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Congratulations to all 25 African startups who got into Google’s Black Founders Fund.
Ten of the grantees were from Nigeria, five from Kenya, and three from South Africa. Ghana, Uganda, Côte d’Ivoire, Rwanda, and Senegal each have one grant recipient, completing the list.
We got a chance to speak to some of the startups including Herconomy and Fez Delivery, and here’s how the founders plan to leverage the opportunity.
Nigerian banks to use social media for KYC
It’s not “just Twitter” anymore. At least not in Nigeria.
Last week, the Central Bank of Nigeria (CBN), released its Customer Due Diligence Regulations 2023 for all financial institutions under its regulatory purview. Under the new regulations, the apex bank has made it mandatory for all financial institutions to use social media handles for KYC operations.
Side bar: KYC stands for know-your-customer and it’s the various processes all services use to verify the identities of their users. If you’ve ever had to verify your identity for an app by entering your national identity number, social security, phone number or email, then you’ve completed a KYC process.
Now, Section 6(iv) of the CBN’s new regulations will make it so that banks have to ask users to confirm their identities using social media—platforms that already have poor and troubling KYC policies. The requirements cover both individuals and businesses, all of whom will need to provide social media handles moving forward.
Business publication Nairametrics states that the new requirements come as the country recognises the growing importance of social media.
A concerning move? Already, Nigeria has a slew of other options for KYC including its NIN and BVN services which many Nigerians still have trouble accessing. It’s questionable why social media handles would be necessary, given that only 31.6 million Nigerians—about 16% of the entire population—have access to social media.
Image source: Zikoko Memes
Another concern surfaces with Nigeria’s troubling history with social media. Since its 2020 #EndSARS campaign, led by the country’s youth, went viral on social media, the country has been trying to censor social media, even banning Twitter for seven months in 2021. The country has tried to enact a social media bill, a hate speech bill, and several amendments to different acts which censor social media.
With several Nigerians imprisoned and targeted by government officials for their online presence, many Nigerians have tagged the move as yet another move by the government to curtail social media.
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Flutterwave enters 5-year deal with Microsoft
Olugbenga Agboola, CEO of Flutterwave
Fintech unicorn Flutterwave isn’t just racking up licences across Africa, it’s also entering big deals.
Last week, the company announced that it had signed a 5-year deal with Microsoft. The partnership will see the fintech company build a new generation of payment services on Microsoft Azure, powering payments infrastructure across the African continent and beyond.
This partnership, according to a statement forwarded to TechCabal, will enable the African payment firm to service multinational firms. Some of them include enabling payments of Uber, Netflix, and Microsoft, solidifying Azure’s role in facilitating a seamless, reliable, and secure payment experience.
Flutterwave on Azure: Flutterwave will also onboard its products such as Flutterwave for Business, Send by Flutterwave, Flutterwave Store, and Flutterwave for Fintech Platform onto Microsoft’s Azure Cloud Platform. The goal is to offer payment services to-and-from Africa.
An East African hub: Meanwhile, the payments company is also looking to make Kigali, Rwanda, its East African hub. Since it acquired electronic money and remittance licences in Rwanda earlier this year, the company has been planning to set up a financial operations centre for East Africa in the county’s capital.
Flutterwave CEO Gbenga Agboola believes the country has ambitions of being a premier destination for foreign investment funds management into Africa.
The big picture: Meanwhile, the company is moving ahead with its plan for an IPO. Agboola confirmed to TechCabal that the company isn’t looking to raise more funding, but will instead focus on deepening its market presence across regions where it has licences, including Egypt.
Student expulsion in Nigeria sparks digital rights debate
With a 40% internet penetration rate as of 2022, sub-Saharan African remains the least connected region in the world. The International Telecommunications Union (ITU) estimated that an investment of almost $97 billion is needed to bridge this connectivity gap on the continent. Depending on the level of connectivity achieved, Africa’s internet economy is projected to grow to $180 billion by 2025 and $712 billion by 2050.
Despite the pressing need for improved internet access, there is a growing trend of government-directed internet shutdowns in various African countries, which have implications for the digital economy. Internet shutdowns have more than doubled in Africa between 2020 and 2022, from 12 to 25 respectively, making one in four Africans affected. A recent example is the Senegalese government’s decision to cut off internet access in response to violent protests and the spread of controversial messages on social media platforms during the first week of June.
Image source: Ayomide Agbaje/TechCabal Insights
According to Surfshark’s internet censorship annual recap, Africa ranks as the second in terms of internet shutdowns, with over 300 million Africans affected, trailing behind only Asia. The economic consequences of internet shutdowns are evident, as highlighted by the estimated combined loss of $2.4 billion suffered by African nations in 2022 due to internet restrictions. For instance, Sudan’s 185-day shutdown also cost the country approximately 7.3% of its 2020 GDP.
Despite the potential for significant economic growth in the internet sector, government-imposed restrictions pose substantial challenges. Africans are not only feeling the cost of internet shutdowns in their pockets. As technology makes inroads to African agriculture and digital tools enable better farming for the continent’s smallholder farmers, reliable access to the internet becomes increasingly tied to food security.
More than ever, Africa requires not only infrastructural development to grow its digital economy but also to address the issue of internet shutdowns. Governments should adopt policies that promote open and accessible internet environments, ensuring that connectivity is not only expanded but also protected. By investing in reliable infrastructure and fostering an environment that values internet access as a catalyst for economic growth, African nations can unlock the immense potential of the internet economy and drive overall development.
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The World Wide Web3
* Data as of 06:30 AM WAT, June 26 2023.
Binance is in more trouble as Belgium orders it to stop offering crypto services. According to CoinDesk, Belgium’s Financial Services and Market Authority (FSMA) issued a notice stating that the platform was violating laws by providing “exchange services in Belgium between virtual currencies and legal currencies, as well as custody wallet services, from countries that are not members of the European Economic Area”. The authority then ordered Binance to stop offering all crypto services in the country.
Belgium becomes the fourth country to set its eyes on Binance after the US, France and Nigeria all launched several investigations into the affairs of the crypto exchange platform.
A Twitter hacker has been sentenced to five years in prison for a $120,000 crypto scam. Hacker News reports that Joseph James O’Conner was sentenced in the US last week. O’Conner was arrested in 2021 for using backend tools used by Twitter to hijack 130 popular accounts and perpetrate a crypto scam that gained about $120,000 in illegal profits. The convict is also accused of targeting an unnamed New York-based crypto platform from which he stole over $700,000.
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