How Zambia’s national debt restructuring can boost country’s tech ecosystem
Despite the much-heralded development over the last two years, Zambia’s tech ecosystem has lagged behind in attracting venture capital. With the country having reached a debt restructuring agreement with some of its major creditors, can this development benefit its ecosystem? After Zambia announced a debt restructuring deal with creditors, economists are hailing the move as a step in the right direction. Many also expect the restructuring deal to have an impact on the country’s technology ecosystem. Zambia’s tech ecosystem is fledgling and has had a tough time attracting venture capital, unlike rival continental hubs like Nigeria, Kenya, and South Africa. Many expect that the restructuring will help rally investors to the southern African nation’s ecosystem, spurring growth. In 2020, Zambia became the first African country to default on its debt payments offset. That default limited the government’s ability to invest in programs critical for economic growth. “[The restructuring] allows for increased fiscal space and increases the amount of funds available for the government to invest in priority projects and social expenditure, and other areas where there was a budgetary gap,” said Jito Kayumba, special assistant and advisor to President Hichilema on economic, investment and development affairs. Potential benefits of debt restructuring on Zambia’s economy (Image source: Linkedin/ Andrew Chibuye) Good news for Zambia’s fledgling tech ecosystem Over the last year, Zambia’s tech ecosystem has seen a significant boost as numerous pan-African companies have set up operations in the country. These include subscription video-on-demand platform Wi-flix, technology infrastructure company Liquid Intelligent Technologies, and crypto exchange, VALR. The fintech unicorn Chipper Cash also entered the Zambia market last year. The ecosystem also got a co-sign from Vitalik Buterin, founder of Ethereum, who hailed the “unique opportunities” present in the country. According to Andrew Chibuye, senior country partner of PwC in Zambia, “The restructuring should result in a more favourable investment environment that will benefit all sectors including technology. Technology is considered as key to enabling growth of the economy and so it is expected to be integral as the country goes forward.” This point is reiterated by Kayumba who also points out the importance of the country’s technology sector in also enabling the growth of other important sectors of the country’s economy like mining and agriculture. “The beauty of technology is that it can help create efficiencies in the supply chain and the value chain of most of our other core sectors. Growth in agriculture, mining, and energy can be accelerated by the smart integration of technology, leading to new jobs created, new homes being built, and new infrastructure across the board,” he said. For startups, who have thus far struggled with attracting venture capital funding, the restructuring is a welcome development that could boost their ability to raise capital from investors, both local and international. Since 2015, 23 startups have raised more than $75m in disclosed funding, according to Biter Bridges, far behind ecosystems like Nigeria, Kenya, and South Africa. Snapshot of the state of venture capital funding in Zambia. (Image source: Briter Bridges) Ahmad Hamwi is the founder of Ignitos Space, a spacetech startup providing farmers with farming insights. According to him, the restructuring is the biggest opportunity to take the Zambian startup ecosystem to the next level in terms of providing liquidity for funding. “I believe that we will see a lot of shifts in the ecosystem which will lead to more investor attention. Zambia has over the last two or so years shown that it can become a very lucrative place to invest in and this debt restructuring will further prove the viability of the economy for investing which I believe will boost investments in our startups,” Hamwi told TechCabal on a call. Beyond investment into startups, Hamwi believes that subsequent digitalisation initiatives will move Zambia deeper into the digital transformation journey, boosting the scale-up of local startups, and making them attractive to investors. “The restructuring will allow a lot of projects to boom, including digitalisation ones, which would help a lot with bringing a lot of people into the digital economy. Also, an increase in trade resulting from the process could go a long way in boosting the growth of e-commerce and fintech solution providers in the country,” he added. Creating an enabling environment for ecosystem success Mwiya Musokotwane is the CEO of Zambia-based investment firm Thebe Investment Management. Together with Perseus Mlambo, CEO of Union54, they are the founding members of the Zambia Technology Sector Working Group, whose main mandate is to work with partners, including forty local and international companies, to develop business-friendly legislation to support African tech companies looking to incorporate or operate from the country. Speaking to TechCabal, he stated that the restructuring process, among other upsides, presents an opportunity to use technology to accelerate economic growth and job creation in Zambia. “From a technology perspective, I think the opportunity that exists is that technology investment benefits are felt from day one. For example, if a tech startup domiciles itself in Zambia because the government has created an incentive package, that means jobs are immediately brought to Zambia because that founder will probably come and live here. A significant part of the startups team will probably come and live here and by coming here, they boost adjacent economy sectors,” he said. “If just 6,000 software developers moved to Zambia, its GDP would grow by 1%. That is not immaterial. That is a material contribution to GDP growth rate because software developers have a higher earning potential so they’re bringing their salaries which they will spend on other sectors of the economy. If we look at the number of people who work in the technology sector across Africa, it’s well above 700,000 individuals and if you become the best place for these people to live and work, you can certainly do a significant much in growing the economy.” For Lulumbi Njeleka, principal partner at Monter Capital, a Lusaka-based investment firm, the restructuring has the ability to create an enabling environment for alternative investors, including
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👨🏿🚀TechCabal Daily – SA lawyers use ChatGPT…and fail
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Threads has now reached 90 million users within five days of launch. Elon Musk isn’t having it though. The billionaire is threatening to sue Mark Zuckerberg and Meta for hiring Twitter employees—some of whom he fired without due process or severance, and mocked. According to Musk, the ex-Twitter engineers built Threads, but Zuckerberg has responded that no ex-Twitter employee was involved in building the new social media platform. In today’s edition South African lawyers use ChatGPT for case and fail Medsaf lays off full-time staff Airtel launches 5G in Kenya TC Insights: Unionising Africa’s digital labour The World Wide Web3 Event: The Moonshot Conference Opportunities AI SA lawyers uses ChatGPT for case, and fail History is repeating itself, and within a month too! South African lawyers arguing a case at the regional court in Johannesburg were called out for using fake precedents generated by ChatGPT. To sue or not to sue: According to Sunday Times, the unnamed lawyers were representing a woman who was suing the trustees of a company for defamation. While the company’s lawyers argued that trustees could not be sued for defamation, the plaintiff’s lawyers argued that South African courts had—in previous cases—judged that trustees could in fact be sued. The judge then postponed the hearing for two months to allow the lawyers time to find the precedents they needed to prove their case. Unfortunately, the lawyers could not track down the case manually and instead asked ChatGPT for citations. While the citations were for real cases, they had nothing to do with defamation. Image source: YungNolly Careless not misleading: In the judgement against the plaintiff, Judge Chaitram called out the lawyers stating that they were, “simultaneously simply overzealous and careless.” “The embarrassment associated with this incident is probably sufficient punishment for the plaintiff’s attorneys,” said Chaitram. Big picture: This is the second case where lawyers have used ChatGPT to source for cases, and failed. In May this year, a US law firm was fined $5,000 after one of its lawyers used ChatGPT to cite bogus cases. It’s also one of the many cases where ChatGPT and similar services have provided false information to users. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Click here to open a business account today. Layoffs Medsaf lays off all full-time staff In layoff news, Nigerian healthtech Medsaf has laid off all its full-time employees, about 30 employees. Last week, sources confirmed to TechCabal that the startup, in March, made the layoff announcement via its chief operating officer Rotimi Lawal. Lawal informed staff that the company was experiencing funding gaps and other dismal payment issues in the operation of its business. The company—which has raised $3.6 million total since its founding in 2017—has reportedly been facing financial difficulties since mid-2022, and this led to delays in staff and vendor payments. Unpaid salaries and benefits: Several laid-off employees also confirmed that they hadn’t been paid salaries since December 2022, despite promises from the company that salaries arrears would be paid by April 2023. In response, Medsaf’s CEO, Vivian Nwakah, blamed the situation on investors reneging on funding commitments. Nwakah also noted that staff had been asked “not to come to work in January…So many of the employees that you are speaking with hardly worked in January and are requesting salaries that are owed to them when they were not actively working for the company,” she said. Vivian Nwakah, CEO of Medsaf. Image source: Seedstars Sources also allege financial misappropriation by the company’s management citing a $100,000 project fee that never made it into the company‘s accounts. Medsaf denies the story: A day after the report, CEO Nwakah took to LinkedIn to tag the report as “full of lies, misinformation and slander”. In the post, Nwakah shares a cease and desist letter to TechCabal where Medsaf—through its lawyers—demanded a retraction of the story, and an apology. TechCabal, however, stands by its story. We have found no instances of material errors, misrepresentations, falsehoods, or malice in our article. Telecoms Airtel launches 5G in Kenya Image source: Airtel More Kenyans are getting 5G! Last week, Airtel became the second telecom to launch 5G in the East African country, following Safaricom’s October 2022 launch. Where is it launching? We don’t know yet, Airtel hasn’t specified. The telecom only mentioned that it has 370 5G sites spread across 16 counties. However, the service is expected to focus on customers in major areas and cities such as Nairobi, Nakuru, Mombasa, and Kisumu. Ashish Malhotra, the managing director of Airtel Kenya, said, “Airtel 5G will revolutionise various sectors, such as smart cities, education, healthcare, agritech, transport systems, entertainment, and more, shaping the future of Kenya.” Can anyone use it? Only if your device is 5G-capable. Airtel argues that customers will be moving in and out of 5G areas and will be well-served by 4G bundles, which can access 5G without issues. The telecom also announced 5G Wi-Fi routers and plans which it is offering to businesses and residential areas. Find the pricing here. Zoom out: More telecoms are shooting to launch 5G in the country including the state-run telecom Telkom. The telecom, however, has been facing financial difficulties, leading to the telco’s failure to pay the American Tower Corporation (ATC) Ksh200 million for tower leasing. GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving sustained business growth in Africa at GrowthCon 1.0. Experience curated masterclasses, case studies, a growth hackathon and more. Get your tickets now at 15% off. Use the discount code “TIX15”! TC Insights Unionising Africa’s digital labour According to the International Labour Organization, there are almost 800 digital labour platforms across the world as of 2022 including ride-haling services and delivery platforms. Over the past decade, digital labour platforms have experienced
Read MoreMedsaf demands a retraction to our ‘defamatory’ coverage. Here’s our response
Through their lawyers, the Nigerian health tech startup, Medsaf, on Friday, July 7, 2023, sent TechCabal a “cease and desist” letter, requesting that our story on Medsaf, published earlier that same day, be taken down. Our story contains allegations that Medsaf employees were owed salaries for months and another allegation of financial misappropriation. We stand by our reporting and have found no instances of material errors, misrepresentations, falsehoods, or malice in our article. We have responded in detail below, clarifying some of the claims made by Medsaf lawyers via email and some claims made by the company’s CEO on LinkedIn. TechCabal’s story on Medsaf alleges that several of the company’s employees were owed salaries from December 2022 until they were laid off in March 2023. We established and corroborated the allegations by speaking to several former employees at Medsaf. TechCabal was also privy to internal correspondence where company officials clearly stated that outstanding salaries for the same period would eventually be paid. Several former employees said that they had still not been paid at the time of our report. TechCabal has seen emails between other employees and the company’s management where employees asked about their outstanding salaries. We’ve also seen correspondence that asked questions about Medsaf’s finances, leading us to publish the allegation by a senior executive of financial misappropriation. TechCabal contacted Medsaf via email to establish a right of response. A right of response is a time-honoured ethical guardrail that mandates that all sides are heard and their views considered before an article is published. While we initially asked that a response be shared in three hours, we quickly remedied that, affirming to Medsaf that we would not publish the story until they shared their perspective and giving them more time to respond. Medsaf emailed TechCabal, sending four emails addressing some of the issues and providing rebuttals. Those responses are contained in our story. Following our email exchange, TechCabal requested a phone call with the company to allow a fuller response to allegations that had not been addressed in the email exchange. On that call, Medsaf’s CEO did not address the substance of the allegations and was instead verbally abusive towards TechCabal’s reporter, swearing repeatedly, threatening legal action and explaining that she only does ‘this work’ for people like the reporter. As a result, we sent another email to Medsaf, outlining the allegations, asking for a proper response or rebuttal and affirming that we were willing to wait for a proper response before publishing. Medsaf declined and said any further responses would come from their lawyers. 24 hours after the beginning of our official engagement with Medsaf, our article was published. With all weighty stories, we will always give our subjects time to respond and insist on sharing their perspective. However, when subjects choose not to respond, we will publish the facts as we know them. It is important to note that Medsaf’s response is far too frequently the approach taken by business leaders when faced with possibly negative stories. Rather than engaging the substance of the allegations, they make the media the story. Medsaf had the opportunity to engage in good faith to respond to weighty allegations but chose invective, threats, spurious legal action and finally, an appeal to public sentiment that suggests that they are the victim here, not their unpaid employees or investors that might want clarity on claims of financial impropriety. We are frequently asked why we publish these stories of struggling companies, layoffs, scandals and financial improprieties, especially in a young ecosystem still primarily funded by foreign capital. Are we not shooting ourselves in the foot? In response, we note that TechCabal has been one of the leading publications telling the African tech story in all its glory for over a decade. Our coverage has showcased the best of African tech to the world, made heroes of founders and builders on the continent, become a critical reference point for investors globally and ensured that there is not any doubt that there is a serious and worthwhile startup and tech industry in Africa that is worth investing in. We’re optimistic about the impact of technology and technology companies in Africa and are cheerleaders for the growth of what we believe is a critical economic engine for the continent. That being said, we recognize the importance of accountability in building a strong ecosystem. That accountability extends to employees, investors, customers and the broad public. Investors want to know when their funds are misappropriated or a business model has gone awry; customers want to know when a company is cutting corners on safety or the security of their information, employees want to be protected from mistreatment, new founders want to know what errors those who came before them made and the general public wants to understand the impact of these businesses and technologies that change their lives so rapidly. Without the accountability the press provides, the worst impulses within the ecosystem will grow unchecked; bad news will stay hidden for longer, and all stakeholders will find the industry harder to trust. We don’t tell these stories because they are salacious. We tell them because they are important. We stand by our story, our methods and restate our commitment to fairness, balance and honesty in our journalism. We also restate that we will continue to honour the ethical demand of providing all subjects of our stories a right to respond and will always engage our subjects, however long it takes until all parties are satisfied that their views and perspectives have been heard.
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Medsaf lays off all its full-time staff
Lire en français Read this email in French. Editor’s Note Week 28, 2023 Read time: 5 minutes Hello Have you responded to our 3-minute survey yet? Please do so and return to delve into this week’s top tech stories. Pamela Tetteh Editor, TechCabal. Editor’s Picks Mesaf lays off all its full-time staff Nigerian healthtech startup, Medsaf has laid off all its full-time employees. Former employees allege that their salaries and benefits remain unpaid. Read more. SomBank & Mastercard launch cards in Somalia Mastercard and SomBank have joined forces to introduce cards as a means of facilitating payments in the country. They believe that cards offer a superior alternative to the recently launched standard QR code, SOMQR, by the government. Learn more. A super comeback In July 2022, Union54 halted its services after it experienced a $1.2 billion chargeback fraud. Now the Zambian startup is making a comeback and building its payments service into a chat platform. Learn more. Ethiopia offers a new telecoms licence Ethiopia has kicked off the bidding process for a new telecommunications licence. Safaricom bought the one the country sold last year and has gained 2.1 million customers in eight months. Learn more. Deadline for crypto license looms A new crypto regulation in South Africa will see crypto exchanges unable to operate in the country without licences by November 30. Learn more. Entering Tech Interested in getting tech career resources and insights?. Then sign up for Entering Tech to get started! SA’s Department of Justice breaks the rules South Africa’s Information Regulator has fined the Department of Justice R5 million ($266,331) for not renewing its licences for antivirus software. Learn more. Bolt gets a CFO Ride-hailing platform Bolt has picked Mikko Salovaara as its new chief finance officer (CFO). The announcement follows Bolt’s profit gains, having experienced notable growth for the first time since 2018. Learn more about him. How social media impacted Nigeria’s elections The EU Election Observation Mission published its report showing more social media activity during Nigeria’s 2023 elections. Learn more. Kenya has a unified payroll system The Kenyan president, William Ruto, has ordered the implementation of a Unified Payroll Number (UPN) system in all state agencies to reduce the government’s wage bill and streamline payroll management. Learn more. Starlink isn’t going to SA soon This week, communications minister Mondli Gungubele reiterated that it must meet the SouthAfrica’s internet service provider (ISP) ownership equity rules first. Learn more. Who brought the money this week? Nuru, a solar company in the Democratic Republic of Congo (DRC), raised $40 million in equity funding. MYDAWA, a Kenyan online pharmacy, received $20 million in an undisclosed round from Alta Semper Capital, a private equity firm. Zuvy, a fintech company, secured $4.5 million in debt and equity funding from TLG Capital. Egyptian fintech company Masroofi raised $1.5 million in an undisclosed round from undisclosed investors. Kenya-based B2B company Revivo raised $ 635 K in pre-seed funding from Raba Partnership, Village Global, Musha Ventures, Satgana, and strategic business angels. What else to read this weekend? How to sell the “Invest in Africa” message Why Latin American fintechs are expanding to Africa Can Lagos’s new electric buses withstand the city’s notorious traffic? A Netflix and HBO’s partnership threatens Showmax Written by: Ngozi Chukwu Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
Read MoreWhat to expect from Nigeria’s new ‘Committee on Fiscal Policy and Tax Reforms’
By asking Oyedele to lead the group that will likely have the most direct influence on federal taxation policy, Tinubu is signalling a willingness to listen to tax policy experts. Having expert advice on the menu is always good, but it does not guarantee that the government will act on recommended policies. Per local media reports, president Tinubu has appointed Taiwo Oyedele, PwC’s Fiscal Policy Partner and Africa Tax Leader to oversee a newly established presidential tax reform group. This is the latest signal of Tinubu’s fiscal policy direction following a series of recently announced tax policies. Taiwo Oyedele, an associate professor at Babcock University, a private university in southwestern Nigeria also leads PricewaterhouseCoopers’ tax business in Africa. His appointment came on the back of new tax programs including a planned expansion of value-added tax to street traders and informal businesses. Nigeria’s government is seeking to increase the revenue it collects from taxes to contain a deficit budget, beef up declining oil earnings and manage staggering debt that is at historic highs. By December 31 2022, public debt levels stood at $103 billion, according to Nigeria’s debt management office. Despite its reputation as an oil-producing country and decades of oil receipts, the country struggles to finance its budget. Between 1981 and 2022, Nigeria only recorded budget surpluses in 1995 and 1996. During his campaign, Tinubu frequently pointed to the rapid increase of state revenue during his 8-year stint as governor (between 1999 and 2007) as evidence of his plans to boost government revenues. As a first step in that direction, Nigeria announced a new annual vehicle ownership verification program. Under the program, car owners would pay N1000 ($1.3) per vehicle yearly, to obtain confirmation that they owned their vehicles. This was quickly followed by an expanded VAT collection plan announced earlier this week. Nigeria’s Federal Inland Revenue Service (FIRS) said it would work with the Market Traders Association of Nigeria to collect VAT from informal traders using “unified systems technology.” The tax plan generated muted uproar on social media networks and Nigerian media publications. The announcement came weeks after the government removed petrol subsidies and floated the naira. Oyedele roundly condemned the vehicle verification program, writing on LinkedIn and Twitter, “This tax is retrogressive. It is ill-conceived and poorly designed. Apart from the payment which seems to be solely for revenue generation, and perhaps more for non-state actors than for the government, it is illogical to have to prove annually that you own a vehicle for which you already have a certificate of proof of ownership issued by the government.” Oyedele however, expressed support for the VAT expansion program while cautioning that it needed “safeguards to prevent abuse.” The government followed that up with four executive orders that rescheduled the start date for new tax programs while suspending the collection of new taxes on telecom services, Single Use Plastics, tobacco, alcoholic beverages and some imports. On social media, Oyedele praised the executive orders By asking Oyedele to lead the group that will likely have the most direct influence on federal taxation policy, Tinubu is signalling a willingness to listen to tax policy experts. Having expert advice on the menu is always good, but it does not guarantee that the government will act on recommended policies. This is not Oyedele’s first public service rodeo. Since 2017, Oyedele served as a member of Nigeria’s National Tax Policy Implementation Committee under immediate past president Muhammadu Buhari. He continued in the same role under Tinubu until the recent announcement. Why is this all important? Nigeria like several African countries has been under scrutiny for debt distress following Sri Lank’s default and the dramatic political fallout. Around 96% of the Nigerian government’s revenues go to paying off the interest on its national debt. Against the background of Ghana’s debt default woes, Zambia’s drawn-out restructuring and Kenya’s fiscal stress, Nigeria’s economic policy decisions are keenly watched by investors and business people alike. Taxes affect consumption habits. Nigeria infamously has an even lower consumption capacity (measured by the number of people who spend $10 daily) compared to neighbouring Ghana. MTN Nigeria, the country’s largest mobile carrier by market share frequently reports lower average revenues per user compared to South Africa or Kenya, for example. By embracing a managed float of the naira, the government sent an early signal that it will embrace traditional economic management. But the unwillingness of the government to allow its bonds to reflect market price expectations has muted investor response even as bank stocks and inflation soared. If the events of the previous two days are any guide, Nigerians may expect mixed policy signals as Tinubu’s fiscal policy is fully revealed. Social media reactions show an expectation that Oyedele will provide a moderating influence on how federal tax policy is formed and implemented. But the new government’s reform zeal will be tested in the coming months as the impact of painful policies fully settles across the economy.
Read MoreYCombinator doubles down on fundamentals as it releases first ever ‘top companies by revenue’ list
As YCombinator shares its first ever list of top companies by revenue, is it a sign to the startup ecosystem about where VCs are headed in terms of priority metrics for their portfolio companies? For the first time ever, San Francisco-based accelerator YCombinator has released its top 50 alumni companies by revenue list. The esteemed accelerator is known for using valuations to rank companies. Of the listed companies, Africa has only one representative: Wave, the Senegalese mobile money app. Other startups which feature include Airbnb, Dropbox, Coinbase, and Reddit. Since the start of the VC downturn in early 2022, YCombinator has stressed to founders the need to move from a “growth at all costs” mentality to building business models which show a path to profitability. Is this new trend of spotlighting revenue as a core metric in judging alumni’s success the beginning of the accelerator’s shift towards bottomline growth heralding? Speaking to TechCabal on a call, Clive Butkow, CEO of Johannesburg-based VC firm Kalon Ventures believes that it is the beginning of not only YCombinator’s push for bottomline growth in its cohorts, but the VC industry in general. “In a downturn, every investor is going to be frugal with their funds because they are so hard to come by, so its not surprising to see YCombinator insisting on the importance of revenue as a growth metric. Of course revenue is still a topline metric so I think eventually, we will see them maybe sharing a Top 50 most profitable startups list,” he said. What does this development mean for African startups? According to Ato Bentsi-Enchill, head of special spurpose vehicles (SPVs) at Microtraction, a Nigerian early stage VC firm, the list should encourage African startups to prioritise metrics like revenue instead of growth at all costs. “Maybe this is a way to encourage startups who perhaps want to apply to YCombinator by showing them the revenue-making abilities of some of their alumni. At the same time, maybe its a subtle reminder to founders that ‘at the end of the day, you’re building a business and business is about making money, and for anyone to invest in your business,” he said to TechCabal. As VC dollars continue to be a unicorn, hard to find, Bentsi-Enchill advises startups that beyond focusing on revenue, it is important for them to think of addressing problems beyond just Africa. Global problem solving in a sustainable and business-sound way will be the next wave. “[At Microtraction], we are also thinking through refining our thesis to make sure that we’re investing in founders whose businesses have applications both on the continent, but can also be expandable across the world and address far-reaching problems,” he added. Regardless of YCombinator’s reasoning for putting out such a list for the first time ever, the fact that such a leading global investor is a sign of wind of change is blowing through the VC industry and whether African startups like it or not, they will have to adapt to the new modus operandi.
Read MoreWhat does remote work mean for compulsory in-person staff?
As more companies embrace the remote work model, some employees face uncertainties around their roles. *Karima is an office assistant at a lending startup in Lagos who earns about ₦80,000 monthly. Her responsibilities include providing managers and other staff with hands-on support, such as making a cup of coffee, welcoming guests or receiving and storing packages. Some days are busier for her than others, depending on the number of staff who come in. The startup runs a hybrid work arrangement, which sometimes reduces her workload. However, Karima worries about what could happen if the company decides to go fully remote. “I’m working on getting some tech skills for myself so that I can easily upskill and switch roles. Most startups are going remote, and if my startup fully goes remote, I might not have a job,” Karima shared. Karima occasionally offers some assistance to remote workers as well, but she argues that it’s work that can be outsourced. “I carry out tasks like overseeing the shipment of work materials to remote workers, but that’s not enough responsibility to keep me on a company’s payroll.” Karima is one of many compulsory in-person workers who are uncertain about the future of their jobs. In the middle of a funding winter, startups are doing all they can to cut costs and stay afloat: brutal layoffs, chopping down marketing budgets and embracing remote work as an operations cost-saving method. While most employees are happy to work remotely as it saves them the stress and time of a daily commute, not everyone can enjoy those benefits, as there is a category of employees whose roles are threatened by remote work. Compulsory in-person roles—administrative staff, office assistants, office managers, and janitors—whose jobs typically require their physical presence are the first to be affected by a shift to remote work. Not only do these employees stand to lose their jobs, it’s more difficult for them to find decent-paying jobs elsewhere. According to Karima who’s currently studying for a diploma at the Lagos cooperative college, the tech industry pays some of the most competitive rates for someone like her, who does not have a university degree. “For this my role and qualification, I’ll probably just earn slightly above the minimum wage. In my first job, before I came here, I was paid ₦25,000 for the same set of responsibilities—and I even had to do more work. I earn a decent amount of money here because it is a tech company and they have more money to an extent. If this company and other tech companies decide to fully go remote, it’s going to be very difficult for me to find another job that’s as good as my current one. This is why I’m doing my best to pick up new skills so that it will be easier for me to find something in the future.” Taiwo Ajaga is an admin manager at Big Cabal Media, which has a widely distributed staff. From a management perspective, Ajaga explains that remote workers indeed save the company money in terms of office space and utilities, and are ultimately easier to deal with. While his role requires him to be at work every day, Ajaga is well acquainted with digital tools that can facilitate his responsibilities in the case of a full shift to remote work. He also believes that a totally remote office should not be too difficult to circumvent for some compulsory in-person staff like office assistants and managers, as they can leverage digital tools to do their jobs well. “Transitioning to a fully remote setup can require adjustments, but with the right support, tools, and processes, admin roles can be managed effectively,” he shared with TechCabal. While there’s truth in Ajaga’s views, the considerably large digital divide in Nigeria must be taken into consideration. Only about 38% of the country’s population has consistent access to the internet due to factors like a lack of devices and poor internet connectivity. These factors, in addition to widespread digital illiteracy, undoubtedly obstruct the ability of staff to adapt to a fully remote work system. Additionally, a lot of compulsory in-person roles are lower-level, and do not pay well enough for staff to acquire the appropriate devices and stable internet connectivity. Is the hybrid work model a saving grace? Joseph*, a tech recruiter, believes that some compulsory in-person workers do not have adequate transferable skills and will eventually lose their jobs in the case of fully remote workforces. According to him, adopting a hybrid work model can mitigate these possible outcomes. “Considering the fact that a number of roles will be made redundant with a fully remote work arrangement, I think a hybrid work arrangement will cushion that effect. You won’t have these people just be without jobs, because to be honest, just a few of them have transferable skills. As a cleaner or office assistant, what skill do you want to transfer to a different role that will make you still relevant in the career space? So I always advocate for the hybrid work model,” he said. Abdul*, who also works as a tech recruiter, agrees with Joseph. He also believes that Nigerian companies won’t be going fully remote anytime soon as a large number of people aren’t equipped with sufficient digital skills to manage this. “I think the market is still largely hybrid and will remain so for the foreseeable future. While some startups might choose to go that route, I still think that office settings will still exist for a long time and that way, there will always be room for physical staff at other companies,” he shared with TechCabal. While the hybrid work model may serve as a middle ground, allowing for a combination of remote and in-person work, the challenges posed by limited literacy, inadequate internet access, and a lack of transferable skills create significant barriers for employees in compulsory in-person roles to adapt to a fully remote workforce. As companies navigate the changing landscape of work,
Read MorePoS operators may stop services as FCCPC blocks price increase
The regulatory clampdown on the recent price increase has raised uncertainty and apprehension among operators who are now faced with the prospect of significant changes to their business operations. On Wednesday, the Federal Competition and Consumer Protection Commission (FCCPC) barred PoS operators in Nigeria from increasing the service charges and threatened a sanction. The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) fixed a service charge of ₦100 for withdrawals between ₦1000 to ₦2400. The president of AMMBAN’s Lagos chapter, Abiodun David, said the proposed price hike was due to the economic realities of PoS operators. According to him, PoS operators may consider other lines of business if the authorities don’t approve the service charge increase. “There is nothing strange in what we have done. The current realities are not convenient for us. Transporters and market traders have done so,” he said. “Why is our case different?” he wondered over the phone in an interview with TechCabal. POS service charge increase in Lagos remains unchanged in Abuja In Lagos and Abuja, the realities have been different. In Iju Ishaga, Lagos, Matthew, a PoS operator charged ₦400 for withdrawing ₦12,000. According to the new prices, the correct fee should be ₦600. In Abuja, the service charge for withdrawals and deposits is unchanged. Reuben, a regular user of the PoS service believes that if there are additional charges imposed on PoS services in Abuja, it will reduce his usage of the service for transactions. “Abuja is blessed with so many banks, and cash is mostly available in their ATMs. So instead of paying extra charges than what I am currently paying for the PoS service, why not just take a stroll to the nearest bank(s) around and get my money?” he asked.
Read MoreAfreximbank and Fiducia join forces to provide financing to SMEs through factoring
Through its partnership with African Export-Import Bank, Fiducia is providing financing to SMEs in Africa through factoring and actively raising awareness about its benefits among African businesses. Fiducia, an investment firm, is partnering with African Export-Import Bank (Afreximbank) to provide additional liquidity for small businesses in Africa through factoring. Factoring provides SMEs with immediate access to cash flow by converting their unpaid invoices to funds. Small and Medium Enterprises (SMEs) are the driving force of economic development in Africa, accounting for 90% of all businesses, 50% of employment and 40% of GDP across the continent. While SMEs contribute the majority of economic output and employment generation in Africa, they often lack access to financing they need to strengthen their businesses. Only 20% of African SMEs have a line of credit. The partnership between Afreximbank and Fiducia seeks to address this concern through factoring. “Fiducia is actively raising awareness about factoring and its benefits among African businesses,” Imohimi Aig-Imoukhuede, the CEO of Fiducia, told TechCabal. “Through joint promotional and educational campaigns, we aim to highlight the advantages of factoring and provide the necessary knowledge to potential users.” Fiducia’s move to reduce the financial gap through factoring is a novel solution and the company is currently testing the waters in Nigeria. According to the CEO, the startup is working with developmental finance institutions and legal firms to “develop a blueprint for the sector” while also advocating for the adoption of sector-friendly policies and regulations. “By collaborating with these stakeholders, we can create an enabling environment for factoring to thrive and expand its reach in Nigeria and across the continent,” he said. Zuvy raises $4.5 million to scale invoice financing in Nigeria How it works The factoring process, which Fiducia aims to implement through its marketplace, involves SMEs supplying goods to corporate buyers. The SMEs upload invoices, which are validated and approved by the corporate buyers. Funders then bid on the invoices, and Fiducia selects the successful funder. Fiducia sends funding instructions to the funder, and the SMEs receive funding. On the due date, the corporate buyers pay the funder. Fiducia facilitates the entire process, ensuring efficient transactions and business growth. “The goal is to facilitate smoother cash flows, improve inventory management, and enhance overall financial stability within the supply chain ecosystem,” Aig-Imoukhuede told TechCabal. Risks abound While Fiducia’s novel approach represents a way forward for financing SMEs in Africa, risks abound. SMEs that opt for factoring may have higher default rates compared to larger, more established businesses. To mitigate this risk, Fiducia says it maintains close relationships with clients and actively monitors their performance and market dynamics to detect potential disruptions in the supply chain. To minimise the credit risks financiers face, Fiducia provides them with market and sector data to help them to filter out those that do not conform to selected criteria. While concentration risk might pose another challenge to financiers, Aig-Imoukhuede asserts that Fiducia mitigates this by allowing financiers to diversify their portfolios. “By employing a proactive and risk-aware approach, we will support the sustainability and resilience of our factoring solutions.” Future Plans While Fiducia is testing the waters in Nigeria, it aims to “make factoring a convenient and reliable financing option for African businesses,” according to the CEO. Aig-Imoukhuede stated that Fiducia plans to deepen its presence across multiple markets on the continent through strategic partnerships.” By establishing strategic partnerships, we will leverage existing networks and expertise to reach clients (even SMEs in remote areas),” he said. “Ultimately, our long-term goal is to contribute to the growth and development of African economies by empowering SMEs, fostering financial inclusion, and driving economic prosperity through factoring,” he concluded.
Read MoreAirtel Kenya announces 5G with unlimited broadband plans
Airtel launches 5G in Kenya, following Safaricom’s lead. 5G Wi-Fi was also introduced. Airtel has become the second telco to launch 5G in Kenya after Safaricom rolled out the service in October 2022, following months of testing. Airtel, also Kenya’s second-largest network operator, announced the product at an event attended by multiple leaders in the ICT sector, including Kenya’s cabinet secretary for ICT, Eliud Owalo, and the director-general of the Communications Authority of Kenya (CA), Ezra Chiloba. Airtel 5G will initially be available to a select number of customers as the carrier only has 370 5G sites spread across 16 counties. The operator did not specify which areas would be served. However, the service is expected to focus on customers in major areas and cities such as Nairobi, Nakuru, Mombasa, and Kisumu. Ashish Malhotra, the managing director of Airtel Kenya, said, “Airtel 5G will revolutionise various sectors, such as smart cities, education, healthcare, Agri-tech, transport systems, entertainment, and more, shaping the future of Kenya.” Airtel has also followed Safaricom’s lead by announcing the availability of 5G Wi-Fi. Safaricom introduced a similar product last year, enabling customers to purchase a 5G router and connect to the network in areas with 5G signals. Airtel 5G Wi-Fi plans Airtel will sell 5G-supported routers to interested customers at KES 10,000 ($72) and for businesses for free, whereas Safaricom charges KES 25,000 ($180) for the same device. Airtel will offer 5G home broadband connections to residential houses and businesses. Plans start at KES 3,500 ($25) at 10Mbps. Customers needing higher speeds will pay more, with 30Mbps costing KES 5,500 ($40) and 50Mbps at KES 7,500 ($54). Airtel will also sell volume-based home data plans starting from KES 3000 ($22). These packages are also unlimited, making them appealing to customers needing high internet speeds. Safaricom also offers the same product at KES 3500 ($25), KES 6000 ($43), and KES 15000 ($108) for 10Mbps, 40 Mbps, and 100Mbps, respectively. Unlike Airtel 5G Wi-Fi plans that are unlimited, Safaricom’s 5G broadband is limited to a given volume of data. Airtel 5G bands and mobile plans Airtel Kenya told TechCabal that its 5G connection is based on a sub-6 GHz frequency band. This refers to the frequency range below 6 GHz. It includes frequency bands such as 600 MHz, 700 MHz, 2.5 GHz, 3.5 GHz, and 4.9 GHz. Sub-6 GHz signals have relatively longer wavelengths, so they can travel longer distances and penetrate obstacles like buildings and walls more effectively. However, they generally offer slightly lower data speeds compared to mmWave. mmWave operates at much higher frequencies, typically between 24 and 100 GHz. These high-frequency signals can provide fast data speeds, even reaching multi-gigabit-per-second rates. However, they have a limited range and are easily blocked by obstacles, including buildings and trees. Thus, mmWave 5G is primarily used in dense urban areas where high capacity and speed are needed. For now, Airtel customers need 5G-capable devices to access the network. However, the carrier has not announced specific 5G plans. Airtel argues that customers will be moving in and out of 5G areas and will be well-served by 4G bundles, which can access 5G without issues. In contrast, Safaricom has introduced 5G-specific bundles, cheaper than other plans but can be used on both 4G and 5G networks. Regulatory support More players may join the 5G race in Kenya, with the next candidate being Telkom Kenya. However, the state-run entity has been facing financial difficulties, leading to the telco’s failure to pay the American Tower Corporation (ATC) KES 200 million for tower leasing. As a result, ATC switched off half of the towers, impacting millions of Telkom customers. The presence of the Communications Authority of Kenya’s director-general, Ezra Chiloba, also indicates the regulator’s support for telcos as they transition to offering 5G services. The CA has not announced specific 5G spectrum fees but has chosen to bill telcos based on deployment and per-installed links. For example, if an operator installs 5G services in a particular area, they will pay fees for that specific area. The regulator will eventually establish a standard cost in the coming days.
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