As such, there appears to be a popular view that the “streaming wars” is on amongst the top video-streaming platforms that are all looking to cut it in Africa. But has the streaming wars really taken off or is the whole thing exaggerated?

Well, streaming wars, by implication, emphasizes the existence of high activity and competition between video streaming services of the likes of Netflix, Showmax, and iROKOtv in Africa.

The streaming wars ideology kicked off on the grounds of how the world’s top video streaming services like Netflix, Amazon,  HBO Max, Disney+, and Apple TV+ are at loggerheads for a share of the video streaming businesses.

And so, does this same ideology also apply to the African continent? Wouldn’t a streaming war occur only when there’s already a giant cake from which each of these individual platforms is fighting for a piece? These are ideal questions to ponder on.

In a real sense, the streaming war term should only be referred to in these parts when these platforms have first hacked video-streaming in Africa, thereby providing a ground for competition, heralding the “war,” so to speak.

On the African continent, the so-called streaming wars that many like to allude to with a hint of fascination is not so much a war as it is a small backyard scuffle.

The reality of the situation is that streaming platforms have barely scratched the surface in Africa. For instance, the continent has a population of 1.3 billion, but not up to 4 million of its indwellers use video streaming platforms.

The state of video streaming in Africa

Answers to two questions are sought after here. In the video streaming game, where exactly is Africa at and how has the continent fared in reality?

According to a London-based industry forecaster known as Digital TV Research, the total number of video streaming users is 3.9 million. And so, this means that just about 0.3 percent of the African population uses at least one video streaming platform.

Digital TV Research also reports that Netflix has just 2 million subscribers in Africa and it’s way ahead of the rest. The likes of iROKOtv, Showmax, Apple TV+, Disney+, and Amazon Prime Video, and others have each managed only a tiny fraction of Netflix’s small subscriber base in Africa.

For context, in the United States, Netflix alone recorded about 73 million subscribers in 2019. For emphasis, this number is just for Netflix users alone and it would be a lot more if the users of other streaming platforms are added up. This statistic captures a video streaming penetration of at least 20 percent in the United States.

Again, Netflix had 195.15 million paid subscribers globally as of the third quarter of 2020. Out of this amount, Africa makes up less than 2 million.

Give this some thought: Africa, the second largest continent in the world, makes just roughly 1 percent of the total Netflix subscribers. This same Netflix also is the most used video streaming platform in Africa.

So iterating again, where is the “streaming wars”?

The next question would then be the “why.” Why is video streaming find it hard to find its feet in Africa?

Africa’s video streaming troubles

In simple words, video streaming is costly. It takes money to produce and deliver quality. And so it’s very likely that a subscription-based service that costs a few dollars would do better in an area with higher income levels. 

It’s no secret that the income level in Africa is one that is way below the global average. 

A world bank statistics in 2015 revealed that sub-Saharan Africa was home to 27 of the world’s 28 poorest countries and had more extremely poor people than in the rest of the world combined. 

The high poverty rate obviously yields the low-income levels seen on the continent. And so a large bracket of Africans that aren’t exactly poor, are not earning so much either. Since video streaming isn’t a necessity for life, wouldn’t money rather be spent firstly on the necessities? And so the low video streaming numbers adds up now, doesn’t it?

Furthermore, video streaming rides on the ship of internet availability and affordability. And Africa has one of the most expensive internet prices in the world. Having stressed the low-income level in Africa, Africans are still found to pay more for the internet.

The country with the most expensive data in the world is an African country, Zimbabwe, where 1GB of data costs USD 75.00. That same quantity of data costs just USD 0.26 in India.

Also, the GSM Association (GSMA) reports that data costs a whopping 6.8 percent of monthly income in African households compared to just 0.5 percent for those living in more affluent areas.

It doesn’t even end there. It has been said that the internet is expensive, alright. But the connectivity of this “expensive” internet is also not that great. And it’s known that video streaming in an area with a poor internet connection would perform poorly.

In simple terms, internet costs in Africa are higher than anywhere else, and yet internet speed remains below global standards.

Besides the gaps in reliable connection, many areas on the continent do not have access to this internet. Although there have been improvements on this front and in the area of smartphone penetration, there is still a lot left to be desired. In any case, these factors are among the reason behind low adoption of video streaming in Africa.

In Africa, only 39.3 percent of the population have internet access, in comparison with a global average of 58.8 percent. This low internet penetration rate, by itself, already video streaming at a huge disadvantage.

The verdict

Yes, it is true that Netflix currently leads the African market, with close to 2 million subscribers. Showmax comes in second with 688,000 direct subscribers, although it existed before Netflix. On its part, iROKOtv trails Showmax.

On the basis of the factors and numbers mentioned above, pronouncing that streaming wars is in full swing in Africa would be quite a reach.

It’s undeniable that there’s a lot more that needs doing in Africa’s video streaming space, as the so-called main players are yet to even scratch the surface.

There is a lot of building, innovation, and reimagination required to make Africa’s video streaming scene pop. And maybe a few years from now, the story may be different, or not.

Featured Image Courtesy: GettyImages

The post Africa’s “Video Streaming Wars” Remain An Exaggerated Small Scuffle appeared first on WeeTracker.

Last week, it was reported that the founder and CEO of South Africa-based Mirror Trading International (MTI), Johann Steynberg, has gone M.I.A.

MTI is an unregistered bitcoin trading outlet that boasts offering its members a 10 percent return each month by implementing a specialized trading approach.

The sad thing about this so-tagged trading return is that the recent spike in bitcoin prices would have caused members to earn even more than MTI’s offering. And so the promised returns aren’t exactly mind-blowing, but Johann now seems to have absconded and user funds are in doubt.

Johann’s disappearance is one that has put the members and even the management of MTI in deep worry.

“The last time we heard from Johann was Tuesday, 15 December 2020, at 01:51 am,” reads the statement released by the company’s management some days ago.

The statement ascertained that Johann was alive and currently is in Brazil. At the moment, the management themselves are unsure about the safety of their funds.

“We as management and leaders do not know if our bitcoin is safe,” the management’s statement read. “

And so if the management themselves feel this way, how much more its members?

The backstory

Johann was reported to have disappeared from South Africa on the 3rd of December. Underlying stories have surrounded his disappearance from South Africa.

Earlier in August, the Financial Sector Conduct Authority (FSCA) in South Africa issued a warning and asked people to withdraw their money from MTI. After issuing the public warning, FCSA went underground to carry out further investigation on MTI.

Fast forward to earlier this month and FCSA opened a criminal case against the bitcoin trading company. In the criminal case, FSCA pronounced the operations at MTI to be illegal and misleading to clients, as they allegedly contravened several laws.

One of the top reasons that sprung FSCA to action in the investigation of MTI’s case is the sudden change in MTI’s choice of broker. MTI formerly used a regulated broker called FXChoice and then switched to Trade3000 who happens to be an unregulated broker.

On the Trade3000 website, it’s stated that the broker is controlled by one “Joe Steyn.” See how that name resembles Johann Steynberg?

And now, in the statement by the management of MTI, it was highlighted that they have struggled to obtain bitcoin from its so-called broker to pay members’ withdrawals.

The management got in contact with the broker, Trade3000, but saw for itself that the company is potentially owned and operated by Johann Steynberg himself. Obviously, response from the “broker” hasn’t been forthcoming.

Another contradictory revelation this case has unraveled is the disparity in what the fund handlers declared previously, and what was later found.

Before this time, MTI’s funds were stated to be handled by Johann, alongside two other top staff. But the investigation has now shown that the funds are in reality managed by Johann and his wife.

And, just yesterday, December 29, the Cape High Court placed MTI in provisional liquidation. The sheriff was instructed to attach all of MTI’s inventory to the master of the Cape High Court.

Now, a whopping 280,000 members are affected and up to 17,000 bitcoin which is worth about USD 450 Mn is in Johann’s custody. In any case, he is still missing, and, right now, it seems like the whole MTI thing is a sham.

Featured Image Courtesy: CryptoZink

The post CEO And 17,000 Bitcoin In The Wind: The SA Sham That Ripped 280,000 People appeared first on WeeTracker.

Hence, it can be said that venture investments, both locally-sourced and foreign-sourced, have been of great significance to the growth of the African startup scene in the last decade.

However, it appears that some specific regions have reaped more from this influx of investment than others.

It’s not much of a secret that Francophone nations on the African continent have been somewhat sidelined when it comes to venture investments. These French-speaking countries are seen to be way behind their counterpart Anglophone countries in the startup investment map.

A well-known fact is that Africa’s startup investment destinations are dominated by English-speaking countries like Kenya, Nigeria, South Africa, etc. These countries attract the bulk of the venture funding seeping into Africa, with their French-speaking counterparts taking the back seat.

For instance, last year alone, Nigeria and Kenya, which are two of the top Anglophone tech ecosystems in Africa, attracted more than 80 percent of the venture capital invested across the continent.

Indeed, WeeTracker’s 2019 funding report revealed that more than 75 percent of the deals were concentrated in Nigeria, Kenya & South Africa.

However, what’s even more unsettling between these two extremes is the huge funding and investment gap found. Yes, it is known that one end receives more funding than the other, but to what extent? Well, it’s actually a wide gap.

The data from Partech Partner’s 2018 report on startup funding in Africa disclosed that only 1 percent of its reported USD 1.16 Bn raised by African tech startups was allocated to ventures in Francophone Africa. This reveals how small the share of venture investment is in those parts.

Many other reports, just like the above, have documented this same worrying trend. It then appears that most of the time, Francophone markets are generally left fighting for crumbs with respect to startup investments in Africa, despite the fact that that demographic host some of the world’s fastest-growing economies.

It’s quite ironic that these same French-speaking countries have been spotted as countries with the highest growth rate in Africa.

In the World Bank’s World Economic Outlook report, the economic growth rate of French-speaking African countries between the year 2012 and 2018 was pegged at 4.9 percent, in comparison with 2.9 percent for the rest of the continent.

This metric shows greater growth potential for these French-speaking countries. But it appears that this growth hasn’t translated to increased venture funding in the region. And so this brings up the “what’s wrong?” question.

The missing pieces

There is no one-size-fits-all reason for the low startup investments recorded in Africa’s French-speaking countries. However, a pool of many likely reasons can keep one a step ahead for the answers sought.

One of these reasons would be the comparatively small population size of these Francophone countries. On introspection, it is seen that the population of the 14 CFA countries added together is slightly lesser than the population of Africa’s biggest country, Nigeria.

This small population size is reflected in the economic size of these countries. Their small population produces a small economic output. And a small economy isn’t exactly a green light for investment, especially for ventures whose growth highly depends on numbers that are tied to scalability.

Insights from the Francophone countries in West Africa alone in comparison to a single Anglophone country in the same region depicts the “small economy” battle they are up against.

In 2016, the Nigerian economy was worth USD 405 Bn, despite the harsh recession at the time. That same year, the Francophone ECOWAS markets (which exclude Ghana and Nigeria), only amounted to USD 120 Bn combined. This amount represents less than 30 percent of the size of the Nigerian economy.

This small population and economic size have therefore placed a strain and have been a huge setback for investment in these countries. It is not strange that a region with a relatively smaller market size would be less prioritized than that with a bigger market size in the selection of an investment destination.

While the “small market size” is worth considering while explaining the paucity of venture investments in Africa’s French-speaking nations, could that be all there is to it? Certainly not.

There’s also the issue of language disparity between both distinct regions. It is important to know that most of the investments in the African tech scene are from English-dominated foreign countries.

In fact, the United States of America, which is primarily English-speaking, is home to many of the big venture capital firms in the world, some of which taken quite an interest in the African market. US-based VCs make up the biggest source of funding for African startups.

The language barrier is a troubling downside and disadvantage to startups in these French-speaking countries, as it basically creates a void between them and important investment sources.

This language barrier, more likely than not, would have played a role in the setback on equity investments in the French-speaking countries in Africa.

If unclear, then think about this: Whose funding application to English-speaking investors is more likely to pull through? That from a person whose primary language is English, or from the person whose primary language is French?

Another valid cause of low startup Investment is the stifling business environment in French-speaking countries.

The World Bank’s Ease of Doing Business ranking reveals the difficulty of doing business in these countries. In this ranking, the 17 OHADA member countries, which are all French-speaking countries, occupied the bottom of the World Bank’s Doing Business report.

OHADA is the acronym for the French “Organisation pour l’harmonisation en Afrique du droit des affaires,” known in English as the French “Organisation for the Harmonisation of Corporate Law in Africa.”

The World’s Bank’s Ease of Doing Business ranking has OHADA countries occupying from 97th place (Togo) to 184th place (Central African Republic). Their English-speaking counterparts are ranked higher.

A country with a tough business environment is a huge turnoff to potential investors and this could also be a thing that has played out against these French-speaking African countries in the area of venture capital inflows.

A glimmer of hope?

Starting from 2018, there has been a surge in the rise of local angel investors focused on these French-speaking countries. These local investors are filling the gaps, though slowly. Angels saving the day, yes?

In 2019, the Dakar Network Angels (DNA) group was launched. The mission of Dakar Network Angels is to pull experts and capital together for startups in French-speaking countries and hence bridge the resource gap these countries have faced.

Other angel groups similar to DNA have arisen in several francophone countries likewise.

In the same 2019, World Bank launched its novel “l’Afrique Excelle”. L’Afrique Excelle. It was established to address the gaps in accelerator and funding programs for Francophone African entrepreneurs.

The accelerator program was geared towards investment-readiness and was designed to support the expansion of 20 startups from Francophone countries in Africa.

In its first cohort, 18 of the selected 20 startups were from French-speaking countries. A total amount of approximately USD 10 Mn was raised for these startups.

It’s not entirely doom for these countries, it appears. With more efforts out in place for these countries, there are glimmers of hope that the record books would reveal better results in the nearest future.

Featured Image Courtesy: LSE

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This new move looks set to basically make a mobile money service that already accounts for around 99 percent of such transactions in Kenya into something that is even more attractive.

The new gist is that Safaricom has, as of this week, pronounced a reduction in M-Pesa transaction fees which is to take effect in the new year, from the 1st of January.

The new charge would begin the very next day after the discontinuation of the ongoing free transaction offer on amounts below KES 1 K, as recommended by the Central Bank of Kenya (CBK), which has been on for several months since the pandemic hit Kenya.

Now, M-Pesa’s tariff is set to be reduced by up to 45 percent, and this will rub off on more than 90 percent of all customer’s transactions. (View all the revised transaction fees here).

This new Safaricom disclosure didn’t just pop out of nowhere, though, as the telecoms giant has previously murmured its consideration for this move. 

Sometime in November, after the release of Safaricom’s half-year financial result, the mobile operator was rumored to be toying with the idea of lowering transaction charges in M-Pesa.

The disclosure by Safaricom also followed CBK’s earlier announcement and reiteration that the offer of free transfers transfer for transactions below KES 1 K, will not end until after December 31st.

It took a pandemic

For years, M-Pesa’s transaction fees have been thought to be quite high despite its ubiquitousness in Kenya. And for customers, this has always been a huge concern even though they have all had little choice but to stick with the service. As it is, it took a pandemic and CBK’s prior move for Safaricom to adjust the steep pricing.

As Peter Ndegwa, the CEO of Safaricom, said in the announcement: “As guided by the Central Bank of Kenya (CBK), and taking into account the principles on the pricing of mobile money services, we have taken the decision to reduce our M-Pesa tariffs by up to 45 percent for lower value transaction bands,” said Safaricom Chief Executive Peter Ndegwa in a statement yesterday.

He further said, “This is in consideration of the expiry of the period for the zero-rated M-Pesa transactions and the ongoing Covid-19 and economic circumstances.”

In essence, this price cut action proves that Safaricom is far from being blind to the cost challenge customers on its platform have been facing. 

For insights, it was seen that there was a surge in transaction volume during the period of zero-fee transactions on the benchmark sum of KES 1 K.

Formerly, sending 101 KES incurs a transaction cost of KES 11.00. That represents 10 percent of the original transaction amount, and thereby points to a huge cost of transaction. No doubt, that has somewhat kept Safaricom doing great numbers regardless through its near-monopolistic grip and control on the market.

The new reduction in place would see the initial transaction cost of KES 11.00 incurred in sending between KES 101 and KES 500, down to KES 6.00. Likewise, transactions between KES 1,501 and KES 2,500 will now cost KES 32.00 down from KES 41.00.

A good move by Safaricom, or not?

While the new move would in no doubt be beneficial to M-Pesa users, can the same be said for the business itself? Would this new move make sense for Safaricom, revenue-wise? A solid question of if this new permanent reduction would hamper Safaricom’s already dwindling earnings from M-Pesa.

M-Pesa’s revenue lifeline is the fees charged to customers upon the completion of transactions and so the permanent reduction of this lifeline poses would almost certainly affect the net revenue of M-Pesa. Just like how its half-year financial result reacted to the effect of the earlier zero-fee transaction pushed by the CBK.

However, it seems to not be totally out of track for its revenue, as would have been predicted. The reason being, the free transaction mandate imposed by the CBK for instance, saw M-Pesa grow its transaction volume by 32.9 percent.

This volume increase faces the threat of being lost if the “free transactions” measure is totally reversed. Hence, this makes the new action taken a positive one for M-Pesa’s growth. This price-cut could also help it retain the newly acquired customers, who joined during the free transaction era.

The plot is to retain the more than 27 Million subscribers on M-Pesa’s platform and to cushion the operators from further losses occasioned by the fees waiver for amounts of less than KES 1 K. A good bet, no?

In any case, it can be said that the permanently reduced fees hold benefits for users and, in particular, Safaricom in the long term.

Featured Image Courtesy: OpenWay Group

The post It Took A Pandemic For Safaricom To Finally Heed & Cut High M-Pesa Fees appeared first on WeeTracker.

At a breakfast meeting in the previous week, the continued commitment to bringing the dream of Kenya’s foremost smart city project, Konza Technopolis City (KTC) to life, was reiterated.

The meeting, organized by the Konza Technopolis Development Authority (KoTDA), the organization in charge of the development of the city had the city’s investors present.

Konza Technopolis City is Kenya’s foremost smart city project with the aim of becoming the “Silicon Savannah.” It’s an organised effort to build Silicon Valley for Africa. 

Although KTC takes its inspiration from the United States’ famous Silicon Valley, it claims that the products to be used in bringing the project to life would be fully Kenyan, thereby giving the project a certain uniqueness.

Konza Technopolis is Kenya’s Vision 2030 economic development project which aims to create a globally competitive and prosperous nation with a high quality of life.

The underlying structure of KTC is a city that would be built upon the rock of technology. Asides from the technological advancement that the city seeks to achieve, there is also a key focus on environmental sustainability which would translate into an improved quality of life.

It means that KTC would be both a smart and sustainable city. And so far, KTC claims to have developed sustainability development guidelines that would meet the metrics for sustainable infrastructure and urban design. This depicts a two-goal project in a single package.

The checklist to meet the ‘smart city’ goal includes putting in place –  modern transport systems, power distribution, and a green initiative strategy. The project also seeks to produce a business-friendly environment with superb governance systems.

The project has the backing of a Colorado-based American Company, Tetra Tech Inc., which is working alongside the Konza Technopolis Development Authority (KoTDA). Tetra Tech would be rendering its expertise in building smart cities to foster the work of KTC.

Information dug from Tetra Tech’s website reads, “Tetra Tech is helping Kenya create a 5,000-acre technopolis, supporting the country as it grows into a globally competitive, prosperous nation.”

It goes further, “The Government of Kenya, through the Konza Technopolis Development Authority (KoTDA) selected Tetra Tech as the Master Delivery Partner 2 (MDP2) for the Konza Technopolis project. Tetra Tech is providing programme management, architecture-engineering services, and capacity building to support KoTDA with the implementation of Phase 1” 

The Konza Technopolis would be the first smart city in Kenya, doubling as a world-class technology hub. This project is forecasted to be a major economic driver for the nation.

KTC is currently valued at USD 400 Mn. Of this total amount, it is said that 90 percent would be funded by the private sector, leaving the rest to the government.

KTC’s progress since inception

In the breakfast event, it was announced that Phase One of the project, which covers 400 acres out of the total 5,000 acres of land set aside for KTC has attracted over 40 percent uptake by investors.

“So far, we are happy to note that the project has realized more than 40 percent uptake, some of the investors expected to break ground include hospitals, real estate developers, institutions of higher learning, government agencies such as National  Construction Authority and KETRACO (Kenya Electricity Transmission Company) among others,” said Jerome Ocheing, the Principal Secretary of Innovation and Youth Affairs during the breakfast event.

The tale about the KTC project began the year it got approved, in 2008. Work on the project began in 2009 with the procurement of a 5,000-acre parcel of land, sitting just a stone throw from Nairobi, the country’s capital

In 2012, the Ministry of Information, Communications, and Technology secured a team of consultants led by New York City-based advisors to prepare a detailed business plan and master plan for the first phase. 

The year 2013 was when KoTDA’s Board of Directors got appointed. The Board was established for the development of infrastructure for the first phase of Konza.

At this point, the government is working to complete the necessary infrastructure projects like roads, electricity by the end of 2021.

This tall dream, when brought to life in Kenya, would assuredly be one of the great things to happen to Africa’s business ecosystem.

But just like the sky-high ambitions of the famous Senegalese musician, Akon, who aims to build AkonCity; a USD 6 Bn smart city in his home country, KTC remains a pretty plan on paper for now.

Featured Image Courtesy: Infrastructure News

The post 12 Years On; A Pulse Check On Kenya’s Tepid Pursuit Of A 5,000-Acre Smart City appeared first on WeeTracker.

A statistics from Blockchain.com puts the global number of bitcoin wallets created so far at 52 million. This same data pointed out Nigeria as the country with the highest flow of activity in recent times, following a recorded 60 percent increase in activity since April. This corroborates the spiking adoption of bitcoin in Nigeria.

In another report from Chainalysis (a blockchain research firm), Nigeria was documented to be on the list of the top ten nations with the highest cryptocurrency use.  The report puts Nigeria as one of the fastest-growing crypto markets globally.

Furthermore, the report that declared Nigeria as the second-largest bitcoin market after the United States, circulated Africa’s media space in the previous week.

This report covered the analysis from Paxful, which claims to be the largest P2P bitcoin trading platform in Africa. Paxful analyzed bitcoin’s transaction flow from 2015 to 2020. 

The findings from its analysis showed Nigeria to have traded more than USD 566 Mn worth of bitcoin during the period. And thus, by Paxful’s analysis, Nigeria was named the second largest P2P bitcoin market.

One thing that can be grasped from all of these three reports is the similar revelations about Nigeria’s waxing cryptocurrency market. It doesn’t even end there, here is one more.

A data drilled from the trading result from the past week via “Useful Tulips” showed P2P bitcoin trading volumes for that week to top about USD 95 Mn.

A further breakdown by region of this figure revealed that sub-Saharan Africa recorded the second largest trading volume with values amounting to USD 18.3 Mn.

Out of this figure, a substantial sum of  USD 10 Mn was from Nigeria. This data thereby puts Nigeria as the largest bitcoin trading country in sub-Saharan Africa. Quite similar to the message in the other reports.

However, all of these data and reports have seemingly left a question hole in many hearts. There now appears to be an ironic puzzle of how, Nigeria, as the world’s poverty capital, tops various global lists on bitcoin usage and adoption. These are valid questions demanding answers.

The ‘whys’ and ‘hows’ of Nigeria’s crypto push

One key thing that can be tied to the spiking adoption of bitcoin and other cryptocurrencies in Nigeria is the changing mindset of Nigerians in general towards them.

In the early days of bitcoin, many years ago, the perception of an average Nigerian towards cryptocurrency wasn’t a positive one. It was thought of as the stuff of scammers and fraudsters, and it didn’t help that it fuelled some Ponzi schemes. Today, this perception is fast-changing.

Another factor in play is the increased awareness and availability of easy-to-use bitcoin platforms in Nigeria. This has in turn played a role in enhancing the mindset change among Nigerians.

International platforms like Paxful, Binance, and Luno, as well as local platforms like Quidax, BuyCoins, and Patricia have been instrumental to this change of course.

Once the mindset issue got solved to a good extent, the increasing adoption documented doesn’t appear to be away from the expectation.

The reason being that Nigeria, as a developing nation, is a country with huge monetary policy gaps, which thereby influenced people’s decisions around cryptocurrency.

The currency instability in Nigeria which has allowed for a periodic devaluation of the naira, as well as the rising inflation, are two economic occurrences that are largely responsible for bitcoin’s wide adoption in Nigeria.

The correlation between currency struggles and crypto adoption is exemplified by Venezuela, for instance, which as a country with pronounced currency woes, is also the top three in the list of top bitcoin users on ChainAnalysis’ list.

This represents an excellent example of the driving force behind cryptocurrency adoption in developing countries and its usefulness in mitigating economic instability.

Another valid case for the increasing adoption of bitcoin in Nigeria is in its usage as a channel for processing remittances.

Pretty much recently, it was reported that the Central Bank of Nigeria (CBN) directed all banks to immediately close the Naira Ledger Accounts meant for the receipt of funds from International Money Transfers Operators (IMTOs). This act has caused many Nigerians in the diaspora to turn to cryptocurrency-powered remittance platforms like SendCash Africa.

It’s a known fact that bitcoin, which is a digital currency, is largely immune to most of these rules and policies, and thereby gives people an alternative to the mishaps of a currency. 

Beyond the rigidity and central policies of traditional remittances, bitcoin is also acknowledged as a cheaper and faster way of processing remittances. A win-win, or not?

Lastly, and definitely not least, Nigeria’s large population, in comparison with the rest of Africa, cannot be left out from the other possible reasons for the spiking bitcoin usage in the country. 

Nigeria’s large population size has no doubt played a part in the rising trading volumes of bitcoin.

Coupled with the high inflationary environment and the prevalent currency volatility in Nigeria, cryptocurrencies like bitcoin seem to be helping millions of locals to hedge against the local economic shocks and profit off of the crypto price movements.

Featured Image Courtesy: HonestCrypto

The post How The World’s Poverty Capital Became A World Power In Bitcoin appeared first on WeeTracker.

Netflix announced the appointment of the Zimbabwean telecoms veteran, Strive Masiyiwa, to its board. Masiyiwa is the founder of Econet Group who is regarded as an all-round agile businessman. He has spent decades building African businesses.

In his statement of appointment, he said.

“Netflix is at the forefront of bringing great entertainment from anywhere in the world to everyone in the world, and I look forward to working with the board and all stakeholders to continue its traditions of innovation and growth.”

This move is one that can help Netflix to be more deeply rooted in the African continent, thereby capturing more proportion of the African market. And ultimately help put Netflix in a better position with other indigenous video streaming platforms that are competitors.

Apparently, Netflix’s interest in Africa in recent times hasn’t been mere posturing. Rather, they have been deliberate moves to see its streaming service grow on the continent.

Let’s go down history lane, yes?

The year was 2016 when Netflix came into the African market. And of course, there arose doubts of whether the streaming giant would cut it in the African market, as ventures in Africa are typically modeled differently from that of other continents if they are to thrive.

At the top of the problems highlighted was the affordability of Netflix pricing for Africans. Also highlighted, was the problem of high internet costs, as well as internet and mobile phone penetration in Africa.

As it stands, it appears that Netflix hasn’t been doing so bad, making efforts to turn the lemons it was handed into lemonades. Indeed, Masiyiwa’s appointment to the Netflix board seems like the latest of specific initiatives that have helped Netfllix capture the African continent better.

Netflix’s Steady Moves in Africa

The starting point of Netflix’s banging moves in Africa can be traced to the acquisition of the Nollywood movie, “Lion Heart,” which was produced by Genevieve Nnaji. This action by Netflix sprung up a sense of positivity amongst African viewers and movie producers even.

Fast forward to February 2020, which saw Netflix release “Queen Sono” in South Africa. Queen Sono is Netflix’s first fully-produced African series, which is synonymous with being the first African Netflix Original series

This shows the remarkable commitment which Netflix has made in producing original African content, particularly in the Nigerian and South African movie industries.

Netflix’s dedication to Africa was also expressed in the special social media pages created for African countries like Nigeria, and South Africa. This openly points out Netflix’s interest to channel more focus on these selected countries.

Another thing that needs to be named in Netflix’s plans for the African continent is the tweak made so far in its pricing model for emerging markets like Africa.

This move seems to have been triggered by concerns about shrinking income levels across the continent which necessitates affordability. In September this year, Netflix revealed its plan to begin testing a mobile-only subscription in Nigeria which brings the price low to USD 2.65 (NGN 1.2 K) monthly.

So far, all of these actions from Netflix seem like necessary ones, given the peculiarities of the African market. They are moves that can steer Netflix through the continent, now and in the nearest future.

Looking at the outcome of Netflix’s effort in Africa, it is apparent that its investment is far from being non-yielding, as the results so far do not spell doom, given the stiff competition it is exposed to.

A report from 2019, puts South African Netflix subscribers at 152,000. Not so bad.

In a continent with more than 1 billion people, the giant video-streaming service has 1.4 million subscribers. That hardly holds up against the 20 million customers signed up to African pay-TV company, MultiChoice, which also has a streaming platform of its own, Showmax. However, there’s cause for optimism.

And so, Netflix is projecting to have 3.6 million subscribers across the African continent in the next five years.

To meet up with this, it wouldn’t be unexpected for Netflix to throw in and follow through with a few more Africa-centric ideas.

Hence, the Masiyiwa appointment, as well as the other executed endeavours, may just be the tip of the iceberg for Netflix’s engagements in Africa with respect to enhancing further growth on the continent’s business landscape.

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But these days, beyond having the word in existence, the API fintech segment itself has been making tremendous progress on the African continent, and there’s probably room for more.

While the success of consumer fintech in Africa is well documented, such that some might argue that the consumer fintech space has become somewhat saturated, it appears that the speedily emerging API fintech area is the next big thing; one that is positioned to quickly become as successful, and perhaps even more.

Amongst the other events of this week, there was the announcement of the pre-seed round raise of a newly-launched Nigerian API fintech startup known as OnePipe.

It was disclosed that OnePipe raised a sum of USD 950 K from a mix of both institutional and angel investors. This sum is just a few legs from the landmark seven-figure USD 1 Mn sum.

In a simple sentence, OnePipe’s objective is to aggregate financial services, in the form of APIs, from banks and fintech into a standardised gateway for service providers to use.

It’s worth stating that OnePipe is one of a growing crop of purely API fintechs to take root in the Nigerian/African market, and also not the first to make such a “money-spinning” entry.

There is also Okra which launched in January 2020 and closed a pre-seed round of USD 1 Mn in April. Another API fintech based in Nigeria is Mono, which also launched this year and raised a USD 500 K pre-seed in August.

One interesting fact; these three startups have raised capital within short durations from the period of their launch. 

Apart from that, there are two other things these three startups have in common.

First, they are comparatively young startups, based on their period of establishment. The oldest of them, which is Okra, isn’t even up to a year old. Yet, despite being recently established, their growth so far has been remarkable.

The second thing they all have in common is that they all are Nigerian owned and based (for now at least). So, it appears that Africa’s biggest economy, Nigeria leads the continent’s API fintech space. It’s hard to pick out a purely API fintech startup in any other African nation besides Nigeria.

So, now the questions would be: Why are these companies making waves at the moment? And why is the rest of Africa seemingly missing-in-action when it comes to API fintech?

But before that, a little touch on the concept of API fintech is expedient.

Unraveling the concept of APIs and API fintech

In the technology startup context, when the word “bridge” or “connector” is being mentioned, API and likewise API fintech is one that should come to mind, as they simply stand for what these words mean.

API in full means “Application Programming Interface,” and it should be understood as a computer interface that defines interactions between multiple software intermediaries. Simply put, an API is what allows programs to talk to each other. 

There has been remarkable growth recorded for the API industry globally so far. According to a GSM Association (GSMA) report titled “Bridging Mobile Operators and Startups in Emerging markets,” it was estimated that as of 2006, fewer than 400 public APIs were available globally.

That number has increased a hundredfold, such that ten years after (that’s in 2016), there were around 15,000 APIs recorded, and it’s been stated that 40 new ones are created every week. 

Going further, one notion that needs to be cleared is that APIs do not only relate to fintechs. It’s instrumental beyond the financial industry, as there are also telecommunication APIs and alongside others.

However, APIs for the fintech industry is one of the fast-growing use cases for APIs. These APIs allow inter-communication between fintech platforms and other platforms (like banks).

One instance is the online purchases and payments made on e-commerce platforms which are a part of the goodness that has been made possible by the use of APIs.

The broader term, API fintech, on the other hand, performs the function of aggregating a host of APIs into one, thereby providing an infrastructure-based service. What API Fintechs offer is what can be labeled “fintech-as-a-service.”

They provide the infrastructure that could make literarily any company become a fintech company. Through this, innovation in the financial service industry has been accelerated.

Why Nigeria leads the way in API fintech?

The trajectory of the API fintech space in Nigeria can be likened to that of the United States of America, as significant similarities can be sighted between both. A little dive into the events between both countries, Yes?

In the United States, the API fintech space can be traced to the advent of payment facilitators or gateways.

Payment APIs like Stripe came up when the gaps in the USA’s financial infrastructure became apparent. These payment APIs emerged to fill those gaps.

Stripe’s launch in 2010 was followed by the Visa-acquired API Fintech startup, Plaid, which launched in 2013. Plaid uses fintech APIs to connect applications with users’ bank accounts.

Plaid’s objective and mission is similar to that of the African API fintech startup, Okra. More so, Okra said in an interview with Forbes that it is building the “Plaid for Africa.”

Interestingly, that’s the similar to way Paystack declared in the past that it was building the “Stripe for Africa” and literally became Stripe for Africa after Stripe acquired Paystack this year.

The Payment API and API Fintech trend of the United States seem to mirror what is playing out in Nigeria. In simple terms, the trend in Nigeria followed the same pattern which began from the advent of payment processors/APIs like Paystack and Flutterwave, and now to the three purely API fintechs that have launched this year.

One role this trend appears to have played with respect to funding for these companies in Nigeria is the new found positive sentiment on the part of investors.

Take a look at this: In January this year, Visa acquired Plaid for a whopping sum of USD 5.3 Bn. And going by pedigree, Visa’s acquisitions usually make financial sense, at that moment and in the future even. 

So somehow, the acquisition of Plaid by Visa likely has put investors on the lookout for investment in such similar companies. There might be a touch of FOMO on this one, but the API fintech segment really does seem like one to watch.

And hence, these events and trail may have played a role in helping these three Nigerian startups raise funds swiftly and within the short duration that they did. 

From another angle, another important factor that seems to have contributed to the uprising of this sector is seen in the rise of the advocacy of open banking in Nigeria.

The value proposition of open banking is the communication between API fintech and banks. In an ideal situation, open banking provides banks and fintech with customer insight and financial innovation via an API ecosystem.

In recent times, there has been a stronger collaborative effort between banks and fintechs. So, it can be said that open banking advocacy in Nigeria has contributed immensely to the progress API fintechs have made in the country so far.

The absence or dearth of such collaborations in other African countries is one of the possible factors behind the fact that API fintech has mostly found a turf in Nigeria while being ignored in other African nations.

With all that said, the API fintech space appears to be a goldmine for the fintech space in Africa. And as stated earlier, only Nigerian startups have so far been sighted to be making moves to tap into this, leaving the rest of Africa out of the equation.

One likely reason for this is the possibility of a lack of cooperation between banks and fintech organisations in other countries. When one party is resistant, there’s likely to be friction in the process. Progress can only be made in this respect provided there is a collaboration between incumbent banks and budding fintechs. 

Or, maybe this area just hasn’t been explored in other countries yet? Perhaps, that can’t be said for sure.

Who knows, it might be sooner rather than later before other African countries key into this “next big thing.”

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