreign employers while choosing their own work locations. According to the amended regulation, applicants to the visa program must be employed by a non-Kenyan company, be earning an annual base salary of $55,000, and have no criminal history. Kenya hopes the visa will bring more remote workers into the country, boosting its tourism sector, which grew by 21.3% in the first half of 2024, generating KES142.5 billion ($1.1 billion). In addition to tourism, the visa is expected to benefit other sectors like housing, transportation, and hospitality. However, details of the program, such as the visa’s processing time, the duration of stay, and the pathway to getting Kenyan citizenship remain unclear. More information is expected to be communicated soon as the program takes shape. Kenya will join other countries like Seychelles, Mauritius, Namibia, and Cape Verde which have successfully rolled out digital nomad visas, offering remote workers tax breaks and a chance to live and work from beautiful cities. Remote work is growing in popularity worldwide and countries want to capitalise on it. In Nigeria, Lagos State will tax remote workers. Kenya, needing a quick win, will also try and tap into this growing travel-work culture. It is unclear if, and how much tax digital nomads in Kenya will pay. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Banking Fidelity Bank records ₦200.8 billion ($125.5 million) pre-tax profits Image Source: Fidelity Bank Fidelity Bank, a Nigerian tier-2 bank with a market capitalisation of ₦323 billion, has reported a ₦200.8 billion ($125.5 million) pre-tax profit for the second quarter of 2024. The results were driven by a surge in net interest income and gains from financial assets. The bank’s net interest income soared by 202%, reaching ₦326.4 billion ($200 million) during the period. This significant increase was fueled by rising interest rates and a growing loan portfolio. Additionally, Fidelity Bank’s fees and commission income rose by 45%, reflecting strong growth in its non-interest income streams. To reward its shareholders, the bank has proposed an interim dividend of ₦0.85 per ordinary share. This dividend payout is expected to further enhance investor sentiment and attract additional capital inflows into the bank. The bank’s total assets grew by 27% year-on-year to ₦7.9 trillion ($4.9 billion) up from ₦6.2 trillion ($3.8 billion) in the same period last year.
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Rethinking risk: How the financial sector can partake in the African Creative Industrial Revolution
This article was contributed to TechCabal by Tochi Louis. For decades, Africa’s creative economy has thrived in pockets, driven by the indomitable spirit of its creators and internal stakeholders. With Nigeria recently becoming the sixth-largest music-exporting country in the world—trailing behind creative economy juggernauts like the US, UK, Colombia, and South Korea—every melody, every frame, pulses with the potential to not only reshape our image and narrative on a global scale but also to evoke a promising economic future. However, one question persists: what’s the extent of the financial sector’s involvement in this renaissance? For too long, the financial sector has cursorily viewed the local creative economy through a lens of skepticism, largely stemming from a misunderstanding of its value chain and perceived volatility that is not always reflective of our reality. It’s time we start having honest conversations and map out strategies to bridge the divide. The creative ecosystem is not monolithic. It spans industries such as music, film, and fashion, and even intersects with sectors like real estate and tech. Yet, as Wakiuru Njuguna, Managing Director of HEVA Fund, a key player in creative financing, points out, “The creative sector has too often been seen as a charity case, when in fact it represents a powerful engine for economic growth if oiled properly.” This mindset has stifled the financial sector’s will to tap into the full potential of Africa’s creative ecosystem. A major part of this hurdle also stems from the misperception of creatives themselves. As Chin Okeke, Founder of Misan Partners, explains, “There’s a view of creatives as just creatives. People do not understand that creatives have business acumen.” This illusion has created a chasm between the financial sector and the creative economy, with the former seeing only surface-level creativity rather than the robust, multifaceted industry and infrastructure powering it. Chin insists, “To truly understand it and change that perception, they [financial sector] have to view it from an industrial perspective. The value chain, the assembly line, input-process-output—it’s no different in music and film than it is in oil and gas or real estate.” Banks and private investors routinely argue that the creative economy carries too much risk, largely because it is viewed solely as a collection of isolated artistic endeavors, rather than as an ecosystem ripe with opportunity that requires appropriate, tailor-made backing. There’s a valuable lesson to be learned from Africa’s agricultural sector, which has long benefited from tailored financial products like micro-loans and crop insurance. Wakiuru suggests that the same level of responsiveness be extended to the creative industries: “What we are seeing is a need for financing that’s as nuanced as the sector itself. It’s not about injecting money into the sector but about creating financial products that reflect the realities of each value chain within the industry.” When dealing with a sector like the creative economy, which primarily generates intellectual property, Wakiuru advises against using the same lens across board to evaluate risk. She cites the need for financial models that blend different forms of capital, from grants to venture capital. Chin also echoes the validity of a blended finance approach: “It allows us to stack different types of capital along the value chain, from grants to equity, to unlock opportunities at every stage.” In her decade-long run at HEVA Fund, Wakiuru has built financing facilities responsive to the creative sector, aligned with their respective markets. She highlights the importance of local context, noting that Africa comprises many countries, each with its own spending and consumption habits, as well as cultural influences. For instance, one of the largest video-on-demand platforms in Kenya has over five million Google Play downloads and has built, a strong business case around affordable, culturally relevant content delivered through a pay-per-view model, championed by local talent. Meanwhile, the Nigerian box office is increasingly recording more billion-naira blockbusters compared to the past decade. “Most of that revenue comes from local audiences, which is proof that local markets can drive substantial revenue when given the right infrastructure,” Chin says. “So, the game isn’t just to make more films; it’s also about expanding from 300 screens to 3,000 to make content more accessible for our people and meet local demand,” he adds. The same principle applies to audio. In Nigeria, the music consumed is overwhelmingly Nigerian, yet there are hardly any platforms that allow Nigerians or Africans to fully access and engage with their own music on a specialised scale. “The demand for local audio is huge,” Chin explains. “We have the market, we have the demand, but we need a solution tailored for Africa because streaming, as it stands, applies a Western solution to a market where it isn’t fully working.” Wakiuru complements Chin’s perspective, challenging the perception that ‘success in the creative economy should ultimately be tied to foreign demand’. “We could consider demand from the diaspora,” she asserts, “but that ultimately depends on the investor’s agenda and the kinds of opportunities they’re pursuing.” Chin explains that layers of opportunity in various creative industries can be viewed differently. “If we look at the Music industry, 98% of the revenue comes from outside Nigeria. Thus, you would focus on exports for short- and mid-term investments. On the other hand, Film presents a different picture. Here, the short- and mid-term opportunities for revenue lie within the local market.” Chin points to promising indicators such as a growing youth population, improved education, lower mortality rates, and rising disposable income to buttress this. “The demand is there. We want to consume our own products—our clothes, music, and films. The supply is also there. What we’re missing is the infrastructure to make it accessible. That’s where the local opportunity lies.” He adds, “If we can produce nearly a billion streams on Spotify in the first half of 2024 and rank in the Top 25 out of Spotify’s 184 markets by streaming appetite in just three years of Spotify launching in the market, the real question should be about scaling that number from one billion
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