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TOGETHER WITH FLUTTERWAVE
11 - 12 - 2019

Hello there! Welcome to today's edition of TC Daily.  Please take a moment to subscribe if you haven't. Also, join us on Telegram. Don't miss out on all the tech news and analysis on digital innovations from around Africa!

MallforAfrica provides a platform for Africans to purchase items directly from international online retailers - companies that, otherwise, would be inaccessible to the African population. By powering MallforAfrica's payments, Flutterwave gives users access to hundreds of US and UK e-commerce retailers and more than 8.5 billion products combined. Start shopping here.
Dear Nigerian banks and fintechs, The Central Bank of Nigeria is not joking regarding loans. Since July, the banking regulator has asked banks to increase their loans to deposit ratio (LDR) from 59% to at least 65% by December 31, 2019. The plan is to get banks to loan more to stimulate the economy. Failure to meet the target will lead to a penalty. The threat appears to be working, at least for increased lending. Between May and October, bank credit grew by N1.1 trillion ($3.04 billion). With N459.7 billion ($1.3 billion), the biggest growth came from the manufacturing sector. But the growth we’re most curious about is in consumer loans. Banks are usually scared of providing consumer loans because the risks are too high. So fintech startups like Carbon, FairMoney and others emerged. They absorbed the risk by adopting relatively higher interest rates than banks and using proprietary technologies to build out credit information about their borrowers. Now, because of the CBN's LDR policy, banks are getting back into the consumer loans business. Between May and October, consumer loans grew by N356.6 billion ($984 million). Banks have the advantage of lower interest rates on loans, but fintechs have the technology advantage. With the December LDR deadline around the corner, the CBN is now reportedly considering raising the target from 65% to 70%. If that policy kicks in next year, banks have two choices again: reject customer deposits or lend more. No bank will want to reject deposits, so they will need to lend more. To lend more banks will either have to work with fintech startups and leverage their technologies or compete against them by building and promoting rival products. In this article from November, I explained that this is the battle between banks and fintechs. Do you like graphs? Here's one from the good folks at Bloomberg.
Moving on, Cheki Nigeria, a classifieds listing platform for cars, has appointed Chimezie Okonkwo as its new CEO. Okonkwo replaces Gbenro Dara who resigned to join OList, the fast-growing classifieds owned by Opera. Okonkwo has over 14 years working in the digital scene. He started his career at MTech in 2006 before joining Terragon Group as Team Lead for Mobile Value Added Services. Okonkwo also worked at 9Mobile as manager of digital media for nearly four years. Before joining Cheki, he was head of operations at M-Vanadium Core.
Google’s Project Loon, has signed an overflight agreement with the government of Uganda. Project Loon is a connectivity project that provides internet to people using helium powered balloons. Flying 20 kilometres above sea level, these balloons are able to provide internet access to some of the most remote places in the world. In addition to laying high-speed fibre optics cables, Loon is one way Google is trying to connect the world digitally. The overflight agreement would allow the balloons to operate in Ugandan airspace. Similar agreements have been reached in Kenya and Peru over the last two years.
US streaming giant, Netflix is looking to hire a new Head of Public Policy for Sub-Saharan Africa. The role involves helping the company understand policy trends and the impact that potential changes to policies in the Sub–Saharan region may have on Netflix. Click here to apply.
Imposing taxes on social media has consequences Last year, Uganda thought it was a great idea to introduce taxes on social media as a way to raise revenue. The government requires citizens to pay 200 Ugandan Shilling ($0.05) per day to access services like Facebook, WhatsApp, Twitter and 57 other services. That turned out to be a bad move. Statistically, the country’s internet population dropped 30% between March 2018 and September 2018. In turn, the government lost 400 billion Ugandan Shillings ($108 million) in taxes. Many believe that the miscalculated game plan was actually politically motivated and designed to block online dissent against the over 30 years rule of President Yoweri Museveni.
Kenya is about to piss off the US government with digital taxes We’ve paid attention as governments globally have intensified plans to change how digital businesses are taxed. Governments want to be able to tax businesses like Facebook and Google that are making money from their citizens by providing digital services. Countries want to tax businesses as long as they make money from citizens in that country. Unlike physical goods which are easy to tax, digital services fly across borders and are difficult to tax. International tax rules have also not seen major changes for decades, so there is no global consensus on how to tax digital businesses. A few countries like the UK, Egypt and France, have gone unilateral to impose their own taxes. But many of the services and servers powering the global digital economy are from the US. In essence, any country that unilaterally imposes taxes on digital services like Facebook and Google is invariably setting itself up for a trade dispute with the US. Under President Donald Trump who is focused on "America first", the chances of disputes are higher. Like China, the EU, and even Rwanda (for used clothes sales) have witnessed, the US will retaliate if it thinks an issue is not favouring its citizens or businesses. This is the situation Kenya is weighing at the moment. Last month, the government signed a Finance Act that would give it the right to impose taxes on the income of digital platforms. In this article for The Conversation, Mercy Muendo explains that Kenya might trigger a trade war with the US if it goes ahead and imposes a digital tax.
Still on Kenya, Cars45 has officially expanded its operations to the East African country and Ghana. Backed by the Frontier Cars Group (FCG) who just raised $400 million, Cars45 is not done expanding. Olumuyiwa Olowogboyega has more on this story.
They did it! The Jollof Road team is back in Lagos! 80 days ago, the Jollof Road gang hit the road to do something audacious: tour 14 West African countries. Gradually they made their way around the region, exploring the culture, the food, the infrastructure and the currency of the different countries. It was an adventure worth sharing, and they did exactly that on the Jollof Road website. Head over there to find all the journal entries, documentaries, images and short videos from the trip. Here's the latest journal entry from day 80, the last day of the adventure.
Bike hailing struggles in Lagos Bike hailing companies continue to face significant challenges trying to operate effectively in Lagos, Nigeria’s most important city. We’ve already done serious coverage on how government regulation and challenges from transport unions have affected how these startups operate. But in the latest twist, the police is now a major headache for these startups. Over the last couple of weeks, it has clamped down on their operations and impounded dozens of bikes. In this article, Kay Ugwuede spoke with the Lagos police spokesman, Bala Elkana, who said the police is simply impounding bikes that “break traffic laws”. That’s a vague statement since bike hailing startups already operate under a regulatory grey area.
Applications are now open for the Migration Entrepreneurship Prize, a project developed by Seedstars and the Human Security Division of the Swiss Federal Department of Foreign Affairs. The objective of the prize is to identify and support the most promising seed-stage startups working to alleviate the pressure for people to take dangerous routes leaving their homes. Entry is open to businesses in African and Middle Eastern countries that are prone to strong migration movements. Interested startups should click here to apply for the prize.
In Nigeria, the Financial Services Initiative (FSI) has launched the country's first ever fintech industry sandbox. The sandbox allows any Nigerian developer to try out their fintech solutions by plugging into APIs from the Nigeria Inter-Bank Settlement System (NIBSS). The sandbox also offers developers the exposure they need for growth. The initiative is backed by NIBSS, the Central Bank of Nigeria (CBN), EFInA (Enhancing Financial Innovation and Access) and Flourish Ventures (from Omidyar Network).
Jiji has managed to pull off a number of things in recent years. First, it grew to become the biggest classifieds platform in Nigeria in less than 6 years; then it acquired its biggest rival, OLX. But its most important feat is staying alive; that’s no easy feat considering that many of its rivals have either shut down or simply ran out of the market. Today, Jiji is solidifying its base with a $21 million Series C funding round. Another interesting raise for a classifieds business. But despite the new funding, the road ahead won’t be easy for the company. In my article, I write that Jiji has serious competition emerging from every side especially from Opera's OList.
That's it for today  
We'll see you tomorrow!    - Abubakar       Share TC Daily with your friends!
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