How Paystack’s maturity relied on a community of hard and smart workers
NOVEMBER 29, 2020
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I am excited by something happening in Nigeria right now, want to know what? I’ll tell you.
So, an aide to Nigeria’s VP announced a 30% slash on imported vehicles via a tweet;
“To further cushion current socio-economic conditions, Buhari adm(sic) is proposing more tax incentives in the 2020 Finance Bill including import duty reductions from 35 to 10% & 0% levies on tractors, transport vehicles & co, 50% reduction of minimum tax, specific TETFUND exemption…”, a part of the tweet read.
I am excited because this means I can finally ship in the Benz of my dreams without paying almost the cost price in shipping fees.
Before you get carried away with my excitement, here’s a breakdown of what you should know about these revised levies;
In 2014, the government increased import duties on used cars to 35% to “develop Nigeria’s automotive industry, and promote purchase of made-in-Nigeria cars.”
Six years later, without any consultation with stakeholders investing in the industry, the government pushes it down by 30%.
Chidi Ajaere, CEO of GIG Group, says that in pursuance of the government’s earlier indigenisation policy, the group has “spent over ₦5 billion of private funds, without any loans from the banks, to build the vehicle assembly plant.”
“We have invested all that money. What is going to happen to us (the investors in that vehicle assembly plant) now with the policy somersault? Will the Federal Government come to our aid with incentives for the monies sunk already into the investment?”, Ajaere wants to know.
Anybody? None? OK.
See, at this point, the seesaw of regulations in Nigeria is a familiar bug we have all become somewhat blasé about. So that part of this levy is not what might dampen my initial excitement, at least not the major thing.
The problem here is that the world is moving away from automotive carbon fuels, and Nigeria’s efforts are dismal, worryingly so.
“Besides, in an economic sense, we are an oil-producing country, so we should do everything possible to frustrate the sale of electric cars in Nigeria to enable us to sell our oil.”
This statement is attributed to Ike Ekweremadu, the immediate past Deputy President of the Nigerian Senate.
In 2019, Ekweremadu was justifying turning down a bill to phase out petrol vehicles by 2035 in favour of electric cars.
The bill was heavily rejected, and its sponsor, Ben Murray-Bruce was eventually forced to withdraw it.
Murray-Bruce’s electric car bill had its own merits, a lot of it, but it did not seem to be well researched. His claim that “In the next 5 years, more electric cars will be sold than fuel cars,” was proven to be wrong.
“Except the Federal Government urgently creates aggressive policies of hydrocarbon reserves replacement, geologists and other stakeholders in the oil sector have raised an alarm that the nation’s crude oil reserve would be totally depleted in the next 37 years precisely by 2048.”
Nine years later, I can categorically tell you that nothing aggressive is happening.
Last year, the DPR gave another 50-year timeline to dry-up. As inconsistent as these timelines are, every keen observer knows that one day, really soon, the giant of Africa will be oilless.
Apart from crude oil depletion, environmental damage is another major concern. Africa is not yet industrialised enough to rank on the global destruction scale.
For global greenhouse gas (GHG) emissions, South Africa is the only country on the continent in the top 20 list. Regardless, there is still cause for worry.
Without going into plenty of details, most of the countries with high emissions have plans for a fully green, or hybrid fuel, future. But Africa is not on these plans.
With an increasing rate of industrialisation, e-waste, among other unsustainable practices, the situation is dire.
More fumes, still
In all this, it is alarming that the 6th most powerful man in Nigeria was apparently unaware of all these realities, or worse still, could not be bothered.
This alone is the most evident indicator of the government’s attitude towards electric cars.
On the 13th of November 2020, Stallion Motors and Hyundai launched Nigeria’s first locally assembled electric car; the Hyundai Kona, in Lagos.
Head of Sales at Hyundai Nigeria, Gaurav Vasisht said this move is towards a “greener Lagos.”
Photos showed Lagos State governor, Babajide Sanwo-Olu present at the launch, and I wondered if he told Vasisht the government’s stance on electric vehicles.
I reached out to Hyundai Nigeria via email and Instagram, and was aired, till today. It hurts.
Regardless, I’m wondering if this is all for real this time, or is the Nigerian government waiting for a sadistically sweet moment to pull an okada ban on this industry?
We’ll see, I guess.
FROM THE CABAL
On LifeBank’s underestimated, but thriving niche.
Although it has saved hundreds of lives across Nigeria, and Africa, LifeBank is not considered a cool startup and does not announce funding rounds.
Founder, Temie Giwa-Tubosun talks about her journey, and why she thinks about fundraising as a car refuelling process that should not be announced.
How Paystack’s maturity relied on a community of hard and smart workers. “At Paystack, triggers and nudges for product creativity and stunning user interfaces come from team members’ expectations of how they want the world to look and feel.”
In this detailed account, co-founder, Shola Akinlade tells the story of the hottest kid on the African fintech block.
THE CRYSTAL BALL
“The rise of remote work due to the pandemic has massive implications for Nigeria’s power sector. With fewer employees at the office, companies can reduce their energy consumption, and as loads become smaller. They can start integrating solar power into their power generation, reducing their dependency on shaky grid power, and dependence on polluting diesel generators. Growing acceptance of working from home, coupled with plummeting solar costs, could even push more Nigerian businesses to go fully off-grid.”
Every week, we ask our readers, stakeholders and operators in Africa’s tech ecosystem what they think the new normal will look like,and share their thoughts here. You can share yours to firstname.lastname@example.org with ‘The Crystal Ball’ in the subject line.
Ask entrepreneurs in sub-Saharan Africa about the biggest challenges they’ve faced in running their businesses and a recurring answer you’d get would be unstable electricity.
While South Africa experiences the lowest rates of power outages with only 50 hours in a year, countries like Niger and Nigeria experience as high as 1,400 hours and 4,600 hours respectively on a yearly average. This means that on average, Nigeria spends over half of the year without power.
Power outages are only one problem; access to electricity is another.
World Bank data shows that as of 2018, only 47.7% of the population of Sub-Saharan Africa had access to electricity.
These electricity problems have debilitating costs for startups on the continent, and not costs of alternative power sources – data shows Nigerians spend an estimated $14bn annually on small-scale diesel generators – but in terms of business hours lost in order to save on power costs.
Nigeria has launched its first electric vehicle, joining other African countries like South Africa and Rwanda. While it is a good thing that the country is adopting the use of cleaner vehicles, the power problem in the country leaves too many questions for comfort. There’s already a very high demand for electricity, which means Nigeria is generating way less electricity than the population needs.
According to data from the Centre for Global Development, Nigeria is the most under-powered country in Sub-Saharan Africa, with energy consumption at 79% less than income levels suggest.
The Future of Energy in sub-Saharan Africa, a report by TechCabal and Stears Data shows that Africa’s electricity consumption is way less than other regions even with widely varying population sizes – Africa has a population over 50 times that of Australia but only consumes three times as much energy.
The problem of outages and shortages needs to be addressed first before jumping on the EV bandwagon. Perhaps, an introduction of electric cars will mean the government facing the nagging electricity problem squarely. However, this still remains largely to be seen.