Questions over a Chinese loan for broadband connectivity in Nigeria
Welcome to TC Daily! In today’s digest: Dubai-based payments company acquires Africa-focused DPO Group, Nigeria’s legislative chamber raises questions about a Chinese loan for broadband connectivity and we explore tackling venture capital bias.
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Dubai’s Network International is set to acquire Nairobi-based fintech DPO Group for $288 million.
DPO Group is one of the largest pan-African online payment platforms with a presence in 19 countries across the continent. In 2019, it reported $16 million in revenue and its major markets include Kenya, South Africa, and Tanzania. The
fintech currently works with about 47,000 merchants across the continent.
The acquisition helps Network International consolidate and accelerate its presence in Africa. The deal is expected to be completed in Q4 2020. DPO’s founders will have $13 million in their ownership of the company rolled over into Network International shares and a two year holding period after the acquisition.
The DPO deal is the second major fintech acquisition within the space of a month in Africa where tech exits are an exception and not the norm. But there’ve been at least 3 others within the past year. Last month, MFS Africa acquired
Beyonic, a Uganda-based digital payments company. Earlier this, Paga acquired Apposit, a software development company based out of Ethiopia.
It’s still too early to say whether these are signals of a change in the landscape but these are surely interesting days for fintech in Africa.
VENTURE CAPITAL BIAS
After an eleven-year career at General Electric helping expand its business portfolio in Africa, Ivorian entrepreneur Swaady Martin founded YSWARA; a South African gourmet tea company that sources ingredients across Africa and exports to 17 countries around the world.
Despite her network, professional achievement and sector knowledge, Martin says she has been unable to raise funding for the company. But she continues to see capital cycle from white funders to white founders in ways that mimic the transfer of World Bank loans from
Washington institutions to Africa-based NGOs led by white people.
Martin believes funding bias in favor of African businesses founded by non-Africans “is another form of neo-colonialism.”
Over the past few weeks, an old conversation about funding bias has re-emerged within the African tech community. Alex spoke with key industry players about how to tackle the bias.
CHINA + AFRICA
Nigerian lawmakers have raised questions over a clause in the country’s loan agreement with China according to local media reports. Part of the loan, about $328 million from the China-EXIM bank is expected to be used for expanding fiber infrastructure to 19 states in Northern Nigeria.
The problematic clause reads as follows:
“The Borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.”
The House has accused the Finance Ministry of surrendering Nigeria’s sovereignty to China in exchange for the loan. Although the matter is yet to be investigated, it
ties into concerns about China’s role in Africa and whether nations are mortaging their futures in exchange for loans.
Nigeria’s House of Representatives has summoned the Minister of Digital Economy, Isa Pantanmi, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, among others. They ‘ve been asked to appear before the House Committee on Treaties, Protocol, and Agreements on August 17.
Credit data marketplace, Carma which is currently present in Nigeria and Kenya has launched in Zambia. Carma seeks to provide lending companies with access to real-time credit data, on a peer-to-peer basis, through a pay-as-you-go service
In Zambia, CARMA has signed an agreement with NASCU Zambia to
provide credit reference services for 1,122 credit unions. The credit unions serve almost 1.5 million credit union members which are about 15 percent of Zambia’s adult population.
During her internship year in university, Olamide Ajah first learnt about Visual Basic. Her boyfriend at the time, now her husband, “had gone for training in Visual Basic and came back to school bubbling with this new knowledge that he had gained,” Ajah told TechCabal.
“I was amazed by how you could think of an idea and create something tangible by tapping a few strokes of your keyboard. That caught my attention and that’s where it all started,” Ajah narrating the event.
Today, Ajah is the Chief Technology Officer at Seamfix, an organization that provides identity management and verification solutions. She shared her story and her journey in tech with Kay in this week’s #MyLifeInTech.
TC LIVE WITH TOKUNBOH ISHMAEL
For the next TC Live session on Friday, July 31st we will interview Tokunboh Ishmael, co-founder and Managing Director at Alitheia Capital whose portfolio companies include MAX, Lidya and Tomato Jos. Alitheia Capital is one of the continent’s most prolific local investors. Ms Ishmael has a 20-year experience spanning investment banking, private equity investing, technology and new business development on and off the continent. She will answer questions in an interactive session about Building in Africa. Register here to join the session.