IN PARTNERSHIP WITH
Good morning ☀️ ️
Jeff Bezos’s space firm, Blue Origin, is suing NASA for awarding Elon Musk’s firm, Space X, a lunar lander contract.
NASA is gearing up to send more people to the moon for the first time in 42 years. The deal surrounding the plan was initially supposed to involve two space firms – presumably Bezos’s and Musk’s – but NASA changed its mind and picked only one.
Anyway, Jeff is not happy and he’s taking it to court.
Heads up, there’s a lot of Nigerian content in today’s newsletter. Why? Well, a lot has happened in the tech ecosystem there and we don’t want you to miss anything.
Grateful? Then share this newsletter please. 🥺
In today’s edition:
- NITDA’s play for Nigeria’s tech sector
- CBN strikes again
- Chekkit leaves Afghanistan
- Events: TC Live
NITDA’s PLAY FOR NIGERIA’S TECH SECTOR
The Nigerian tech sector is booming, and everyone wants a piece of it, especially the government.
Early in March, the Nigerian Information and Technology Development Agency (NITDA), which regulates information and technology services in the country, announced they would be amending their 2007 act.
Their reason? It’s a help-us-help-you situation. NITDA Director-General, Mallam Kashifu Inuwa Abdullahi, says the amendment is necessary to help the agency keep up with the accelerating changes in the tech ecosystem. A lot of new things have been introduced since 2007, and NITDA wants to make sure they’ve got everything under control.
This sounds good, right? After all, these regulations will help make sure that everyone is doing the right thing the right way. Well, a recent leak of the draft bill shows that there’s a lot more that NITDA wants.
More like levies, fees, and sanctions
Yes, there’s of course money involved. In H1 of 2021, Nigerian tech startups brought in twice the combined total made in H1 of 2019 and 2020.
If the bill passes, Nigerian tech companies with revenues over ₦100,000,000 ($243,831) will have to pay levies worth 1% of their annual profit-before-tax revenue.
This isn’t the only part that deals with money.
All [tech] companies also stand to pay an additional 0.5% of the amount for every day they default in payment. So if you miss the payment deadline by a month, you stand to pay at least 15% as levy instead of 1%.
More so, any company that fails to adhere to the directives of the Agency stands to be fined ₦3,000,000 ($7,315) for individuals, and ₦30,000,000 ($73,149) for corporate bodies. What’s alarming about these fines is that they’re a far cry from the current fines which stand at ₦200,000 ($487) for individuals, and ₦500,000 ($1,219) for corporate bodies.
Offenders may also be subject to some time behind bars.
Jail time for offenders? Really?
Yup, and that’s what’s caught the public’s attention.
Offenders may be subject to fining and/or imprisonment of up to two years.
To be clear, this provision exists in the current NITDA Act of 2007; offenders under that Act can also be punished with imprisonment. The present NITDA Act, however, doesn’t apply to certain tech companies or startups.
The Third Schedule of the proposed bill takes care of that right away, encompassing IT companies, digital platforms/providers, e-commerce companies, fintechs, and more under the jurisdiction of NITDA.
I write a bit more about this in Nigeria’s proposed technology Act seeks to introduce levies and licensing fees to tech companies
Increase your online sales with a Paystack Storefront – a free, beautiful seller page that helps you bring creative ideas to life.
CBN STRIKES AGAIN
Yes, we’ve been doing a lot of reporting on the Central Bank of Nigeria. The bank is hard at work, we have to reward them with a little coverage.
What’s new with CBN?
A temporary court order to freeze the bank accounts of Nigeria fintech platforms Bamboo, Risevest, Trove, and Chaka for the next six months.
Ah, but why?
Forex trading. Late last month, CBN banned money changers from forex trading but this has nothing to do with that directive.
It, however, has everything to do with another circular released in 2015. CBN alleges that Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited, and Trove Technologies Limited are complicit in operating without a license as asset management companies “and utilizing FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of the CBN circular referenced TED/FEM/FPC/GEN/01/012, dated July 01, 2015.”
The prosecutor also told Justice Ahmed Mohammed that the foreign exchange deals done with the defendants were making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for about 180 days.
So far, none of the affected companies have come out to refute CBN’s claim.
Okay, what about their customers’ accounts and monies?
Customers’ deposits are safe.
Chaka, Rise Vest, and Bamboo have sent out missives to their customers, assuring them that trading activities will continue as usual and the issue will be sorted out with the regulators.
Join the Future Africa Collective – an exclusive community of investors who invest in startups building the future of Africa. With a $1,000 annual or a $300 quarterly subscription fee, you get access to invest a minimum of $2,500 in up to 20 fast-growing African startups each year. Learn More
Chekkit leaves Afghanistan
Nigerian authentication and product tracking startup, Chekkit, is pulling the plug on all its operations in Afghanistan.
Backstory:
Over the weekend, the Taliban hijacked the Afghan government and assumed total control of the capital city. The central government was disbanded; and Ashraf Ghani, the president of Afghanistan fled the scene unannounced, leaving what remained of his administration in the mercy of the Taliban.
Hundreds of citizens are also scrambling to leave the country as soon as possible. There’s even footage of some clinging to the body of a US Air Force plane as it departed the Kabul airport.
Everyone is affected, startups too
Earlier this year, Nigerian startup Chekkit expanded to Afghanistan after landing a partnership with the Afghanistan Ministry of Health to help combat the endemic counterfeit medicine products in the country.
Now, three months later, the startup is pulling the plug on all its operations in Afghanistan. Their exit wasn’t much of a decision as all their partners have been forced to exit the country.
“We have discontinued our communication/operation in the region as our partners have also exited the region due to the civil unrest,” said CMO Oluwatosin Adelowo. ”Our heart is with the people of Afghanistan and we pray for strength for them to withstand and surpass the current issues.”
Damilare Dosunmu has more in Nigerian startup checks out of Afghanistan post-Taliban takeover
The hottest knowledge podcast right now?
Take control of your lifelong investing journey by learning the basics of US Stocks and Crypto in an hour. Stocks have existed for over 100 years, Crypto is an asset class of the future, acquire the knowledge for free on our simplified podcast here.
EVENTS: TC LIVE
This Friday, August 20th at 11 am (WAT), Josh Nzewi, Co-founder and CEO of EZE will speak on TechCabal Live.
EZE is the world’s first fully automated marketplace for trading new and used electronics.
In this episode, Josh will discuss some of the inefficiencies he has observed in the market for smartphones and other electronics, as well as EZE’s approach to solving them. He will also talk about the role of policymakers and other stakeholders in addressing the current issues with supply chains in Africa.
Josh will be speaking with Adegoke Oyeniyi, Editor-in-Chief at TechCabal.
This event is open to innovators in the e-commerce sector, investors, policymakers, and everyday consumers of smartphones and other electronics.
Sign up now: http://bit.ly/tcliveaug20
Note: By clicking on the registration link for this event, you’ve indicated interest in the event and will get an invite to attend. To opt-out, please ignore the invite.
Small business budget? Access affordable service and more on the FCMB Business Zone; a robust one-stop online platform that provides a wide range of services such as advisory, escrow, certified online learning, etc. to small and medium enterprises. Access it for free here.
What else we’re reading
- A $400m private equity firm, Convergence Partners, is investing in Africa’s digital inclusion.
- Remember Khaby Lame? Well, the Senegal-born social media sensation has just become TikTok’s first megastar.
- Fintech startup, Pngme, closes $15m Series A to increase customers and expand its team.
- A rival to Uber has been born in South Africa as e-hailing app, DiDi, launches in Johannesburg, Pretoria and Ekurhuleni.
HELP SHARE THIS!
Written by – Timi Odueso
Edited by – Daniel Adeyemi
