👨🏿‍🚀TechCabal Daily – Kenya’s food crisis

16 million Kenyans cannot afford food, despite 4.3% ‘low’ food inflation rate

Kenya’s food inflation, at 4.3%, is one of the lowest in Africa, far below Nigeria’s 39.16% and South Africa’s 4.7%. Yet, 16 million Kenyans—nearly a quarter of the population—cannot afford food, according to Kenya National Bureau of Statistics (KNBS).

Nearly 40% of Kenyans live below the poverty line, and rural households spend less than KES2,600 ($20) a month on food—insufficient to meet their basic feeding needs.

The problem is particularly acute in arid regions like Turkana and Mandera, where recurring droughts have devastated agriculture, leaving food unaffordable for over 60% of residents. 

In urban areas, where incomes are slightly higher, inflation on essentials like housing and transport leaves little for food, pushing millions into food poverty. 

Kenya’s low inflation rate remains a hollow achievement, masking the reality of hunger for millions. Though the country has come a long way from the food insecurity it suffered in 2022 and 2023, the low food inflation doesn’t make a difference if the people cannot earn more to sustainably afford food.

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Language learning startups are on the rise in Africa. Last year, when I wrote about Izesan, a language learning app for African languages, I was in equal parts awe and excitement. It was my first time encountering an African version of Duolingo. Flash forward to this year and I have encountered more edtechs teaching African languages. 

Last weekend, we had a chat with Frank Williams, who had just raised funds for his edtech Lingawa, which teaches Nigerian languages to diasporan audiences. 

Williams is well aware of the gap that needs to be filled in teaching Nigerian languages to people living in the diaspora. A $45 billion market opportunity he calls it. To take a share of the market the startup raised $1.1 million from a coterie of investors including Voltron Capital, Weav Capital, Kaleo Ventures, MasterCard Foundation, and other angel investors.

Lingawa, which currently teaches students through personalised tutor learning sessions, will use the cash injection to develop an interactive language learning app.

Currently, students pay tutors $10 per hour to learn either Yoruba or Igbo on the Lingawa web based platform. Lingawa supplements lessons by tutors with online resources such as flashcards, immersive games, and virtual immersion sessions to aid their ability to speak fluently.

With over 100 tutors, the startup claims it has taught over 3,000 learners. Its current crop of students are primarily located in the United States, Canada, and the United Kingdom. 

Lingawa will also use part of the funds raised to add newer languages, as well as invest in talent and development. 

It plans to include Zulu, Arabic, and Swahili in Q1 2025. The edtech will also launch a gamified app for learners who cannot afford its subscription.

MultiChoice, the pay-TV conglomerate, will pocket R1.2 billion ($67 million) in cash by the end of November after finalising the sale of its insurance subsidiary, NMS Insurance Services (NMSIS), to Sanlam Life. 

The deal, announced in June has now been approved by South African regulators. As part of the deal, Sanlam Life, an insurance company, will continue to sell long-term insurance policies to MultiChoice customers.

The deal will also likely get bumped to R2.7 billion ($150 million) based on performance targets agreed upon by the two companies. The additional payment depends on how much gross premium NMSIS earns Sanlam by the end of 2026.

For the 2023 fiscal year ending in March 2024, NMSIS’ gross written premium grew by 36% year-on-year to R970 million ($54 million), and profit after tax increased by 51% to R296 million ($16 million).

NMSIS provided policies like device insurance for decoders and equipment used by MultiChoice customers. The transaction will provide MultiChoice with additional liquidity after the group announced mixed results last Tuesday.

Despite slightly growing revenue in H1 2024 on a constant currency basis, MultiChoice took a hit as devaluation chopped its profits in several key markets like Nigeria and Zambia.

The pay-TV company is also struggling with subscriber churn across its streaming businesses.

Selling off its insurance product allows MultiChoice to focus on its other value-added services. Moment, its fintech product, and KingMakers, its sports and entertainment arm, were some positives from its last announced results.

Multichoice is also betting heavily on Showmax, its local streaming platform. It grew its subscriber base by 50% year-on-year, and will continue to invest resources on streaming, where it hopes to compete with global giants.

Written by: Emmanuel Nwosu & Faith Omoniyi

Edited by: Olumuyiwa Olowogboyega