with FLUTTERWAVE, INVEST AFRICA & CATALYST FUND
Good morning. An NGO is suing Nigeria’s National Youth Service Corps’ for forceful publication and sale of Corp members personal data in a Magazine/Yearbook. Nigeria’s data protection laws are in for some testing this year.
In today’s edition:
-Jumia and MTN
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JUMIA, MTN AND THE STOCK MARKET
There’s been a lot of activity around Jumia’s stock in the last two weeks. This time, MTN Group is in the mix.
Here’s a timeline of events:
In December 2013, MTN Group became a 33.3% shareholder in Jumia
MTN Group upped its stake to 41.4% a few months later
In April 2020, MTN Group began plans to “significantly reduce” its stake in Jumia
Following a stock rally in August 2020, MTN said it would sell off its stake in Jumia
MTN Group has now “fully exited its 18.9% investment in Jumia.”
The future: Jumia’s Q3 results are due in a few weeks. The leading question will be whether investors will react like they did to their mixed Q2 results?
The Present: So far, it doesn’t look good. After a high of $18.03 on October 26, Jumia’s shares are dipping again, and it could point lead to an even weaker position once Q3 results are out.
What matters: Despite the fact that Jumia’s losses are reducing quarter-on-quarter, investors will be focused on GMV, the total value of goods sold by Jumia in Q3.
Bonus: After saying that he has a long position in Jumia stock, the editor of Citron research, Andrew Left is now insinuating that Alibaba or Softbank will become strategic investors in Jumia.
Join the teams at Catalyst Fund, MEST, and Mastercard Foundation for the virtual launch of the Inclusive Digital Commerce Accelerator in Ghana and hear from leading investors and speakers including Anita Erskine, Alex Bram, Albert Biga, Lexi Novitske, Clarence Blay,
Kareem (not real name) is a taxi driver in Uganda.
His regular customers usually contact him via Whatsapp, and so he needs constant internet access. However, it has become increasingly harder to do so with the introduction of Uganda’s tax on the use of platforms like WhatsApp.
In May 2018, the Ugandan government passed a law imposing a daily levy of 200 shillings (five cents) on users of “over-the-top” online services including Facebook and Whatsapp
Uganda is not the first to tax digital
services. In 2014, South Africa implemented a 14% value-added tax (VAT) on digital imports, making it the first African country to introduce digital taxes. This month, the Cameroonian government attempted to introduce a phone tax but it retraced its steps.
These taxes are counter-productive for Africa’s growing digital economy. Within two months of implementing the social media tax in Uganda, the internet penetration rate had fallen to 35% (13.5million internet users) from 47.4% (18.5 million internet users) the previous month.
Before the tax, 33% of internet users in Uganda used social
media platforms 10 times a day. After the tax, this percentage became a paltry 6.6%.
While taxes are undeniably a large source of revenue, they are a shortsighted approach. On the other hand, they are an effective way for governments to stifle digital activity. This is especially true given the revolutionary power of social media to hold governments accountable.
Africa’s digital economy is set to hit over $300bn by 2025. This long-term growth should be a focus for African governments. However, the growth will not happen without the presence of available and affordable internet, neither will it be encouraged by a decrease in the rates of internet penetration.
Digital taxes are a huge burden in a continent with the highest connectivity costs globally; where 1GB of mobile data costs up to 9% of the average users’ monthly income.
The Africa Debate is the flagship event of Invest Africa, the leading trade and investment platform for African markets.
This year, the forum will be held virtually, connecting the international investment community with businesses across the Continent via an interactive online platform.