Nigeria telecom operators lost $11.3 billion over 11-year tariff delay
The Nigerian telecom operators are reeling from significant financial losses, with projections estimating a staggering $11.3 billion in revenue erosion between 2022 and 2026. This follows an 11-year delay in approving a much-needed tariff increase, according to an in-house report conducted by MTN Nigeria and obtained by TechCabal. The primary cause of this financial hemorrhage is the devaluation of the naira, which, coupled with prolonged regulatory inaction by the Nigerian Communications Commission (NCC), placed immense pressure on telecom operators’ ability to sustain operations. Industry executives, including MTN Nigeria’s CEO Karl Toriola and Airtel Nigeria’s CEO Dinesh Balsingh, claimed the delay pushed the telecom sector to the brink of collapse. With soaring operational costs, the telcos claimed their financial positions were unsustainable. “The price increase which was highly needed for the survival and continued growth of the industry, will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers,” Balsingh said. A tariff adjustment became inevitable following naira devaluation in 2022 and liquidity problems which often forced players to resort to the parallel market. By 2023, the exchange rate had slipped to $1 to ₦900, further driving costs and cutting into profit margins. Telecom operators, who rely on imported equipment, were caught in a vicious cycle of rising costs and plummeting revenues. In 2023, MTN Nigeria reported its first loss since its 2019 IPO, recording a ₦137 billion deficit largely driven by forex losses. Airtel Africa also faced its first-ever loss in Nigeria, with a post-tax loss of $89 million for the financial year ending March 31, 2024. “We were borrowing at 120% to fund our operations, which was unsustainable,” Toriola said during a media conference MTN Nigeria in Lagos on Tuesday. MTN Nigeria had consistently paid dividends to shareholders from 2007 to 2022, but the pressure from the foreign exchange decline made regular payments impossible. Dividends declined from ₦530 billion in 2022 to ₦196.67 billion in 2023. One of the most alarming side effects of the delay was the drop in taxes paid by telecom operators to the government. While taxes grew from ₦329 billion in 2023 to ₦428 billion in 2024, they are set to plummet to just ₦29 billion in 2025, a 92% decline. This will significantly impact government revenue. Toriola emphasized that MTN Nigeria had explored alternatives, such as import waivers, to alleviate the financial burden. However, these efforts would not have been sufficient to offset the enormous costs imposed by rising power charges, taxes, and right-of-way fees. “Any relief from waivers would have come at a cost to the government, which would have been irresponsible,” he said. In response to these escalating challenges, telecom operators had initially called for a 40% tariff increase in 2022. However, as the naira continued its downward spiral, the situation worsened, and demands for a 100% hike became urgent. According to the MTN report, the industry’s total revenue plummeted from $7.62 billion in 2022 to $6.87 billion in 2023, and further sank to $3.55 billion in 2024. The long-awaited approval for a tariff increase finally came on January 20, 2025, offering hope for an industry in crisis. With the new tariffs in place, the telecom sector is projected to rebound, with revenues expected to rise to $6.67 billion in 2025 and $8.33 billion in 2026. However, experts warn that the 11-year delay has already caused irreversible damage, with long-term economic consequences for both the telecom industry and the Nigerian economy.
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MTN 5G, and ipNX are Nigeria’s internet speed kings – Ookla’s H2 2024 report
Who offers the fastest mobile internet and fixed broadband in Nigeria? MTN and ipNX lead in Ookla’s report MTN Nigeria delivered the fastest mobile internet speeds while being the top choice for gaming, according to Ookla’s H2 connectivity report, which uses Speedtest intelligence data. Ookla evaluated performance across all mobile and fixed internet service providers (ISP) to determine the best performers using a connectivity score which combines speed, web browsing performance, and video streaming quality. In the second half of 2024, MTN recorded a median 5G download speed of 231.39 Mbps and an upload speed of 17.35 Mbps, making it the go-to network for gamers and video streamers. Airtel was a distant second for mobile internet speed, while Grandmasters of Data Globacom had the lowest speed score to round up the top three. MTN share price jumps 9.87% on news of tariff hike approval On the fixed broadband front, ipNX was the fastest provider, with a median download speed of 37.78 Mbps and an upload speed of 38.50 Mbps, solidifying its reputation as the leader in fixed broadband performance in Nigeria for the second half of 2024. Geographically, Lagos recorded the highest median mobile download speed at 40.26 Mbps, followed by Benin City (23.54 Mbps) and Ibadan (23.03 Mbps). In terms of fixed broadband, Port Harcourt led with a median download speed of 24.04 Mbps, followed closely by Lagos at 23.44 Mbps and Kano at 23.4 Mbps.
Read MoreLemfi completes acquisition of Irish currency exchange Bureau Buttercrane; begins European march
Lemfi, a financial services platform for immigrants operating in 22 countries, has acquired the Irish currency exchange platform Bureau Buttercrane, marking a key step in its European expansion. The deal, which received regulatory approval from the Central Bank of Ireland, enables Lemfi to use its Irish licence to operate across the European Economic Area (EEA), unlocking new growth opportunities. The acquisition is a strategic move to ensure regulatory compliance in Europe post-Brexit. While Lemfi already holds a British license from its 2021 acquisition of RightCard, it couldn’t process European transactions directly. The Irish license allows it to operate in all EEA countries using a system called passporting. ‘Rather than focusing on [Buttercane’s] tech stack or profitability, the acquisition was driven by our need to secure the right regulatory framework for our expansion,” said Ridwan Olalere, Lemfi’s CEO. “We already have the technology; this was a strategic acquisition to ensure smooth and compliant operations across Europe.” The deal comes 21 days after Lemfi told customers it could operate in Europe using a partnership with Dutch company Modulr Finance. “We established that partnership because we wanted to start operating in Europe while pushing for an approval from the Central Bank of Ireland,” Olalere said. That approval came quickly because Lemfi had “the right team and followed the correct processes.” “If another European regulator has already approved you in the past, it works in your favor because it shows credibility,” Olalere said. With the deal completed, Lemfi plans to make Dublin its European headquarters, hire local staff, and deepen its relationship with regulators as part of its long-term strategy. Given its track record in Asia and Africa—Lemfi processes $1 billion in monthly payment volume— the company is positioned to tap into the $64 billion European remittance market. Operating in multiple markets is necessary for growth for remittance startups, yet expansion comes with unique challenges. “Europe is a big, complicated market with different payment methods, rules, and preferences across countries. We’re optimistic about growth, but it’s a challenging landscape.” As Lemfi builds its European base, integrating local payment methods will be crucial. “In France, a common payment method is called “Carte Bancaire,” which isn’t Visa or Mastercard. If you enter the French market without supporting this method, you’re missing out on a significant user base,” Olalere said. Nevertheless, Lemfi remains optimistic, drawing on the lessons from its successful Asian expansion. Buoyed by a recent $53 million Series B raise and strong investor confidence, Lemfi is carving out space in the competitive remittance market and positioning itself to challenge competitors head-on. For remittance startups, operating in multiple markets is necessary for growth, as serving more corridors (US to India, Europe to Africa), increases its revenue base. More corridors mean a broader and stickier user base as customers are likely to remain loyal if they see the company as a one-stop solution for sending money to different places. Lemfi raises $53 million Series B round, acquires European firm
Read MoreM-KOPA wins trademark case against former agent imitating its name and logo
M-KOPA, a leading Kenyan asset financing startup, has won a landmark trademark case against a former agent who registered a business with a strikingly similar name and logo. The agent, John Waweru Njenga, operated MKopo Kastomer Care and Accessories, a phone and accessories business that copied M-KOPA’s branding to capitalise on its established market presence. The suit, filed by M-KOPA in August 2023, highlights a worrying trend in Kenya where smaller companies adopt names and logos similar to well-known brands to attract unsuspecting customers. On January 23, High Court Judge Peter Mulwa ruled in favor of M-KOPA, determining that Njenga’s business had infringed on its trademark and caused brand dilution by misleading consumers into thinking the two companies were affiliated. In his ruling, Judge Mulwa pointed out that the names “MKopo Kastomer Care and Accessories” and “M-Kopa Kenya Limited” were so similar that the average customer could easily confuse the two. This confusion could lead consumers to mistakenly believe the two businesses were connected or partners. “Having considered the names MKopo Kastomer Care and Accessories and M-Kopa Kenya Limited, I note a striking similarity between them. In my view, the average customer may not immediately discern the difference between the two and may, therefore, believe that both represent the same product or service,” Judge Mulwa stated in his judgment. The court also found that MKopo Kastomer Care and Accessories had used M-KOPA’s logo to advertise its products and services, further violating trademark laws. Trademark and copyright violations have long been an issue in Kenya’s informal markets, especially in urban areas like Nairobi. Poor enforcement of intellectual property laws allows unscrupulous traders to imitate the identities of successful companies, misleading customers and benefiting from the hard-earned trust that these brands have built. In M-KOPA’s case, the company’s legal battle was costly but necessary to protect its reputation. Court filings showed that Njenga’s business was riding on M-KOPA’s success, leveraging its established brand to drive sales of phones and accessories. Judge Mulwa’s ruling highlights the need for stronger intellectual property protections in Kenya. While trademark infringement cases are common, the lack of strict enforcement and prolonged court cases often allow these infringements to continue unchecked, undermining the ability of businesses to protect their trademarks and, ultimately, their revenue. “These acts constitute trademark infringement, as they confuse the plaintiff’s customers and undermine its exclusive rights to its mark. It dilutes the distinctiveness of the plaintiff’s brand and misleads the public into believing that the defendant’s business is affiliated or authorised by the plaintiff,” Judge Mulwa ruled.
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TechCabal Daily – Debit first, questions later
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning We’ve got something for our readers in Lagos, Nigeria. If you love talking about money or have thoughts about personal finance content, we want to hear from you! Our sister publication, Zikoko, is hosting an open and honest conversation about all things money-related, including feedback on their content. As a thank you for your time, you’ll receive a food voucher after the session. Just fill out this form and we’ll reach out to schedule a chat! CBN’s new fraud policy: debit first, questions later M-Pesa faces an old friend Zenith Bank increases staff salaries by 20% Nigeria hopes to subsidise electricity tariffs with new $15 billion pitch World Wide Web 3 Events Regulation CBN’s new fraud policy? Debit the banks first, ask questions later Image Source: YungNollywood In a move that might have some bankers sweating, the Central Bank of Nigeria (CBN) has issued a strong message: banks and fintechs are now directly responsible for fraudulent transactions that slip through their systems. The regulator has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit bank settlement accounts for any fraudulent funds received, burdening financial institutions with the responsibility to tighten their fraud prevention measures. This tough-love approach stems from the CBN’s growing concern over rising fraud rates in Nigeria’s financial services sector. Nigerian banks lost ₦42.6 billion ($27.7 million) to fraud in Q2 2024, highlighting the urgent need for stronger safeguards. The CBN has been increasingly scrutinising fintechs for compliance issues since early 2024, and this new directive suggests that the regulator is taking no chances. While the new policy is still taking shape, it’s clear that banks will improve their Know Your Customer (KYC) processes and fraud detection systems. As one banker told me, “If a bank allows a fraudulent transaction to pass through its system, it has to bear the consequences.” In December 2024 when a major bank lost ₦7 billion ($4.5 million) to fraud, NIBSS debited the settlement accounts of the fintech that received some of the proceeds of the funds without explanation, according to people close to the matter. The banking sector is bracing for the impact of this new policy, with some banks already implementing stricter controls on transactions. While the jury is still out on the industry-wide response to this move, one thing is clear: tightening accountability is a critical step in fighting fraud. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Fintech M-Pesa has a new an old challenger: Airtel Money Airtel Money MD, Anne Kinuthia Otieno and Naivas Chief of Operations, Peter Mukuha Kenya’s mobile money market, a one-horse race that favoured M-Pesa, is undergoing a dramatic shift. It is now a fiercely contested market, with customers growing increasingly price-sensitive. The operator offering lower prices will capture a larger market share. On Tuesday, TechCabal reported that Airtel Money, Kenya’s second-largest mobile money operator, doubled its market share from 2.9% to 7.6% in just one year, chipping away at M-Pesa’s customer base. Airtel Money’s strategy hinges on affordability, with lower transaction fees and free Airtel-to-Airtel transfers. Airtel Money’s growth strategy is to expand its retail agent network through strategic partnerships while attracting high-value users with higher transaction caps to make bulk transactions on cheaper charges. For example, sending KES 1,000 ($7.7) costs KES 11 ($0.093) on Airtel Money, compared to M-Pesa’s KES 13 ($0.093). Safaricom, M-Pesa’s parent company, now faces pressure on two fronts. Its telecom business is battling fierce competition from satellite internet service provider (ISP) Starlink, while its fintech arm is under siege from Airtel Money’s aggressive growth over the past year. M-Pesa’s advantage lies in its wider utility than Airtel Money. Beyond basic money transfers, M-Pesa offers users the ability to borrow loans through services like M-Shwari and KCB M-Pesa, as well as access insurance products—features that provide added financial flexibility and security. These services create a strong ecosystem that goes beyond simple transactions, making M-Pesa indispensable for millions of Kenyans. Additionally, M-Pesa remains the preferred option for merchant payments due to its acceptance and trust among businesses. However, can this trust sustain M-Pesa in this competitive market? While the industry often pays homage to M-Pesa for pioneering Africa’s fintech evolution, we may be witnessing a case of iterative technology surpassing its predecessor—or simply a battle of business wits. Right now, Airtel Money is winning. Whatever the case, M-Pesa is in a tough spot, and the pressure is mounting for one of Kenya’s biggest businesses. Will it bounce back? Banking Zenith Bank increases staff salaries by 20% GIF source: Tenor Zenith Bank, a Nigerian tier-1 commercial bank, has raised the bar in Nigeria’s banking industry by increasing salaries for nearly 10,000 employees by 20%, effective January 2025. However, it falls short of the 40% salary increase set by GTBank, another tier-1 lender, in September 2024. Aside Zenith Bank and GTBank, Union Bank and Sterling Bank have also raised staff salaries over the past six months, signalling an industry-wide move to address the high cost of living crisis in Nigeria’s inflationary environment (read: strategic move to retain talent.) The rate of job switching in the banking industry is high, as many professionals possess transferable skills that make it easy for them to secure positions quickly at competing banks. For example, banks often hire contract staff for their engineering teams, which makes it easier for these workers to move between institutions. The banks are well aware of this, which is why salary increases are often seen as necessary to retain staff in an environment where skilled professionals are always in demand. However, the question remains: can these salary increases keep pace with Nigeria’s rising inflation and the lure of opportunities elsewhere? How are smaller banks that make less money supposed to compete with the bigger banks with deep pockets
Read MoreAirtel Money eats into M-PESA’s dominance in Kenya, doubling market share to 7.6%
Airtel Kenya’s mobile money service, Airtel Money, grew its market share from 2.9% to 7.6% in the year to September 2024. The growth was fuelled by free Airtel-to-Airtel transfers, lower fees than Safaricom’s M-PESA for sending money across networks, and cheaper withdrawal charges. Over the same period, M-PESA’s market share declined from 97.0% to 92.3%, with Airtel Money steadily eating into its dominance, once reaching 98%, according to the data by industry regulator the Communications Authority of Kenya (CA). With over 40 million mobile money users in Kenya, affordability has become a key factor for Kenyans when choosing how to transact. “Subscriptions to mobile money services increased from 39.8 million to 40.6 million, translating to a penetration rate of 78.9% during the reference period,” the CA said in a statement. In 2020, Airtel Money eliminated charges for Airtel-to-Airtel transfers in an attempt to grow its market share. Sending KES 1,000 ($7.7) to other networks costs KES 11 on Airtel Money, compared to M-PESA’s KES 13 ($0.093), while withdrawing the same amount costs KES 29 ($0.22) on Airtel Money—KES 2 less than M-PESA. Airtel Money has also expanded access points to address past concerns about its limited agent network. In 2024, it partnered with supermarket chain Naivas to increase its agent network. The Central Bank of Kenya (CBK) has pushed for full mobile money interoperability for unrestricted transactions across networks. While progress has been made—customers can send money between networks and make interoperable utility and business payments—agent interoperability remains unrealised, despite CBK’s pledge to implement it by 2024. This missing element, which would allow users to access services at any agent regardless of their provider, keeps the ecosystem incomplete and sustains the dominance of larger players like M-PESA. By September 2024, the overall mobile money agency network had grown to over 365,000 agents, up from 347,700. Airtel Money’s adoption has also been supported by CBK’s 2024 decision to increase the transaction daily limit cap from KES 300,000 ($2322) to KES 500,000 ($3870) to attract high-value customers and businesses. Customers can keep funds received from other wallets for over a week, eliminating the previous requirement to withdraw or have the money sent back to the sender.
Read MoreNigeria’s Central Bank orders NIBSS to debit banks over fraudulent transactions, tightening accountability
To curb fraud in the financial services sector, Nigeria’s Central Bank has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of commercial banks that receive fraud proceeds. The directive, effective January 2025, signals a shift towards greater accountability for banks, compelling them to tighten their fraud detection measures. According to multiple sources familiar with the matter, the new rule is part of the CBN’s efforts to hold banks and fintechs accountable for lapses in their transactin monitoring systems. Banks that fail to vet incoming transactions or detect fraudulent activity adequately will face instant debits once that activity is reported. This move is designed to encourage financial institutions to improve their Know Your Customer (KYC) and due diligence—areas the CBN has repeatedly highlighted as critical to safeguarding Nigeria’s financial ecosystem. “What this means is that banks and fintechs are now responsible for the money that comes to them,” said Adedeji Olowe, founder of Lendsqr. “This has always been the foundation of KYC, not just in Nigeria, but in every financial jurisdiction in the world.” The new directive has unofficially been in effect since December 2024 when a major bank lost ₦7 billion to fraud. NIBSS reportedly debited the settlement accounts of the fintech that received some of the proceeds of the funds without explanation, according to two fintech executives familiar with the matter who asked not to be named discussing the regulator’s actions. This comes as the CBN increased its scrutiny of fintechs over compliance issues in early 2024. NIBSS did not respond to a request for comments. The CBN did not respond to a request for comments. “The CBN is holding them [banks and fintechs] accountable this time around. If a bank allows a fraudulent transaction to pass through its system, it has to bear the consequences,” said one banker who asked not to be named due to the sensitive nature of the matter. Nigerian banks lost ₦42.6 billion to fraud in Q2 2024, according to a report by the Financial Institutions Training Centre (FITC). However, most financial institutions avoid reporting fraud incidents for fear of suffering reputational harm in a low-trust market. Only 60 of 163 financial institutions in Nigeria reported fraud cases in 2023, according to a NIBSS report. The new CBN directive is expected to generate significant ripples within Nigeria’s financial sector, with commercial banks likely to respond by implementing more rigorous controls on transactions. At least two commercial banks have tightened their monitoring of large or unusual transactions, according to people familiar with the matter who asked not to be named to speak freely. As the directive takes effect, its impact on reducing fraud in Nigeria’s financial sector will serve as a critical test for the CBN.
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Zenith Bank raises pay by 20% for nearly 10,000 employees to keep in step with tier-1 banks
Zenith Bank has raised the salaries of its nearly 10,000 staff by 20%, effective January 2025, as part of a wider industry trend to retain top talent amid Nigeria’s soaring inflation. The salary increase, confirmed by three employees who asked not to be named discussing a sensitive matter, follows similar moves by GTCO, Union Bank, First Bank, and Sterling Bank over the past six months. “In order to continue to motivate its staff and improve service delivery, Zenith Bank implemented a salary increment of between 20% – 30% involving all staff effective January 2025,” the bank told TechCabal via email. “The Bank also promoted well over 4000 staff on January 17, 2025. This exercise, which is still ongoing, has been described as one that involves the highest number of staff in one promotion in the industry.” With Nigeria’s high headline inflation, commercial banks are under pressure to keep their workforce motivated and prevent talent poaching. Though Nigerian banks employ around 94,000 people, retaining skilled professionals remains a challenge, as job-hopping is often seen as the quickest route to career advancement. Secrecy around salary structures is one way banks try to hold on to their employees, but salary increases by major players like Zenith often trigger a domino effect, forcing competitors to follow suit. The adjustments mean that executive trainees (ETs), previously earning ₦245,000 monthly, will now take home ₦294,000. Assistant banking officers (ABOs) on a ₦609,000 salary will see their pay rise to ₦730,800, and banking officers (BOs) on ₦800,000 will now earn ₦960,000. The 20% – 30% raise will mean a bigger wage bill for Zenith Bank. As of September 2024, the bank’s personnel expenses reached ₦97.496 billion, accounting for 22.86% of its overall expenses in the period under review. Zenith Bank has the second lowest wage bill among tier-1 commercial banks. GTBank, Nigeria’s cost-efficiency leader in commercial banking, spends the least on personnel expenses. It is an industry-wide response, prompting several tier-1 and tier-2 banks to review their compensation structures. In recent months, competitors Guaranty Trust Bank, Union Bank, and Sterling Bank have also announced salary adjustments, though percentages vary. It also suggests that these measures are not only a response to economic pressures but also a strategic effort to reduce the risk of employee attrition, particularly as skilled professionals seek better opportunities abroad.
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TechCabal Daily – The zenith of raises
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning If you know a first-class or exceptional 2:1 graduate in Lagos, Nigeria looking to kickstart their journalism career, you should point them to The TechCabal Journalism Fellowship. Our promise to our fellows includes hands-on newsroom experience, mentorship from top journalists, a competitive stipend and full-time job opportunities. Sounds like you or someone you know? Then get started now. Zenith Bank raises $226 million from rights and public offer issuance UK’s Actis sells Java House to two Africa-focused private equity firms Meme Coins: Hype, Riches, or Risky Business? World Wide Web 3 Events Banking Zenith Bank raises $226 million from rights and public offer issuance Image Source: Stitch Ten months after Nigeria’s Central Bank raised minimum capital requirements, commercial banks are sprinting to meet the March 2026 deadline. A bank that will not be named told us about its slice of orange but still fell short of its capital needs, raising only ₦209 billion ($135 million) of its ₦369 billion ($238 million) target. But Zenith Bank, the tier-1 heavyweight with a market capitalisation of N1.56 Trillion, has no such worries. Per a Monday filing, it raised ₦350.46 billion ($226 million) from a rights issue and public offer that opened in August 2024. The rights issue and public offer were oversubscribed, helping the bank finish this big ask with time to spare. The bank plans to use all that cash to expand further into Africa and Europe because why dream small when you have all that money? Yet, it’s not the only bank swimming in cash. Access Bank was first to the recapitalisation finish line, raising ₦351 billion ($228 million) in December 2024. For other tier-1 banks, meeting the ₦500 billion ($321.5 million) target feels like a foregone conclusion, but smaller commercial banks, which need to raise ₦250 billion ($160.7 million) will face an uphill task. Will we see mergers and acquisitions just like in 2004? If your history is slightly rusty, capital requirements also saw Nigerian banks shrink from 89 to 25. The deadline might be one year away, but time flies when you’re trying to raise a boatload of money. So, expect to see some action in Nigeria’s banking sector this year. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. M&As UK’s Actis sells Java House to two Africa-focused private equity firms Image Source: Kenyan Wallstreet Java House, the largest coffee chain in East Africa, is again changing ownership. London-based private equity firm Actis is selling the business to two Africa-focused investment firms: Alterra Capital and Phatisa Group. This marks the fourth sale of the coffee chain in just 12 years, reflecting its enduring buy value that still appeals to investors. Since 2023, Actis has reportedly been looking for buyers for Java House and several suitors—like Mauritius PE firm Adenia Partners—have long circled around with offers. The sale finally went to Alterra and Phatisa for an undisclosed amount, with the deal expected to be finalised by the end of January 2025. Alterra will hold the majority stake, while Phatisa will take a smaller share but maintain control rights. Java House, which began as a single coffee shop in Nairobi in 1999, has grown to over 80 branches across Kenya, Uganda, and Rwanda. The group also operates other well-known brands, including Planet Yogurt and 360 Degrees Pizza. Multiple ownership changes have shaped its journey. Emerging Capital Partners acquired the chain in 2012 and fueled its expansion: it expanded into Uganda in 2014. The following year, there were talks to expand the business to Nigeria, but this didn’t work out. In 2017, Dubai-based Abraaj Group acquired it in a deal reportedly worth over $100 million. After Abraaj’s financial collapse, Actis took over in 2019—at a time when Actis was actively buying African businesses in growth markets like retail, telecoms, education, and renewable energy. Actis has raised $25 billion since its inception. It raises money from family offices, development financial institutions (DFIs), sovereign wealth funds, endowments, and pension funds to invest in these growth markets. To date, Actis has invested in 40 ventures and exited 34. The Java House exit is another day in business for the PE firm. Yet, the sale to Alterra and Phatisa presents a new chapter for the coffee business. Both firms are committed to scaling African businesses, with Alterra focusing on sectors like food and hospitality and Phatisa specialising in the food value chain. Their partnership could breathe fresh life into Java House’s operations and expand its market presence. As Java House transitions to new hands, its legacy as a pioneer in East Africa’s coffee culture remains intact. The deal could pave the way for further growth, securing its status as a household name in the region. Cryptocurrency Meme Coins: Hype, Riches, or Risky Business? Image source: Wunmi Eunice/TechCabal Meme coins like $TRUMP are flooding social media, luring investors with promises of quick riches and skyrocketing gains. But are they worth the gamble, or just fleeting internet trends? Take $TRUMP, for instance. At its peak, this politically branded meme coin saw trading activity that pushed 20% of its value to $14 billion in a single day. But just a week later, its price plummeted from $75.35 to $42.80, leaving many late investors counting losses. Driven by internet culture and the fear of missing out (FOMO), meme coins often gain value through buzz rather than substance. One tweet from a celebrity can send prices soaring—or crashing just as fast. Yet the risks are real: some everyday users have watched their savings vanish, while seasoned traders admit to losing hundreds of dollars on coins like Saylor Coin. With regulatory scrutiny increasing and scams like “rug pulls” becoming more common, navigating the meme coin market requires more than luck. Should you take the plunge, or is
Read MoreMade a fortune from $TRUMP? Should you buy meme coins?
Meme coins like $TRUMP are dominating social media feeds, promising quick riches and skyrocketing gains. But are they worth the gamble, or are they just fleeting internet trends? Meme coins are a type of cryptocurrency driven largely by internet culture, memes, and social media hype. Unlike Bitcoin or Ethereum, which are built on robust technologies and have clear use cases, meme coins typically have little to no real-world utility. Their value comes from buzz, not substance. From Dogecoin to $TRUMP The story begins with Dogecoin, a cryptocurrency born as a joke in 2013. What started as a parody of Bitcoin gained serious traction when online communities and later high-profile figures like Elon Musk embraced its charm. Dogecoin’s success sparked many imitators, including Shiba Inu and Floki Inu, and set the stage for meme coins like $TRUMP, which lean on political branding and viral marketing. As former Coinbase CTO Belaji Srinivansan said on a thread on X (formerly Twitter), meme coins operate as ‘zero-sum lottery.’’ Early investors reap the benefits, while those that join late are left holding assets that rapidly lose value. The dynamic makes meme coins both exciting and risky. Why do people keep investing in meme coins? The rise of memecoins can be attributed to internet trends, the excitement of making quick money, and how people think and act. These coins are like inside jokes on the internet that everyone can join in on. People buy them not just to make money but also to feel they are a part of something fun and trendy. What makes memecoins popular also makes them risky. Their value often depends on social media buzz, with platforms like X (formerly Twitter) playing a big role. A single tweet from a celebrity and influencer can make the price skyrocket or crash just as quickly. Take the $TRUMP coin for example. This meme coin used Donald Trump’s political brand to get attention. It saw massive trading activity, and 20% of it was worth $14 billion in just one day. But its value, on Wednesday, has dropped to $42.80, from its all time high of $75.35 recorded on January 19, showing how unstable the market can be. Another big factor is FOMO, or ‘the fear of missing out.’’ When people see others making money, they rush to invest without fully understanding the risks. Sometimes, this gamble works, but many end up losing a lot of money. This was the case for 24-year-old Tosin, who got into meme coins in 2022 by trading a coin called Freecoin. “There was so much hype about it, and everyone around me was buying. I didn’t want to sit back while others were making generational wealth. So, I jumped in and bought a few units with my last cash,” he shared. Tosin invested about ₦5,000, but the value of Freecoin plummeted, leaving him with no profits. “Buying when a meme coin is trending is always a bad idea,” he said. Ater the launch of the $TRUMP coin, 25-year-old Sandra Ubochi, a crypto trader with five years of experience, decided to invest in another meme coin called Saylor Coin. “I put in $500, expecting to make at least $2,000, but things didn’t go as planned. The value dropped so much that it fell below $1,” she explained. Should you buy meme coins? The question of whether to invest in memecoins boils down to your risk tolerance and understanding of the crypto market. Experienced crypto traders can make quick profits from memecoins by riding short-term trends. But for most people they are a risky bet. Without proper research and a clear plan for when to buy or sell, the potential losses can outweigh the gains. Memecoins like $TRUMP show both the excitement and danger of the crypto world. Some people strike it rich quickly, while others lose big. If you are thinking about investing, remember that success in this space isn’t about luck. It requires careful research, a skeptical mindset, and an understanding that the difference between making money and losing it can be razor-thin. Sandra views trading meme coins as a fun activity, without expecting major profits. “Only trade money you can afford to lose, and make sure you understand how the market works before getting involved,” she advises. For potential investors, the takeaway is clear: approach memecoins with caution, knowledge and willingness to accept losses. Whether they are a fleeting trend or a lasting part of a crypto culture, memecoins like $TRUMP remind us of the thin line between opportunity and risk in the digital age. The celebrity effect Celebrity endorsements play a significant role in the rise of meme coins. Donald Trump’s $TRUMP coin is a prime example. Launched amid significant online buzz, it drew immediate attention and trading activity. Similarly, Afrobeat superstar Davido was tied to a hypothetical meme coin. In June 2024, TechCabal reported that the Nigerian Securities and Exchange Commission issued a disclaimer alert to investors regarding $DAVIDO coin backed and promoted by Davido. This was done after $Davido coin raced to a $10 million market capitalization just four hours after it launched. The celebrity effect cuts both ways. Public sentiment can shift rapidly if a celebrity distances themselves from a coin, its value can plummet, leaving investors at a loss. Celebrities like Kim Kardashian, who was fined in 2022 by the U.S. SEC for failing to disclose compensations for promoting cryptocurrencies. Regulatory and legal concerns Meme coins also present unique challenges for regulators. Unlike established cryptocurrencies, which are often designed with clear purposes, meme coins exist in an obscure legal space. The U.S. Securities and Exchange Commission (SEC) has indicated that some meme coins may qualify as securities under the Howey Test (a rule set by the U.S. Supreme Court to figure out if a deal is an investment contract. If it is, the deal is considered a security), subjecting issuers to potential lawsuits and penalties. Anti-money laundering (AML) compliance and Know Your Customer (KYC) requirements add another dimension to scrutiny, as meme coins often
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