TechCabal Daily – The ZiG isn’t zagging
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Thanks to everyone who spoke out for Daniel Ojukwu, a Nigerian journalist who was wrongfully detained for 10 days for his investigative report involving mismanagement of funds by Nigerian officials. Daniel was released on Friday morning. Now, onto the business of the day. In today’s edition Fresh subsea cable cuts hit Africa Zimbabwe’s new currency struggles as businesses mark up ZiG purchases Solar storm dazzles social media and Starlink South Africa takes action against AI election threat The World Wide Web3 Opportunities Internet Fresh subsea cable cuts hit Africa Modern civilisation, as we know it, can grind to a halt if one of these three things happens: if World War III happens and somehow everybody dies; if the internet cables crisscrossing the earth all snap at once; and if aliens finally make contact. This writer wagers the second option might as well be in the works. How? On March 14, the world as we knew it, got a taste of its dependence on the internet. At least 8 African countries experienced internet outages due to damage to submarine fibre optic cables along the West African coastline. The outage halted trading activities on Ghana’s stock exchange, caused Nigeria’s second-largest cement maker to postpone meetings with investors, and caused panic among many other Africans who wondered why surfing the net had become a frantic exchange of text messages asking if anyone else’s internet was working. Another one: March’s outage affected the West Africa Cable System, MainOne, South Atlantic 3, and ACE sea cables. Per local media reports, there have been fresh cuts on two internet cables connecting South Africa and Kenya. While the cause of the cut is yet to be discovered, internet users across Kenya and Tanzania will be severely impacted, with major Kenyan network and internet service providers, including Safaricom and Telkom Kenya, experiencing outages. Total internet blackouts are expected in some areas. Internet users across Rwanda, Uganda, and Madagascar will also be impacted by the cuts. Per TechCentral, cable repair ships have been deployed, but no estimated time for repairs has been given. With the last subsea cable disruption, it took at least five weeks to fix two of the three cables and an additional four weeks for the final cable to be fixed. Read Moniepoint’s case study on family-owned businesses Family-owned businesses are everywhere, shaping our world in ways you might not expect. We’ve found some insights into how they work, and we’d love to share them with you. Dive in right away here. Economy Zimbabwe’s new currency struggles as businesses mark up ZiG purchases Zimbabwe is cracking down on businesses using inflated exchange rates instead of the rate stipulated by the new gold-backed currency also known as the ZIG. The news: In an attempt to stabilise the value of the ZiG, the government released a notice that it will fine businesses 200,000 ZiG ($14,815) for offering exchange rates higher than the official rate of 13.5 ZiG per $1. Additionally, businesses caught selling goods or services using an exchange rate higher than the interbank selling rate will be committing a civil offence. The ZiG isn’t zagging: Despite hoping the new currency, ZiG, would boost the economy, its value has instead dipped. Initially trading at 13.53 ZiG per $1, it fell to a record low of 13.67 ZiG just one month later. The reason for the instability of the currency: Prior to this change, stores would mark up prices by 10% for ZiG purchases. This protected businesses from losing money if the currency weakened further. However, it also made ZiG less attractive to use, fueling inflation and a black market for foreign currency. Now, with stores required to charge the official price, ZiG should become more competitive with dollars. Unlicensed currency traders also offered much more attractive rates, buying US dollars for up to 15 ZiG and selling them for around 20 ZiG. This contrasted sharply with the official rate of 13.5 ZiG per US dollar. Additionally, informal traders remained hesitant to switch to the new currency, clinging to the US dollar due to concerns about the volatility of the ZiG. Four currency changes in four years: Zimbabwe’s fight against hyperinflation has led to frequent currency changes, with four new currencies introduced since 2019. This started with replacing its old RTGS currency with the Zimbabwean dollar in 2019, introducing a new Z$100 note in 2022, and announcing a gold-backed digital currency in 2023. This year, it introduced a new gold-backed fiat currency the Zimbabwe Gold (ZiG) to replace the Zimbabwean dollar, which lost a staggering 75% of its value in 2024. The ZiG is the nation’s sixth attempt to establish a stable local currency. It is backed by the country’s gold reserves (2.5 tons) and some foreign currency holdings ($100 million) by its central bank. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Internet Solar storm dazzles social media and Starlink Image source: Andrew Chin/Getty Images Over the weekend, social media exploded with dazzling photos of the Northern Lights, an awe-inspiring natural phenomenon painting the sky with a rare display of vibrant colours. Christened Aurora, the sightings were a rare event that last happened in 2003. While the sighting was not visible in most parts of Africa (parts of South Africa were invited to the watch party), people across the continent joined in—virtually—with dazzling images shared on the gram. As the sighting blessed us with colourful skies and maybe a rare sighting of unicorns in the sky, Aurora also meant that satellite-based internet services like Starlink experienced glitches. How? This light sighting was the result of a geomagnetic storm, the strongest ever to hit the earth. Geomagnetic storms
Read MoreEntering Tech #65: How to become a data engineer
Want to be the brains behind the next ChatGPT? 11 || May || 2024 View in Browser In partnership with #Issue 65 How to become a data engineer Share this newsletter Hello ET people Welcome to the third and last edition of our series on entering tech as a data professional. In the past two editions, data professionals shared how newbies can become data analysts and data scientists. Today, we will be treating the least popular of the trio, data engineering. Like back-end developers, data engineers don’t often enjoy the spotlight, even though they do very important work that makes it possible for generative AI like ChatGPT to exist today. So next time you see a data engineer, don’t be scared, just give them a polite nod and maybe offer a fist bump. They’re not used to attention. Let’s dig in. by Faith Omoniyi & Timi Odueso How data engineering works Businesses need large amounts of data to make informed decisions. This data is often available only in raw formats and is hard to make sense of. Data engineers collect this unprocessed data and turn it into actionable and usable information for data scientists, data analysts, and business analysts, who use it to make business decisions. Data engineers are the unsung heroes, as they make it easier for data scientists and analysts to earn a living. Data engineers wear many hats! They source datasets relevant to business goals, develop algorithms to transform raw data into insights, design and maintain data pipelines, collaborate with management to understand needs, create new data validation methods and analysis tools, and ensure everything complies with data governance and security policies. Too many tasks, you might say; remember, they are heroes, right? Before we go further, let’s tell the story of Adeolu Adegboye, who leveraged his data science background to transition into data engineering. Adeolu started learning data science when he thought the world was ending during the COVID-19 lockdown. In 2021, he got an internship as a data scientist and then transitioned to data engineering in 2022 because engineering had always winked at him. Adeolu Adegboye Who is a data engineer: Coursera defines data engineering as the practice of designing and building systems for collecting, storing, and analysing data at scale. *Newsletter continues after this ad. Get more from your salary with Eazipay ‘ Join 150,000+ SMEs and employees to get up to 100% extra salaries and more this Workers’ Day! Visit www.myeazipay.com or download the Eazipay Business app to sign up to begin. Contact cx@myeazipay.com or 07000332947 for more info. What you need to become a data engineer? Here’s what the typical career path of a data engineer looks like: Data Engineer Mid-Level Data Engineer Senior Data Engineer Data Architect/Lead Data Engineer/Data Engineering Manager. Data engineering is a purely technical field that requires programming knowledge of Python and SQL, along with skills in data modelling, ETL, data management, and data architecture. Adeolu strongly recommends that prospective engineers be versed in the different cloud computing platforms—Amazon Web Services (AWS), Microsoft Azure, and the Google Cloud Platform (GCP). According to him, data engineering is a holistic skill that requires learning a bit about everything, from database handling to analytical reasoning, machine learning, data security, data storage, and so on. On the soft skill rung of the ladder, problem-solving, communications and stakeholder management are the most important skills. Data engineers are required to ensure the end user/client understands the full context of what the data provided can do for them. Meme Source: Zikoko Memes If you’re wondering where you ca learn data engineering, Adeolu recommends that you follow the 100-day plan for newbies in data engineering by The Seattle Data Guy. He teaches a range of topics and provides a spreadsheet that houses over 50 courses, challenges, and materials. Adeolu claims that if followed religiously, the 100-day plan could potentially land you an internship or even a full time role if you’re a badass. Data professionals I have spoken with for this series say Data Camp is a safe haven, if not heaven, for data professionals. Courses on the platform are made by data professionals and cater to different phases of your learning journey. While courses on DataCamp are priced, Adeolu recommends free alternatives on Codecademy and Coursera. Below are some of his recommendations. *Newsletter continues after this ad. The 3i Africa Summit!!! Are you ready to be part of the FinTech revolution in Africa and across the globe? Join us, as we prepare for the unforgettable 3i Africa Summit that unites industry leaders, businesses, investors and innovators. Venue: Accra International Conference Center, Accra, Ghana. Date: 13th – 15th of May, 2024. Register here to save your spot!! You do not want to miss out on this!! You can learn data engineering too IBM Introduction to Data Engineering Learn the basic skills required for an entry-level data engineering role. Price: Free Duration: 1 – 4 weeks Tools Needed: Laptop + internet access Level: Beginner Get course IBM Data Engineering Foundations Specialization Learn the Working knowledge of Data Engineering Ecosystem and Lifecycle. Viewpoints and tips from Data professionals on starting a career in this domain. Price: Free Duration: 2 months (at 10 hours a week) Tools Needed: Laptop + internet access Level: Beginner Get Course Introduction to Relational Databases (RDBMS) Learn how to describe data, databases, relational databases, and cloud databases as well as information, data models, relational databases, and relational model concepts (including schemas and tables). Price: Free Duration: Flexible schedule (15 hours approximately) Tools Needed: Laptop+ internet access Level: Beginner Get Course Data Engineering on Google Cloud This programme provides the skills you need to advance your career and provides training to support your preparation for the industry-recognized Google Cloud Professional Data Engineer. Price: Free Duration: 1 month (at 10 hours a week) Tools Needed: Laptop+ internet access Level: Beginner Get Course How to land your first role However, if you are looking to take a stab at it right away, Adeolu claims that following the
Read MoreHow South Africa’s ecosystem has stayed resilient during the funding downturn.
Between Q1 2023 and Q1 2024, at least five South Africa startups managed to raise follow-on funding rounds. In a funding downturn, raising one round is already tough enough, let alone two within a year, making this feat by startups like Planet42 and Carry1st all the more impressive. Over the last two years of the VC downturn, the South African ecosystem has shown more tenacity than its peers across the continent. According to ecosystem stakeholders, this results from a combination of factors including business culture, macroeconomic conditions and fundraising environment. Apart from startups in the country being able to raise follow-on funding, South Africa was the only ecosystem in sub-Saharan Africa to see an increase in average valuations in 2023, according to data by MAGNiTT. The country also held its ground in terms of attracting venture capital in terms of deal value and volume. Here is why SA startups saw an uptick in average valuations in 2023 “Despite a -34% YoY decline in total equity funding in 2023, South Africa has been the most resilient ecosystem in the top 4, emerging as the new leader of the African tech funding landscape,” Partech shared in its annual report. So what has enabled South Africa to take the VC downturn punches relatively well? Some investors state that at the peak of VC inflow into Africa, South Africa was mostly left behind by countries like Nigeria, Egypt and Kenya. Development Finance Institutions (DFIs), major contributors to VC funds on the continent, believed that the country was “too developed” to pour funds into. Local institutional investors also did not back the VC asset class due to perceived risk. Keet van Zyl, managing partner at VC firm Knife Capital, says the historical scarcity of capital positively affected the tenacity of South African startups who now prioritise keeping cash-flown burn rates at sustainable levels. “ SA startups may not be paper unicorns, but they are generally robust, sustainable and capital efficient,” van Zyl told TechCabal. He added that South African startups also have a good balance of sensible valuations based on real unit economics, which makes them investible in a macroeconomic slump. Will Green, co-founder of business development firm Co.Lab, concurred that because of how risk-averse the South African VC market has been in the past, startups have had to build solid businesses to even get a sniff at VC cheques. “When the market reset as it did, those principles of good unit economics and fundamentals have proven to be the saving grace for the SA ecosystem,” Green told TechCabal. Macroeconomic resilience is a factor Despite facing high unemployment levels, load shedding and a declining currency, South Africa’s macroeconomic fundamentals have held up compared to most of the continent. According to Clive Butkow, managing partner at Conducive Capital, the resilience has trickled down to the country’s startup ecosystem. “SA’s currency, inflation and other macroeconomic factors have held up better than peers,” Butkow told TechCabal. However, Butkow admits that being able to raise capital internally enabled the South African ecosystem to weather the great American VC flight. Over the last year and a half, South Africa has seen a rise in capital from banks, pension funds and family offices being funnelled into VC funds. According to data from the Southern Africa Venture Capital Association (SAVCA), 11% of South Africa’s private equity (PE) firms investments went to technology companies. This represents the highest investment of any sector by the country’s PE firms. SA tech sees boost in investment from private equity firms What is interesting about the companies that private equity investors are backing is that most of them recorded a “rapid growth in revenues”, according to the report by the SAVCA, perhaps showing investors’s principles for companies with solid unit economics. Additionally, the startups that raised follow-on capital, Carry1st and Planet42, are rapidly growing, having collectively raised hundreds of millions of dollars in venture and debt funding. Carry1st is a mobile game publisher while Planet42 is a rent-to-buy car subscription service. Carry1st’s latest round was $27 million while Planer42’s has raised $150 million. More data from the African Private Capital Association (AVCA) shows that the southern Africa region attracted the highest volume (26%) and value of deals ($2.6 billion) with South Africa in front amidst growth in sectors like IT, software, logistics, and transportation. In showing faith in South Africa’s tech startup ecosystem, investors have also reaped rewards, perhaps motivating them to further invest either directly in startups or VC funds. In 2023, exits in the South African ecosystem returned investors R318 million (~$17 million), representing a 3.8x return multiple on the R83 million (~$4.4 million) invested in such deals. SA startups returned $17 million in exit returns to investors in 2022 How long can South Africa’s resilience last, though? The funding winter is not showing any signs of abating. Every quarter, data reports from publications such as TC Insights paint a gloomy picture, with deal volumes and values declining. Even in South Africa, despite its tenacity, startups such as WhereIsMyTransport have had to shut down due to funding challenges. With some startups having raised bridge rounds, a longer funding winter is likely to affect dilution and cap tables, leading to a further cashflow crunch. So in light of the uncertainty of the funding environment for the foreseeable future, how long can the South African ecosystem keep holding out? According to van Zyl, this will vary from company to company. Still, overall, he expects the majority of startups which have learnt from the ecosystem’s values to hold out for as long as possible. “The great startups will remain tenacious.” Butkow also expects South Africa’s relatively stable macroeconomic fundamentals to sail startups through the stormy funding weather. Additionally, he also expects the country’s low-risk profile to help attract foreign capital into local VC funds and startups. “For investors, risk equals uncertainty and when you have limited capital, you want as little relative uncertainty as possible and SA offers that.”
Read MoreTechCabal Daily – Is Amazon prime for competition in South Africa?
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning This morning, the team at TechCabal would like to ask you to take a few seconds out of your day to speak out for press freedom. One of our colleagues, Daniel Ojukwu who works for the Foundation for Investigative Journalism (FIJ) has been wrongfully detained by the Nigerian Police Force for nine days. Daniel’s detainment is due to his investigative report involving mismanagement of funds by Nigerian officials. Daniel is yet to be charged to court as required by Nigerian law, and has been transferred to the Federal Capital Territory without due process. Please lend your voice to #FreeDanielOjukwu across social media, and help us ensure that all journalists can uncover the truth and hold leaders accountable. In today’s edition NIBSS in ₦1.4 billion lawsuit Takealot beats Amazon to a prime offer ASafaricom is East Africa’s most profitable company Elon Musk’s Neuralink malfunctions in test patient Funding tracker The World Wide Web3 Opportunities Economy NIBSS in ₦1.4 billion lawsuit What do you call an unexpected event? A black swan. The biggest black swan in Nigeria’s waters right now might be the fraud and financial impropriety allegations against the country’s financial infrastructure backbone, the Nigeria Interbank Settlement System (NIBSS). How? Last year, Temidayo Adekanye, a former chief risk officer of NIBSS, flagged fraudulent activity across different arms of the company, including AfriGo, a domestic card scheme launched in 2023, and NQR, a platform for QR-code payments. He also raised similar concerns about a cloud migration project, according to court filings. Adekanye then requested details of the company’s financial records and third-party contracts but was denied access. Shortly after, Adekanye was asked to resign and was offered ₦160 million ($112,700) in severance or risk immediate termination of his employment in a meeting with the company’s Head HR, HOD Legal/Company Secretary, Executive Director, Business Development, and CFO. His request to review the offer was refused, and eventually, he was fired. What’s next? The former NIBSS executive has sued, and is now asking the National Industrial Court to award damages of ₦1.4 billion ($986 million) for wrongful termination and breach of contract. Dig deeper. Read Moniepoint’s case study on family-owned businesses Family-owned businesses are everywhere, shaping our world in ways you might not expect. We’ve found some insights into how they work, and we’d love to share them with you. Dive in right away here. E-commerce Takealot and Amazon in early competition Days after the launch of Amazon in South Africa, the e-commerce company is being welcomed with stiff competition. What’s happening? Naspers-owned Takealot, South Africa’s top online retailer, is offering South Africans a subscription service similar to Amazon Prime. You see, Amazon Prime is a paid subscription service offered by Amazon that provides a variety of benefits to its members including free and faster shipping, streaming services and exclusive discounts. This feature, however, isn’t yet available to South Africans. Yesterday, Takealot announced a similar feature called “TakealotMore” which is scheduled for a May 13 launch. This feature offers free deliveries for subscribers which matches one of the major selling points of Amazon Prime. It will be offering the new subscription with a tiered approach to cater to different budgets. This means there will be two plans to choose from, the TakealotMore Standard plan costs R39 ($2.11) per month, while the Premium plan is priced at R99 ($5.36) per month. Competition is the fuel that ignites innovation: It’s taken over a decade–operating in South Africa since 2011—and the threat of a multinational behemoth for Takealot to offer its prime service. The company, however, has had years to observe customer preferences and develop its own offering. Presently, Takealot looks like it’s staying ahead in South Africa by offering high-quality products at friendly prices. Amazon is touting the same root, focusing on matching those same good prices for local customers. It’s still the early days but only time will which platform will be primed for the market leader status. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Companies Safaricom becomes East Africa’s most profitable company Kenya’s Safaricom is winning big with M-Pesa but it’s taking a hit on profits due to its Ethiopian expansion. A financial rollercoaster: On one hand, Safaricom’s net profits grew by a small 1.2% from $474 million in its 2022 financial year to $480 million for its 2023 financial year. On the other hand, a different metric—its operating profits—shows a 20% jump to $1 billion, which makes Safaricom East Africa’s first billion-dollar profit boss. M-Pesa magic: The push behind Safaricom’s growth is M-Pesa, Safaricom’s mobile money platform. It grew revenue by 20% (thanks to a surge in both business and personal payments). Data usage is also booming, with revenue up by 18%; this alone brought in about $1.4 billion. What this means is that Safaricom’s core business of providing mobile phone services and M-Pesa transactions is highly profitable. Even though the company’s overall net income was impacted by the Ethiopian expansion, Safaricom’s day-to-day operations in Kenya are generating significant earnings. Its Ethiopian expansion is a hungry venture: Safaricom’s big move into Ethiopia is exciting for the future, but it’s hurting profits now due to startup costs. The company spent about $700 million over the course of two years as it expanded into another East African country. Currently, it’s facing an uphill battle against the state-owned Ethio Telecom, which boasts 72 million mobile subscribers compared to Safaricom’s 9 million. Similarly, Safaricom’s M-Pesa service—with 3.1 million users in February 2024—needs significant growth to catch up to Ethio Telecom’s dominant mobile money platform with 41 million users. The good news? Kenyan unit profits are still up 13.7%. The bottom line: Safaricom’s core business in Kenya
Read MoreTop African Tech Industries Attracting Venture Capital Funding
This article was contributed to TechCabal by Seth Onyango via bird story agency. Africa’s tech ecosystem is attracting billions of dollars, thanks to dynamic startups whose innovation and creativity are reshaping industries and unlocking new opportunities. The young population and digital connectivity are further fueling growth. From the fintech startups driving financial inclusion to the agri-tech startups improving food security, the impact of these startups is nothing short of transformational. Here are the ten most-funded tech industries: 1. Fintech (31.5%): Fintech continues to dominate the African market, driven by a growing demand for digital financial services. Mobile money solutions are at the forefront, offering alternatives to traditional banking that appeal to millions of unbanked Africans. These digital options are attractive because they provide more portable and accessible financial services than traditional banking, which is often limited by paperwork and account maintenance requirements. 2. E-commerce and Retail Tech (11.3%): E-commerce is booming as internet penetration rises and consumer behaviour shifts online. Platforms like Jumia have paved the way, reaching millions across the continent. Retail tech is tapping into social commerce, logistics optimisation, and direct-to-consumer business models, meeting the growing appetite for convenient shopping experiences. 3. E-health (10.1%): E-health startups are addressing the challenges of inadequate healthcare infrastructure. Telehealth services are reducing the barriers to medical advice, while digital platforms like Helium Health in Nigeria are digitizing patient records. The rise in smartphone usage has made virtual care possible, improving access to healthcare even in remote regions. 4. Logistics (6.9%): With a fragmented infrastructure across many African regions, logistics startups are innovating to streamline the supply chain. Companies like Kobo360 offer on-demand logistics services, helping businesses transport goods efficiently. Drone deliveries are gaining traction in Rwanda and Ghana, showing the creativity of solving delivery problems in challenging terrains. 5. Agri-tech (5.9%): Agri-tech is key to enhancing productivity in a sector that employs over 50% of Africa’s workforce. Startups like Twiga Foods connect farmers directly to markets via mobile apps. They’re also using AI to predict crop diseases and optimize farming practices, addressing the critical challenge of food security. 6. Ed-tech (5.7%): The continent’s education system faces resource constraints, and ed-tech startups are filling the gaps. Digital platforms provide courses and vocational training to millions. Eneza Education in Kenya, for example, offers curriculum-aligned learning via SMS, while other companies are working to expand coding and technical skills training. 7. Energy (4.9%): Off-grid and renewable energy solutions are crucial as only 43% of the population has reliable electricity. Solar energy startups like M-KOPA offer pay-as-you-go solar home systems, while microgrids power entire communities. These innovations are helping bridge the energy access gap sustainably. 8. Transport (3.9%): Transport startups alleviate traffic congestion and provide mobility solutions in rapidly growing urban areas. Ride-hailing services like Bolt are popular, and some companies offer motorbike taxis for better accessibility. There’s also a focus on electric vehicles, and startups are working to provide charging infrastructure. 9. Recruitment and HR (3%): African job markets often struggle with skills mismatches and informal hiring processes. Recruitment startups are streamlining talent searches by digitizing the hiring process and leveraging AI for candidate matching. Companies like Shortlist in Kenya are finding ways to align employers with the right candidates, more efficiently. 10. AI (2%): Though small, the AI sector is growing as local startups tap into machine learning for various applications. DataProphet in South Africa uses AI to optimize manufacturing processes, while other startups are building natural language processing for African languages. AI in agriculture, healthcare and education promises further transformation.
Read MoreFirst Bank Limited appoints Ebenezer Olufowose as chairman
First Bank Holdings the parent company of First Bank Nigeria has appointed Ebenezer Olufowose as chairman of its banking subsidiary following the completion of Tunde Hassan-Odukale’s12-year tenure. In April, Adesola Adeduntan, the CEO of First Bank of Nigeria Limited, resigned after spending nine years in the position. Following his resignation, the group canceled the extraordinary general meeting planned for April 30, 2024, to approve plans for a capital raise. Adeduntan and Odunkale were the only survivors of a 2021 CBN-led boardroom shake-up that swept away all the bank’s directors. With both gone, the bank will look forward to getting back on the road for recapitalisation. Ebenezer Olufowose, the group managing director of First Ally Capital Limited, was appointed to the board of directors of First Bank of Nigeria Limited on April 29, 2021 The new chairman who holds a first-class honours degree from the University of Lagos, started his banking career in 1985 at NAL Merchant Bank Plc. He has worked for 36 years in the financial services industry with specific experiences in corporate finance, project finance, and investment banking to the board. Before joining the board, he was executive director at Access Bank Plc, and Citibank Nigeria, where he led Citigroup’s origination, structuring, and evacuation of corporate finance and investment banking transactions in Nigeria, according to a filing on the Nigerian Exchange.
Read MoreBosun Tijani’s internet access target at risk as rising taxes, costs squeeze telecom operators
In the seven months since Bosun Tijani became Minister of Communications, Innovation, and Digital Economy, internet access has declined from 45.57% to 43.53%. It’s an early challenge for a minister who set a goal of 70% internet penetration by 2025. Tijani’s early focus has been 3MTT, a program to train 3 million Nigerians on digital skills. He has also begun plans to create an AI framework. But without increasing internet access, these goals will be difficult to achieve. In March, the minister set up a $2 billion fibre fund to connect the 774 local government areas in the country. The World Bank and a few partners have indicated an interest in the project, but a source close to the minister said talks are still ongoing to get other partners involved. For telecom operators, these measures do not solve the immediate challenges. The telecom companies responsible for expanding internet access face several problems: fiber cuts, multiple taxes, excessive right-of-way fees, insecurity, high energy costs, and inflation. The Federal government also plans to reintroduce a 5% telecom service tax it suspended in 2023 as part of negotiations with the World Bank for a $750 million loan meant to boost electricity infrastructure in the country. If that telecom tax is reintroduced, it will increase the taxes companies pay to the federal, state, and local governments to 53, according to the Association of Licenced Telecom Operators of Nigeria (ALTON). On May 2, three operators, MTN, Airtel, and Globacom saw their operations disrupted by an agency of the Kaduna State government which sealed off six base stations over claims of unpaid N5.3 billion taxes. “Nigeria is not going to meet its broadband penetration target,” said Ikemesit Effiong, partner and head of research at SBM Intelligence. Data released by SBM Intelligence in April 2024 found that Nigerians now spend less on communication and entertainment despite relative price stability in voice and data tariffs. Airtel’s profit plunged by 99% in 2023 and revenue dipped 5.3% to $4.9 billion, forcing the company to outsource more of its tower operations to IHS. It also initiated a share buy-back programme to reduce its debt exposure. On Monday, April 22, 2024, the company bought back 11.9 million shares from Citigroup. On an investor call in March, Ralph Mupita, CEO of MTN Group said the company aims to cut its expenses by $368.51 million (7-8 billion rand) in the next three years, especially in Nigeria. It also plans to raise the prices of its data and voice services. The company also plans to reduce its capital expenditure in 2024 and focus on maximising the utility of its previous investments. “The company will optimise latent capacity and implement radio planning strategies to minimise potential impacts and disruptions to MTN’s network quality,” MTN noted in a corporate filing on May 3, 2024. Broadband penetration, which measures a population’s access to the internet, depends on the investments telecom operators make in infrastructure, three industry experts told TechCabal. Those investments have declined since 2021 when the industry hit a peak of over ₦1 trillion and foreign investment of $753 million. With domestic and foreign investments down by almost half from 2022, operators are trimming operational costs. That tradeoff has meant little improvement in the quality of internet service. The country’s internet speed remains one of the lowest in the world at 17.65 Mbps, ranking 148 out of 172 countries in January 2024, according to a report by Data Pandas’. The global average speed is over 50 Mbps, and South Africa leads the continent with a broadband speed of 54Mbps. Access is also unevenly distributed with urban areas experiencing more quality internet than rural areas. “Broadband infrastructure will only be deployed by operators in areas where they are confident there will be returns on their investments,” said Rotimi Akapo, partner and head of Telecommunications, Media, and Technology Practice Group, at Advocaat Law Practice. Operators are also choosing to invest in the states with friendly regulations. Only four states have waived expensive right-of-way fees, which are charged for laying fibre optic cables. Some experts believe this may lead to preferential broadband access. TechCabal also learned that tower operators are switching off some base stations due to difficulty in sourcing diesel to power them. In March 2024, the average price of a litre of diesel was N1,341 up from N840 in March 2021. Tower operators depend on electricity provided mainly by diesel-powered generators. Gbenga Adebayo, president of ALTON believes the industry should review service tariffs. Telecom service tariffs have not been reviewed in the past ten years despite macroeconomic changes. He also pointed out that every other industry has increased prices including government-owned service providers except telecom operators. “The federal government must put its teeth into this fight to compel states to either relinquish or at least significantly reduce the right of way fees that we have now,” said Ikemesit Effiong.
Read MoreAirtel mobile money to IPO in 2025
Airtel Africa will take its mobile money unit public in 2025 even as it plans to expand the service to more African countries. The service is currently active in fourteen countries. “We will list next year. We will continue to bring additional countries into the envelope. We are still a year from that IPO,” said CEO Olusegun Ogunsanya. He did not disclose details regarding the preferred stock exchange for the listing. Airtel Money is Airtel Africa’s fastest-growing arm, with a potential valuation surpassing $4 billion. Its performance stands in contrast to the company’s earlier released financial results, significantly impacted by challenging macroeconomic conditions that affected profitability for most of the financial year. These headwinds contributed to an $89 million loss after tax, a sharp decline from a $750 million profit recorded at the end of last year. Despite the overall financial challenges, the mobile money unit emerged as a bright spot alongside its data revenues. Airtel mobile money’s transaction value increased by 38.2% in constant currency with an annual transaction value of over $112 billion in reported currency. Year-on-year, mobile money customers grew 20% to 38 million, driven by a continued strong performance in East Africa and Francophone Africa. Airtel’s planned mobile money IPO follows a trend of investment in African mobile mobile money providers. Two years after its $100 million investment in Airtel Money, Mastercard acquired a minor stake in MTN’s mobile money arm. Airtel Mobile money is strongest in six markets, four of which are in East Africa: Zambia, Uganda, Tanzania, and Malawi. The other two are Gabon and DRC Congo, in the Francophone markets, the CEO said. Part of the winning strategy includes first mover advantages, key infrastructure and distribution. Ogunsanya said Airtel leads the Zambia and Malawi market. In Uganda, the competition is low because only two operators exist, while only three operators exist in Tanzania. “We were the first to deploy ATMs, giving us a significant head start,” Ogunsanya explained. “Our network boasts 29,000 exclusive mobile money branches, along with a well-established system. We have been effective in leveraging our infrastructure to our advantage.”
Read MoreM-Pesa and data revenue push Safaricom to first profit growth in 3 years
Kenya’s Safaricom, East Africa’s most profitable company, has posted a 1.2% increase in net profits to $480.84 million (KES62.99 billion) in the full year ending March 2024, driven by strong mobile money service and internet growth. Revenues from M-Pesa grew 20% year-on-year, reaching $1 billion (KES140 billion) from $891.3 million (KES117.2 billion) in 2023 while mobile data revenues rose 18% to $1.4 billion (KES189.8 billion). Voice revenue declined 0.6 % to $608.4 million (KES80.5 billion). M-Pesa’s growing profitability was driven by strong performance in B2B (39.8%) and P2P (15.4%) payments and rising uptake of the firm’s global payments platform which rose 20% year-on-year. The firm’s operating profit increased 20% to $1 billion (Sh140 billion), becoming the first East African listed firm to cross the billion-dollar milestone. Overall, the telco’s Kenyan unit profits jumped 13.7% to $644.4 million (KES84.74 billion) but were dragged to $324.4 (KES42.66 billion) because of higher costs tied to its entry into the Ethiopian market. Safaricom is betting on Ethiopia to grow its regional dominance as the growth in the Kenyan market slows. Peter Ndegwa, Safaricom’s chief executive, told investors on Thursday that the firm is looking to break even in 2015. “We are extremely pleased with what we have been able to achieve as a group despite the significant startup costs in our Ethiopia business. We expect that from 2025, Ethiopia will start being a significant growth contributor at group level for both top and bottom line,” Ndegwa said. Ndegwa added that the regulatory environment in Ethiopia has boosted the telco’s confidence in the market, which was its first major expansion outside Kenya. In April 2024, the Ethiopian Communications Authority (ECA), the telecommunication regulator, cut mobile termination rates (MTR), leveling the field for the players in the market. “We have doubled our active customer base to 4.4M, we have built a world-class network that is currently almost half Kenya’s size, and are on track to meet our license obligations,” Ndegwa said.
Read MoreNIBSS faces billion-naira lawsuit: ex-Chief Risk Officer alleges wrongful termination, fraud
A former chief risk officer of the Nigeria Inter-Bank Settlement System (NIBSS), Temidayo Adekanye, has sued the switching company for unlawfully terminating his appointment months after he raised concerns about financial impropriety. The former NIBSS executive is asking the National Industrial Court to award damages of one billion naira for wrongful termination and breach of contract, court documents seen by TechCabal show. He is also asking for ₦250 million in special and general damages, ₦150 million in compensation for infringement of his fundamental rights, and ₦10 million as the cost of legal proceedings. Alternatively, Adekanye, 52, asked the court to compel NIBSS to “pay him the full amount of salaries, allowances, and other emoluments that he would have earned on the unexpired remaining years upon attainment of 60 years.” He also prayed the court to mandate NIBSS to pay him 2% of its profit before tax declared for 2023 and “other entitlements applicable to the claimant in the circumstances.” At the heart of his lawsuit is the claim that he was wrongfully fired after sharing concerns internally about “serious financial misappropriation, corporate governance, and fraud” at NIBSS, the industry-owned operator of the Nigeria Central Switch. The allegations of financial impropriety and fraud at NIBSS will raise serious concerns about the integrity of Nigeria’s financial system. “We respect the judicial process and believe it is essential to allow the legal process to take its course without interference or speculation,” a spokesperson for NIBSS said via email. “The referenced case in the National Industrial Court is not founded on any crime but what the Claimant perceives as an unlawful termination.” Per court filings, Adekanye alleged fraudulent activity connected to Afrigo, a domestic card scheme launched in 2023, and NQR, a platform for QR-code payments. He also raised similar concerns about a cloud migration project. The former chief risk officer told the court that he requested information on the company’s financial records and third-party contracts from the Chief Financial Officer (CFO), Company Secretary/Head of Legal, and Managing Director, but was denied access. He took his complaints to the board audit and risk committee on November 13, 2023. Shortly after, Adekanye was asked to resign and was offered ₦160 million in severance or risk immediate termination of his employment in a meeting with the company’s Head HR, HOD Legal/Company Secretary, Executive Director, Business Development, and CFO on January 15, 2024. His request to review the offer was refused, and eventually, he was fired. The position of Chief Risk Officer was also eliminated within the corporate governance structure of NIBSS. “Rather than act swiftly on the concerns raised by him, the defendant [NIBSS] changed its corporate structure and organogram to eliminate the claimant’s [Adekanye] office in a calculated attempt to oust his jurisdiction and stultify his duties as the Chief Risk and Compliance Officer,” the court papers read. The National Industrial Court has fixed May 20 for the first hearing.
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