CRYPTO MARKET: NIGERIA PROPOSES TAXING CRYPTOCURRENCIES

Bitcoin	$17,046	– 1.04%
Ether	$1,265	– 2.10%
BNB	$289	1.80%
FTX Token	$1.42	– 0.04%
Name of the coin Price of the coin 24-hour percentage change		Source: CoinMarketCap

* Data as of 04:49 AM WAT, December 06, 2022.

The Nigerian government announced that if its proposed Finance Bill 2022 is approved, it will start taxing cryptocurrencies and other digital assets in 2023.

According to the bill’s amendment to the section on Chargeable Assets, “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” 

Despite having one of the highest crypto adoption, Nigeria has had a rocky relationship with cryptocurrencies. The Central Bank of Nigeria (CBN) ordered Nigerian banks to close the accounts of cryptocurrency traders or other entities involved in transactions using their systems last year. It warned that they are used to finance illicit activities, and fined banks for facilitating crypto-related transactions. The Securities and Exchange Commission (SEC) announced about eight days ago that it will push “sensible digital assets, not cryptocurrencies” in its campaign to encourage the adoption of digital assets nationwide. Despite the government’s harsh stance towards cryptocurrencies and its harrowing treatment of cryptocurrency users, the proposed bill did not exempt cryptocurrencies from taxation as digital assets. 

The Finance Ministry wants to tax cryptocurrencies and other digital assets in order to capture all economic sectors, including international e-commerce, in the tax net. The National Economic Council (NEC) has given the bill the go-ahead. Now it is on its way to the Federal Executive Council, the president, and the National Assembly for consideration. 

If it is approved, Nigeria will join Kenya and South Africa as one of the African countries that tax crypto assets.

EX JUMIA CEO RAISES $8 MILLION FOR NEW STARTUP, KAPU

Kenyan social commerce startup Kapu, led by ex-CEO of Jumia Kenya, Sam Chappette, announced an $8 million seed funding round. Kapu, which means “large basket”, wants to help Kenyans get more food for less. 

Currently, the average African household spends 40% of its expenditure on food-related expenses, while in the US, they spend 10.3%. In a LinkedIn post, Chappette stated Kapu has already helped its customers save $300,000 to date and has processed 1 million customer orders.

Kapu operates in the B2C sector and enables customers to buy groceries online and offline at cheaper prices than market rates. Customers can buy groceries through Kapu’s agents and receive their order the next day; they will soon be able to buy through WhatsApp. The startup can sell at lower prices, up to 30% lower, because it sources directly from manufacturers and producers, and buys in bulk from them.

Kapu launched in Nairobi earlier this year and claims to be active in 1,500 communities through its agent collection locations spread throughout the city. With this funding, Kapu will expand its network of local agents, support the deployment of WhatsApp orders, improve its platform, and fully penetrate Nairobi before expanding to new markets.

Zoom out: WhatsApp is used by 93.5% of the Kenyan digital population. When Kapu eventually offers an online grocery shopping option, its growth will be accelerated, and it will be interesting to see how this affects Kenya’s economy. 

ARUWA CAPITAL CLOSES $20 MILLION FUND

Aruwa Capital, a female-founded early-stage growth equity fund, has announced the successful close of its first institutional fund, exceeding its $20 million target. The leading investors for this fund include Visa Foundation and Mastercard Foundation Africa Growth Fund, among others. Notably, 30% of the fund came from local investors—both private and institutional.

Aruwa Capital’s 32-year-old founder, Adesuwa Okunbo Rhodes, is the youngest solo general partner (GP) to raise a $20 million fund in Nigeria successfully. Believing that the gender-based gap in funding is fuelled by the fact that most investment firms are led or owned by men, she founded Aruwa Capital in 2019 to give more women-led businesses access to funding.

Aruwa Capital describes itself as a pre-equity investor, and it invests between $500,000 and $2.5 million in women-led and focused businesses across Nigeria and Ghana. It has invested in six companies so far: healthcare companies Wemy Industries and Lifestores Healthcare; fintech startups PngMe and Crowdforce; a cleantech company, Koolboks; and Agroeknor, a business in the essential consumer goods sector. 

PAYMENT INFRASTRUCTURE: ENABLING RAILS FOR THE FUTURE OF PAYMENTS IN AFRICA

Africa is gunning to be a cashless economy. While this ambition is strong, 90% of retail transactions are still cash-based. In South Africa, for instance, only 21% of internet users use mobile payment methods. 

The continent still lags behind other regions when it comes to the uptake of digital payments, and as such, it offers a significant opportunity to digitise payments for consumers and businesses.

In the latest white paper by TechCabal Insights, in partnership with Zone (formerly AppZone), we explore how digital payment is evolving on the continent, the blockers that challenge growth, and the role of each stakeholder in navigating them.

Download your free copy here.

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IN OTHER NEWS FROM TECHCABAL

Venco raises a pre-seed round to help manage African properties.

Next Wave: Africa sobering.

OPPORTUNITIES

• The Fondation Maison des sciences de l’homme and the Institut Français de Recherche en Afrique of Nairobi are offering a three-month-long fellowship in France for postdoc researchers from Kenya, Tanzania, Uganda, Burundi, Rwanda, and Eastern Congo (Kivu) who have presented their thesis from 2017. Laureates will receive a monthly stipend of €1,600 at the start of each month. Apply by December 9.

• If your startup or innovation is focused on climate-smart agriculture practices, apply to the THRIVE|Shell Climate-Smart Agriculture Challenge for a chance to win $100,000, a spot in a prestigious accelerator, publicity and more. Apply by December 11.

• Applications are open for the TechBridge accelerator programme to innovative African startups. It provides $200,000 in funding, learning opportunities, and access to the TechBridge hub, community, and support tools and resources. Apply by December 15. 

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