Raising interest rates to lower inflation works
If I had a dollar every time someone asked why Nigeria’s Central Bank keeps raising interest rates to fight inflation, I’d be on a yacht in the Maldives and not write a weekly column. The CBN has raised interest rates four times this year, yet inflation remains at its highest level in nearly three decades: 34.2%. The myth: Raising interest rates to fight inflation doesn’t work. The facts: Raising interest rates is a monetary tool to manage inflation. Generally, the way it works is that the central bank raises the interest rates for loans. Banks, in turn, raise the price you pay to borrow money from them. The theory is that when borrowing becomes more expensive, it discourages spending and reduces demand for goods and services. Prices will eventually fall. “If raising interest rates to moderate inflation really works, then why does Nigeria’s inflation rate keep accelerating?” Raising interest rates isn’t a magic wand that makes inflation disappear overnight. When the Bank of England (BoE) started raising rates in December 2021, inflation was 5.4% and rose to 11.1% in October 2022 despite sustained hikes in interest rates. Between December 2021 and August 2023, the BoE raised interest rates fourteen consecutive times to a 16-year-high of 5.25%. It held rates until July 2024. The country’s inflation is now 2%. On Thursday, August 1, BoE cut the rate to 5%—for the first time in four years. Yet Governor Andrew Bailey told BBC the mission wasn’t “accomplished yet.” Fighting inflation is not a two-day task, and the rates will not always translate quickly. The current CBN leadership started its inflation fight in February 2024. There’s no fixed timeline for how long the transmission mechanism takes but Bank of Canada estimates between 12 and 18 months. The Bank of England says 12 months to two years. No surprises there, as it kept rates up for two years. CBN governor Olayemi Cardoso expects Nigeria’s inflation to moderate to 21.4% this year. Ultimately, one thing is clear: raising interest rates to lower inflation works.
Read MoreLagRide could lose ₦10m daily due to nationwide protests
₦10.52 million. That is the figure LagRide, the government-backed ride-hailing platform, could lose daily after drivers were asked to stay off the roads due to a nationwide protest, according to calculations by TechCabal. If the strike lasts ten days as planned, the ride-hailing company could lose ₦94.69 million. On Wednesday, LagRide told its 1,000 drivers to stay home and suspend their daily repayments during the strike. Drivers pay ₦700,000 ($791) for brand-new GAC vehicles and spread the rest of the payment for four years through daily payments of ₦10,522. “Any captain found driving or making offline trips or impersonating tomorrow will have their vehicle repossessed without options of settlement,” the company said in a statement seen by TechCabal. Only LagRide directed its drivers to stay off the road. Its competitors like Bolt, Indrive and Uber did not. However, officials of the e-hailing drivers union instructed drivers to stay home for fear of reprisal attacks. “We did not stop operations, we only advised safety,” national treasurer of App-Based Transporters of Nigeria (AUATON), Jolaiya Moses said in a text message. “We encouraged everyone to stay safe, if possible stay at home. It’s a volatile period.” The suspension of LagRide driver’s accounts will significantly impact the drivers’ ability to earn money to cater to their needs during the protest period. In July 2024, drivers’ daily asset repayments were increased 17% from ₦8,955 ($5.72) to ₦10,522 ($6.72) due to accelerating inflation and macroeconomic headwinds. The inability to make daily repayments could, in turn, result in losses for the government and the private investors should the protest extend.
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UNILAG 2024 admissions and Post UTME Screening Exercise
The University of Lagos (UNILAG) has just announced the commencement of its Post UTME screening for 2024 admissions into all undergraduate programmes. The screening process is an essential step for prospective students who selected UNILAG as their first choice in the 2024 Unified Tertiary Matriculation Examination (UTME). Eligibility criteria for Unilag Post UTME screening for 2024 admissions To participate in the Unilag Post UTME screening for 2024 admissions, candidates must: Have chosen UNILAG as their first choice in the 2024/2025 UTME. Achieve a minimum score of 200 in the UTME. Possess five (5) credit passes at one sitting in relevant O/Level subjects, including English Language and Mathematics. Upload their O/Level results on the JAMB Central Admissions Processing System (CAPS) by 9th September 2024. Be at least sixteen (16) years old by 31st October 2024. Ineligible candidates for Unilag Post UTME screening for 2024 admissions Candidates should note the following disqualifications: Former students whose admissions were withdrawn due to poor academic performance or absence status can only reapply for a different programme. Students expelled from UNILAG cannot be re-admitted. Candidates who do not participate in the Post-UTME Online Aptitude Test will not be considered. Registration details for Unilag Post UTME screening for 2024 admission The Unilag Post UTME screening for 2024 admission registration begins on Monday, 5th August and ends on Friday, 23rd August 2024. Registration procedure 1. Visit the UNILAG website at www.unilag.edu.ng. 2. Navigate to the Admissions section. 3. Select “Post-UTME Application”. 4. Log in with UTME Application number as username and surname in lowercase as password. 5. Generate and print payment advice. 6. Pay online with the available payment options or proceed to any commercial bank to make payment. 7. Return to the UNILAG portal to complete the screening form. 8. Print the Post-UTME Examination Pass. Screening fee The fee for the Unilag Post UTME screening for 2024 admission is N2,000. Unilag 2024 Post-UTME test schedule The online Post-UTME Aptitude Test will occur from Monday, 2nd September to Friday, 6th September 2024. Enquiries For further details, candidates may contact UNILAG via: Email: admissions@unilag.edu.ng Phone numbers: 09053006772, 08027953216, and 08141656802. Final thoughts Adhere strictly to all guidelines. Ensure necessary clarifications are obtained. UNILAG maintains a zero-tolerance policy for drug abuse and will withdraw admissions of candidates who test positive for drug use before or after registration. Candidates must follow these steps meticulously to complete the Unilag Post UTME screening for 2024 admission successfully.
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👨🏿🚀TechCabal Daily – Kenya rules against crypto tax
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF To close out the week, we’re once again asking you to move this newsletter to your Main/Primary folder so that we can be smack dab in your faces. A small glitch means our newsletter is landing more in the Promotions folder, so a qquicck drag-and-drop will help solve this. Don’t make us ask again . Thank you. In today’s edition WhatsApp threatens to exit Nigeria Chowdeck’s ad business Kenya removes Digital Asset Tax (DAT) Shago sues Fidelity Bank over $488,000 chargeback Funding tracker The World Wide Web3 Events Regulation WhatsApp threatens to exit Nigeria Nigerians may have to imagine life without WhatsApp. Meta says the Federal Competition and Consumer Protection Commission’s (FCCPC) demands would make it “impossible to provide WhatsApp in Nigeria or globally”. On July 19, 2024, FCCPC handed WhatsApp a $220 million fine over claims that the social media company breached user data policy on Nigerian users and forced them to accept dubious data requests. In addition to the fine, the FCCPC is also asking WhatsApp to stop sharing user data with its other Facebook companies and third parties. This situation puts Nigeria in a pickle. On one hand, the government’s flex shows it’s not afraid to take on tech giants. On the flip side, it risks pushing away a company that millions of Nigerians rely on daily for income and entertainment. Meta’s data use allows it to continue to float its other money-spinning business—advertising. More than 10 million digital advertisers use Meta Ads daily to reach their target audience, thanks to the data Meta collects. Last year, 98% of Meta’s $134.9 billion revenue came from advertising. However, this scrappy data collection practice has put it in trouble in many parts of the world. Currently, Meta is facing regulatory complaints in 11 countries and recently agreed to pay a $1.4 billion Texas fine for a biometric data breach. It seems shady that the non-data compliance in Nigeria is given a different treatment. Meta’s bluster is a tactic to strong-arm the country, according to FCCPC chairman Babatunde Irukera. In his X post, he says, “if [Meta] didn’t violate the law, it should appeal and let the legal process run its course.” Read Moniepoint’s 2024 Informal Economy Report 89% of businesses in the informal economy pay levies and market fees. The informal economy is typically described as untaxed, but is that true? Click here to find out more. Startups Is Chowdeck ads a profitable side hustle for the company? Growth-stage startups often have to think outside the box to create new pathways to profit. Sometimes these revenue opportunities are low-hanging fruits already layered on top of a product they deliver for free. Chowdeck is delivering a complementary ad product to make more money. Its value proposition for third-party businesses goes like this: for ₦250,000 ($150.5) per week, place ads on Chowdeck and reach 600,000 users. Much like food delivery companies in the US, Chowdeck is profiting off its free app to create an additional income source for its business. Already, it has attracted the likes of Guaranty Trust Bank which advertised its share offering on the platform this week. Other food delivery companies have tried a version of this ad product to generate income before. For example, Heyfood, another food delivery startup,, offers banner advertising spaces for aggregator restaurant companies on its roster. Businesses on the platform that want more visibility can advertise to users in order to increase orders. Chowdeck also has one thing going for it. Its large user base and the age demographic that uses its app make it a valuable destination for businesses to place ads. And as its users increase, it further strengthens Chowdeck’s position. As a growth-stage startup, staying in business long enough likely creates an opportunity to win. And how do you stay in business long enough? By figuring out ways to bring in more cash and burn less money. Chowdeck has just figured it out with an ad product. 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. Crypto Kenya removes Digital Asset Tax (DAT) Like opening this newsletter daily, death and tax are a given. However, crypto exchanges in Kenya will be avoiding taxes for now. In 2023, Kenya introduced a Finance Bill that mandated crypto exchanges to pay 3% of their revenue from trading cryptocurrency and other digital assets as part of a Digital Asset Tax (DAT). While some critics argued that the government should have aligned the DAT with the 1.5% Digital Service Tax (DST) which caters to taxes on digital services including crypto transactions, others were against the entire Finance Bill. Senator Okiya Omutatah, who is thought to be the defender of most public interest cases in Kenya and some activists—Eliud Matindi, Benson Otieno and Blair Oigoro—took the National Treasury to court to defend the bill. Okiya argued that additional taxes could affect the quality of Kenyan lives. Yesterday, Kenya’s Court of Appeal ruled against Okiya case, ruling the 2023 Finance Act unconstitutional, null, and void. The ruling means that crypto exchanges in the country will no longer be required to pay Digital Asset Tax (DAT) which was included in the Finance Act. The National Treasury will appeal the decision at the country’s Supreme Court. The ruling comes after Kenyan authorities bowed to public protests, reversing some of its newly proposed tax. President Ruto introduced new taxes in the 2024 Kenya Finance bill—that sought to place a tax on everything from the price of bread, motor vehicles, mobile money transfers, and banking services—in hopes of increasing government earnings to help pay back its debts. Banking Shago sues Fidelity Bank over $488,000 chargeback A Nigerian fintech dragging a commercial bank to
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Inside Shago Payments and Fidelity Bank’s ₦811 million chargeback tussle
Shago Payments, a fintech company owned by B2B e-commerce platform Alerzo, has taken Fidelity Bank to court over a chargeback dispute. Shago, which offers payments and agent banking services like Moniepoint and Opay, had its settlement accounts with Fidelity Bank. Three sources with direct knowledge of the situation said a series of chargeback claims were filed with Fidelity Bank between June and August 2023. Those claims amounted to ₦811 million and were deducted from Shago’s Fidelity Bank account without their knowledge. The case highlights the dynamics of chargeback claims. In a typical “four-party model,” when cardholders dispute a transaction, their bank contacts the card processor (in this instance, Interswitch) and asks for a chargeback. The chargeback is deducted from the acquiring bank (Fidelity, in this instance), which in turn debits the merchant (Shago Payments) that provided the service to the cardholder. Merchants can appeal these chargebacks by showing evidence that the cardholder’s transaction was legitimate and should not be reversed in a process called representment. Shago alleges that Fidelity Bank “unilaterally resolved” the chargeback claims resulting in “unauthorised debits” on its accounts. The four-party model According to one person with knowledge of the matter, Shago reported the incident to the Economic and Financial Crimes Commission in September 2023. The fintech startup also held several meetings with Fidelity Bank’s leadership between July 2023 and early 2024 to resolve the chargeback, but the talks stalled. Eventually, Shago went to court and asked a Federal High Court in Lagos to award ₦10 billion in damages for the incident. It also asked the court to restrain Fidelity Bank from making any further debits to its accounts and for the ₦811 million the bank already deducted to be held in trust until the determination of the suit. Global Accelerex, a Payments Terminal Service Provider, and Interswitch, a switching company, are listed as defendants in the suit. “The 1st defendant’s failure to honour the plaintiff’s various demands, particularly by the plaintiff’s letters of 13 July 2023 and 21 July 2023, as well as emails of 31 August 2023, 22 September 2023, 5 October 2023, and 8 November 2023 amounts to a breach of the 1st defendants (re)payment obligations to the plaintiff,” said an excerpt of Shago’s court filing. Shago declined to comment. A spokesperson for Fidelity Bank did not respond to a request for comments. Interswitch and Global Accelerex declined to comment, citing judicial considerations. On July 17, the court asked Fidelity Bank to pay ₦811 million to a court-designated account pending the determination of the suit. The court restrained Fidelity Bank from taking further action on the alleged chargeback claims by setting off the credit balances in Shago’s account numbers. The case was adjourned to August 1, 2024 for mention.
Read MoreOurPass acquires MFB licence as it hopes to serve enterprise customers
Five months after securing an approval in principle, OurPass, the e-commerce one-click checkout company that pivoted to business banking, has acquired a Microfinance banking licence from Nigeria’s Central Bank. When it begins operation in September 2024, OurPass will offer business accounts, loans and business management tools for businesses. “We have done all the major integrations, we are left with one last integration with NIBSS [Nigeria Interbank Settlement System], “ said Samuel Eze, the company’s CEO. When fully operational, OurPass will compete in Nigeria’s business banking space with established players Brass, Moniepoint, and Prospa. Unlike its competitors that primarily serve small businesses, Ourpass will focus on large corporates like Shoprite, Medplus, UAC Foods and SPAR. “We are focusing on giving credits for large-corporates, focusing on inventory financing, Asset financing and invoice discounting. “ While its competitors primarily have digital presence, OurPass will build physical presence in all 774 local government areas across Nigeria. The bank will establish presence in business cluster areas—like computer village—and open markets, according to Eze, who declined to share specifics about the implementation. OurPass will release its banking-as-a-service product before the end of the year and also create a specialised products for creatives. Eze claims the startup will be profitable within the next 12 months. “We are somewhere in between a traditional bank and a fintech.” While established banks prioritise revenue, excel in risk management and governance, neobanks have redefined customer experience and operational efficiency. OurPass says it will offer the reliability and financial prudence of a traditional bank alongside the speed and user-centricity of a fintech. “At the heart of our business strategy is sustainance. We are constantly thinking about revenue. We are now focused on achieving the best net income ratio.”
Read MoreExclusive: WhatsApp could exit Nigeria over FCCPC demands, $220 million fine
One week after Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) fined WhatsApp $220 million for a data privacy violation, the commission’s additional demands could lead to WhatsApp suspending operations in the country. At least four people familiar with the conversation said Meta was considering “withdrawing certain services” in Nigeria. In addition to the hefty fine, FCCPC asked WhatsApp to stop sharing user data with other Facebook companies and third parties without explicit consent. The social media platform must also provide information about data collection and restore user control over data usage. “We want to be really clear that technically, based on the order, it would be impossible to provide WhatsApp in Nigeria or globally,” a spokesperson for WhatsApp told TechCabal via email. “This order contains multiple inaccuracies and misrepresents how WhatsApp works. WhatsApp relies on limited data to run our service and keep users safe, and it would be impossible to provide WhatsApp in Nigeria or globally without Meta’s infrastructure. We are urgently appealing the order to avoid any impact on users,” the statement added. Meta did not comment on the FCCPC’s claim that WhatsApp did not allow users to opt out of the 2021 policy. However, it insisted that its January 2021 Privacy Policy update does not include sharing user data. “While traditionally mobile carriers and operators store this information, we believe that keeping these records for two billion users would be both a privacy and security risk and we don’t do it,” the privacy document reads. If Whatsapp ceases operations in Nigeria, it will have enormous consequences for individuals and small business owners. Many SMEs rely on WhatsApp, Instagram, and Facebook to reach their target customers. Three privacy lawyers questioned the FCCPC’s reference to the National Data Protection Regulation (NDPR) as a basis for the fine. Enacted in 2019 by the National Information Technology Development Agency (NITDA), NDPR is the primary data protection framework in Nigeria. Two lawyers who asked not to be named say the NDPR will not stand up to scrutiny in court and asked if a government regulation could be authoritative in a matter as significant as privacy. While Meta is undoubtedly subject to regulatory oversight, the proportionality of the $220 million fine levied by the FCCPC is questionable, two government figures who asked not to be named said. “We are too revenue-focused. What is the opportunity cost of $220 million in government coffers?” asked an Industry expert. If WhatsApp ceases operating in Nigeria over those demands, the FCCPC and the Nigerian government will have their answer.
Read MoreAs Chowdeck dominates food delivery, its ad business is growing
The appeal of advertising on Chowdeck, Nigeria’s most popular food delivery app, continues growing as its business grows. Chowdeck now claims to have 600,000 users, according to marketing documents seen by TechCabal. It also claims to be the country’s most downloaded food delivery app. Chowdeck currently delivers around 20,000 orders daily and is looking to more than double that number before the year ends, said one person with knowledge of the business. “[Chowdeck] will expand to other states in the South-South, safe regions in the North and the South-East,” that person said. If Chowdeck hits its ambitious daily order target, it will make its ad business, even more popular. Chowdeck declined to comment for this story. Guaranty Trust, one of Nigeria’s top banks, advertised its share offering on Chowdeck’s app this week on a banner that has previously displayed ads for three other prominent brands. The food delivery company charges ₦250,000 per week for those ads, said one person familiar with the pricing. “[The company] can put a lot of ads up there,” said one person familiar with Chowdeck’s advertising. If four ads are on the banner, the company can earn ₦3 million weekly without incurring additional operational expenses. The company is also working on personalising ads; “the adverts someone in Lagos will see are not the same someone in [Abuja] will see.” Those slide–show banners aren’t Chowdeck’s only ad offering. It also offers push notifications ads that cost ₦250,000 per notification and ads on its famous brown delivery bags that cost ₦3 million for 10,000 bags, according to a rate card seen by TechCabal. It is unclear what the sales team, led by co-founder Kennedy Offor, has set as the revenue target for those ads. Finding advertisers is now part of the KPIs of the sales team, but they have not “aggressively started selling ads.” If Chowdeck expands its ad business, it will be a boon to a startup that is also profitable after delivery, per a 2023 report.
Read MoreNigerian banks ask employees to work remotely, “maintain situational awareness” as protests begin
After weeks of government rhetoric advising against a cost-of-living protest, Nigerian banks are choosing caution, telling employees to work from home on Thursday, the first day of the protest. At least five commercial banks told employees at their head office and branches considered to be in volatile areas to stay home, according to several emails seen by TechCabal. At least two top banks did not ask employees to work remotely, telling them to “dress down” and “avoid protest routes.” Three employees at those banks said several teams still chose to work from home, with team leads citing safety concerns. “All colleagues in non-essential roles are encouraged to prioritise working remotely from the nearest branch or hub,” said an excerpt from an email communication from a top Nigerian bank. “Colleagues in essential roles working on-site are required to maintain situational awareness and regularly engage supervisors or line managers to provide or receive important updates as applicable.” Nigeria’s commercial banks are some of the country’s most prominent businesses, valued at trillions of naira. In the 2020 protest to end police brutality, the banks were widely criticised for allegedly freezing bank accounts related to protest organisers. When the protests were infiltrated by thugs, some Nigerian banks were affected by the violence. It has influenced how the banks react to unpredictable situations. Mystery buyer LH Telecoms takes over Nigeria’s troubled 9mobile The Lagos state government is also choosing caution, telling people not to protest and surrounding many parts of the city with noticeable police presence. Two people reported significant military presence on the third mainland bridge and several other areas in the business district of Victoria Island. At least four state governments have obtained court orders limiting protesters to certain parts of the city. The legality of those court orders has been questioned. As Nigeria faces its worst economic crisis in a decade, Nigerians are feeling the pinch, with headline and food inflation at record levels. Economic reforms, including a much-needed removal of fuel subsidies and a relaxed FX policy regime, have not delivered the quick wins the government hoped for.
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Where to follow the 2024 EndBadGovernance Nigeria protests live
The 2024 EndBadGovernance protests in Nigeria have drawn significant attention both locally and globally. As citizens demand accountability and reforms, staying informed in real-time is vital. Here are platforms and channels that are highly likely to give live video and textual coverage of the protests as it ensues nationwide from August 1st. 1. YouTube for the 2024 EndBadGovernance Nigeria protests Channels to follow: Arise News, Channels Television, TechCabal and Sahara Reporters. Details: These channels are known to provide comprehensive live coverage, including on-the-ground reports, interviews with key figures, and analysis of the ongoing protests. Subscribing to these channels will ensure you receive timely notifications as the 2024 EndBadGovernance Nigeria protests begin. 2. Facebook for the 2024 EndBadGovernance Nigeria Protests Pages to follow: Arise TV, Channels, TechCabal, Zikoko, Premium Times, Pulse Nigeria, FIJ Nigeria, and The Guardian Nigeria, Details: Facebook allows live streams of events, enabling followers to comment and share real-time updates. These media outlets are known for their detailed and timely reporting. So you will find them most likely providing live coverage of the 2024 EndBadGovernanceinNigeria protests. 3. Twitter for the 2024 EndBadGovernance Nigeria Protests Accounts to follow: @AriseTV, @PIDOMNIGERIA @Firstladyship, @fijnigeria, @FS_Yusuf_ @Ruffydfire, @SaharaReporters, @TechCabal, @EiENigeria, @chiditweets042, and @WestAfricaweek. You can also follow hashtags like #EndBadGovernaceProtest #EndBadGovernaceProtestinNigeria #EndBadGovernaceProtests #August1st2024 #August1Protests to find relevant updates from covering accounts. Details: Many organisations and activists use Twitter to broadcast events. With analysis of the build up towards 2024 EndBadGovernanceinNigeria nationwide protests beginning on August 1st, these curated accounts will keep you abreast with live streams, immediate reactions from different protest locations, and other protest perspectives that may interest you. 4. Instagram for the 2024 EndBadGovernanceinNigeria protests Accounts to follow: @arisetv @channelstv @instablog9ja, @Mufasatundeednut @officialhiptv, and @lindaikejiblogofficial Details: Instagram influencers and media outlets often use Instagram to cover events, using the live and posting features. These accounts provide a mix of live updates, behind-the-scenes footage, and interactive sessions with followers. 5. TikTok for the 2024 EndBadGovernanceinNigeria Protests TikTok creators often provide live coverage with a mix of personal commentary and interactions with their audience. Simply use the hashtag as mentioned in number 3 for you to see accounts providing updates on the protests. Final thoughts on following the 2024 EndBadGovernance Nigeria Protests live Staying updated with the 2024 EndBadGovernanceinNigeria protests is essential for understanding the socio-political climate and supporting informed and decent activism. By following these platforms and channels, you can access real-time video and textual coverage and participate in the conversation, no matter where you are in the world.
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