MTN expects profits to fall up to 30% as Iran investment takes a hit
MTN Group is making more money from its core telecom business, but its profits are heading in the opposite direction. Africa’s largest telecom operator expects headline earnings per share to fall by as much as 30% in the first half of 2026, even as its underlying earnings rise by up to 23%. The reason is Iran. A large impairment on MTN’s 49% stake in Irancell, an Iranian telecom operator, alongside foreign exchange losses and hyperinflation, is dragging down headline earnings despite stronger underlying performance, according to the company’s trading statement on Tuesday. MTN’s underlying earnings are expected to rise by up to 23%, but a write-down on its Irancell investment, compounded by hyperinflation and foreign exchange losses, is dragging reported earnings lower. MTN said it took a material hit on its 49% investment in Irancell because of geopolitical and economic conditions during the period, including the war in Iran. The impairment losses accounted for 213 cents of the difference between H1 2026 earnings per share and headline earnings per share, compared with 104 cents a year earlier. The Group also recorded 178 cents in non-operational items, up from 12 cents in H1 2025. These included a 52-cent impact from hyperinflation and 126 cents from foreign exchange losses. The result is a sharp decline in reported earnings per share that does not directly reflect the performance of MTN’s underlying telecom operations. Still, MTN said it expects earnings per share for the six months ended June 30 to come in between 377 cents and 431 cents, down 20% to 30% from the 539 cents reported in H1 2025. But that decline masks a stronger underlying performance. MTN projects adjusted headline earnings per share, which the company considers a better measure of operating performance, to rise 18% to 23%, from 657 cents in H1 2025 to between 775 cents and 808 cents. “Overall, the MTN Group delivered a resilient performance, with strong commercial execution and disciplined capital allocation in the period,” the company said in its statement. MTN also reported strong Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin expansion, free cash flow growth and cash upstreaming to the Group. MTN said its operations in Nigeria, Ghana and Uganda delivered “solid operational performance” during the first half. Nigeria remains an important growth market, but its fintech business is facing pressure. MTN believes this was partly driven by the regulatory suspension of airtime lending. MTN’s South African business is facing tougher conditions. The group said the country’s prepaid market remained challenging in Q2 2026, particularly for voice revenue. “As previously communicated and expected, the South African prepaid market continued to be tough in Q2 2026, specifically on voice service revenue,” MTN said. MTN is making progress on its proposed IHS acquisition. IHS shareholders voted in favour of the deal on August 4, giving MTN the required two-thirds majority to acquire the 75.3% of IHS it does not already own. The transaction would take MTN’s stake to 100% and result in IHS being delisted from the New York Stock Exchange. The company said it expects to publish its full interim results on or about August 24. True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.
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IHS Towers revenue rises 8% as diesel, merger costs squeeze profits
IHS Towers, Africa’s largest independent telecommunications tower infrastructure company, grew its revenue by 8.2% in the first half of 2026, but higher diesel and power costs, along with expenses related to its proposed takeover by MTN Group, put pressure on its profits. Revenue from continuing operations rose 8.2% to $844 million in the six months to June, compared with $780.3 million a year earlier. Revenue also grew 10.4% in the second quarter to $428.6 million, according to the company’s H1 financial report. The results show how rising diesel costs are putting pressure on IHS’s profitability, making cost control increasingly important as the company prepares for its proposed takeover by MTN. Operating income fell 38.4% year-on-year, while net income rose 10.3% in the first half compared with H1 2025. However, IHS swung to a $7.5 million net loss in the second quarter. A major reason was the rising cost of powering its towers. Diesel prices in Nigeria increased sharply during the first half of the year, from an average of ₦1,361.57 ($0.999) per litre in January to ₦3,277.47 ($2.41) in May in some parts of the country. That rise in diesel prices fed directly into IHS’s power costs. The company spent $205.4 million on power generation, primarily diesel, in the first half, up from $165.4 million a year earlier. IHS said the increase was partly driven by higher global energy prices and geopolitical tensions. “We incur capital expenditure in relation to the maintenance of our towers and fiber equipment, which is non-discretionary in nature and required for us to optimally run our portfolio and to perform in line with our service level agreements with customers,” the company noted in its report. Merger-related expenses also added to the pressure. IHS recorded $83.1 million in accelerated share-based payment and long-term employee incentive expenses during the first half, linked to the proposed MTN acquisition and the company’s asset sales. Despite these pressures, adjusted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA), a measure of the company’s underlying operating performance, rose 2.6% to $514 million. The company also benefited from the stronger naira when its Nigerian operations were converted into dollars. The currency movement added $40.7 million to second-quarter revenue and $22.6 million to adjusted EBITDA compared with the same period last year. However, underlying revenue growth was weaker. Organic revenue declined 0.6% in the first half as gains from new tenants, new sites and lease changes were offset by lower foreign exchange-related revenue and the loss of some sites. IHS said about 1,050 sites were vacated following the renewal of its contract with MTN Nigeria. The company is also reshaping its business ahead of the MTN takeover. IHS shareholders approved MTN’s proposed $8.50-per-share cash acquisition in August. The deal is still subject to the remaining regulatory and closing conditions. “The proposed acquisition of IHS Towers by MTN, an important step in the Group’s evolution, was recently approved by our shareholders and remains on track to close in 2026, subject to the remaining closing conditions,” said Sam Darwish, IHS Towers Chairman and Chief Executive Officer. In May, IHS sold its 51% stake in Brazilian fibre company I-Systems to TIM S.A, a Brazilian telecommunications company, for $183 million in gross cash. In August, it completed the sale of its Brazilian and Colombian tower operations, covering about 9,000 sites, to Macquarie Asset Management for an enterprise value of about $952 million. The sales mark IHS’s exit from Latin America and leave the company focused on its African operations. As of June 30, IHS operated 37,672 towers across seven countries, although its tower count was down by 1,512 from a year earlier, largely because of the sale of its Rwanda operations. IHS ended June with $1.5 billion in total liquidity, including $1.09 billion in cash and $407.1 million in unused credit facilities. It had $3.11 billion in total borrowings. True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.
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Nigeria collects $19.9 billion in taxes as digital systems expand
Nigeria collected an average of ₦127.83 billion ($93.98 million) in taxes every day between January and July 2026 as new laws and digital systems helped the government bring more economic activity into the tax net. Tax collections reached ₦27.1 trillion ($19.93 billion) in the first seven months of 2026, according to data shared by the Nigeria Revenue Service (NRS), the country’s tax agency. The increase in collections puts Nigeria on track to raise more tax revenue in 2026 than it did in all of 2025, while new tax laws and digital systems give the government greater visibility into how much Nigerians and businesses earn, spend, and move. In seven months, the NRS has already collected 95.76% of the ₦28.3 trillion ($20.81 billion) it collected throughout 2025, and has reached two-thirds (66.57%) of its ₦40.71 trillion ($29.93 billion) revenue target for 2026. The NRS attributed the increase to the “digitisation of tax systems, four new tax reform laws, the transformation of the revenue service and an executive order that closed loopholes in the system.” In 2025, President Bola Tinubu signed four new tax laws, changing the framework for administering, collecting, and enforcing taxes in Nigeria. The reforms came as the government sought to raise more revenue from an economy where oil could no longer be relied on as heavily as it once was. The four tax laws signed in 2025 outlined new rules for administering and collecting taxes, including a legal basis for using technology to automate tax assessment, collection, and information gathering. “A relevant tax authority may deploy technology to automate tax administration processes including tax assessment, collection, accounting and information gathering,” part of the Tax Administration Act read. In 2021, the NRS, then called the Federal Inland Revenue Service, launched TaxPro Max, a platform that allows taxpayers to register, file returns, make payments, and download tax clearance certificates online. Since August 1, 2025, businesses with annual turnovers above ₦5 billion ($3.68 million) have been required to integrate their invoicing systems with the NRS platform for real-time validation and reporting. “Leveraging technology, such as the automated tax administration system (TaxPro Max and E-services) to further simplify tax processes, drive voluntary tax compliance, increase revenue collection, and create a tax environment that is conducive for taxpayers to fulfil their tax obligations,” the government explained in a policy paper. In July, the NRS told TechCabal that large taxpayers were already under compliance monitoring, while medium-sized businesses began mandatory onboarding in July 2026. Emerging businesses will follow in 2027 as part of a three-year phased rollout. Nigeria is looking to mirror the success of countries such as Rwanda, which digitised its customs process through the Electronic Single Window, and Kenya, which uses its iTax platform. The ₦127 Billion Clock Nigeria collected an average of ₦127.83 billion daily between January and July 2026. Select an illustrative public project below to see the elapsed time required for the government’s tax engine to collect an equivalent amount. Per Day … Per Minute … Per Second … Choose an illustrative project: Primary Health Centre — ₦150m 1MW of Solar Infrastructure — ₦1.2bn 1km of Paved Road — ₦1.5bn Annual Minimum Wage for 10,000 Workers — ₦8.4bn Time elapsed to collect this amount — The bigger story is not the clock. A fast collection rate improves government revenue without automatically closing the gap between what it earns and what it spends. The clock shows scale, not fiscal solvency. Despite hauling in roughly ₦1.48 million every second, the government must still borrow to balance its budget. As the Minister of Finance noted, for every ₦6 the government targets in revenue, its expenditure demands ₦10. Data: Nigeria Revenue Service (January–July 2026 Average) / TechCabal. Project costs are illustrative. Tax revenues are pooled and not explicitly earmarked for individual projects. The taxman can see more of the money In July 2025, TechCabal reported that the NRS, then the FIRS, had developed a real-time portal to track Value-Added-Tax-eligible electronic transactions and was requiring banks, card schemes, fintechs, and payment service providers to integrate with the system. In August 2025, the Federal Government said the portal had been introduced as part of the Transaction Monitoring System (TMS). To give the TMS access to more of Nigeria’s payment system, which processed more than ₦1.2 quadrillion ($882.26 billion) in 2025, the Central Bank of Nigeria in March 2026 mandated all licensed Payment Solution Service Providers (PSSPs) and Switches and Processing Operators to integrate with the system. VAT collections increased by 9.98% in the first quarter of 2026 to ₦2.42 trillion ($1.78 billion), according to the National Bureau of Statistics. The point of a more aggressive and efficient tax system is ultimately how it affects everyday economic activity. But higher revenue collections have not eliminated the government’s need to borrow, with Nigeria’s debt stock reaching ₦159.35 trillion ($117.16 billion) at the end of March 2026. Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, said on July 20 that higher revenue collection does not necessarily eliminate the need to borrow when expenditure requirements remain higher than available resources. “We look at all our numbers and say that we can generate ₦6. ₦6 is our revenue target; our expenditure is ₦10,” Oyedele said. “If we end up generating ₦7, we will say we have exceeded our revenue target. It is not a lie. But we still need ₦3 to balance the budget because we need to spend ₦10. So this is the reason why both can co-exist. The government can exceed the revenue target and still have to borrow.” The numbers show that the government is getting better at identifying taxable activity and collecting revenue. The harder question is when that additional revenue will be enough to reduce the government’s reliance on borrowing and, eventually, translate into better public services. True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders
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How Android Halo shows you what your AI agent is doing
You ask an AI agent to handle a task for you, close the app, and carry on with your day. But then you start wondering: Is it still working? Did it finish? Does it need something from me? Or did it get stuck somewhere along the way? This is one of the problems Google is trying to solve with Android Halo, a new interface designed to show users what their AI agents are doing without forcing them to stop whatever else they are doing on their phones. Google previewed Android Halo in May 2026 as part of its push to make Android more useful in an increasingly agentic AI era. Instead of keeping an agent’s activity hidden inside an app, Halo brings updates to the top of the phone screen, showing when an agent is working on a task, enters live mode, or sends a message. This article explains what Android Halo is, how it works, and why giving users a window into their AI agents could become increasingly important. What is Android Halo? Android Halo is a new interface on Android that gives users an at-a-glance view of what their AI agents are doing. Google describes it as a way to bring an agent’s status and progress to the top of the phone screen. Instead of opening the Gemini app or another app to check what an agent is doing, users can see updates while remaining on whatever screen they currently use. Think of it as a small communication layer between you and your AI agent. If you ask an agent to handle a task that takes several steps, you don’t necessarily need to sit and watch it work. Halo is designed to keep you informed as the task progresses. The feature is particularly relevant as Google moves from AI assistants that primarily answer questions towards agents that can carry out tasks on a user’s behalf. How does Android Halo work? 1. It shows when your agent is working The first job of Android Halo is visibility. When an agent takes on a task, Halo can show its activity at the top of the screen. Google says the interface provides at-a-glance visibility into what an agent is working on at any given time. This matters because agentic tasks can take longer than a typical AI response. An agent may need to work through several steps before completing what you asked it to do. Rather than leaving users wondering whether anything is happening, Halo provides a visible indication that the agent is active. 2. You can see progress without leaving your current screen One of Halo’s most useful ideas is that you don’t have to stop what you’re doing to check on an agent. Google says users can see an agent’s progress from the top of their screen. That means you could continue using your phone while an agent works in the background and still have a way to see what is happening. The distinction is important. Halo isn’t simply another notification that asks you to open an app. It is designed as an always-visible, lightweight status layer that keeps the agent’s activity within your field of view. 3. It can show when an agent enters live mode Halo can also communicate when an agent enters live mode. Google has described three specific moments that trigger the indicator: when an agent picks up a task, when it shifts into live mode, or when it has something to tell you. That gives users another indication of what the agent is doing without requiring them to leave their current activity. 4. It can surface messages from your agent Halo can also notify you when an agent sends you a message. This is useful because an agent doesn’t necessarily work completely independently from start to finish. It may need to communicate with you as it works, and Google is building Halo to make those interactions visible without interrupting your workflow. The important point is that Halo is not simply showing whether an AI is running. It is intended to create an ongoing line of communication between the user and the agent. What does Gemini Spark have to do with Android Halo? Android Halo is closely connected to Google’s broader push towards personal AI agents, particularly Gemini Spark. Google describes Spark as a 24/7 personal AI agent designed to help users navigate their digital lives and take actions on their behalf under their direction. It can work with Google’s tools, including Gmail, Docs and Slides, and continue working in the background even when a user’s laptop is closed or their phone is locked. On Android, Google says users will be able to see live updates and task progress from agents such as Spark through Android Halo. This is where the two products fit together. Spark is the agent doing the work. Halo is the interface that helps you see what the agent is doing. That distinction is important because an agent that can act on your behalf needs a different kind of interface from a chatbot that simply waits for your next question. Why does Android Halo matter? The bigger issue here is not the visual design of Halo. It is trust. When an AI only answers a question, you can usually see what it has produced immediately. But when an agent is performing a task for you, there can be a period where it is working without you watching every step. That creates a new problem: users need to know what the agent is doing. This fits a pattern in how Google has been positioning its AI rollout more broadly, leaning on language like transparency and user control as agents take on more autonomous tasks. Halo is one way of putting that principle into the interface. Instead of hiding an agent’s activity behind an app, Google is making that activity visible at the top of the screen. When is Android Halo coming? Google has not announced a specific launch date for Android
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South Africa wants to use machine learning to screen travellers for fraud
South Africa is turning to machine learning, biometrics and facial recognition to tackle one of its most politically explosive problems: controlling who enters the country. President Cyril Ramaphosa will launch the Electronic Travel Authorisation (ETA), a digital visa system, at OR Tambo International Airport on Wednesday, making it the centrepiece of Home Affairs’ technology immigration overhaul. The move comes as anger over undocumented migration, porous borders and weak enforcement has fuelled anti-immigration protests, some of which have turned violent and strained relations with countries including Ghana and Nigeria. “The ETA combines advanced biometric verification, machine learning and the upgraded Electronic Movement Control System (eMCS 2.0) as part of a modern digital immigration ecosystem that strengthens border security while making travel to South Africa faster, simpler and more secure for legitimate travellers,” the Presidency said in an August 6 statement. The system has already processed more than 203,000 applications since May before it officially launches on Wednesday, according to Leon Schreiber, the Home Affairs Minister, with more than 5,500 fraudulent applications rejected, including fraudulent passports, manipulated documents and other indicators of fraud detected through machine learning. In his May budget vote, Schreiber said the ETA also allows prospective travellers to apply for a tourist visa from their laptop or smartphone, using biometric and machine learning technology to verify their identity. The technology starts checking travellers before they reach the border. Schreiber said the system checks 40 parameters to establish whether a passport is authentic and uses liveness detection to compare an applicant’s selfie with their passport photograph. At the border, the Border Management Authority (BMA) uses facial recognition to verify the traveller’s identity and visa. For aviation, the immediate promise is faster movement through airports. Guy Leitch, a Johannesburg-based aviation analyst, said automated passport control is “long overdue for Africa,” having been used at European ports of entry for years. But he cautioned that the technology will not solve South Africa’s broader immigration problem. “I would be reluctant to draw any strong connection between this and it being a solution to immigration problems,” Leitch told TechCabal. That distinction is important. The ETA is designed for travellers using formal ports of entry; it cannot address people who bypass them entirely. “They are crossing rivers. They’re crossing through the Kruger National Park. They are wading through rivers,” Leitch said. “All of those things are not going to be affected by this at all.” He stated that the technology is therefore aimed at making formal border processing more efficient and harder to exploit, rather than sealing every gap along South Africa’s borders. That comes as immigration enforcement has become a source of growing political tension. In June, March and March, an anti-immigration group called for undocumented foreigners to leave South Africa. Protests spread across the country, with some demonstrations involving violence and looting. The fallout also spilled into regional relations, with Ghana and Nigeria raising concerns about the treatment of their citizens. The government has sought to distinguish concerns about irregular migration from attacks on foreign nationals. President Ramaphosa has said everyone in South Africa must be in the country legally, while warning citizens against taking immigration enforcement into their own hands. Ndileka Cola, Head of Communications at Home Affairs, confirmed that the department has been working to put systems in place across the country’s entry points but declined to provide further details before Wednesday’s launch. “We are excited to be launching the ETA, but we are not giving out that sort of information now because that’s the information that’s going to be delivered at the actual launch,” Cola told TechCabal in an interview on Tuesday. Home Affairs says the ETA is only the beginning. The department plans to expand it into a single digital visa platform that covers visitor, work and study visas, replacing legacy systems and paper-based processes. True scale demands moving beyond surface-level integrations to robust execution. We’ve filtered the noise out of Moonshot 2026, optimising the conference strictly for high-calibre connections between startup founders, global financial operators, enterprise leaders and individuals rewiring Africa’s technical frameworks. Get 20% off Early Bird tickets for a limited time.
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👨🏿🚀TechCabal Daily – Age-gating social media
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning. Egypt may have found a way to keep more of its fintech value at home. MNT-Halan has been in talks since June to list its Egyptian-only business on the Egyptian Exchange, while keeping its operations in markets—such as the UAE, Turkey, and Pakistan—private. Nigeria, meanwhile, is facing the opposite situation: fintechs including OPay and PalmPay are looking at foreign listings. The Nigerian Exchange Group is now asking the government to encourage major fintechs to list locally, or at least alongside foreign listings, arguing that Nigerian investors should also have a chance to benefit from companies built on the country’s market. What would it take for Nigeria to make staying home as attractive as going abroad? Let’s dive in. Become smarter about tech and commerce in Francophone Africa, and the policies shaping them. Read our newsletter here first or subscribe below. Subscribe NCBA’s Multiple Hauliers takeover hits a court roadblock South Africa wants YouTube and TikTok to check your age Nigeria wants to bring its cloud computing back home Kenya says receipts alone won’t beat a KRA tax bill World Wide Web 3 Opportunities Banking NCBA tried to take over Multiple Hauliers. A Kenyan court has stopped it—for now Image Source: Tenor Kenya’s High Court has temporarily stopped NCBA Bank Kenya, one of the country’s largest lenders, from taking control of troubled logistics company Multiple Hauliers (EA) Ltd. Here’s what happened: NCBA says the transporter owes it KES 7.2 billion ($55.7 million). The bank appointed two administrators from consulting firm PwC to take over the company and rescue it or recover money for creditors. Under Kenyan insolvency law, administration is similar to putting a company under external management: the administrators can run the business, control assets, and decide whether it can be saved or should be sold. Multiple Hauliers challenged the appointment in court. A judge has now issued a temporary order blocking the PwC administrators from acting as administrators or taking charge of the company until the case is heard on September 25. Why does this matter? The dispute is much bigger than a single bank loan. Multiple Hauliers reportedly has more than KES 31 billion ($240 million) in claims from various Kenyan lenders and creditors, while its assets are estimated at KES 17 billion ($131.5 million), according to local publication Business Daily. Major banks including KCB, Co-operative Bank, I&M Bank, and others are also exposed. Between the lines: NCBA has not acquired Multiple Hauliers and does not currently control its operations or assets. The court has merely paused the takeover attempt while it decides whether the bank’s appointment of administrators was lawful. The bigger signal is about Kenya’s credit market. When a large logistics company spends years moving between restructuring talks, administration attempts, and liquidation proceedings, lenders recover their money more slowly, which can make banks more cautious about financing transport and logistics businesses across the economy. Zoom out: NCBA is in the middle of a KES 116.3 billion ($794 million) takeover by South African lender Nedbank. On July 21, Nedbank confirmed that it had secured a 66% stake in the Kenyan bank, clearing its path to take control of NCBA. The Multiple Hauliers case shows that one of the bank’s largest corporate debt disputes is still unresolved as the takeover process moves forward. Getting paid in cedis just got easier for African businesses operating in Ghana. Fincra now issues dedicated GHS virtual accounts to enable businesses to collect payments. See how Fincra GHS virtual accounts work. Social media South Africa wants YouTube and TikTok to start checking your age Image Source: Tenor When it comes to policy drafting, South Africa seems to be putting the bigger battles—such as regulating AI—on hold and focusing on a problem that affects far more people every day: what children can watch online. The country is drafting rules that could force social media platforms, such as YouTube and TikTok, to introduce age-verification systems for content deemed harmful or distressing to children. What happened? The proposal is part of a draft online safety framework being developed by the Department of Communications and Digital Technologies (DCDT), the South African government ministry responsible for communications, broadcasting, telecommunications, and digital policy. The same framework would also create an online content ombudsman to handle complaints involving misinformation, harmful content, and material considered unsuitable for minors. Explain like I’m new here: The government is not banning YouTube and TikTok for children. It is saying that platforms may need stronger systems to decide who is old enough to view certain content. The draft draws heavily from the United Kingdom’s Online Safety Act and Australia’s social media restrictions for under-16s. Those models go well beyond the familiar “Yes, I am over 18” checkbox. The UK framework, for example, allows measures such as facial age estimation, ID uploads, or credit-card checks for restricted content. Between the lines: The proposal would also encourage age ratings on uploaded videos and stronger parental control tools. The interesting part is the scope creep. The white paper is not only about child safety; it is also examining whether global streaming services such as Netflix and Disney+ should face a regulatory and tax treatment closer to that of South African broadcasters. The policy is not law yet. The government is still reviewing submissions from industry groups, media organisations, and digital rights advocates, and the consultation process remains open. Zoom out: South Africa is joining a growing list of countries trying to answer an uncomfortable question: how do you protect children online without exposing every other user to the same rigorous ID checks? The technology industry has not found an answer yet, and South Africa is about to test whether regulators can do any better. Download PalmPay. Bank smarter. With PalmPay, you can bank with confidence. Enjoy seamless everyday banking with security features designed to help protect your money. Send money, pay bills, and manage your finances all in one app. Learn more. Digital Sovereignty 85%
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85% of Nigerian workloads run on public clouds as government pushes localisation
Nigeria is moving to bring more of its cloud infrastructure within the country, in a push to reduce reliance on overseas systems and keep more of the digital economy’s value at home. More than 85% of Nigerian workloads now run on public clouds, according to Kashifu Inuwa, director-general of the National Information Technology Development Agency (NITDA). Nigeria also hosts only 22% of its 1,000 most-accessed websites locally, below the Sub-Saharan Africa average of 34%. Nigeria wants to bring more of its cloud infrastructure onshore, betting that localising the systems that run its digital economy will reduce exposure to foreign infrastructure, keep more technology spending in the country and make critical services more resilient. The push is being formalised through the National Sovereign Cloud Initiative, whose regulatory instruments were signed with Galaxy Backbone Limited, a government-owned ICT infrastructure and shared services provider, on August 5, 2026. The framework sets out the policy, technical and quality requirements for hosting more digital services in Nigeria. Inuwa said the move builds on Nigeria’s 2019 Cloud First Policy, which sought to move government institutions away from standalone server rooms and data centres with high operating costs and towards cloud-based services. “The idea then was, how can we encourage government agencies to stop spending money on building technology and let them patronise data centre providers, both local and international providers,” Inuwa told TechCabal in an interview in Abuja on Wednesday, on the sidelines of the two-day summit where the National Sovereign Cloud Initiative was signed. But the policy also produced an unintended outcome: government and businesses moved rapidly to public clouds, without a corresponding expansion of local cloud infrastructure. “People just started going to public cloud,” Inuwa said. “Yes, it’s easier to move to public cloud, but also we need to encourage building the local ecosystem.” That has raised concerns about how much of the economic value generated by Nigeria’s digital economy is being captured outside the country. “Imagine localising and keeping all that content locally,” he said. “The kind of innovation and economic activities you can create.” The government’s argument is partly economic. Over 90% of Nigeria’s digital data and enterprise workloads are currently hosted on offshore servers, resulting in an estimated $850 million in annual capital flight as local banks, fintechs, and enterprises pay foreign cloud providers in US dollars. This foreign-currency exposure leaves domestic businesses vulnerable to severe foreign exchange volatility and geopolitical risks. Expanding Nigeria’s domestic cloud and data-centre market—projected to reach $782 million by 2031—would allow companies to pay in local currency (Naira), retaining hundreds of millions of dollars locally while creating high-value jobs in network engineering, software, cybersecurity and content delivery. “Imagine if you are paying in naira, jobs will be created in Nigeria,” Inuwa said. “Nigerians will be building content locally,” while investment in large data centres would create additional employment and business opportunities. Inuwa said the push to localise cloud infrastructure is also about making Nigeria’s digital services more resilient. As more critical services move online, heavy reliance on infrastructure and connectivity outside the country can leave businesses and essential services exposed when international links are disrupted. In March 2024, four major undersea cables serving West Africa—MainOne, WACS, SAT-3 and ACE—were damaged simultaneously in waters off Côte d’Ivoire. The outages disrupted internet connectivity across the region, exposing the risks of Nigeria’s reliance on international infrastructure and triggering widespread disruptions for businesses and essential services. “For us, sovereignty is not about protectionism,” Inuwa said. “It’s not about closing our doors against the big cloud service providers, but it’s about asking them to come and build with us in Nigeria.” The objective is to create a more resilient domestic infrastructure network capable of maintaining services even when individual locations or connections fail. “The big picture is how can we build like a digital triangle in Nigeria, where we create resilience and service assurance,” Inuwa said. “Even if there is an earthquake in one location, everything can seamlessly fall over to another location.” Nigeria could also strengthen its position as a regional cloud hub for West and Central Africa, using its large internet market and growing subsea cable capacity to attract hyperscale cloud facilities and carrier-neutral data centres. NITDA said the policy is not intended to displace public cloud services or exclude global providers from the Nigerian market. Instead, the agency wants major cloud providers, or hyperscalers, to deploy and operate more infrastructure locally. Inuwa said the government had previously granted waivers allowing institutions to use public cloud services, but it eventually began pressing providers for clearer localisation plans. “We can’t continue giving you waivers,” he said. “We need to have a roadmap on when you are going to localise some of this infrastructure in Nigeria.” One obstacle was the argument from some hyperscalers that Nigerian data centres did not meet the technical requirements needed to support their infrastructure. It was to address these concerns that NITDA brought hyperscalers and local data-centre operators together at the summit to discuss the technical and regulatory barriers to local deployment. The discussions led to a technical working group comprising local providers and global cloud companies, which developed the framework for the sovereign cloud initiative. The framework includes guidelines covering data classification, technical requirements for cloud service providers and digital quality assurance. Providers will have to meet defined standards and certifications to host certain categories of services. The initiative also seeks to address cost, a major barrier to local adoption, as cloud infrastructure in Nigeria has historically been more expensive than hosting workloads abroad, making overseas public cloud providers more attractive to startups and other businesses. NITDA and Galaxy Backbone are working on a plan to offer startups cloud services at lower costs and allow them to pay in naira, according to Inuwa. He expects greater local capacity to increase competition and put downward pressure on prices. “Today, because of lack of competition, that’s why the hyperscalers choose their own price,” Inuwa said. “But if there is competition in terms of capacity and availability
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What African investors think about the funding squeeze killing early-stage startups
Early-stage African startups have found it difficult to raise money this year. In July, GoLemon stopped taking orders after two years and tens of thousands of deliveries, with an average basket of about ₦43,700 ($32). The company said it made money on every delivery, but when it sought capital to scale, it could not raise enough to continue. Its explanation for shutting reflects a position that more African startups have found themselves in as venture funding has tightened. FoodCourt paused orders after failing to raise new capital, while Gigbanc shut down after also struggling to secure funding. The headline funding figures suggest the African tech market has remained relatively resilient. TechCabal Insights’ State of Tech in Africa report puts funding in H1 2026 at $1.44 billion, up 1.4% year on year. But the number of deals fell from 252 to 174 over the same period, while funding that reached early-stage startups dropped to $9 million from $25 million. Africa: The Big Deal, which tracks the market using a different methodology, found that only 190 startups raised at least $100,000 in the first half of 2026, the lowest half-year count since 2021. The number of startups raising between $100,000 and $1 million fell from 179 in H2 2025 to 100 in H1 2026, a 44% drop in six months. If you read this together, the figures suggest that capital is still flowing into African startups but is reaching fewer companies and becoming increasingly concentrated among larger, later-stage businesses. The pipeline of smaller rounds has contracted particularly sharply, narrowing one of the key funding routes for startups trying to move from early experimentation to a more established business. For this week’s Ask an Investor, we asked investors three questions: what has changed in what startups must demonstrate to raise their first cheque? Who should fund the stage that is increasingly being left behind? And what would give more of these companies a better chance at surviving? The responses offer a view into how investors are assessing risk, traction and capital efficiency in a market where simply having a promising idea is no longer enough to attract funding. It is important to note that the views expressed are those of the individual investors and analysts who responded and do not necessarily represent the positions of their respective firms. The interviews have been edited for length and clarity. What changed between 2022 and now in what an early-stage African startup has to show to raise its first cheque? Samuel Frank: In 2022, an early-stage African startup needed to show innovation around an idea and how big a market could be for that idea. What has changed is that you now have to show that a market actually exists for that idea. You have to execute on your idea in some shape or form. Pre-seed investing has changed over the last three or four years. Now, at pre-seed, people expect a startup to be doing maybe $1,500 to $2,000 a month and growing that at 10% to 20% month on month. What they are trying to validate is that you can execute on the idea you developed and that you are proving there is a business around it. Amarachi Nwachukwu: The biggest change is the amount and type of capital available. Between 2019 and 2022, there was a lot of dry powder coming out of Silicon Valley, and investors were willing to deploy into new markets. We saw the likes of Y Combinator and Techstars start investing in our markets. They were willing to underwrite potential, but that appetite has changed. Cheques have slowed, and some investors have stopped deploying into Nigerian markets completely. The bar is now very high. Every investor is asking for evidence like traction, a proven business model, revenue quality, and unit economics. They also evaluate your path to scale. In the early days, investors mostly looked at the team, the market opportunity, and the potential size of the market. Beyond traction, investors look at founder-market fit (who you are as a founder and what assets you have). Then, in this market winter, investors look closely at how a company is going to survive. If we are going to invest $100,000 into your company today, I want to understand how many months of runway that gives you, the runway you already have, and your current burn. We give you a milestone: based on your current product roadmap, can $100,000 unlock a new revenue milestone that makes you more fundable? If we see risk in your business model that could affect the outcome of the investment, we say no, even with traction. We also do the exit maths – what would need to be true for us to generate a return? Another factor is product defensibility. The easier it is to build a product today using AI, the more I want to see what nobody else can replicate over a weekend. That could come from a regulatory angle, such as a licence you have or are working towards that is not easy to get. It could come from the quality of the technology itself. Investors have moved from underwriting possibility to underwriting evidence. Mercy Ndubueze: The bar has shifted from potential to proof. In 2022, investors were more willing to back a compelling founder, a large market opportunity, and early traction. Today, founders need to demonstrate stronger evidence of product-market fit, revenue quality, customer retention, unit economics and, importantly, capital efficiency. Investors are asking not just how big this can become but also what you can achieve with this capital and how efficiently you can get there. Pius Bankong: Fundamentals have been recentred. Most of the funding abundance in 2020-2022 was a result of the global monetary policy at the time (zero interest rate policy). Cheap capital was available, and that reflected in how it was deployed across a number of circumstances. As rates rose and capital tightened, investor priorities recalibrated. Greater emphasis was laid on things that demonstrated likely venture-scale outcomes,
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Nigeria is making crypto companies collect taxes for the government
This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, financial institutions, companies, and governments. A new edition drops every Monday. Nigeria’s new virtual asset tax guidelines do more than tax crypto traders. They turn cryptocurrency exchanges, brokers, custodians, wallet operators, and peer-to-peer (P2P) marketplace operators into extensions of the country’s tax collection network. Under the Nigeria Revenue Service (NRS) framework, a Nigerian virtual asset service provider (VASP) may have to deduct withholding tax on qualifying virtual asset sales, withhold stamp duty in Bitcoin or USDT, charge value-added tax (VAT) on exchange and service fees, file multiple tax returns, maintain transaction records for six years, and pay up to 30% company income tax on its own profits. The rules come as Nigeria seeks to strengthen non-oil revenue collection. Company income tax collections fell 8.08% quarter-on-quarter in Q1 2026 to ₦1.37 trillion ($1 billion), according to the National Bureau of Statistics, adding pressure on authorities to improve tax compliance across emerging sectors. “VASPs, like every other company, shall bear their own corporate income tax liability on their revenues,” the NRS said in the guidelines. “This is separate from their deduction of tax at source obligations.” That distinction is important. A virtual asset company is not simply remitting taxes it collects from users; it is also a taxpayer in its own right. Beyond paying company income tax on their own profits, VASPs must build systems to identify taxable transactions, calculate and withhold different taxes, reconcile token-denominated collections with fiat VAT obligations, maintain detailed records, file multiple returns, and respond to regulatory requests. The requirements could increase compliance costs and force companies to expand their finance and compliance teams. They could also require changes to internal systems for onboarding, settlement, custody, and reconciliation. The accounting advantage Not every aspect of the guidelines is unfavourable to crypto businesses and investors. One potentially significant provision is how the NRS wants taxpayers to account for gains on virtual assets when the naira depreciates. The guidelines indicate that taxpayers should not be taxed simply because a virtual asset’s naira value increased as a result of currency depreciation. Consider an exchange that buys Bitcoin worth ₦1 million when the exchange rate is ₦1,000 to the dollar. If it later sells the Bitcoin for ₦1.97 million, but the naira has weakened to ₦1,500 to the dollar by the time of the sale, a simple naira comparison would suggest a ₦970,000 gain. The NRS approach instead requires the transaction to be converted to dollars. The purchase would be valued at $1,000, while the sale would be worth roughly $1,313 at the new exchange rate applicable at the same time. The underlying gain would therefore be about $313, rather than the entire ₦970,00 increase in naira terms. That $313 gain would then be converted into naira for tax purposes. The principle is straightforward: the taxpayer should be taxed on the real increase in the value of the asset, rather than on an increase caused solely by the depreciation of the naira. The guidelines contain another important provision for VASPs: when a company buys Bitcoin, the 1.5% stamp duty is deducted from the Bitcoin received rather than from the cash paid. Suppose a company pays ₦1 million for Bitcoin and, before the deduction, would have received 1 BTC. After the 1.5% stamp duty, it receives 0.985 BTC. The NRS treats the company as having paid ₦1 million for 0.985 BTC, not for 1 BTC. In effect, the stamp duty forms part of the acquisition cost of the Bitcoin rather than being treated as a separate deduction when the asset is sold. TechCabal Interactive Explainer The VASP Corporate Tax Shield Visualizer See how the NRS USD-conversion method (Paragraph 9.1) calculates taxable gains and shields VASPs from paying tax on Naira devaluation. 1. Acquisition (When Crypto Was Bought) Fiat Cost (₦) NAFEM Rate (₦/$) 2. Disposal (When Crypto Was Sold) Fiat Proceeds (₦) NAFEM Rate (₦/$) Step 1: How the NRS Converts the Trade to USD USD Purchase Value: $1,000.00 (₦1.0M ÷ ₦1,000) USD Sale Value: $1,313.33 (₦1.97M ÷ ₦1,500) Real Underlying USD Gain: +$313.33 Step 2: Assessing Tax Liability (Direct Naira vs. NRS Rule) Direct Naive Method (Incorrect ₦-to-₦ Comparison) Apparent Gain: ₦970,000.00 CIT Tax (30%): ₦291,000.00 NRS USD-Referenced Method ($313.33 USD Gain × ₦1,500) Assessable Gain: ₦470,000.00 CIT Tax (30%): ₦141,000.00 Tax-Free Inflation Shield (Gain Excluded): ₦500,000.00 Actual VASP Corporate Tax Saved (30% CIT): ₦150,000.00 Why This Rule Matters for VASPs Data source: Nigeria Revenue Service (NRS) Information Circular No. 2026/21 (Paragraph 9.1 & Illustration 2). Applies to Category 1 assets. Corporate Income Tax calculated at standard 30% CIT rate. The bigger operational challenge, however, falls on exchanges. A ₦1 million Bitcoin trade can trigger several tax obligations: stamp duty when the Bitcoin is acquired, VAT on the exchange’s trading fee, withholding tax where applicable when the Bitcoin is disposed of, and tax on any taxable gain realised by the user. The exchange may be responsible for collecting and remitting several of those taxes even though only the trading fee is its own revenue. The compliance burden becomes more complicated because the taxes may be accounted for in different forms. Stamp duty and withholding can be remitted in the relevant virtual asset, while VAT is remitted in the currency used for the transaction. An exchange could, therefore, be holding Bitcoin collected as stamp duty, another virtual asset collected as withholding tax, USDT received as service fees, and naira reserved for VAT remittance, while simultaneously managing price volatility, custody, reconciliation, and regulatory reporting. And after all of that, the company remains liable for company income tax on its own taxable profits. P2P trading doesn’t escape the tax net Peer-to-peer (P2P) trading has become one of the most popular ways for Nigerians to buy and sell crypto. Years of restrictions on direct bank-to-crypto deposits pushed retail users toward P2P platforms. The new guidelines bring that market firmly within the tax framework, although the compliance obligations
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The Next Wave: The mechanics of buying your own company
Cet article est aussi disponible en français <!– In partnership with –> First published on August 9, 2026 There is a standard, expected lifecycle for a serial technology entrepreneur. A founder builds a startup, scales it, and eventually experiences a liquidity event, either an acquisition, a public offering, or, more often, a quiet shutdown. Following this, the founder takes some time off, brainstorms a new idea, and starts the cycle again. But occasionally, the timeline folds in on itself. A founder starts a company, leaves to start a second company, and then uses the second company to acquire the first company. To an outside observer, this looks like a glitch in the corporate matrix. Buying a company from oneself sounds like the sort of infinite loop that ought to violate the laws of financial physics. This exact manoeuvre occurred in the African technology ecosystem this week. Cloud9, a Kenyan digital banking platform targeting businesses and young consumers, acquired Chpter, an AI-powered conversational commerce startup. The detail that captured the market’s attention is that Tesh Mbaabu founded both of them. The founder launched Chpter in 2024 after their previous venture-backed e-commerce platform, MarketForce, shut down its core operations during the global funding winter. By September 2025, Mbaabu and another co-founder, Mesongo Sibuti, stepped away from the daily operations of Chpter, leaving co-founder Mark Kiarie to run it. Weeks later, they launched Cloud9. Less than a year after that, Cloud9 returned to acquire Chpter in an all-stock transaction. When a transaction like this occurs, the immediate questions are structural and ethical: How does this happen? Is it legal? Is it right or wrong? Understanding the answers requires examining the underlying plumbing of corporate governance, venture capital incentives, and the concept of related-party transactions. Next Wave continues after this ad. The best builders don’t just shape the future – they stay informed. Series V by Ventures Platform brings you the insights, perspectives, trends, and opportunities shaping Africa’s innovation ecosystem. It’s an essential monthly asset for founders, operators, investors, and anyone building the future of the continent. Subscribe now! Related-party transaction In corporate law, when a buyer and a seller share the same key decision-makers, it is known as a “related-party transaction.” It is not inherently illegal, nor is it automatically unethical, but it is structurally highly suspicious. The bedrock of market capitalism is the arm’s-length negotiation. A buyer wants to pay the lowest possible price, and a seller wants to extract the highest possible price. The friction between those two competing desires creates a fair market value. When the buyer and the seller are closely linked—or are literally the same people—that friction disappears. The risk is that a controlling shareholder might use a healthy company they control to overpay for a struggling company they also own, effectively bailing out their bad investment with other people’s money. The textbook modern example of this dynamic involves Elon Musk. In 2016, Musk was the CEO and largest shareholder of Tesla. He was also the chairman and largest shareholder of SolarCity, a financially struggling solar panel company founded by his cousins. Musk proposed that Tesla buy SolarCity for $2.6 billion in stock. Aggrieved public shareholders immediately sued. They argued that Musk used a compliant board of directors to overpay for an insolvent company to save his own equity. The legal defence in these situations relies on objective procedural protections. To cleanse a related-party transaction of its conflicts, a corporate board must typically establish a special committee of completely independent directors, exclude the conflicted founders from the vote, and hire outside financial advisors to draft a “fairness opinion”. The Delaware Chancery Court eventually ruled in Musk’s favour, applying a rigorous standard known as “entire fairness.” The judge concluded that, despite procedural flaws, the price paid was fundamentally fair and the acquisition was strategically beneficial to Tesla’s evolution into a vertically integrated clean energy company. However, the court explicitly noted that the gruelling, expensive litigation could have been avoided with stricter adherence to independent governance procedures. More recently, this dynamic reappeared when Musk’s private space exploration company, SpaceX, acquired his private artificial intelligence startup, xAI. When related-party transactions happen in the private market, they bypass the procedural drag and public disclosure obligations that public companies face. A private market merger allows founders to set relative valuations and negotiate terms within a controlled ecosystem, avoiding immediate retail shareholder lawsuits. Cap tables and all-stock deals The Cloud9 acquisition of Chpter operates in this less regulated private sphere. Because there are no public shareholders to file derivative lawsuits, the arbiters of fairness are the venture capitalists sitting on the capitalisation tables (cap tables) of both startups. Chpter was not a bootstrap operation; it raised a $1.2 million pre-seed round in 2024 from investors including Ventures Platform, Future Africa, Launch Africa, and Techstars. Cloud9 is similarly backed by early-stage venture capital. For Cloud9 to acquire Chpter, the investors on both sides had to agree on a valuation. Because the transaction was an all-stock deal, no cash actually changed hands. The investors and remaining founders of Chpter simply swapped their shares in the standalone commerce company for newly issued shares in Cloud9. Why would venture capitalists agree to this arrangement, especially knowing the founders sit on both sides of the history? The answer lies in the unforgiving math of the current technology market. Venture capital in Africa has experienced a severe contraction, heavily penalising standalone point-solutions that struggle to monetise. Chpter is a software platform that helps merchants sell products and automate conversations on WhatsApp and Instagram. That is a useful software layer, but software-as-a-service (SaaS) is notoriously difficult to scale profitably without massive injections of growth capital. Digital banking, by contrast, monetises the actual flow of funds, foreign exchange, and credit. The logic dictates that an all-stock buyout is a rational risk-mitigation strategy. The venture investors in Chpter are trading a larger ownership percentage of a smaller, potentially stalled asset for a smaller ownership percentage of a larger, more ambitious financial ecosystem.
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