eTranzact declares ₦1.01 billion profit in H1 2023
eTranzact International Plc has released its financial report for the half year 2023. The payments provider recorded N1.01 billion in profit, a 149% increase from the previous year. Nigerian payments provider, eTranzact International Plc profits rose to ₦1.01 billion in the first half of 2023—representing a 149% increase compared to the previous year. eTranzact’s profit for the half year surpassed its earnings forecast for the third quarter of 2023, which is projected at ₦582 million. Similarly, it earned ₦17.37 billion as its revenue for H1 2023. This figure is higher than the net revenue of ₦9.13 billion it forecast for September 30, 2023. President Bola Ahmed’s moves to eliminate Nigeria’s multiple exchange rate windows resulted in record losses in half year 2023 results for several companies. Airtel Nigeria similarly suffered a $151m loss in its Q1 2023 results. The telco said it would continue to invest in the country to enable it to capture the growth opportunity. The total value of total transactions eTranzact processed in 2022 is pegged at over ₦50 trillion. This was made possible through its switching services, SwitchIT. The company also said it ensured a 99% success rate and uptime across the various service offerings during 2022. Its current profit of ₦1.01 billion demonstrates the wide adoption of its fintech services in Nigeria. Currently, Access Bank is the biggest shareholder in the firm, owning a 37.54% stake in H1 2023 from a 23.80% stake it owned in H1 2022. It has surpassed eTranzact who now owns 22.98% in H1 2023, from a 31.86%, owned in H1 2022. Accelerex Holding is the third largest shareholder with 11.15%. Two industry watchers who spoke about this phenomenon said Access Bank’s move is in line with the lender’s aggressive expansion plan across the African continent. Last month, it acquired the subsidiaries of Standard Chartered Bank. In that statement, Access Bank stressed that the acquisition was “a strategic transaction” that represents its journey in serving as a gateway for payments in Africa and the world. The bank did not provide any update on the shareholding status.
Read MoreMultichoice terminates DStv service in Malawi after court blocks price increase
Multichoice is exiting Malawi following a high court ruling preventing the company from invoking further price increases for DStv service in the country. Pan-African broadcaster Multichoice is pulling its satellite television service provider, DStv, out of Malawi. This follows a decision by Malawian regulators to reject DStv’s latest price hikes. At the end of July, the Malawi Communications Regulatory Authority (MACRA) obtained an interim injunction from the country’s High Court. The injunction prohibited Multichoice Malawi from changing or modifying DSTV tariffs. Yesterday, August 8, the high court further ordered Multichoice to comply with the order, leading the broadcaster to terminate its DStv offering in Malawi. MACRA’s injunction was premised on the fact that because Multichoice did not directly offer the DStv service to the public, it could not set or adjust tariffs for the service in the country. Multichoice believes that the court order makes business impossible. And the consequence of non-compliance, which included imprisonment for the company’s staff, led to the decision to exit the market. “Given the impact on Multichoice Malawi and an increasingly adverse regulatory environment, [Multichoice] is therefore left with no option but to terminate DStv services indefinitely,” the company said. Setting precedence for the rest of Africa? In Multichoice’s annual results for the year ended March 31, 2023, DStv’s “Rest of Africa” market segment, which includes its plays in the continent apart from South Africa, returned to profitability for the first time since the company was publicly listed in 2019. “We continued to scale our overall subscriber base and benefited from a strong performance in the Rest of Africa, that delivered a trading profit for the first time since our listing in 2019,” said CEO Calvo Mawela. With DStv’s growth in South Africa slowing down over the last few years, Multichoice is looking to the RoA segment to compensate for that slump. Data firm Omdia forecasts modest pay TV subscriber growth of just 5.1% between 2022 and 2027 for MultiChoice in South Africa, compounded by the energy crisis currently gripping the country. By contrast, the firm expects the RoA segment to contribute a growing proportion of MultiChoice’s total pay TV subscriptions, with this share of subscribers forecast to rise from 53.6% in 2022 to 56.4% by 2027.
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TechCabal Daily – Safaricom Ethiopia gets $257 million
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning WhatsApp is turning into a conferencing app. Soon, you’ll be able to share your screen while on WhatsApp video calls. The feature is live now, and it’s slowly rolling out across the globe. The app also recently allowed users to share links to video and voice calls. With the launch of usernames, communities and channels, could WhatsApp be the next frontier for personal and professional collaboration? In today’s edition Senegal arrests Starlink sellers Safaricom finalises $257 million IFC deal Influencers cash out on X Uber drivers implicated in passenger attacks The World Wide Web3 Event: Code Cash Crop Ag-Hackathon Opportunities Internet Senegal arrests Starlink sellers The Senegalese government is taking its internet shutdown very seriously. Yesterday, one week after another internet shutdown was effected, the government began arresting Starlink sellers. Per the government, the sellers are guilty of “illegal provision of internet access and irregular marketing”. The five people arrested by the Department of Urban Security of the National Police face up to five years imprisonment and a fine of CFA60 million($100,000). The telecommunications regulatory authority has also issued a warning for any service providers marketing Starlink and any other company with similar activities to immediately cease all service throughout the country. Conflict in Senegal in June. Image source: Annika Hammerschlag What’s happening? One week ago, the Senegalese government shut down its internet, citing a need to prevent disturbances to public order. This was the country’s second internet shutdown in two months. The first internet shutdown was an aftermath of the violent protest in the country which started after Senegal’s opposition leader, Ousmane Sonko, was sentenced to two years in prison for “corrupting the youths.” The first shutdown lasted about 3 days according to Netblocks, and it’s presently unknown how long the present one will last. Zoom Out: The Senegalese government can not shut down Starlink as it is a satellite-based internet service and does not rely on physical infrastructure such as data centres, fibre-optic cables, and cell towers like traditional internet services and physical locations on which the government can easily exert control. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. Telecoms Safaricom finalises $257 million deal with the IFC Image source: Yung Nollywood Safaricom Ethiopia has bagged significant funding from the World Bank’s private investment arm for its greenfield telecommunications project. On Monday, the telecom finalised an agreement with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), to receive Ksh36.8 billion ($257.4 million) in funding. The deal was first announced in June. The funding agreement: The IFC is providing a loan of Ksh14.3 billion ($100 million) to Safaricom and investing ($157.4 million) Ksh22.5 billion in Global Partnership for Ethiopia BV (GPE). This investment will give the IFC a smaller ownership stake in GPE, with Safaricom PLC remaining the major shareholder. Furthermore, MIGA will provide guarantees for ten years worth Ksh143.1 billion ($1 billion), safeguarding the investments of Safaricom Ethiopia’s shareholders, which include Vodafone Group, Vodacom, Sumitomo Corporation, and British International Investment. Additionally, the MIGA Guarantee Facility is contributing an extra ($76 million) KSh10.9 billion to support these guarantees. The investment is intended to support Safaricom Ethiopia’s ongoing greenfield telecommunications project to deploy and operate 4G and 5G mobile networks across the country. Zoom out: According to Safaricom’s chief business development and strategy officer, Michael Mutiga, the entire package amounts to more than $1.275 billion. This funding comes after Safaricom Ethiopia secured a mobile money license, seven months after launching its operations in Ethiopia. Discover Trends with Smile Identity Download the Smile ID State of KYC in Africa Report on the latest trends in identity verification across Africa, highlighting the power of biometric verification and document verification in combating fraud. It is a must-read for any business looking to acquire users across Africa and keep up with fraud trends. Creator Economy Twitter influencers in Nigeria are cashing out X is marking the spot for many influencers. Yesterday morning, several influencers and Twitter X Premium users were greeted with credit alerts. These users each received payments of between $251 and $500 for being active on the platform. Image source: Y Combinator Why is Elon paying influencers? These payments, which make up X’s Ads Revenue Sharing programme for creators globally, are a part of Musk’s strategy to encourage subscriptions to X Premium by sharing income made from advertising with the creators. The company sent out the first round of payments for eligible accounts in July before opening up registration to more people. Four days ago, the company’s support account apologised for delayed payments as their system received more registrations than they had anticipated. However, it seems that has been sorted as numerous users globally have taken to the app to share screenshots of their payments from the platform. How can you get paid:The criteria for eligibility include being subscribed to X Premium, and having a minimum of 500 followers and at least 15 million impressions on cumulative posts within the past three months. Subscribing to X premium cost about $8/month for a monthly plan or $7/month for the annual plan Zoom out: While some influencers acknowledge that the new incentive by Elon Musk might raise the stakes for influencer marketing, others worry that the platform is about to get riddled with more toxicity as people will go the length to spread misinformation and hate, to elicit engagement and grow their followers. More worry that as demand for X Premium grows, the Ads revenue programme will get stricter and less welcoming. It remains uncertain how long Musk can sustain these payouts considering the company’s declining revenue. Mobility Uber drivers implicated in passenger-attacks in South Africa In South Africa, ride-hailing drivers have gone from prey to predators. ICYMI: In early June 2023, Uber and Bolt drivers were attacked
Read MoreExclusive: Sendy, the Kenyan logistics startup in acquisition talks
Sendy is currently in advanced negotiations for an acquisition, with an official announcement expected soon. The startup has encountered significant challenges due to declining investor funding within the African startup ecosystem. According to sources close to the matter, logistics startup Sendy is allegedly in the process of handing over its business to a new owner. The Kenyan company, which has been in operation for nearly a decade, has been battling sustainability challenges after several lay-offs and business decisions that forced it to abandon some of its products. It is unclear which company will acquire Sendy, although TechCabal confirmed that the firm is engaged in a transaction that will essentially see its ownership change soon. In the same breath, details about the transaction cost have not been revealed. It is also unclear whether Sendy will further trim its employees or the new owners will keep the headcount intact. Sendy declined to comment at this time. Recent layoffs and funding Following the end of the COVID-19 pandemic, several key technology companies and startups embarked on mass layoffs to trim their headcount after massive hirings during the lockdown. Workers were laid off due to economic downturn, financial strain and overall business uncertainty. Sendy was one of the companies that sent home workers. In 2022, Sendy shifted its focus from a supply service for retailers to concentrating on end-to-end fulfillment, leading to its decision to cease operations in Nigeria. At that time, Sendy said it would aim to match online buyers with appropriate logistics providers. Its fulfillment service remained unaffected in other markets. This strategic change meant Sendy was moving away from its asset-heavy model in Nigeria, streamlining its approach based on market demands since its launch there in late 2021. In late 2022, Sendy secured undisclosed financial support from MOL PLUS, the venture capital division of Japanese transport firm Mitsui O.S.K. Lines, Ltd. This funding, seemingly acting as a rescue fund, aimed to stabilise Sendy while the logistics startup strategised its future moves. The funding discussions with MOL PLUS seem to have aligned with Sendy’s proactive efforts to reduce costs. In 2018, Sendy concluded a Series A funding round, using the investment to enhance its range of services, grow its workforce, and prepare for the East African market. By 2020, the company had secured a $20 million Series B funding, with Atlantica Ventures taking the lead. This round also saw participation from Toyota Tsusho Corporation, the trade and investment division of Japanese automotive giant Toyota. Sendy is also one of the first beneficiaries of Safaricom Spark Fund, a $1m investment vehicle targeting growing startups.
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Starlink sellers arrested in Senegal
A week after shutting down the internet for the second time in two months, the Senegalese government is arresting people selling Starlink in the country for “illegal provision of internet access and irregular marketing”. On Monday, the Senegalese government arrested five people for selling Starlink terminals without the required licence or authorisation. The five people arrested by the Department of Urban Security of the National Police face up to five years imprisonment and a fine of 60 million CFA ($100,000). The telecommunications regulatory authority has also issued a warning for any service providers marketing Starlink and any other company with similar activities to immediately cease all service throughout the country. Starlink is an internet system developed by SpaceX, an American private space exploration company founded by Elon Musk, that delivers speeds of up to 150Mbps with only a clear view of the sky needed. Its terminals would allow the Senegalese to access the internet via satellite, thereby bypassing the need for a telecom operator. Thus, if the government decides to suspend the internet again, Starlink users would still be able to connect to the internet. However, according to Starlink’s website, the internet service provider is unavailable in Senegal. Senegal’s government suspends internet again to “prevent disturbances” This arrest follows a series of clampdowns by the Senegalese government, which has restricted internet access on multiple occasions to control its citizens. Last month, the government restricted access to the internet after protests erupted when Ousmane Sonko, a popular opposition politician, was arrested. The government also suspended internet access last week after Sonko was rearrested. After the ban was suspended last week, the government suspended TikTok because it is “favoured by people with bad intentions to spread hateful and subversive messages,” according to Moussa Bocar Thiam, the country’s minister of communications, telecommunications, and digital economy.
Read MoreMoonshot: Africa should not play catchup with AI regulation
Moonshot by TechCabal is the conference that brings together Africa’s tech ecosystem in person to network, collaborate, share insights and celebrate innovation. Join us in Lagos on October 11 and 12. In this third article built around the conference, Kenn Abuya considers how African governments can adopt a united approach with AI regulation while upholding human rights, ensuring data privacy and protecting individuals’ intellectual property. Since the early days of the internet, Africa has mostly been a consumer of new tech. Like in social media, where non-US nations have to adapt to American platform rules, and Africa often has little say in shaping or challenging these norms, the same pattern is happening with powerful AI systems like ChatGPT. Africa is again in the receiving position. But, this time, the continent can shape the regulations to position itself as an active and influential participant in the global AI landscape. This involvement can lead to a more equitable, ethical, and responsible AI development and deployment across the continent. Africa can push for a new and inclusive approach to regulate AI, unlike how it tackled social media. AI regulation in Africa has a long way to go African nations, such as Kenya, have yet to address the regulatory aspects of AI. While some existing legal frameworks offer potential avenues for incorporating AI elements, the rapid advancement of this technology has outpaced the scope of these laws, particularly concerning data collection. Given this scenario, creating a dedicated, all-encompassing regulatory framework for AI is key. Kenya already has some regulations in place, such as the Data Protection Act (2021) and the Computer Misuse Act (2018), which could be amended to accommodate the dynamics of AI applications. According to J. Walubengo, ICT lecturer at Multimedia University of Kenya, who spoke to TechCabal, “AI is quite a broad space. A new, isolated Act to regulate AI would be needed.” Walubengo cites the proposed EU AI Act as a framework that can guide the development of AI regulations for the African market. For instance, its goals include ensuring safety and adherence to existing laws regarding fundamental rights and values for AI systems entering the EU market. The framework also seeks to establish legal clarity, promoting an environment conducive to investment and innovation in AI. It also aims to bolster governance and enforce prevailing laws concerning fundamental rights and safety prerequisites applicable to AI systems. For now, a few African states have made significant progress regulating AI: Tunisia, Egypt and Mauritius. While the call for Africa to engage in AI regulation is valid, Africa must also consider the practical challenges of the continent’s digital policy decisions and the lack of necessary infrastructure that affects the development of AI legal frameworks, Megan Kathure, a tech policy analyst, argues. “AI regulatory attention by African states will take various forms, as already evidenced by Mauritius and Egypt, which have National AI strategies, while other countries adopt a piecemeal approach to governance by creating task forces or research labs. While the clamour for the continent to throw its hat into the ring of AI regulation bears merit, sight should not be lost on the realpolitik attendant to Africa’s digital policy-making and the infrastructure deficit impacting the coming into fruition of AI legal frameworks,” Kathure told TechCabal. Most African nations, like Kenya, have not yet implemented a formal national strategy. However, Kenya has introduced recent resources like a guide for AI practitioners. It’s important to note the significance of the Blockchain & Artificial Intelligence taskforce discussed in 2018, which wrote a report called “Emerging Digital Technologies for Kenya: Exploration and Analysis.” It offers guidance for individuals engaged in AI development and use. It also aids in shaping future regulatory initiatives by Kenyan authorities. Ethical AI regulations are important, though The nature of AI systems poses a challenge to lawmakers seeking to establish regulations that safeguard individuals’ rights. However, one key question emerges: how might legislators navigate the nuances of AI and applications to create regulations that uphold human rights? According to Walubengo, specialised legislation often overwhelms legislators. The solution involves the legislators forming a task force of AI experts, legal professionals, and academics to draft the law. They would then educate the parliament to enable informed debate and passage of the legislation. Megan Kathure, on the other hand, argues that effective lawmaking in this era of emerging technologies should consider how these technologies impact various aspects of human rights. Recognising this and prioritising human rights in policymaking will assist policymakers in navigating AI regulation. “Legislators usually can’t cope with most specialised legislation; what happens is that the minister for ICT would need to constitute a taskforce of AI experts/practitioners, legal experts, AI academics, etc, to draft the law, then educate the parliament on the same for them to debate and pass the legislation,” said Walubengo. “Effective lawmaking in this epoch of emerging technologies should take note of the rapid diffusion of technologies in every facet of our lives and how such incursion has the potential to facilitate or stymie the realisation of human rights. Such an appreciation, coupled with the intentional centralisation and respect for human rights in policymaking, will aid policymakers in navigating the spheres of AI regulation,” added Kathure. AI can be impactful if properly regulated AI can wield significant influence when subject to effective regulation. Proper oversight ensures its potential benefits are harnessed while minimising risks, fostering innovation, and safeguarding ethical considerations. Walubengo acknowledges AI’s value for productivity, but with a caveat: its success hinges on extensive data, and some AI firms have already breached privacy laws to gather vast personal and potentially copyrighted data. Therefore, regulation is vital to harmonise the interests of AI developers, personal data, and intellectual property. He said, “AI is good and should be embraced and encouraged. However, its side effects (e.g., non-responsible AI) should be regulated for the benefit and safety of humanity.” “While too often we wax lyrical of how regulation can stifle innovation—a plausible reality but often a stand-in for entities to
Read MoreHow the Congo Business Summit can help Nigerian investors find promising startups in Kinshasa
Noel K. Tshiani is the managing director of Congo Business Summit, a flagship conference and expo that brings together startups, corporations, and government officials from the Democratic Republic of Congo and abroad. With a deep commitment to innovation, he is passionate about building and advancing the country’s startup and tech ecosystems, recognising the transformative impact they can have on the economy. The beauty of the African continent lies not only in its diversity, but also in its untapped potential. Every nation and every city has something unique to offer. However, there are certain opportunities that are too big to miss, and one such opportunity awaits in the heart of Africa: the Democratic Republic of Congo (DRC). As we look forward to the upcoming Congo Business Summit in Kinshasa from October 12–13, 2023, a clarion call goes out to Nigerian investors: now is the time to broaden your horizons and tap into the latent potential of the DRC’s rising tech startup scene. Let us examine some statistics. The DRC has a population of 100 million, almost equal to the combined populations of Cameroon (30 million), Côte d’Ivoire (30 million), Niger (24 million), Senegal (18 million), and Congo-Brazzaville (6 million). The capital alone, Kinshasa, is home to 20 million people, more than live in Senegal. Kinshasa is not just a city; it is a bustling metropolis with the population of an entire nation. The DRC’s strategic location, bordering nine countries, offers an additional potential consumer base of some 250 million people. Clearly, this is an opportunity too significant for any ambitious business angel or institutional investor to neglect. In addition to the size of the market, there are a number of other reasons why Nigerian investors should be interested in the DRC. The country has a young population, with 60% of its citizens under the age of 25. This means there is a large pool of potential customers for tech products and services, ranging from financial services to education. The DRC is also a resource-rich country, with abundant reserves of copper, cobalt, diamonds, and other minerals used to make mobile phones, laptops, and batteries for electric vehicles. These minerals are estimated to be worth $24 trillion. This means there is a strong foundation for economic growth, which will create even more opportunities for tech startups. Now imagine the kind of market such numbers represent, especially in the tech sector. With rapid urbanisation, increasing internet penetration, and a youthful population hungry for tech solutions, the DRC presents an ideal landscape for investments in tech startups. Kinshasa’s tech scene is a melting pot of innovation, with young Congolese entrepreneurs eager to solve local challenges with regional aspirations. These startups need the kind of expertise and financial backing that Nigerian investors, who have seen the boom in places like Lagos, can provide. Consider the successes of other francophone cities such as Dakar or Abidjan. While they have seen substantial tech growth, the sheer size of the DRC’s market offers unparalleled scale. When a startup succeeds in the DRC, it is not just serving a city or region, but an entire nation, a market larger than many well-known European countries such as the Netherlands (18 million), Belgium (12 million), Sweden (10 million), Switzerland (10 million), and Portugal (10 million). Nigerian investors have a track record of identifying lucrative ventures, with Nigeria’s own fintech tech startups attracting attention and investment on the global stage. The DRC, with its size and potential, can be the next big gold mine. Congo Business Summit is not just another event. It is the gateway to Africa’s next unicorn for investors who are ready to explore promising tech startups in Kinshasa. Investing in tech startups in the DRC is investing in the future of a prosperous Africa. While many regions in francophone Africa provide only modest investment prospects, the DRC presents Nigerian investors with a vast horizon to carve out their mark. That is why Congo Business Summit is a real opportunity for Nigerian investors to learn about the DRC and the investment opportunities that exist in sectors such as fintech, edtech, medtech, agritech, and regtech. The DRC is a market with huge potential, and Nigerian investors who get in early will reap big rewards.
Read MoreTwitter influencers in Nigeria are now being paid for tweets
Elon Musk is trending on X (formerly Twitter) today, and for the first time in a long time, it’s for something positive. This morning, Desmond Oris and a number of his friends were greeted with credit alerts from Twitter. The group of influencers, also X Premium users, each received payments of between $251 and $500 for being active on the platform. These payments, which make up X’s Ads Revenue Sharing programme for creators globally are a part of Musk’s strategy to encourage subscriptions to X Premium by sharing income made from advertising with the creators. The criteria for eligibility include being subscribed to X Premium, and having a minimum of 500 followers and at least 15 million impressions on cumulative posts within the past three months. Oris, who started on his influencer path in June 2022, didn’t expect much from the Ads Revenue Sharing programme at first. “A lot of us just signed up for the sake of signing up, and lowkey thought Musk was just talking,” he said. Musk announced the Ad revenue-sharing programme for creators in February 2023 amidst his campaign to get more people to sign up for Twitter Blue. The company sent out the first round of payments for eligible accounts in July before opening up registration to more people. Four days ago, the company’s support account apologised for delayed payments as their system received more registrations than they had anticipated. However, it seems that all that has been sorted, as numerous users globally have taken to the app to share screenshots of their payments from the platform. For Victoria Gwaza, an influencer with close to 20,000 followers, this development has pushed her to get the famous blue tick that accompanied subscribing accounts. “I’ve always wanted to get the tick because it has a lot of benefits, like being able to edit tweets and send DMs to anyone without worrying about DM limits. However, my card wasn’t compatible, and so I couldn’t do that earlier. With this new payment system now, it is absolutely necessary for me to find a way to get it done, and I will do that today. I tweet regularly and have impressions as high as four to five million monthly.” According to Gwaza, X payouts have also raised the stakes for influencer marketing. “My prices have automatically gone up,” she said while laughing. “Brands can no longer offer peanuts to influencers because now, with or without brands paying you, you’re going to get paid for being relevant and sparking conversations.” Not everyone is happy with this development, however. A number of users have expressed concerns about the app becoming even more toxic in the coming days. “I can already tell that people are going to be unapologetically hateful and reckless moving forward. I feel bad for minority groups in particular as they will be on the receiving end of a lot of this. We’ve had countless scenarios where people came on there to spread misinformation and hate, to elicit engagement and grow their followers. These followers and engagement are what increase their chances of being selected by brands. Now that the process is much more direct and everyone can get paid as long as you have a blue tick and a certain number of impressions, do you realise how much more desperate these people will become?,” a user, Falmata shared. “The most insidious thing is that Musk has made it possible for these influencers to hide their verified badges so that we can’t even tell those tweeting in good faith and those simply farming for engagement,” she concluded. It’s worthwhile to note that Premium users aren’t automatically eligible and you have to apply. The application process is fairly straightforward, according to Oris. “Once you go to ‘Settings’, click on ‘monetization’, and then click on ‘Creator Ads Revenue Sharing’, and then ‘Enable’. That’s all you need to do.” While it’s uncertain how long Musk can sustain these payouts considering the company’s declining revenue, it has undoubtedly done what he set out to achieve— motivate more people into signing up for the Premium service.
Read MoreZenith Bank digitalises intra-Africa trade for exporters through the SMARTAfCFTA portal MoU
Zenith Bank has signed an agreement with the secretariat of the African Continental Free Trade Area (AfCFTA) to digitalise trade relations across the continent Nigeria’s Zenith Bank has signed a Memorandum of Understanding (MoU) with the African Continental Free Trade Area (AfCFTA), to develop the SMARTAfCFTA portal. The SMARTAfCFTA portal is an initiative of the bank to digitalise trade, according to the Secretary-General of the AfCFTA Secretariat, Wamkele Mene. The GMD of Zenith Bank, Dr Ebenezer Onyeagwu and the AfCFTA General Secretary signed the agreement during the 2023 international trade seminar of Zenith Bank today. Setting the stage for the agreement, Mene explained that it is very important to stop relying on Europe’s imports to feed. African countries need to be self-reliant and be able to cater to all their needs alone in case of a war or pandemic. This is even more so at the height of global economic shocks and inflationary pressure. “55 African countries contribute 3.1% to global GDP and 2.1% to global trading. Yet Singapore singlehandedly contributes over 6% to global trade and output. This deficit is an opportunity for Africa to accelerate competitiveness,” Mene said. Nigeria is unclear in its stance on exporting Nigeria has demonstrated a high commitment to the implementation of AfCFTA. This was occasioned by the implementation of the AfCFTA agreement in 2021 which the past president, Muhammadu Buhari, adhered to. However, it is yet to finalise its tariff schedule as well as unveil guidelines and implementation strategy for the trade deal. So far, seven countries, Rwanda, Cameroun, Egypt, Ghana, Kenya, Mauritius, and Tanzania have been selected to trade under the AfCFTA framework in a pilot phase. Nigeria is still dragging its feet in 2023. To date, the West African nation still struggles with issues of port congestion and repatriation of FX earnings. This matter has been complicated by President Bola Tinubu’s moves to loosen the control of the naira and eliminate Nigeria’s multiple exchange rate windows. Two months after a naira float that was supposed to unify rates, a significant arbitrage is emerging again. Zenith Bank commits $1m to the project Mene admits that a million dollars has been earmarked for the development of the SMARTAfCFTA portal. He is confident that this financial support by Zenith Bank will improve trade, while opening up the digital economy, especially in financial services. According to him, the continent imported $16 billion pharmaceutical products in 2019— this overreliance on foreign economies would stop once this portal is developed. He also adds that rules of origin restricting trade with other African countries have been sorted to 90%. Hence, significant opportunities await. Both the GMD of Zenith Bank and the Secretary of the National Action Committee on AfCFTA agree with this. “The MoU will showcase African products and services and where they can be found,” Onyeagwu said.
Read MoreCashlinq wants to foster financial inclusion in Zimbabwe. Here is how
A conversation with Tendai Mugovi, co-founder of Zimbabwean fintech startup Cashliq which offers banking as-a-service products. He speaks on the origins of the startup, challenges they have faced in its operations and how they have working their way through the challenges. Cashlinq is a Zimbabwean fintech startup that offers core banking services to banks and other financial institutions including telcos. The startup hopes that by offering such services, it help facilitate financial inclusion across the country as well as its other markets which include Zambia. TechCabal caught up with Tendai Mugovi, co-founder of Cashlinq, to learn more about its product offering, challenges it has faced, as well as future growth ambitions. Tell us about Cashlinq and the problem the startup is trying to solve. Tendai Mugovi: The idea for Cashliq started when I and two other co-founders were working as management consultants with one of the leading consultancy firms in the country. We were doing consultancy work around digital transformation products, and go-to-market strategies around those. While working there, the main challenge was having to come up with a brilliant project idea, seeing it approved by the board and then seeing it falter at the implementation stage. Reasons for them not being implemented were mostly around the fact that the core banking systems were either too expensive to use or the infrastructure did not really support the project. After seeing this problem across the board in the banking sector, not only with local banks but also international ones, we realised that it was worth trying to solve. We then came together to build a core banking platform from the ground up. In short, Cashlinq aims to provide African financial institutions with a flexible and affordable banking solution so that they address the unique opportunities and challenges in our continent. Explain exactly how Cashlinq works. TM: It is a suite of applications and currently, we have about 18 modules. So we have core banking which comprises web-based and cloud-based applications. This is the application where your account and wallets sit. It does all your bookkeeping and integration with the national banking systems so that wallet holders can be able to send and receive money and also do bill payments. We also have channel applications where we have internet banking, mobile banking as well as USSD and WhatsApp applications. Basically, it’s a suite of web and mobile applications that are used to run like a digital bank. What challenges have you faced in trying to solve this problem? TM: I think the main challenge has been proving ourselves. The organisations were are trying to service are big with billions of dollars in revenue so as a fairly small outfit, having them trust us is a big ask. But we have been adding more clients so thats great, though that barrier to entry still exists. Our product is a core banking application which is the backbone of any financial institution soo because of that, there is obviously a lot of due diligence needed before you can onboard a new service. How we’ve been traversing it is that with our first client, which happened to be a mobile network operator, we initially offered a free trial because we were quite confident that if they genuinely wanted a solution, ours was that. So we had them run our solution for two months and that trial was successful because we went on to sign contracts with them. Additionally, we have also been pushing for media coverage so we can build strong brand equity and I think that has also gone a long way in helping us establish ourselves. How much traction has Cashlinq garnered so far? TM: We are now operational in Zimbabwe and Zambia and will soon deploy our solution in Mozambique and Malawi. This is actually by extension of one of our Zambian clients who is also present in those countries. In terms of client base, we currently have four onboarded including one of the three telcos in Zimbabwe. We also have two banks onboarded. In Zambia, we have a neobank that we are also working with. We also have two pilots with one of the biggest brands here in Zim for a new wallet. What role is Cashlinq playing in trying to facilitate access to financial services not only in Zimbabwe but also in other markets? TM: I think in many of these markets, there are a lot of economic fundamentals that are not in place. This means that if core banking services are not available, then the main business of banking is also not available. In our markets, banks normally work by getting deposits, investing them in the market, giving out loans and getting interest from those. They also charge transaction fees. But in other countries like New Zealand, there are zero transaction fees, which is impossible in an economy like ours because the only avenue for banks to make money is to charge transaction fees which have become high as the cost of doing business goes up. That further demotivates people from getting into the financial system, to begin with. So with our solution, knowing the fundamentals of the market and being very open in terms of our pricing modules, I think we offer relatively affordable services compared to what’s on the market. We are providing an opportunity for banks to include a lot of people who wouldn’t otherwise afford banking services. Also with our modules, banks can pick and choose what they want to pay for. For example, a bank can pay for our remittance banking module and not an agent banking module. That flexibility saves them a lot because they don’t have to pay for services they are not going to use. It allows them to be more innovative to the realities of the market. What’s next for Cashlinq? TM: We definitely want to scale across many African countries and that’s going to require some fundraising so that’s what we want to work on next. Editor’s note: Interview
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