👨🏿‍🚀TechCabal Daily – Is Kano building a tech pyramid?

Fintech

What’s one thing you can find on every street in Nigeria? Here are a few hints: it requires a firm grip, and careful finger-play will give you what you want.

If your answer is a PoS machine, you’re right. If it’s anything else, you may want to check out our sister publication Zikoko Daily instead. 

Anyway, POS operators and their machines have become as much a Nigerian staple as garri or those stained tupperware people never throw away. As of March 2024, there were over 2.7 million PoS terminals and 1.9 million PoS agents in the country; so it makes sense when Nigeria’s business regulator said, over the weekend, that it’s battling 15,000 applications per day for its fintech regularisation exercise. 

A hard lesson on deadlines: If you’re wondering what this exercise is, we could say it’s Nigeria’s attempt to curb PoS fraud. 

From 2022 to 2023, over ₦1.95 billion ($1.2 million) was lost to PoS-related fraud. These types of fraud also accounted for ¼ of all Nigerian fraud incidents in 2023. So back in January 2024, the country’s apex bank started working with several agencies to create a new feature to flag fraudulent transactions on PoS terminals. This feature cascaded into a rule that requires fintechs to register all their PoS operators with the Corporate Affairs Commission (CAC) by July 7, 2024. 

With 6 days left on the clock, the CAC has noted that it’s handling over 15,000 applications every day—weekends included—to meet up. But the truth is, with the 62-day notice it gave POS operators, it should be handling at least twice that amount if it doesn’t plan to extend the deadline. 

A new portal: This “unprecedented” number has pushed the agency to launch the Special Registration Portal (SRP). More importantly, it says it has granted fintechs APIs to the SRP so they can register their agents and merchants on their own platforms. 

A penny for your troubles: It’s not all gloom for the CAC. With registration at ₦10,000 ($6.48) a pop, it should pocket a neat ₦19 billion ($12.3 million) from the exercise if it manages to register all 1.9 million operators.

And we’ll have processed almost 5,000 more by the time you’re done reading this. Your business payments can be one of them. Click here to sign up.

Startups

If you asked anyone on the street about the most prominent Nigerian startup cities, chances are that they’ll mention Lagos, or Abuja. 

And it’s for good reason too. Startups based in Lagos, Nigeria’s tech capital, accounted for 88% of the nation’s $2 billion tech funding from 2015-2022. The state is home to at least two of the continent’s existing unicorns—Opay and Interswitch—and is the birthplace of over 508 other startups including PiggyVest, Paystack, and Jumia. 

If you go out of the streets and into tech events or conferences, you may find more ingrained and experienced stakeholders mentioning Ibadan, Enugu or Kaduna as other startup cities. Earlier this year, we wrote about Kaduna’s budding tech ecosystem where the state government donated seven hectares of land for a tech university.

Nigeria’s second-largest industrial zone: One state you may not find many people speaking much about in the tech context, despite its rich economic history, is Kano. One Google search will show you images of the state’s groundnut pyramids which symbolised Nigeria’s agricultural wealth in the 1960s.

Another search will show you that the city whose Hausa nickname, “Tumbin Giwa”, translates to “Centre of Commerce”, is the second-largest industrial zone in Nigeria with a $12.39 billion market. 

This commercial busyness might now be bleeding into the state’s ecosystem as the state made the list for the 2024 Startup Index. With over 60 startups—a 1,100% increase from 2021’s five startups—Kano’s techpreneurs believe that the spotlight will come only after startups in the state have figured out other critical challenges.

“There’s a huge gap between the training and impact we see in the ecosystem at the moment. A lot of us are still using the templates from other places to train Kano youth, and it’s not the right fit. Funding is important, but the things we do before getting to where we need funding should also be focused on, said Aisha Tofa, the co-founder of Startup Kano.

Here’s more on how Kano is becoming one of Nigeria’s biggest startup cities. 

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Creator Economy

For content creators on the continent, chances are the only way to make money on social media is via brand deals. Platforms like TikTok and Meta have refused to open monetisation opportunities to creators domiciled on the continent. In 2023, X (Twitter) started changing that by sharing its ad revenue with all creators, regardless of location. Creators in Nigeria started receiving up to $500 per month for their hit tweets! 

Earlier in March this year, Meta followed suit with a different route. The parent company of Facebook hosted some of Nigeria’s top creators in its Lagos office. In the meeting, Nick Clegg, the company’s President of Global Affairs announced that the social media giant was launching a monetisation feature on Instagram and Facebook similar to Twitter’s. 

How it works: Last week, Meta finally approved the monetisation feature—Ads on Reels—allowing creators in Nigeria and Ghana to make money on their accounts via advertisement. Creators can run advertisements in new and existing videos, including live video feeds. Creators’ earnings will depend on the number of video views.

Meta will also allow in-stream and live ads which include ads that play before (pre-roll ads) during (mid-roll ads) and after videos (after-roll ads). Creators will also be allowed to run static image ads, which appear below the video. 

An unimpressive feat: While Ads on Reels provides a new way for creators in Nigeria and Ghana to monetise content, Meta’s effort to sell Ads on Reels globally has been underwhelming. 

Advertising on short-form videos has been a tough nut to crack for Meta. The company has struggled to convince marketers to switch from advertising on rival TikTok. Also, marketers don’t see Reels as a preferred method for direct-response advertising when compared to placing ads on Instagram and Facebook’s feeds. While Meta continues to navigate these hurdles, it remains to be seen how its monetisation feature will perform in Nigeria.

Paystack would love to hear from you! Let us know what improvements or new features you’d like to see from Paystack in 2024. Share your wishlist here →

Stat of the week

$325 mllion: That’s how much African climate tech startups have raised from January to June 2024 so far.

Source: Africa: The Big Deal

Opportunities

• The Africa Prize for Engineering Innovation is open to African innovators creating engineering solutions to local challenges. Innovators from sub-Saharan Africa should pitch viable engineering products or services that will have social or environmental benefits to the continent. Apply for the chance to get up to $25,000 in funding. 
• The Future of Capitalism Tech Startup Competition is offering $1 million to one lucky tech startup that can transform how businesses today operate. If your tech can save costs, boost efficiency, increase productivity or customer satisfaction, then apply by September 30 for a chance to win. 
• Applications are now open for the 5th cohort of Microsoft’s GrowthX Accelerator Programme. AI Startups can apply to join the eight-week incubator that will provide $25,000 worth of azure credits, mentorship from some of the biggest tech corporations and investor readiness lessons. Apply by September 2, 2024. 
• The WASCI Next Generation Technology Internship is open to young graduates in Nigeria and Ghana who want to use tech to solve social problems. The six-month programme will see 3 interns work in civil society organisations. Apply by July 12.

Here’s what we’ve got our eyes on

• Safaricom under pressure for conflicting explanations over two-hour internet outage in Kenya
• 🚀Entering Tech #68: Who’s to blame for “oga-driven” development?
• Cyril Ramaphosa names “unprecedented” government of national unity cabinet

Written by: Faith Omoniyi & Timi Odueso

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