A TechCabal roundup about the
impact of the coronavirus pandemic
on Africa’s tech industry

MAY 24, 2020
This newsletter is a weekly special focused on the effect of the novel coronavirus, COVID-19 on African tech and innovation ecosystems. Subscribe here to get it directly in your inbox every Sunday at 3 pm WAT. This edition is brought to you in partnership with Helium Health.


About six weeks into the pandemic, our
initial take
was that the fintech boon that was predicted wasn’t really happening. Some major fintechs were struggling.

M-Pesa estimated a loss in revenue, Yoco reported a drop in in-person transactions and mobile money agents including OPay were battling the shutdown of sports betting.

It was
a mixed bag owing to a combination of consumer behaviour, distribution and microeconomic issues.

Today, we’re seeing a slightly different story as the continent continues to fight the virus. Some fintech startups are reporting wins.

Welcome to today’s edition, our 9th one. To catch up, read the 8th one; the good news edition. Also, check out previous editions here.

Let’s take a look at what’s happening in fintech today, shall we?


To help in the fight against COVID-19 and ensure care provision continues during this pandemic, Helium Health is giving hospitals and clinics across Africa access to its telemedicine software. To sign up or get more information, contact team@heliumhealth.com.


Fintech gains users but …
In a recent interview with CNN’s Julia Chatterley, Paga’s CEO, Tayo Oviosu said his company has seen a 330% QoQ growth in mobile wallet sign-ups. The
coronavirus pandemic and resultant lockdown has caused more users to turn to mobile platforms as money agents and banks have shut down.

The news from Paga tells a different side of the story from previous concerns about microeconomic and macroeconomic conditions and their impact on fintech. Although those concerns still remain, fintech companies are reporting wins in user acquisition and transaction numbers.

In Nigeria, mobile payment service, Paga has 250,000, 15 million users and processes 3.5 million transactions monthly. By the end of 2019, the majority of its transactions were from its agents.

“We’re now seeing a trend towards digital,” Oviosu however said. “What’s going on now with COVID-19 is that it’s helping to accelerate that,” he added. The fintech company hopes to reach 50 million users in the next five years.

Another major fintech, this time in the cryptocurrency space, is reporting a huge surge in its customer base. Luno says
it has gained about 1 million users since the pandemic began, across the 40 countries where it is present. This brings the total number of users of the seven-year-old company to 4 million. The SA-founded cryptocurrency platform with presence in Nigeria, Zambia and Uganda is now looking to expand into Ghana and Kenya.

General Manager Marius Reitz said, “activity on the market is being boosted by people looking for digital ways to transact and limit human contact” according to a Bloomberg report.

In April, another cryptocurrency platform, Buycoins launched a money transfer service called SendcashAfrica. About 10 days after it launched, its founder, Timi Ajiboye tweeted that he was hoping for the day the new service would do ₦100 million ($258,000) in transactions. The company reached that
milestone in less than 30 days.

As Fola Olatunji-David, a former program manager at Google pointed out, the growth could have been accelerated by the pandemic.

In the midst of the crisis, Paystack
announced that it now processes 50% of all payments in Nigeria. As of 2018, official communications had it that the fintech was processing 15% of all online payments. Could the pandemic have accelerated its growth? Perhaps.

Source: Save the Children.

While these wins are reasons to be optimistic about the industry’s chances during the crisis, there are also reasons to remain cautious.

Orange Money, the French telco-backed service which has a significant presence in francophone Africa, told the Washington Post that while users have grown, transactions are down some 10 percent globally. A company rep, Cedric Lemaire attributed it to “pandemic economic pressures”. Orange Money saw a 90 percent drop in transactions during a three-day lockdown in Sierra Leone.

So while user growth is accelerating among fintechs, especially those providing cash alternatives, the key question is, in light of economic downturns, will users have enough money to keep transacting on these platforms?

There is the sense that as lockdowns get lifted and economies re-open, things could change. But will it be enough or will it be a few years before things get restored to some form of pre-pandemic economic normalcy?


The strains of eLearning
While children are forced to stay home and learn from digital tools, parents have suddenly become co-teachers and they are mostly not pleased with this new role.

For these parents, it is a mixed bag of experiences, and most are not ecstatic about this new normal.

South African SMEs are on a road to recovery. By the end of April, SA eased lockdowns in the country from level 5 to 4, and this has caused a growth spurt in economic activities for small businesses.

Fintech company, Yoco has come to this conclusion from the data of over 80,000 merchants on its platform. And analysing the study, Alexander Onukwue shows how this growth is led by retail and food delivery.

Gokada’s success and
a secret sauce from Bangladesh.
Ever since bike hailing was banned in Nigeria’s commercial capital, Lagos, existing players have had interesting pivots in a scramble to stay alive. Gokada is one of the earliest players in that space, and its CEO, Fahim Saleh talks how the ban might be a blessing in disguise.

this article, Abubakar Idris also highlighted how one of Saleh’s earlier similar exploits from Bangladesh is pivotal to this moment for Gokada.


The new WFH wave sweeping the world.
Nine tech startups including Facebook and Twitter have given employees the option to work from home indefinitely. Another six, including Google and Amazon, have asked employees to work remotely until February 2021.

Github page is a live tracker of this trend and the growing list of startups on the train.

IBM confirms layoffs. Without revealing the number of people that are being let go or any other additional details, the technology company has confirmed to Techcrunch that layoffs are indeed happening.


Short-term fixes are not enough if SMEs are to survive COVID-19.
In this analysis for BFA Global, Coco Dong and Michelle Hassan contrast small business owners from China and Kenya, and how they are faring with the gradual easing of lockdowns across the

The inevitable geopolitical vaccine tussle. The 2009 swine flu pandemic was
estimated to have killed more than 500,000 people, and experts are afraid that we might see the repeat of an inequitable vaccine distribution system like in 2009.

As the US and China are on a race to the vaccine finish line, this Financial Times analysis examines the effects of this war.

Best wishes for a great week

Stay safe and please observe all the guidelines provided by health experts.

You can subscribe to our TC Daily Newsletter; the most comprehensive roundup of technology news on the continent, and have it delivered to your inbox every weekday at 7 am WAT.

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– Victor Ekwealor, Managing Editor, TechCabal

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