👨🏿‍🚀TechCabal Daily – The future of Kenyan banking….is expensive

Kenya’s Central Bank (CBK) wants to create a new fast payment system (FPS) to make sending money between banks, mobile wallets, and fintechs cheaper and faster. While the idea sounds promising, it has been met with opposition from banks. They rejected the idea of building an FPS from scratch and instead pushed for an upgrade to Pesalink, the country’s interbank transfer system.

In a joint report released by the Kenya Bankers Association (KBA) and Safaricom, the opposers argue that a new FPS could cost up to $200 million, take four years to build, and duplicate existing infrastructure like Pesalink and M-Pesa. 

Today, moving money between banks and mobile wallets in Kenya is costly and slow because platforms operate separately. Mobile money platforms like M-Pesa and Airtel Money use different systems from banks, making direct transfers difficult. 

Some banks aren’t linked to M-Pesa, while others charge extra fees. Pesalink, though effective for bank-to-bank transfers, doesn’t fully integrate with mobile wallets or fintechs, forcing businesses and users to juggle multiple systems for payments.

The CBK’s proposed FPS aims to unify these systems, but KBA and Safaricom argue that upgrading Pesalink into a national switch, where all banks, mobile money platforms, and fintechs can connect, would achieve the same goal more quickly and affordably.

A key sticking point is control. CBK plans to manage the FPS through a special purpose vehicle (SPV) where it would hold a 60% stake, raising concerns about government delays and increased bureaucracy.

The debate boils down to this: should Kenya spend $200 million on a new system or improve the tools it already has? Safaricom and the KBA believe expanding existing platforms would be faster, cheaper, and better suited for Kenya’s mobile-first economy.

The Nigeria Bureau of Statistics website is back up! 

Weeks after the statistics agency website was hacked and taken down, it has published the December 2024 inflation report.

In December 2024, Nigeria’s headline inflation quickened to 34.80% from 34.60% recorded in November. December’s inflation rate was largely driven by consumer spending during the holidays and transport costs. 

The restoration of the NBS website is certainly welcome news. However, the prospect of lower inflation this year offers a more nuanced cause for optimism—it depends on perspective.

Although December’s 2024 inflation was a 7-month high, analysts expect lower inflation rates this year as the National Bureau of Statistics recently modified the way it calculates inflation. 

The NBS calculates inflation using a Consumer Price Index (CPI) basket that measures the average change in the price of goods and services consumed by people daily. The NBS, which previously tracked 740 of those goods and services—including food and non-alcoholic beverages, clothing, and tobacco—increased its basket to cover 960 items.

The new additions help reflect current consumption patterns. 

It may also result in lower inflation because the weighting of food—which has been the major driver of inflation in the past months—has been reduced on the new index. Food previously contributed more than half—51.8%—of the inflation basket. It now contributes 40.1% to the new index.

While inflation could drop in the coming months, analysts say the figures may not reflect reality. The NBS says it will release the new figures based on its new CPI index at the end of the month.

Geely, a Chinese automobile manufacturer, has partnered with local firm Auto Mobility to launch an assembly plant in Egypt. This facility will produce 30,000 vehicles annually, catering to both domestic demand and export markets.

The growth of Egypt’s auto industry is thanks to policies the government has introduced in the automotive industry over the past few years, helping to seal deals like Geely’s. This conscious approach, more than a decade in the making, has attracted several Chinese automakers to establish manufacturing plants in Egypt.

One of these policies, the Automotive Industry Development Program (AIDP), offers incentives for local assembly and production. Combined with Egypt’s strategic location in the Middle East, it makes the country a hub for exporting luxury cars to oil-rich neighbouring countries.

Chinese brands have recognised this potential. Chery, for instance, has been assembling vehicles in Egypt since 2006, initially under the Speranza brand and later rebranded as Chery in 2016. Similarly, SAIC Motor, the parent company of MG, formed a joint venture with Egypt’s Mansour Automotive Group in 2018 to manufacture MG cars locally. And then, it’s a roll call of stats from there of who’s been to Egypt and who has not.

In 2012, a market slowdown in China prompted its auto industry to seek expansion beyond the difficult Western markets. This led Chinese automakers to explore other regional opportunities to boost profits, with Egypt emerging as a particularly attractive prospect due to its large population, growing middle class, and government incentives.

The presence of other multinational manufacturers like Stellantis, which sold 614,000 units across the Middle East and Africa in 2023 (holding a 15% market share), further highlights Egypt’s significance.

The increasing presence of Chinese car manufacturers in Egypt has created a mutually beneficial dynamic, fueled by strong local demand. This positions Egypt as a key automotive manufacturing hub in Africa, second only to South Africa.