U.S. 5% remittance tax plan to threaten $2.8 billion of Africa’s foreign inflows
A proposed U.S. bill to impose a 5% tax on all outbound remittance transfers from non-citizens could divert as much as $2.8 billion from Sub-Saharan African economies in 2025, threatening one of the region’s most stable sources of foreign exchange. Nigeria, Ghana, and Kenya stand to be among the hardest hit. “The One Big Beautiful Bill,” backed by President Donald Trump, would apply a 5% levy on international money transfers made by all non-citizens in the U.S., including green card holders and temporary visa holders. U.S. citizens would be exempt. The bill, now advancing in the House of Representatives, is expected to be voted on May 26, with a possible signing into law by July 4, 2025. The proposed tax will be deducted at the point of transfer and remitted quarterly to the U.S. Treasury. Under this policy, a $400 remittance transfer would be subject to a $20 withholding fee. For individuals sending $400 each month, this tax would add up to $240 over a year. For African countries, where remittances fund education, healthcare, and business investments, the proposed fee could trigger a ripple effect across economies already struggling with high inflation and low foreign direct investment. Who is most affected? African nations, particularly those with large diaspora communities in the United States, will be significantly affected by this proposal. The U.S. Census Bureau data released in April 2024 says the U.S. hosts about 46.2 million immigrants, which makes up almost 14% of the U.S. population. Sub-Saharan African immigrants make up over 5% of the U.S. immigrant population, with Nigeria having the largest number as of 2019, with countries like Ethiopia, Ghana, Kenya, and Somalia. These communities rely heavily on remittances from their overseas populations to support household incomes, fund education, and drive local investments. For instance, Nigeria’s remittance received in 2024 reached nearly $20 billion-making remittances one of the country’s most stable sources of foreign exchange. Nigeria’s economy is highly dependent on these inflows, which often surpass foreign direct investment. Egypt has the highest remittances, however most of them come from the gulf countries, as most of its diasporan population is based there. Broader implications Kahuna, a Tanzanian living in the U.S., told TechCabal that if the bill is applied, she foresees reduced remittance flows with U.S. diasporan communities sending less money home due to the added cost on top of transfer fees. For example, Western Union fees range from $5 to $20, with faster transfers costing more. These additional fees will force many migrants to opt for illegal, informal channels. “It should be interesting to see how this evolves, but by the way things are, it may likely pass,” Kahuna, who asked to be identified by her first name, said. “The changes that have been happening in the U.S. as of late have forced us to question our roles as Africans,” said Joy, a Nigerian living in the U.S. “If this remittance Bill is passed, we will have to find more alternatives of sending money home or even just invest in businesses that would generate cashflow for family support.” Yavi Madurai, the President of African Prosperity Fund, an infrastructure initiative sponsored by the African Continental Free Trade Area (AfCFTA) Secretariat, told TechCabal that the proposed tax on remittances threatens to disrupt a crucial financial lifeline for millions of African families. While the policy targets U.S. domestic concerns, its ripple effects could undermine economic resilience and financial inclusion across Africa. “These funds are more than just income; they support education, health care, housing, and small business development,” she said. “They serve as social safety nets in many communities across Africa.” Sub-Saharan Africa is projected to receive approximately $54 billion in remittances in 2025, and a 5% tax could divert up to $2.8 billion away from recipient households if a significant share comes from non-citizen US residents. Madurai noted that many small businesses in Africa are financed through remittances. A decrease in these funds could slow entrepreneurship and job creation. “Blanket remittance tax risks decreasing transfer volumes, increasing informality, and disproportionately affecting low-income households,” she said. “The poor are going to be impacted the most. Moreover, it undermines global commitments to reduce remittance costs under SDG 10.” Remittance startups like NALA and LemFi may face increased regulatory burdens, as they would be required to verify the citizenship status of senders before processing transactions. This could lead to higher operational costs and potential disruptions in remittance services, further complicating the financial landscape for migrant workers. The policy—part of Trump’s broader campaign to restrict immigration—could open new diplomatic rifts between Washington and African capitals. Analysts say the African Union and affected governments must engage U.S. lawmakers urgently. Madurai noted that African governments should urgently initiate a coordinated diplomatic response through the African Union and engage US lawmakers to seek exemptions or waivers for least developed or heavily remittance-dependent countries. Simultaneously, they should work on regional remittance harmonisation and strengthen financial sovereignty through digital financial innovation. “Now is the time to access the talent and technological advancements we have on the continent,” said Madurai. The bill’s progress will be closely watched over the coming weeks.
Read MoreOnboard Global unaffected by Coinbase’s $400 million data breach
Onboard Global, a Nigerian crypto payments startup, has confirmed that its operations remain unaffected by the recent data breach at Coinbase, the largest US-owned cryptocurrency company. In February, Onboard Global partnered with Coinbase to make it easier for users in Nigeria to buy crypto using local currency through Coinbase Wallet. The integration routes users to Onboard’s platform, where transactions are handled independently. Onboard runs its verification checks, meaning Coinbase does not access or store any of Onboard’s user or system data. “The Coinbase breach does not impact Onboard Global, and there’s no material connection to our operations in this context,” an Onboard Global spokesperson told TechCabal. This assurance comes amid revelations from a May 15 regulatory filing, in which Coinbase disclosed that hackers had bribed and colluded with contract employees, reportedly from India, to steal sensitive data from users. The attackers posed as Coinbase staff and tricked users into sending crypto after gaining access to their full names, government-issued ID images, addresses, and account data. Coinbase CEO Brian Armstrong said the company received a ransom demand of $20 million on May 11. It declined and instead placed a $20 million bounty on the perpetrators. While Coinbase estimates its financial exposure as high as $400 million, it said less than 1% of users were affected. The breach is a stark reminder of how human error and insider threats continue to expose vulnerabilities in crypto infrastructure. Although Onboard is a Coinbase partner, its limited use of the Coinbase Wallet application programming interface (APIs) meant none of its users or systems were compromised. In 2024, Coinbase Ventures, the corporate venture capital (CVC) arm of Coinbase, invested in the crypto startup. Hacks have become a recurring theme in the crypto space. Since 2021, the global industry has lost more than $1.5 billion yearly to cyberattacks. Bybit, another major crypto exchange, was hit by a $$1.5 billion hack in February, reportedly linked to North Korea’s Lazarus Group. These incidents unsettle users, particularly in emerging markets, where trust in crypto is still forming. Often, it’s not the tech that fails, but people. Still, Nigeria’s crypto ecosystem remains on course. Developers building on Coinbase’s Base blockchain—on which Onboard runs—continue to ship products and grow local adoption. The breach hasn’t slowed the pace for African developers, who are carving out their place in the global crypto map with steady momentum.
Read MoreLebara bets on voice bundles to win in Nigeria’s $20 billion telecom market
When Lebara Nigeria, a subsidiary of the London-based Mobile Virtual Network Operator (MVNO) Lebara, launches in Q3 2025, it will challenge the norm of traditional airtime sales by offering voice bundles and data packages tailored to specific user needs. This move will give subscribers more control over their spending, reduce the cost of calls, and deliver longer talk time and browsing value. Lebara’s decision to offer voice bundles instead of traditional airtime underscores a major shift in Nigeria’s highly price-sensitive telecom market. In a market where ₦100 airtime often vanishes without clear usage breakdowns, voice bundles offer predictable, real-time billing with no hidden charges. For investors, this model reflects a lean, tech-driven operation with strong potential for rapid growth, especially given Lebara’s global MVNO experience and low operational overhead. For regulators, it validates the move to open the market to MVNOs. And for incumbent players, it serves as a wake-up call to evolve or risk losing ground to more agile, customer-focused entrants. Lebara’s entry into Nigeria aligns with the Nigerian Communications Commission’s (NCC) broader agenda to expand competition, improve service quality, and drive innovation through Mobile Virtual Network Operator (MVNO) licensing. By allowing MVNOs to offer services over existing telecom infrastructure, such as fibre networks and base stations, without the heavy investment of building it themselves, the NCC aims to lower costs and boost access, especially in underserved areas. For subscribers, this translates into more affordable, tailored voice and data plans. Countries like South Africa, Kenya, and Morocco have more established MVNO ecosystems, thanks to earlier regulatory support, mature telecom infrastructure, and higher mobile penetration. South Africa, for example, has multiple active MVNOs—including FNB Connect and Me&You—backed by strong consumer demand for niche, cost-effective services. Kenya’s ecosystem thrives due to its digital-savvy population and robust mobile money integration, while Morocco’s regulatory framework has long encouraged telecom competition. In contrast, Nigeria, despite being Africa’s largest telecom market by subscriber base, only began issuing MVNO licences in 2023 due to previous regulatory hesitation, infrastructure challenges, and a market long dominated by a few powerful Mobile Network Operators (MNOs). With the NCC now actively supporting MVNOs to foster competition and expand access, the ecosystem is finally beginning to take off. Lebara will operate under a Tier 5 Unified Virtual Operator licence—the most comprehensive category within Nigeria’s MVNO framework—secured through VAS2Net, a local value-added service provider, in March 2024. Valid through 2034, this licence allows Lebara to offer a full range of telecom services. Unlike Mobile Network Operators (MNOs) such as MTN, Airtel, or Globacom, which build and maintain vast infrastructure, Lebara will lease capacity from existing networks and build its offerings on top.. The difference is significant. Airtime is a flexible prepaid credit usable for calls, SMS, or data at standard pay-as-you-go rates, but typically comes with higher per-minute charges. Voice bundles, on the other hand, offer fixed call minutes at discounted rates and often come with usage perks. While airtime suits users looking for flexibility, voice bundles are ideal for frequent callers who want predictability and better value. “You buy minutes, not airtime,” explained Samuel Alabi, Head of Corporate Communications at Lebara Nigeria. “If your call ends in 30 seconds, you still have 99 minutes and 30 seconds left. That’s the kind of clarity and control we’re bringing to Nigerian telecoms.” Betting on lower operational cost Lebara bets that as an MVNO, it can outmaneuver traditional players weighed down by massive operational costs. While MNOs must maintain sprawling infrastructure and thousands of employees, Lebara keeps lean by riding on partner networks and leveraging software, partnerships, and automation. The company is betting it can undercut incumbents and win market share in an industry projected to reach $20 billion this year. “Our operational cost is lower, so our prices can be too,” said Alabi. “It’s like how fintechs disrupted banks—you don’t need a branch on every street to offer great financial services.” That model allows Lebara to tailor products for specific user needs. Whether you’re a tech bro downloading software or a social media addict glued to TikTok, there’s a bundle tailored to the specific activity you want to conduct online. Heavy callers get voice minutes, not confusing unit-based billing. And yes, there will be both physical SIMs and eSIMs at launch. The challenge of Nigeria’s telecom landscape But the path to launching an MVNO in Nigeria isn’t simple. The ecosystem has long been dominated by just a few MNOs, MTN Nigeria and Airtel Nigeria. Infrastructure is patchy, prices are opaque, and service quality varies widely. “The telecom sector here isn’t just suffering from hardware gaps,” said Alabi. “It’s also the software—both literally and figuratively. It’s one thing to have an iPhone; it’s another to know how to use it.” This is where Lebara hopes government support can make a difference. To succeed, MVNOs need regulatory backing, infrastructure-sharing laws, and collaboration between private players and the public sector. As of May 2025, the Nigerian Communications Commission (NCC) has issued at least 41 MVNO licences across five tiers, making Nigeria one of Africa’s most dynamic MVNO markets. The NCC initially licensed 25 companies in 2023, but by late 2024, the number had grown to 41, with companies paying a combined ₦8.6 billion ($5.4 million) in licence fees. The MVNOs in Nigeria are betting on innovation, customer-centric offerings, digital and financial services integration, and strategic partnerships to carve out market share and drive growth in a highly competitive telecom landscape. “MVNOs can’t work without government involvement,” Alabi emphasised. “The NCC’s licensing is a good start, but this has to be a true private-public partnership. That’s why we’re working with the Ministry of Arts, Culture, Tourism, and Creative Economy to ensure the environment supports innovation.” The goal is to unlock competition and shake up a space where too few players control too much. “With only three major MNOs, it’s not easy to get them in a room and agree on pricing,” Alabi said pointedly. “MVNOs change that.” Building through partnerships Two major partnerships backed Lebara’s Nigerian
Read MoreNigeria’s Central Bank holds interest rate at 27.50% for second straight meeting
Nigeria’s central bank held its benchmark interest rate steady at 27.50%, maintaining its policy stance for a second straight meeting as policymakers seek clarity on the inflation outlook. The CBN also left the interest rate unchanged in February. The decision signals a cautious approach by Governor Olayemi Cardoso, who is balancing a need to lower inflation with the need to support an economy that is gradually winning back investor confidence. The Monetary Policy Committee (MPC) voted unanimously to hold rates, citing relative improvements in some key macroeconomic indicators, including exchange rate stability and a gradual slowdown in fuel price increases, and decided that holding rates steady was the best course of action. “Members also noted with satisfaction, progressive moderation in food inflation, and therefore commended the government for implementing measures to increase food supply as well as stepping up the fight against insecurity, especially in farming communities,” Cardoso said at a press briefing on Tuesday. The decision to hold the interest rate was widely anticipated by analysts, who argued that further tightening could stifle business activity, while a premature cut might worsen inflationary pressures. “The relative stability in price levels and exchange rate in recent months reduces the case for further tightening,” said Felicia Awolope, Senior Investment Research Analyst at Meristem. “ Furthermore, the committee will likely weigh persistent inflation risks, including the potential fallout from global trade tensions and tariff-related price pressures.” “Additionally, with oil prices on the decline, FX inflows from crude exports could weaken, increasing the importance of keeping investor sentiment strong to sustain portfolio flows.” Since the start of 2024, the CBN has raised the interest rate in an aggressive attempt to rein in inflation and stabilise the naira. This latest decision suggests the central bank is pausing to evaluate the impact of those hikes rather than committing to further tightening. Headline inflation stood at 23.71% in April, but food price increases have slowed on a monthly basis. The naira has also strengthened in recent weeks, boosted by rising investor confidence and improved foreign exchange inflows. “Holding the policy rate steady would help sustain foreign portfolio investment inflows, which are sensitive to interest rate differentials and currency stability, as this approach aligns with the CBN’s commitment to orthodox monetary policies aimed at price stability,” said Ola A, a banking and investment analyst. With the next MPC meeting scheduled for July 21-22, investors will be watching for signals on whether the CBN maintains its hawkish stance or shifts toward easing if inflation shows signs of further moderation. “The committee, however, acknowledged underlying inflationary pressures driven by high electricity prices, persistent foreign exchange demand pressure, and other legacy structure factors,” Cardoso said. “The committee also called on the fiscal authority to strengthen current efforts at enhancing foreign exchange, especially gas oil and non-oil exports.”
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Nigerian startup, Allawee, wants to restore fintechs’ confidence in cards
Nigerian fintechs have had a mixed relationship with cards. In the past, some offered foreign-issued cards like Visa and Mastercard to acquire customers and encourage online spending. However, as Nigeria’s economy worsened and bank transfers grew, fintechs began ditching foreign card schemes in favour of local alternatives or stopped offering cards altogether to cut costs and adapt to shifting user behaviour. Now, Nigerian fintech, Allawee, is building infrastructure to help fintechs offer cards to their customers. Allawee is aiding other fintechs like Piggyvest, Nomba, and Carbon to issue cards through its end-to-end card-issuing infrastructure, which includes core banking, card authorisation services, and direct integration with switches and card schemes like Mastercard and Verve. “We’ve wrapped all of that into a simple tool that can be accessed through a no-code dashboard or via an API,” Ikenna Enenwali, Allawee’s CEO, told TechCabal. Fintechs make money from card transactions through a fee known as interchange, a small percentage charged every time their customers pay with their cards. If cards are dormant, they continue to incur card-related costs, such as maintenance and compliance, without earning interchange revenue. Allawee’s revenue model is three-pronged: a monthly fee on each active card, a 0.5% interchange fee, and a higher fee for processing foreign transactions. Customers must use their cards frequently for a fintech to break even or turn a profit with cards. However, as bank transfers grew to account for over 51% of online payment transactions, customers transacted less with cards, making them a cost centre for fintechs. The higher margins with bank transfers also made fintechs deprioritise cards. Despite these issues, cards remain one of the most effective channels for customers to access their funds. For many, cards offer an easy and fast option to access cash. If Allawee can consistently ensure that cards issued through its platform complete transactions reliably and make money for the fintechs, it could reverse their deprioritisation of cards. How Allawee helped Carbon bring cards back Carbon, a 13-year-old fintech known for its loan-led approach, stopped offering cards in 2024 because of the high costs tied to foreign cards. The company brought them back in February 2025 after rising demand from customers. This comeback was made possible through a partnership with Allawee, which helped Carbon solve its two biggest problems with offering cards: persistent failed transactions and the high transaction cost. “The decision to partner with Allawee turned out to be one of the most effective moves we’ve made,” said Chijioke Dozie, Carbon CEO. “They moved with incredible speed, understood our needs, and delivered a seamless card infrastructure that surpassed our expectations.” Allawee’s solution allowed Carbon to coordinate with several payment switches, card processors, banks, card personalisers, and manufacturers in its dashboard, which cut the time it takes to issue cards from months to weeks. “With just three clicks, a fintech can configure, issue, and manage cards, “Enenwali said. “Launching a card program traditionally takes about one to two years, whether in Nigeria or elsewhere. We’ve cut that timeline down to just a few weeks. That speed has been a game-changer.” The startup is also allowing its customers to bypass dollar-denominated fees that eat into margins on card transactions through an integration with Verve, Interswitch’s card service, which charges in naira. “We rebuilt the commercial logic. Even when a customer makes a small ₦10,000 payment or withdraws ₦5,000 from an ATM, the fintech should not lose money on that transaction. With our infrastructure, they don’t,” Enenwali said. Allawee’s customers can also issue Nigerian customers who make foreign transactions with Mastercard. In 2024, the global card issuer launched Naijacard, a Nigeria-focused card that charges in naira when making foreign transactions. Verve charges a flat rate lower than ₦10 per transaction, Enenwali said, compared to international card schemes that charge in dollars and are based on transaction amount. “For global card acceptance, we worked directly with Mastercard for two years to negotiate a new pricing model. This model has made Mastercard issuance commercially viable for local fintechs again,” Enenwali said. The startup claims its APIs have allowed its customers to successfully perform card transactions, leading to a 60% monthly growth rate on its platform over the past four months. “We’re trying to restore confidence in cards. We believe that if you give people a reliable card experience, they’ll prefer it,” Enenwali said. The startup also has plans to expand to Francophone West Africa before the end of the year, thanks to a partnership with Mastercard. “The Carbon case also validated something we have believed all along: most infrastructure problems are not about innovation; they are about execution,” Enenwali said. “The technology exists, but it’s often poorly integrated, poorly localised, and difficult to access. We made it simple. API-first, developer-friendly, and modular. That’s our edge.” Enenwali believes that if his company can lower costs and make cards reliable, cards can grow to become a vital part of Nigeria’s digital payments market. If Allawee can succeed on that front, it could change how cards are viewed in Nigeria’s fintech industry.
Read MoreKenya’s Supreme Court warns against AI use after lawyers submit fake citations
A Kenyan Supreme Court judge has warned judges and lawyers about using artificial intelligence tools like ChatGPT in court submissions following a case in which fabricated legal citations were generated and presented in court. Justice Isaac Lenaola, also the chairman of the Judiciary’s Committee on Innovation, described an instance where lawyers had submitted arguments with AI’s help, only for the presiding judge to discover that every legal authority cited in the submission was fictitious. While generative AI tools like ChatGPT promise efficiency and ease in drafting legal documents, their inaccuracy in citing past cases and legal precedents poses serious risks to judicial integrity. Lenaola’s warning calls for regulatory clarity as Kenya weighs in on the legal and ethical challenges of integrating artificial intelligence into courtroom practice. “I was reading a case where a judge was horrified because of what had happened to him,” Lenaola said at the Judiciary Digital Transformation Conference on Friday. “Lawyers filed submissions using AI. The language was beautiful, but when the judge cross-referenced the authorities, all of them were created by artificial intelligence.” Lenaola urged court officials and lawyers to refrain from using AI tools until clear guidelines are established. He warned of the reputational risks to the bench if judges were to incorporate such material into their rulings unknowingly. While AI tools can produce fluent and convincing prose, there are documented cases of false information, especially when generating sources or citing examples. “Please, judges, lawyers who are here. Until we give you guidelines, please avoid AI for now,” he said. “Can you imagine the embarrassment if a judge delivers a judgment, then the AI tools tell him, this was not created by you, this is AI, and all the authorities are fake?” Kenya is not the only country grappling with legal practitioners turning to AI in the courtroom. Courts in the US, Canada, and the UK have also encountered instances where lawyers used ChatGPT to draft submissions containing fabricated case law. In 2023, a New York federal judge fined lawyers $5,000 after they admitted using ChatGPT to create a legal brief that included non-existent court opinions and fake quotes. In 2024, another New York lawyer was sanctioned for citing a non-existent case generated by AI. In Kenya, the Judiciary has been exploring integrating technology, including digitising court records, expanding e-filing systems, and in virtual court sessions. However, Lenaola’s comments suggest a more cautious approach to generative AI.
Read MoreMeta could take millions of SMEs with it, if it exits Nigeria
In April 2025, a legal ruling by Nigeria’s Competition and Consumer Protection Tribunal marked a pivotal moment in the intensifying standoff between Meta Platforms Inc. and the Nigerian government. The tribunal upheld a $220 million fine imposed by the Federal Competition and Consumer Protection Commission (FCCPC) on Meta—parent company of WhatsApp, Facebook, and Instagram—for multiple violations of Nigeria’s data protection and consumer laws. In response, Meta raised the possibility of withdrawing its services from Nigeria, a threat that, if realised, could have sweeping consequences for the country’s digital economy, information ecosystem, and millions of daily users. A looming threat to small businesses The impending shutdown of WhatsApp, a cornerstone of Meta platforms, is poised to impose steep switching costs on thousands of small and medium-sized enterprises (SMEs) that have avoided traditional brick-and-mortar models for digital platforms or depend on the app to finalise sales. Take Oluwafayokunmi Olutomiwa, who, as a 22-year-old engineering student in 2023, used WhatsApp and other Meta platforms to grow her to ₦15 million ($9,000) in annual revenue just two years after launching. Olutomiwa told TechCabal that her enterprise raked in ₦100 million ($60,000) in 2024—without a walk-in office. “I use Instagram to spread awareness and WhatsApp is where I close sales,” Olutomiwa told TechCabal, emphasising the platform’s role in enabling direct, real-time customer engagement. The app’s interface allows her to manage bespoke orders requiring constant back-and-forth, a level of customisation she believes websites struggle to replicate. “A website is mostly one-sided,” she said. “Even when you see ‘chat with our staff,’ it often redirects to WhatsApp anyway.” A shutdown would stall her operations. Building a following on other non-Meta social media platforms and designing a new platform to replicate WhatsApp’s fluid order management is a daunting prospect, she told TechCabal on a call. “How do I create enough channels for people to place orders with multiple modifications without mixing up jobs or causing miscommunication?” The cost of transitioning—both in time and resources—looms large for Olutomiwa and others like her. Caroline Fabara, founder of WAB Digital, a marketing agency that also helps e-commerce businesses integrate WhatsApp on their websites, echoed these concerns. Her agency funnels leads from digital ads directly into WhatsApp, where businesses showcase products via the app’s catalog and close deals. Fabara herself relies on WhatsApp as her “virtual office”, using it to promote services, finalise sales, and host training sessions. “It’s where I close the deal,” she said. Her online ads automatically add clients to WhatsApp groups upon signup, a tactic widely used by digital trainers, a sect of service providers that have become increasingly popular. WhatsApp’s network effect—boasting over 51 million active users in Nigeria alone—makes it a go-to for entrepreneurs targeting local markets. Its ubiquity has spawned an ecosystem of adjacent businesses, from food vendors taking orders via WhatsApp bots to fintechs enabling in-app payments. However, the platform’s dominance is a double-edged sword. “Businesses will have to rebuild their contact lists from scratch on new channels,” Fabara noted. “You don’t have a CRM-ready email list to pivot to. You’re starting over, spending money to redirect customers.” While there are alternatives, the size of the WhatsApp user base and the upending of its network effect would have businesses scrambling for ways to promote their products and services. Olutomiwa says it will be most profound for a generation of Gen Z entrepreneurs like her, who built their livelihoods on the platform’s accessibility. The shutdown could exacerbate economic pressures, potentially fueling unemployment and stifling innovation in Nigeria’s digital economy. The origin of the conflict The friction between Meta and Nigerian regulators began in May 2021, following WhatsApp’s controversial update to its privacy policy. Nigerian users were reportedly required to accept the new terms, which required collecting and sharing user data without proper consent, or risk being locked out of the app, a tactic that sparked outcry over user consent and fairness. Regulators alleged that Meta was treating Nigerian users less favorably compared to their counterparts in jurisdictions like the European Union, where stricter data protection laws limited how user information could be handled. Over a 38-month investigation, Nigerian authorities claim they uncovered a troubling pattern: Meta allegedly collected and transferred users’ personal data without proper consent, failed to appoint a local data protection compliance body, and withheld mandatory audit reports. More critically, the company was accused of abusing its dominant market position to impose exploitative terms and discriminatory practices. Meta’s pushback Meta has not taken the ruling lightly. It contested the fine because the FCCPC’s directives were legally ambiguous, technically impractical, and not reflective of existing Nigerian law. The company also argued that Nigerian users had a choice: accept the privacy terms or stop using WhatsApp. But the tribunal disagreed, affirming both the legitimacy of the fine and the expectation that Meta must align with Nigerian regulations. In the aftermath, Meta warned—via court filings—that it may withdraw its services to shield itself from regulatory uncertainty. The FCCPC dismissed this as a pressure tactic, noting that Meta had absorbed similar penalties elsewhere, such as in India and Brazil, without threatening an exit. A country on the brink of a digital disconnect Should Meta carry through with this threat, the impact on Nigeria would be enormous. WhatsApp alone boasts 90–100 million users in Nigeria, making the country its largest African market and the 10th largest globally. With a 95% penetration rate among internet users, WhatsApp is more than a messaging app—it is the digital lifeline for commerce, family communication, religious communities, activism, and emergency services. Instagram and Facebook also play vital roles, especially for small businesses, influencers, content creators, and community organisers who rely on these platforms to reach audiences and generate income. The disruption of these services would leave a gaping void in Nigeria’s social and economic fabric. A costly departure Meta’s investments in Nigeria are neither trivial nor recent. Since opening its Lagos office in 2021—the first on the continent with a full engineering team—Meta has supported digital innovation through partnerships like NG_Hub with
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Twiga’s pivot to asset-light model begins with acquisition of Kenyan distributors
Twiga Foods, a Kenyan B2B e-commerce startup, is shifting its strategy and pivoting after years of pursuing direct operations, including managing farms, delivery fleets, and supply chains. In April, Twiga acquired controlling shares in three local FMCG distributors: Jumra, Sojpar, and Raisons to cut costs and improve profits while figuring out how best to navigate Kenya’s scattered retail market. Kenya’s B2B FMCG trade is still largely informal, with fragmented supply chains, overlapping distribution networks, and, to some extent, minimal use of technology. Twiga, launched in 2014, once tried to fix this through vertical integration, building and owning the entire supply chain from farm to shelf. That approach was capital-intensive and operationally complex. The company now wants to merge traditional distribution with software and procurement systems while outsourcing physical operations to third-party operators. The three acquired firms will continue to run their existing businesses. Twiga says it will introduce its software stack, including warehouse management systems, route optimisation, and data tools, but will not take over day-to-day logistics. The original management of Jumra, Sojpar, and Raisons remains in place. “These acquisitions are a key step in our strategic transformation,” a Twiga spokesperson told TechCabal. “They enable Twiga to scale quickly and efficiently by leveraging these distributors’ market experience and operational capabilities. The integration creates mutual benefits: the distributors gain access to Twiga’s advanced Tech stack, business intelligence (BI)/data analytics, sales expertise, and institutional capital, while Twiga significantly extends its geographical reach and operational capabilities.” The acquisition gives Twiga access to eight distribution centres across Central, Coast, and Western Kenya. Instead of building new infrastructure, it will use existing facilities, while cutting costs. The company declined to disclose the value of the acquisitions or the revenues of the acquired firms. The new strategy avoids the failures of Twiga’s earlier commercial model, which forced the company to adjust its operations multiple times. The company once operated its commercial farms, worked directly with farmers, and managed much of the transport and delivery in-house. That model helped Twiga control quality and pricing and created high fixed costs. In 2023, the company shut down its farming unit, laid off staff, and began pivoting to an asset-light model. Twiga will focus on serving informal retailers (a shift from its earlier urban-only model), while the three acquired firms will continue with formal trade clients. Integration will not be immediate, Twiga told TechCabal. Joint procurement is planned for some product categories, but Twiga has not explained how decision-making will be shared across the four entities. One goal is to reduce supplier payment delays and improve cash conversion cycles, both of which have strained Twiga’s relationships with vendors in the past. Twiga likely believes that shared procurement and inventory visibility will ease pressure on working capital. The deal was financed by existing shareholders Juven and Creadev, suggesting that Twiga did not raise new external funding. It also points to a cautious investment environment, where investors prefer consolidation and lower-risk expansion over aggressive growth strategies. Twiga declined to comment on the details of the transaction. Twiga chose to reinvest, without revealing how much or when, instead of raising fresh capital, a move that signals investor unease over its delayed path to breakeven. Twiga’s ability to stabilise margins through decentralisation could determine how soon it attracts fresh institutional backing. Twiga describes the new approach as a hybrid model, “decentralised in operations to maintain agility and local knowledge, yet centralised in tech, BI and support processes, delivering optimal efficiency.” But the mechanics of that model remain unclear. Despite claiming that each firm runs its operations, Twiga does not disclose its influence over core functions like pricing, inventory management, and fulfilment. It did not disclose how to measure success in such a decentralised environment. Twiga is also reviewing the future of its main logistics base. On May 16, it confirmed to TechCabal that it may move out of Tatu City and is considering locations like Syokimau or Mombasa Road, which are closer to existing trade routes, which indicates a shift in priorities, possibly from long-term infrastructure projects to cost control and proximity to clients. The current base at Tatu City, while purpose-built, has been expensive to run and less efficient for last-mile distribution. Moving closer to Nairobi’s dense trade corridors could shorten delivery routes while reducing fuel and fleet costs. Twiga’s pivot reflects a broader trend among African startups. Many startups that raised large funding rounds between 2019 and 2023, peaking at $4.6 billion in 2022, are now under pressure to show profitability. Fintech giant Flutterwave is focused on profitability in 2025 ahead of its much-talked-about IPO. Grand narratives of disruption have been replaced by talk of discipline, focus, and operating leverage. “We are moving to a leaner, disciplined model with improved margins and working capital,” the company said. Whether this new approach can solve the long-standing issues in Kenya’s distribution sector remains to be seen. Managing logistics in Kenya involves more than software since it requires strong ground execution, local relationships, and adapting to volatile demand. Twiga is no longer trying to control everything. Whether it can coordinate effectively across semi-independent businesses or deliver better results under its new structure is unclear.
Read MoreUSPF launches coalition to drive inclusive learning in hard-to-reach communities
The Universal Service Provision Fund (USPF), an initiative of the Nigerian Communications Commission (NCC), will launch the USPF Impact Alliance, a coalition aimed at expanding inclusive education and digital access in Nigeria’s underserved communities. With a long-standing mandate to bridge Nigeria’s digital divide, the USPF has invested in over 2,500 educational projects since 2007. These interventions have delivered more than 100,000 computers and custom connectivity solutions to schools nationwide, enabling remote learning, boosting school enrollment, and supporting computer-based testing in even the most rural areas. The USPF Impact Alliance, launching Monday, May 26, 2025, in Lagos, will bring together key stakeholders from the private sector to co-create solutions that drive inclusive learning through technology. “The USPF Impact Alliance will lead innovation for universal service and access funds, accelerate digital inclusion in Nigeria, and guarantee the sustainability of the Federal Government’s investment in digital infrastructure in unserved and underserved communities,” said USPF Secretary Yomi Arowosafe. The Impact Alliance seeks to improve the sustainability of government investment in digital infrastructure, ensure optimal deployment of tech resources, and spark innovation at the intersection of education and connectivity. It also aims to accelerate Nigeria’s push toward inclusive digital literacy, ensuring that no community is left behind in the country’s technological transformation. For millions of Nigerians in hard-to-reach communities, this initiative could mean more than just internet access and unlock new opportunities for learning, empowerment, and upward mobility.
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217+ startups, ₦11B fraud, and $3B valuations: Insights from the 2025 Nigeria Payments Report
This article was originally published on TechCabal Insights, and was written by Victoria Olaonipekun– Analyst, TechCabal Insights. Zone, a regulated blockchain-powered payment infrastructure company, has released the Nigeria Payments Report 2025 in partnership with TechCabal Insights, the research arm of pan-African publication TechCabal. This second edition builds on the insights from 2024, which tracked how the COVID-19 pandemic spurred a surge in digital payments, with e-transaction values doubling to over ₦1.25 quadrillion. It also charted the rise of Nigeria’s fintech sector—over 200 startups accounted for 42% of all tech funding, driving financial inclusion to 76%. The 2025 report builds on these trends. From open banking and AI-powered fraud detection to blockchain-based innovations, it maps Nigeria’s fast-evolving payment landscape and highlights what lies ahead for the continent’s largest digital economy. It highlights standout players and milestones across the payments ecosystem. Moniepoint adapted quickly to stricter KYC rules while deepening mobile money adoption. Flutterwave, valued at $3 billion, remained a market leader despite a major ₦11 billion fraud incident, underscoring industry-wide security concerns. Banks are deepening collaboration with fintechs on open banking and AI-driven fraud detection, while regulators like CBN drive innovation with diaspora accounts and real-time compliance checks. Despite a funding slowdown, VCs still bet big on Nigeria, injecting $140 million in H1 2024 alone. Key Findings from the 2025 report: Explosive growth: E-payment channels, including POS, mobile money, USSD, and RTGS, are driving a 70% year-on-year rise in transaction volumes, led by fintechs delivering innovative, user-focused solutions. Regulatory momentum: Initiatives from the Central Bank of Nigeria (CBN), including the Payment Systems Vision (PSV), open banking guidelines, and new diaspora account categories (NRNOA/NRNIA), are fostering a more secure and inclusive ecosystem. Cross-border expansion: Nigerian fintechs such as LemFi and Rise are leveraging annual remittance flows of over $20 billion to scale Africa’s global payments influence. Persistent Challenges: Infrastructure gaps, fraud threats, and a 54% dip in overall African fintech funding underline the need for sustained investment. “This edition reflects how quickly collaboration among banks, fintechs, and regulators is reshaping our economy,” said Olayiwola Osoba, VP of Marketing and Communications at Zone. “But bold moves in risk management and cross-border innovation will be key to maintaining momentum,” he added. According to the CEO, Obi Emetarom, Zone processes over ₦100 billion in transaction value each month, totalling more than ₦1 trillion annually. He is highly optimistic about the prospects of payments in 2025, following regulatory approval of its decentralised PTSA model that is expected to spur widespread adoption. “Our ambitious target for 2025 is a 20x growth, meaning the current annual volume would become the monthly average by the end of next year, marking a major scale-up in operational capacity and network usage,” he said. What’s next for Nigeria’s payment ecosystem in 2025? Scaling AI-powered fraud detection and RegTech partnerships (e.g., SmileID, Dojah) Using open banking and AfCFTA frameworks to grow cross-border payment solutions Bridging the fintech funding gap to solidify Nigeria’s lead on the continent Download the full Nigerian Payment Report 2025
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