👨🏿‍🚀TechCabal Daily – Kenya Airways’s 10-year loss

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In more news about FTX, ex-CEO Sam Bankman-Fried is facing more charges for attempting to bribe a Chinese official with $40 million in cryptocurrency. The Wall Street Journal reports that prosecutors are now accusing Bankman-Fried of conspiring to bribe Chinese government officials to regain access to more than $1 billion in frozen cryptocurrency which FTX lost access to in 2021.

A new blockchain use case for Africa will see to a new digital identity project that will help 3,600 Ethiopian schools eliminate fraud. Nodo News reports that Ethiopia is close to launching a digital identity programme, in partnership with Input Output Global (IOG), that will help implement a digital student identity programme using the Cardano blockchain network.

KENYA AIRWAYS RECORDS A DECADE OF LOSS

Kenya Airways’s books have not been looking up for the last 10 years. This week, the airline reported its tenth consecutive loss with a record Ksh38.26 billion ($290 million) full-year loss, driven by debt and skyrocketing fuel prices.

The loss breaks the record for the country’s biggest loss from a listed company, a record previously held by, guess who, Kenya Airways.

Stacking up losses

According to Business Daily, the airline more than doubled its loss from Ksh15.87 billion ($122 million) to Ksh38.26 billion ($290 million) for the financial year ended December 2022 despite—or maybe even because—being in the hands of four different CEOs in the last decade.

Current CEO Allan Kilavuka says he sees the national carrier, which fell into insolvency in 2018 after an expansion drive left it with billions in debt, hitting break-even at the end of December and a profit by the end of next year.

Better luck next time?

The airline is drawing encouragement from an improvement in its underlying performance and other metrics such as a rise in customer numbers from 68% to 3.7 million and a 66% rise in turnover from Ksh70.22 billion ($535 million) to Ksh116.78 billion (895 million).

“This 2023 looks good and we hope to continue this way. We really expect that by the end of this 2023, we will be in a break-even from a financial point of view and hit profit level in 2024,” said Michael Joseph, Kenya Airways chairperson, who was previously CEO and chairperson at Safaricom.

Zoom out: African national airlines have over the years had a notorious trend of bleeding cash. According to the African Airlines Association, African airlines incurred a revenue loss of $800 million in the third quarter of 2022. 

META CAN’T ESCAPE KENYA’S COURTS

Meta wants to play in Africa, but Zuck and his team are quickly learning that if they want to play in our pit, they have to play by the rules.

Yesterday, a Kenyan court rejected Meta’s pleas to dismiss a lawsuit levied against the company by its former content moderators in the country.

ICYMI: Last week, we reported that 43 ex-employees of content moderation firm Sama are suing Meta, Sama’s former client. The content moderators who, under Sama, used to censor Facebook posts, revealed that over 260 moderators had been fired within a week. Meta had also instructed their new content moderation partner, Majorel, to blacklist them. They also claim that Sama failed to issue proper redundancy notices and didn’t follow the required 30-day termination notice. Finally, Sama tied their severance pays to non-disclosure agreements.

What are Meta and Sama saying?

Sama denied the allegations, stating that they followed Kenyan law. Meta, on the other hand, filed an objection claiming that because Meta doesn’t have a physical office in Kenya or trade in Kenya, it cannot be sued in Kenya.

The Kenyan court, however, rejected the plea and upheld an injunction filed by the moderators which prevents Meta and Sama from firing all 260 moderators, and changing its outsourcing company from Sama to Majorel.

Zoom out: Believe it or not, this is not the first time Kenyan content moderators are suing Meta, nor the first Meta is arguing that it cannot be sued in Kenya, nor the first time a judge is rejecting Meta’s argument. Earlier this year, in a suit where another content moderator sued Meta for exploitation, Meta also claimed the court had no jurisdiction over it and the court threw out its objection. Uber also received a similar judgement in 2021 after it was sued by 34 Kenyan drivers for violating an online contract.

NIGERIA’S CBN TO KEEP OPEN BANKING OPEN

Remember we told you that Nigeria’s central bank (CBN) wanted to appoint the national payment settlement mechanism, NIBSS, as the go-between for open banking, but the banking industry said “no way”? 

They didn’t want a middleman and preferred to connect directly with fintechs or banks. One banking expert even compared it to being forced to watch one TV station to catch broadcasts from other networks. Well, guess what? The CBN heard their concerns and reversed the decision. 

ICYMI: Open banking allows the sharing of consumer data between banks and fintechs.

Nigeria became the first African country to create national operation guidelines for open banking.

This is good news because?

It is good because, otherwise, the middleman would have been an enemy of progress to the country’s effort towards open finance. Open banking, and open finance generally, involves integrating financial data with non-financial industries like healthcare and education. 

Luckily, the CBN has promised to keep open banking “open” and will work with the NIBSS to develop an open banking registry. The CBN is still eager to hear more feedback from the banking and fintech industries to help make those open banking guidelines a reality.

BETTING FIRMS ARE EVADING TAX IN KENYA

Kenyan betting firms have been playing their own game of “hide and seek” with the taxman. Now the government has invalidated any tax break not approved by the parliament.

The Kenya Revenue Authority (KRA) says that betting companies have found a way to hide away from the taxman’s radar by reporting losses left and right. But the business seems lucrative. For example, betting firm SportPesa reportedly made a net profit of Sh12.9 billion in its first five years of operation.

Business Daily reports that not only have they been lying on paper about losing money, they have also been getting tax exemptions under the guise of corporate social responsibility (CSR). They claim that they are performing CSR by sponsoring local football clubs and charities, even though they didn’t. 

Those that do can be found inflating the money they actually spent on the project. They also inflate their actual advertising spend because the tax exemption law allows them to withhold the tax on advertisement.

KRA says the tax breaks have been running into hundreds of millions and going on for as long as six years. Due to the shady activities of the owners of betting firms, tax breaks not approved by the parliament will no longer be official.

EVENTS: TECHCABAL AT 10

Here’s a list of all the Twitter Spaces we’ll be holding to celebrate our 10th-year anniversary.

• March 30—The role of the media in covering African tech. How can the media help Africa’s developing tech ecosystem? What responsibility does the media owe the ecosystem, and what can the media expect in return? Should the media only cover the good stories? Find out here.

IN OTHER NEWS FROM TECHCABAL

Naira redesign: Nigeria’s tortuous vanity project comes to an end.

How a South African “Facebook rapist” escaped from prison by faking his own death.

OPPORTUNITIES

• ALX Africa is calling for young African learners who are interested in data analytics, data science, cloud computing, and salesforce administration to apply to its new world-class programmes at no cost to them. Apply to any ALX course here.

• Dream VC has announced that it’s now open for its Launch Into VC (LIVC) and Invest Accelerator programmes. Junior professionals keen on breaking into the investor space can apply for LIVC to get a carefully curated investor talent accelerator led by existing venture builders. Senior professionals should apply for its Investor Accelerator 2023 Programme where future investment leaders and ecosystem builders will be upskilled. Apply for LIVC and Investor Accelerator Programme by April 16.

• The Jasiri Talent Investor Programme is looking for highly-driven individuals with a history of achievement and/or entrepreneurial action who aspire to launch a high-growth venture. Apply by April 23.

• The HiiL Justice Accelerator Programme is now open for applications from Kenyan startups with solutions that help people resolve their legal problems. Eight selected startups will receive $10,000 in equity-free funding as well as the chance to win up to $21,000 on Demo Day. Apply by March 31.

• The Africa’s Business Heroes (ABH) Prize Competition, a philanthropic initiative sponsored by the Jack Ma Foundation and Alibaba Philanthropy, is calling for participation from Africa’s entrepreneurial talent. Apply by May 12.

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