👨🏿‍🚀TechCabal Daily – Show me the naira

Around this time last year, Africa’s tech ecosystem erupted in a conversation on how much tech startups spend on cloud computing.

One Nigerian HR-tech startup told TechCabal that they pay up to $80,000 monthly in cloud costs—pocket-clenching costs that now make accelerators and VC firmsallocate cloud credit to new and emerging startups. Google, for instance, gives startups up to $200,000 in Google Cloud credits to startups through its Black Founders Fund, while accelerators like Techstars and Y Combinator give their portfolio companies cloud credits. 

For startups operating in countries like Nigeria where currency devaluation has doubled cloud costs—as cloud providers like AWS, Microsoft Azure, and Google Cloud price their offerings in dollars—these costs can be a headache. A $1,000 cloud service that would have cost ₦458,000 in early 2023 now costs ₦1.52 million, a 107% increase!

As the effects of the naira valuation persisted, local cloud companies—like Okra, Nobus MainOne Cloud, Web4Africa, and Layer3—began positioning themselves as alternatives with one major selling point: allowing customers to pay in local currency. This narrative was an instant hit for startups as they were keen on reducing costs. 

However, global cloud players are catching on. Yesterday, AWS announced that it will now accept naira payments. In addition to the naira, AWS announced that it will be accepting payments in 7 other other local currencies.

AWS’s move to offer naira pricing means that local cloud providers must up their game by providing a unique value proposition. While local cloud providers have built a competitive edge around naira pricing, AWS’s offer of local payment options diminishes that edge. Startups may now find it harder to justify switching to local providers solely because of pricing reasons, forcing local players to innovate or compete on other value propositions. By paying in naira on AWS, startups can better manage their cash flow without worrying about sudden spikes in cloud costs due to dollar fluctuations. 

AWS’s move to offer naira pricing may also inspire Google Cloud and Microsoft Azure to offer similar pricing in Nigeria.

What excites bank employees more than a raise? A bigger raise. Bankers often joke that their expenses are the only things that inflate faster than their egos—while their salaries stubbornly refuse to keep pace. 

The latter part of this joke rings true for employees of a Nigerian commercial bank. Months after it introduced a cost-of-living adjustment (COLA) stipend, Sterling Bank, a tier-2 Nigerian commercial bank, raised salaries by 7%. The salary adjustment, first disclosed to employees in an internal memo in early January 2025, is meant to help employees offset the rising cost of living and quickening inflation. But employees want more.

Late last year, Nigerian commercial banks raised salaries in response to economic pressures on consumer spending. GTBank, one of Nigeria’s biggest banks, for example, raised salaries by 40%. Union Bank, another tier-2 bank, followed suit with a similar 40% raise. While reviewing compensation is necessary to help employees cope with the economy, it also helps these banks retain talent in an industry where competitors don’t shy away from poaching.

Sterling’s salary increase, however, is less than sterling to employees who expected a 20-30% increase, similar to competitor banks. 

Executive trainees (ETs), previously earning ₦327,000 ($211) monthly, will now take home ₦351,000 ($226). Senior executives (junior roles above ETs) on a ₦500,000 ($322) salary will see their pay rise to ₦527,000 ($340).

The salary raise will impact the bank’s bottom line. Banks are known for their cost-efficiency, especially when it comes to employee compensation.

Sterling Bank spent ₦22.6 billion ($14.6 million) on personnel expenses as of September 2024, accounting for 21.67% of its total expenses, which stood at ₦104.3 billion ($67.2 million). Some back-of-the-napkin math based on a 7% increase means the bank’s wage bill would be around ₦24.22 billion ($16.2 million).

Nigeria is set to expand its digital infrastructure courtesy of a $2 million grant from the US Trade and Development Agency (USTDA). This funding will expand the country’s fibre optic network by 90,000 kilometres, a move in line with Nigeria’s National Broadband Plan for 2020–2025. 

Expanding the fibre optic network will provide better internet access to rural areas, help reduce the gap in digital access, and create more jobs.

Nigeria’s current internet penetration rate, according to various reports, sits between 40–45%. This is much lower than other countries like Egypt (72%) and South Africa (74%) which have better internet coverage and thriving ecosystems.

Sectors like fintech, ride-hailing, and e-commerce in Nigeria rely heavily on the internet. The more people have access to better internet, the greater the reach startups will have. As these startups grow, ecosystems expand.

Talents have also been held back by slow internet. Many skilled workers face unreliable connections, preventing them from participating in the global digital economy.

In recent years, the Nigerian government has worked to expand its fibre optic network, announcing plans to extend it by 90,000km in 2024. The government has made efforts to protect internet infrastructure in the past, like criminalising the destruction of broadband cables.

This new project builds on these efforts, positioning Nigeria to improve its digital connectivity and create new opportunities for businesses and individuals across the country. If you want to get a better idea of how the fibre optic project has advanced in Nigeria, read our deep dive here.

OpenAI has appointed Nigerian-born financier Adebayo Ogunlesi to its board of directors, marking a significant milestone in the global AI space. Ogunlesi, a BlackRock senior managing director and co-founder of Global Infrastructure Partners, brings decades of expertise in infrastructure investments to the ChatGPT maker at a critical juncture.

With plans to scale AI capabilities, OpenAI is lobbying for expansive infrastructure development, including data centres and energy solutions. Ogunlesi’s proven track record—transforming GIP into a $105 billion powerhouse and leading innovative projects like London Gatwick’s operations overhaul—positions him as a key player in navigating these ambitions.

For Africa, Ogunlesi’s elevation is symbolic and strategic. It underscores the region’s rising influence in global decision-making circles, even as foreign investors like BlackRock scale back direct equities exposure in markets like Nigeria and Kenya. With Ogunlesi on OpenAI’s board, African stakeholders may see opportunities to align with global infrastructure trends, particularly as the continent seeks to leverage AI for development.

OpenAI’s board now features 10 directors, including CEO Sam Altman, with a vision to restructure into a public benefit corporation—a shift that could redefine tech governance. Ogunlesi’s appointment aligns with this transformational vision, linking AI innovation with practical infrastructure expertise on a global scale.

Could Ogunlesi’s role inspire greater African participation in shaping AI infrastructure? The answer may well define the next chapter of the continent’s tech evolution.

Source:

* Data as of 06:40 AM WAT, January 15, 2025.

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