Celebrations are in order as Nigeria turned 61 on 1st October 2021. In the “KINGS of Africa’s digital economy“I recognized Nigerians for their commotion and this commotion has produced four of the major fintech unicorns in Africa to date, namely, INTERSWITCH, FLUTTERWAVE, CHIPPER CASH and OPAY. You can do five if you count JUMIA, which was the first company valued at over $ 1 billion. (aka a unicorn) in Nigeria.
ANDELA is now the sixth, it started in 2014 as a training platform for junior developers in Nigeria, expanding to other African cities and now a market for remote technical talent for US companies. September 29e, 2021, ANDELA announced a $ 200 million increase in Series E to a valuation of $ 1.5 billion, making it Nigeria’s latest unicorn. ANDELA was co-founded by Iyinoluwa Aboyeji (AKA “E”) and Jeremy Johnson who is now CEO after E left to co-found FLUTTERWAVE, making him the only Nigerian tech founder with two Unites to his name. E is now the co-founder of FUTURE AFRICA which democratizes access to seed capital for startups in Africa.
The 17the September 2021, news broke that IHS TOWERS, Nigeria’s leading telecommunications tower supplier and the fourth largest in the world, had filed documents with the Securities and Exchange Commission (SEC) for go public on the New York Stock Exchange. The expected valuation of the company was around $ 10 billion, which would make it the largest initial public offering (IPO) in African telecommunications history. MTN Group, which owns 29% of the company valued at $ 2.9 billion, is seeking to sell part of its shares as part of the listing.
PAGA, a payment processing company in Nigeria (similar to PAYPAL) started by Tayo Oviosu in 2009 is set to become the next unicorn as it processed $ 2.3 billion in transactions in 2020 and $ 8 billion over the course of of the past four years. The company is now expansion into Ethiopia and Mexico as part of its global growth plan. Another future unicorn is CNG TRANSFER founded during the pandemic by Emmanuel Tochi and Vincent Omulo, respectively Nigerian and Kenyan. The flagship product of the startup is Transfy.io – a cross-border intra-African money transfer platform built on the blockchain allowing Africans to transfer money from one country to another transparently and without charge. Less than a year after launch, they have already processed 100 million Kenyan shillings in Kenya alone while being operational in Nigeria, Zambia, Botswana, South Africa, Rwanda and Ghana.
Nigeria is also the most populous country and the largest economy on the continent. At the same time, it has yet to adopt Mobile Money like Kenya and Ghana even though sub-Saharan Africa is the world leader in Mobile Money according to the Global System Mobile Association (GSMA). In August 2021, the Central Bank of Nigeria (CBN) froze the bank accounts of Nigerian fintech platforms RISEVEST, BAMBOO, TROVE and CHAKA for six months. In the same month, Nigeria’s National Information Technology Development Agency (NITDA) fined online lending company SOKO LOANS $ 10 million ($ 25,000) for various offenses against its users. , in particular the invasion of privacy and the “”erosion of trust in the digital economy”. This suggests that the established institutions are threatened by these new actors because the measures taken on these regulatory infractions are too severe.
In the meantime, MTN GROUP has entered into a partnership with FLUTTERWAVE allowing companies that integrate Flutterwave in Cameroon, Ivory Coast, Rwanda, Uganda and Zambia to receive payments via MTN’s Mobile Money (MoMo) with plans to expand to other key markets across the continent. This seems to suggest that MTN will expand its MoMo efforts in Nigeria through the partnership.
In July, the CBN announced that it would launch the pilot project of its digital currency, the “ENaira” on October 1, 2021. eNaira is a digital currency issued by the Central Bank of Nigeria that provides a unique form of naira denominated currency. It serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions compared to cash payments. The eNaira will force local banks to start looking at fiat money and cryptocurrencies differently. This coincides with an interesting development in the banking sector where seven of the 23 Nigerian bank CEOs are now women.
Gender balance and equity have been an important topic in the male dominated banking sector recently, so it is a welcome development to see Nigeria embrace this change which will ultimately serve the banking sector better. This does not, however, exclude the banking sector from the challenges presented by fintechs who are busy having lunch. There is a standoff between fintechs and commercial banks, the regulator is leaning towards the latter. It seems to be playing out in the obsolete 2007 NITDA realignment proposal which appears to have licenses, fees, fines, and penalties for startups. Would the leaders of these banks find a solution? Time will tell us.